Product Merchandising Strategies

* Notes *

Marketing Strategies Include:

• Scrambled merchandising

• Narrowing the product line

• Sampling and product demonstrations

• Shelf positioning

• Packaging

• Brand selection and identification Learning Target: to be able to analyze and show examples

of each one.

Scrambled merchandising

• It used to be that you went to a drug store for drugs, hardware store for hardware, a pet store for pet food and a grocery store for groceries.

• Now you can buy groceries at the drug store, find pet food at the hardware store and get anything you want at Wal-Mart or Target, not to mention Zappos or Amazon.

“Real Hits and Misses” http://retailhitsandmisses.blogspot.com/2008/09/scrambled-merchandising.html

Scrambled merchandising

The Consumer Electronics Association presented at RetailVision results from a recent consumer survey about buying preferences:

• 25% would be willing to buy consumer electronics products from Starbucks

• 30% from Ikea• 40% from Bed, Bath & Beyond• And almost 60% from Home Depot

*Scrambled merchandising Defined

• Scrambled Merchandising refers to a practice by wholesalers and retailers that carry an increasingly wider assortment of merchandise.

• It occurs when a retailer adds goods and services that are unrelated to each other and to the firm's original business.

• They might add fast moving items that can be sold in volume

The Product Line

• *A product line is a group of closely related products manufactured or sold by a business.

• Examples include all the car models produced by the Pontiac division of General Motors or all the cereals produced by Kellogg’s.

• Retailers frequently sell more than one product line.

*Narrowing the product line

• Product lines can be narrowed to become very specific and specialized.

Sampling and product demonstrations

• *Product Sampling: Potential customers get to try the product before buying it. It increases awareness of the product and could attract new customers.

Sample of a Sample

• *Product demonstrations: Show how a product works and what its benefits are. It shows the consumer what the product could do for them and helps establish a perceived need for the product.

Demonstration

Shelf positioning

Stores like Safeway sell their shelf space for a fee to their suppliers. Suppliers who want to put their products on the best areas of the shelves pay a premium.

Shelf positioning

• *The price for the shelf space is determined by location in the store and level on the shelf.

• “End caps” receive the highest price point followed by other special locations, which vary from store to store.

Shelf positioning

• *Along a common aisle, the higher the product, the higher the price point for its shelf space.

• Eye level often costs more and the horizontal location can also be an important factor.

Shelf positioning• Private label (ex. President’s

Choice) items are placed to the right of their national brand (Del Monte) items because, "the majority of the human population is right handed, therefore; the more people will grab to their right before their left."

Packaging

• *Attractive, colourful, and visually appealing packages have promotional value and can carry important messages about the product’s performance, features, and benefits.

Packaging

• Packages display the products name, logo and its brand/company and are often used to promote an image such as prestige, convenience, or status.

Packaging

• Product packages often come in different sizes to meet the needs of different market segments. Family packs are designed to meet the needs of larger families, while smaller packages are made for individuals.

Brand selection and identification

• *Branding establishes an image for a product or company and projects that image to its customers and the marketplace. The use of brands is important in product planning.

Brand selection is used to:

• Build product recognition and customer loyalty so that satisfied customers can make repeat purchases

• Ensure quality and consistency which is communicated to customers through branding.

Brand selection and identification

• Capitalize on brand exposure because it allows companies to expand their products into new target markets. It also helps to introduce new product lines as customers are more willing to try new products that carry a familiar brand name.