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Retail IIPM Project

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Merchandise assortment planning

Merchandise assortment planning

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  • Hello..Your work is quite appreciable and is a class apart from others. Even my area of interest and study is Retailing. Request you to kindly share this document with me at 'geetu_bonde@yahoo.com'. Looking forward to see your generous and kind helping hand.
    Regards
    Geetanjali
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  • plz send this i required your help
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  • plz mail me this project it is very good project i like it very much , my email add is vaneetsingla2@gmail.com thanks
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  • pls cn u maill this doc to me.i wanted to do a project to retail sector in my mba last year.. so jst to hav an idea it vl be very helpful to me.. pls forward it to me on my email id: sagarpanchal3806@yahoo.com
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  • PLease please cn u mail me this doc i wld b very happy plz sir it is jst gr8 doc u made hats off. plsh mail to kushalchowdhary87@gmail.com
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  • 1. 1 CHAPTER - 1 INTRODUCTION
  • 2. 2 INTRODUCTION 1.1 Retailing Overview Retailing is one of the world’s largest industries. It is in a permanent state of change, and the pace of this change has been accelerating over the last decade. From the marketing perspective, retailers are, by definition, closer to the consumer than manufacturing companies. Retailers represent the culmination of the marketing process and the contact point between consumers and manufactured products. While retailing has long set buying decisions as its highest priority and was very focused on the product assortment, it now follows a more holistic approach to management and marketing and is seizing the opportunity to be consumer oriented, engage in the personal contact with customers, gather information on consumer behaviour and exploit insights into consumer behaviour and preferences. What was once a simple way of doing business is transforming into a highly sophisticated form of management and marketing. Retail marketing consistently features more efficient, more meaningful and more profitable marketing practices. Modern retailing has entered India in form of malls and huge complexes offering shopping, entertainment, leisure to the consumer as the retailers experiment with a variety of formats, from discount stores to supermarkets to hypermarkets to specialty chains. However, kiranas still continue to score over modern formats mostly due to the convenience factor i.e. near to their house. This organized segment typically comprises of a large number of retailers, greater enforcement of taxation mechanisms and better labour law monitoring system. It's no longer about just stocking and selling but about efficient supply chain management, developing vendor relationship quality customer service, efficient merchandising and even the labour class is also in the working process timely promotional campaigns. The modern retail formats are encouraging development of well-established and efficient supply chains in each segment ensuring efficient movement of goods from farms to kitchens, which will result in huge savings for the farmers as well as for the nation. The government also stands to gain through more efficient collection of tax revenues. Network marketing has been growing quite fast and has a few large players today. Gas stations are seeing action in the form of convenience stores, ATMs, food courts and pharmacies appearing in many outlets.
  • 3. 3 In the coming years it can be said that the hypermarket route will emerge as the most preferred format for international retailers stepping into the country. Estimates indicate that this sector will have the potential to absorb many more hypermarkets in the next four to five years List of retailers that have come with new formats: Retailer Current Format New Formats Shoppers’ Stop Department Store Quasi-mall Crossword Large Bookstore Corner shop Piramyd Departmental Store Quasi-mall, Food retail Pantaloon Own brand store Hypermarket Globus Department Store Small fashion stores Traditionally, the kirana retailing has been one of the easiest ways to generate self- employment, as it required minimum investment in terms of land, labour and capital. These stores are not affected by the modern format of retailing. In order to keep pace with the modern formats, kiranas have now started providing more value-added services like stocking ready to cook vegetables and other fresh produce. They also provide services like credit, `phone service, home delivery etc. The organized retailing has helped in promoting several niche categories such as packaged fruit juices, hair creams, fabric bleaches, shower gels, depilatory products and convenience and health foods, which are generally not found in the local kirana stores. Looking at the vast opportunity in this sector, big players like Reliance has announced its plans to become the country's largest modern retainers by establishing a chain of stores across all major cities. Apart from metro cities, several small towns like Nagpur, Nasik, Ahmadabad, Aurangabad, Sholapur, Kolhapur and Amravati has seen the expansion of modern retails. Small towns in Maharashtra are emerging as retail hubs for large chain stores like Pantaloon Retail because many small cities like Nagpur have a student population, lower real estate costs, fewer power cuts and lower levels of attrition. However, retailers need to adjust their product mix for smaller cities, as they tend to be more conservative than the metros. In order for the market to grow in modern retail, it is necessary
  • 4. 4 that steps are taken for rewriting laws, restructuring the tax regime, accessing and developing new skills and investing significantly in India. This chart is showing three lines mainly, overall retail sales; food, beverages and tobacco segment sales and clothing sales. And here researcher’s focus is on clothing segment. So let now discuss about apparel industry. As we know apparel is one of the basic needs of any person. And now in India, either a rural person or an urban person, all prefer these easy and
  • 5. 5 comfort retail formats for them. As a research conducted by KPMG/research firm; in India, in rural segment there is a 61% spending and in urban market, there is 39% spending. Indian Organized Retail is set to explode with Food & Lifestyle retail as major segments And apparel industry is also one of these SBU’s; so definitely these all things make it more valuable than others. India is on the radar screen in the retail world and global retailers and at their wings seeking entry into the Indian retail market. The market is growing at a steady rate of 11-12 percent and accounts for around 10 percent of the country’s GDP. The inherent attractiveness of this segment lures retail giants and investments are likely to sky rocket with an estimate of Rs 20-25 billion in the next 2-3 years, and over Rs 200 billion by end of 2010. Indian retail market is considered to be the second largest in the world in terms of growth potential.
  • 6. 6 TABLE –1 India Retail - Share of Categories (per cent) 2003-04 2004-05 2005-06 2006-07 1. Food & grocery 66.4 62.5 61.7 59.6 2. Beverages 2 2.7 3.1 3.6 3. Clothing & 7.3 8.8 8.6 9.3 footwear 4. Furniture, 4.8 5.8 6.2 6.8 furnishing, appliances & services 5. Non- 9 8.6 8.5 8 institutional healthcare 6. Sports goods, 2 2.4 2.6 2.7 entertainment, equipment & books 7. Personal care 3.5 3.8 3.9 4.2 8. Jewelers, 5 5.4 5.4 5.9 watches, etc Total Retail 100 100 100 100 Source: http://www.expresshospitality.com/20080615/management07.shtml 1.2 Apparel Retailing
  • 7. 7 The order of present day business being global, a constant adaptation and reinvention of marketing strategies is imperative so as to face the challenge of satisfying the local customers in the global markets. In the Retail sector, India is currently witnessing tremendous growth; but there has been a dismal performance by many owing to the fact that Westernised formats in India have been blindly followed and replicated without considering the abysmal differences in all types of macro and micro environmental factors. So it is obvious that we need to find out some solutions for the retails in India, keeping in mind the intrinsic differences in the people across the country in terms of culture, economic condition, purchase attitude and so on. This paper attempts to highlight the differences in Retail Purchase Factors across customers and suggest a way out for effective marketing & assortment for apparel outlets with local orientation. Keywords: Retail, Purchase behaviour, Consumer behaviour, Proximity, Price, Product Assortment, Ambience, Service, Communication A smart product mix is vital for the apparel supply chain Style, fashion and brand image all capture the imagination of consumers shopping for value in apparel items. However, increasing the product mix to ramp up market share can also lead to operational losses and non- fulfilment of the delivery schedule. Increasing market expansion and fashion volatility are all intensifying competition in the apparel chain, and companies are being forced to diversify their products in an attempt to improve market share. This diversity is largely determined by attributes such as design, handle, size and fit - and leads to a correspondingly wide spectrum of upstream manufacturing parameters and small batch sizes. These, in turn, are major hurdles in meeting delivery schedule and quality standards, which severely affect the marketability of a brand. It's a typical problem faced by apparel supply chain, where the scheduling of work becomes complicated by the introduction of a highly diverse range of products. This complexity makes it more difficult to manage a given product basket in terms of time, cost and serviceability. Moreover, product replenishment in the apparel supply chain assumes a new dimension, as global sourcing becomes the order of the day with raw material supply; manufacturing, distribution and retailing all are dispersed across the globe.
  • 8. 8 Under these circumstances it becomes mandatory to "get the right product to the right place at the right time at the right price." Factors Affecting Replenishment Replenishment of merchandise is dependent on: 1. Type of merchandise 2. Type of store 3. Storage capacity of the store 4. Lead times for supply of goods 5. Rate of sales 6. Relative stock positions across the chain 7. Planned marketing activity 8. Ensuing events like seasonality 9. Beginning, Mid or end of season Basic Concept on Replenishment There could be SEVERAL other factors like commercial contracts, priority on stores etc. that affect the replenishment Fundamentally replenishment is driven by standard replenishment models and variables • Minimum stocks • Maximum stocks • Re-order point • Re-order quantity • Economic order quantity
  • 9. 9 • Lead time for replenishment Effect of Merchandise Type on Replenishment Fashion retail best practice is to: • Categorize entire merchandise into: 1. Regulars - Carried through all seasons 2. Seasonal - Carried through one or two seasons 3. Fashion - Carried only once and only one delivery is expected Apparel fashion has always changed no matter what category of apparel it is, and men’s business wear is no exception. Social forces are believed to influence fashion including Replenishment efforts in terms of Min / Max / EOQ etc. is set ONLY for Regulars and a few Seasonal men’s. Ones spouse, family and culture are some of the forces that change fashion. An example of ones spouse influencing an individual, when he buys apparel, is that she may accompany him and offer suggestions when he purchases items of apparel. A male consumer’s family and culture can influence his purchase decision because of the social interaction he has with them, including whether his dress is acceptable to the group. Identification of the role of apparel as a sign of business success is not a new concept. A review of related literature revealed that self-image/product image congruity was related to an individual’s behavior to a particular item and that apparel products had symbolic meaning. Studies have considered the relationship between the self and apparel and have taken into account the various aspects such as actual self-image and ideal self-image. If the image of an outfit were a positive match with the self-image, including both the actual self and the ideal self, the apparel item would be worn most of the time. The Multi-Fibre Agreement (MFA), that had governed the extent of textile trade between nations since 1962, expired on 1 January, 2005. It is expected that, post-MFA, most tariff
  • 10. 10 distortions would gradually disappear and firms with robust capabilities will gain in the global trade of textile and apparel. The prize is $360 bn market which is expected to grow to about $600 bn by the year 2010 – barely five years after the expiry of MFA. An important question facing Indian firms is whether their capabilities and their diverse supply chain are aligned to benefit from the opening up of global textile market? The history of textiles in India dates back to the use of mordant dyes and printing blocks around 3000 BC. The diversity of fibres found in India, intricate weaving on its state-of-art manual looms and its organic dyes attracted buyers from all over the world for centuries. The British colonization of India and its industrial policies destroyed the innovative eco-system and left it technologically impoverished. Independent India saw the building up of textile capabilities, diversification of its product base, and its emergence, once again, as an important global player. Today, the textile and apparel sector employs 35.0 mn people (and is the 2nd largest employer), generates 1/5th of the total export earnings and contributes 4 per cent to the GDP thereby making it the largest industrial sector of the country. This textile economy is worth US $37 bn and its share of the global market is about 5.90 per cent. The sector aspires to grow its revenue to US $85bn, its export value to US $50bn and employment to 12 million by the year 2010 (Texmin 2005). In the Indian Market so many National as well as International brand in different apparel segment which include:  Corporate Wears  Ethnic Wears  Sports Wears  Casual Wears Players in Apparel market As we have discussed that there are so many players are ruling in the Indian apparels industry out of which some players are national Players & some players are of International standards
  • 11. 11 Every player have their different product portfolio in a particular apparel segment Or there are many players in each apparel segment which we have discussed above i.e. corporate/formal wears, ethnic wears, Sports wears & casual wear segment Players  Corporate Wear’s segment  LOUIS PHILLIP  JOHN PLAYERS  PROVOGUE  PETERENGLAND  PARK AVENUE  DONEAR  MAYUR  Casual Wear’s Segment  SPYKAR
  • 12. 12  PEPE  LEECOOPER  MONTE CARLO  LEVIS  CHARLE OUTLAW  KOUTONS  DUKE  COTTONCOUNTY Ethnic Wear’s Segment
  • 13. 13  TIMBERLAND  LIBAS  FAB INDIA  MILLIONAIRE  HERITAGE  DIWAN SAHEB  AMARSONS  SIYARAMS  VIMAL  CAMBRIDGE Sports Wear’s Segment  REEBOK  NIKE  ADIDAS  FILA  YONEX  HEAD  PUMA
  • 14. 14  POLO 1.3 In Apparel Segment and Merchandise Assortment Planning • Merchandise planning. The most critical decision in any consumer goods value chain is which merchandise to stock. But this decision, although ultimately driven in retail by the buyer’s judgment, must draw on data and analytics that evaluate, based on historic demand) the relative likely revenue and margin resulting from different merchandise portfolios, and test the feasibility of the portfolios against constraints such as store space or labor availability or the firm’s available working capital. • Size optimization. For retailers selling footwear or apparel a statistical understanding of the distribution of sales by size by store is vital in order to meet consumers’ needs and avoid mark downs and stock outs. It’s well known that consumers’ sizes vary from one region or to another, with North Indians for example in general being taller for example than population from the North East region of India but retailers need powerful sparse data analytics to plan for the differences in populations that visit urban and out of town stores. • Space optimization. Retailers provide space in stores in proportion to their expect sales and margin for each merchandise item. But the complex tradeoffs between affinity items, with different margins and attracting different promotional funds simply demand an enterprise analytic approach rather than single user planning tools. • Revenue optimization. For retail, decisions about pricing and mark downs are critical to the achievement of financial goals and while analytics are widely deployed to understand the likely overall impact for example of a promotion on volume and profit the real challenge is to solve simultaneously the merchandise assortment, pricing optimization and space management for each store within the retailers’ supply chain and working capital constraints • Pack optimization. Pack optimization balances the complex cost and velocity trade offs at different points in the supply chain between moving only highly aggregated quantities, for example pallets and shipping highly disaggregated units. For example single SKUs or Stock Keeping Units.
  • 15. 15 Issues such as what merchandise to purchase and in what quantity, are of strategic significance to every retailer, especially for the multi-store retail chains of today. For decisions on these matters, a thorough plan called a merchandise assortment plan has to be adopted. And as clothing is one of the basic needs of every person. So definitely apparel industry has a wide scope. That’s why right now many players are operating in this industry and new players are also coming. So competition is also increasing in this industry day by day. And as retailing environment is emerging now a days and Indian economy is also developing so a wide range of fashionable and trendy clothing is available now and customers have a lot of options in their hand that’s why it is essential for every retailer to position themselves as a different and best option for customers. For every industry, its product range and varieties are the best way to attract and retain customers. That’s why this concept of merchandise and assortment planning emerged and now most of retail organizations focusing on this for being alive in the market. The retailer must make decisions regarding the merchandise offered depending on the sales targets and financial objectives of the store. Merchandise comes in a variety of sizes, colours, makes and models. Retailers should be very careful while deciding on the amount of stock to be maintained in each category, if large stocks are maintained in a particular category, there may not be sufficient resources left for providing a deeper assortment of goods. Hence, the retailer should establish a trade-off between the type of categories or assortment and the inventories being maintained. This is called merchandise assortment planning. An assortment plan depicts what should be carried in a specific category of merchandise. An assortment plan for a merchandise category based on fashion will not identify particular stock keeping units, because fashions vary from year to year and sometimes, from season to season. The more fashion-oriented the merchandise category is, the more necessary it is for the merchandise planner to accommodate changes in fashion, and hence, the lower the level of detail in the assortment plans. The starting point for developing an assortment plan for a given season is the historical data for a particular merchandise category. Apart from the assortment plan for a merchandise category in the previous season, sales, inventory turnover and GMROI (Gross margin return on inventory investment) figures are used to develop an assortment plan for the current season. The merchandise planner then makes the required
  • 16. 16 changes according to his expectations of what products or fashions will be really significant for the coming season. TABLE- 2 Assortment Plan For Boys’ Jeans Style Straight-leg Straight-leg Straight-leg Loose-fit Loose-fit Retail price 999 1399 1799 1299 1599 (in Rs.) Type of Regular Stone Tinsel- Broken twill Over dyed Fabric denim washed Lyera based denim denim Colours Light blue Dark blue Light blue Light blue Blue Black Indigo Black Black Black Black Deep blue Figure: Assortment Plan for Boy’s Jeans at Spykar Source: Data collected from Spykar team. This plan describes general styles, price levels, fabric composition and colours. The process of developing an assortment plan can be quite complex, especially in multi-store chains like Shoppers’ Stop, Pantaloons or Food World. An effective assortment plan requires equal or more effective sales, inventory turnover and GMROI forecasts, to complement the experienced judgment of the merchandise planner. 1.4 RESEARCH PROBLEM/OBJECTIVES OF THE STUDY The study was performed aiming at the following objectives:
  • 17. 17 Primary Objective of the study- • Understanding the merchandise assortment planning concept and process adopting by apparel outlets at Chennai. • To study about customer’s preferences towards it. Associated Objectives- • To know about the factors influencing inventory management decisions of different apparel outlets. • To study competition between apparel industry and strategies followed by them to overcome from it. • Grasping the knowledge about how customers take these decisions taken by retailers and its then their response towards it. • Analyzing that difficult situation of operating business for apparel outlets in quick- changing market conditions, competition and entry of big giants in this segment. And apart from these all stated objectives my first and foremost objective was to acquire the practical knowledge about the Merchandise Assortment Planning like how these retailers do this process for their survival and how they fulfil demands of customers. 1.5 LIMITATIONS OF THE STUDY • Time constraint- The major limitation of this project is the time period for this thesis because it is not possible to look in to each and every aspect of Merchandise Assortment Planning in such a short span of time.
  • 18. 18 • Because all research is related to Chennai city only and here a limited scope is available for these types of studies. • Sample for the study taken is of only 100 consumers. Which can also act as a constraint in the study • People whom data will be collected can be biased on some time and because of lack of awareness and lack of knowledge people can give wrong opinions. • Since the results will draw on the basis of Information which will be provide by the respondents; chance of response error might possible. Disinterest of customers may generate non response while collecting data. 1.6 BENEFITS TO THE STUDY i. To Self- • Knowledge earning.
  • 19. 19 • Gaining practical exposure to Merchandise Assortment Planning. • Gain knowledge about customer preferences. ii. To company- • This report will be beneficial for companies and outlets too because from this report they get to know about their customer’s preferences. • From this report they will get the knowledge about required changes in their strategies and customer base. iii. To customers- • They will get to know about retailer’s strategies and their work process. • From this report they can say their views and their opinions about these retailing strategies, so it is beneficial for them to make all required changes in system. CHAPTER - 2 LITERATURE SURVEY
  • 20. 20 LITERATURE REVIEW According to Torex, a Merchandise Assortment Planning firm, in its online journal says that, merchandise Assortment Planning provides planners with everything they need that helps to analyze efficiently and in a customer-centric manner. From store layout and sizing to packing and allocation, the tools in the application help buyers give their customers the right product in the right place at the right time. Perhaps most importantly Assortment plan helps in giving customers and rich experience with continuous availability of fresh and appealing products.
  • 21. 21 This results in lower inventory costs, lower markdown and increased sales. Retailers need their products to fit their demographics. Stores with different climates need to carry different products; thus Assortment plan must be done in different seasons. While customers expect this, it’s hard for retailers to achieve with basic spreadsheets. Normally merchants plan ranges based only on the size and sales of the store. With Merchandise Planning, buying and merchandising teams maintain consistency, both with their business processes and their execution. All of this adds up to decreased supply chain management costs, lower markdown costs, increased sales and margins and a competitive edge. Merchandise Planning allows buyers to take customer demographics into account when planning ranges. They can create assortment ranges by store as well as by store attributes. They can also plan different delivery dates to allow for seasonal differences. Source: http://www.torex.com/uk/docs/enterprise-solutions/TXDS_MPLENA4_1008_lr.pdf Surinder mishra in his article India third most attractive market for apparel retailers has found that India has emerged the third most attractive market destination for apparel retailers, according to a new study by global management consulting firm AT Kearney. India comes after Brazil and China in the AT Kearney Retail Apparel Index, which looks at ten drivers, including apparel consumption and clothing imports/exports, to rank the top 30 emerging markets for retail apparel investments. "In India, apparel is the second largest retail category, representing 10 percent of the $37 billion retail market. It is expected to grow 12-15 percent per year," said Hemant Kalbag, principal of Consumer Industries & Retail Practice, AT Kearney India. Gabay Gillie (2009):- The purpose of this paper is to empirically test the consumer-centred approach to brand management theorized by Rust, Zeithaml and Lemon in 2004 to assist companies in reducing the depreciation of brand equity. Brand equity was operationalized in the context of conjoint measurement. In total, 5,364 respondents participated in interviews testing drivers of brand equity for six brands each in apparels. It was found that brands did not hold much beyond their name. Companies holding strong brands will need to define
  • 22. 22 product design & Faison in terms of their perceived functionality across consumer cutting edge methodology to test mindset segmentation by combinations of product features as a new basis for brand management was used. In contrast to traditional segments Companies are to build and position brands around customer segments. The study focused on brands in the textile industry requiring the replication to additional industries. Data from the large-scale study revealed that across categories brand value may not hold much beyond the name in the minds of consumers. It was found that mindset segmentation may be a basis for brand management. Messages that focused on product functionality were found to be stronger drivers of preference of one brand over another. Product quality & design instead of brand names emerged as the primary source of value across segments. Kwan C.Y. (2004): This paper explores young Chinese consumers’ decision-making behaviour towards casual wear purchase in Mainland China. Specifically, it offers empirical results on the relationship between consumers’ decision-making styles and clothing choice criteria towards buying casual wear. The Consumer Style Inventory (CSI), developed by Sproles and Kendall (1986) for examining different consumer decision-making styles, was adapted in this study. A questionnaire survey was employed as the tool to collect primary data and the research instrument was administered to 161 University students in Shanghai, Beijing and Guangzhou in the Mainland. The results show that six decision-making styles (recreational and hedonistic consciousness, perfectionism consciousness, confused by over choice, habitual and brand loyalty, price and value consciousness, and brand and fashion consciousness) were found in the Mainland CHAPTER - 3 RESEARCH METHODOLOGY
  • 23. 23 3.0 RESEARCH METHODOLOGY For the perfect thesis one has to know each and every aspect of the concept thoroughly. And then for merchandise assortment planning one has to get update with the latest trends and all factors which are continuously affecting these decisions. So acquiring the data regarding this I gone through by several things like:  Books;  Magazines;  Journals; and  Web site. In order to understand the merchandise assortment planning process, as per the objective stated, the various steps which are to be followed are given below: a) Planning the research design. b) Selecting the research method. c) Selecting the sampling procedure. d) Data collection. e) Evaluating the data. f) Preparing and presenting the research report. 3.1 RESEARCH DESIGN Research design essential because it facilitates the smooth flow of various research processes. In order to get the appropriate results on a clearly defined research topic, the design chosen by the research is exploratory in nature. Exploratory studies: This research is carried out to make the problem suited to more precise investigation or to frame a working hypothesis from an operational prospective. It is not used in case where definite result is desired as in our research case where only impact is to be studied. This research was conducted using both qualitative and quantitative technique.
  • 24. 24 As a part of exploratory studies the secondary data is being collected since this topic is very highlighted in all over India and the sector growth is also very rapid. On the basis of that in Chennai context this research is an attempt to know the perception of Chennai people and the apparel store retailers. 3.2 RESEARCH METHOD After developing an appropriate research plan, it is important for the researcher to select a proper research method. For this research, the research method chosen by the researcher are secondary data and survey methods. a) Primary data: These are those data which are collected afresh and for the first time, and thus happen to be original in character. I would be using the structured questioners. b) Secondary data: These are those which have already been collected by someone else and which have already been passed through the statistical process. I have collected it from the sources like internet, published data etc. Surveys: This is a research technique, which is used to gather information from a sample of respondents by employing a questionnaire. These surveys will be conducted among the: • Apparel store retailers, • Customers, And all the sources I got to know by the proper guidance and immense knowledge and experience of my faculty supervisor. So these are the main sources of my project study. 3.3 SAMPLING PROCEDURE Sampling is generally a part of the research design but is considered separately in the research process. Sampling is a process that uses a small number of items or a small portion of a population to draw conclusion regarding the whole population. For this research the sampling method chosen is simple random sampling and Convenient Sampling.
  • 25. 25 Since in Chennai, only few organized apparel outlets is their so the unorganized retailers also being chosen for interviews and customers are chosen at random. Sample Size: Sample size is around 5 for apparel outlets to study their merchandise assortment planning and 90 for customers to understand their preferences, 5 for Experts interview totally 100. Sampling Unit: Colorplus, Derby, Raymond, Spykar and Adidas Sampling Area: I have Chosen Chennai. 3.4 DATA COLLECTION After preparing a suitable sample, the researcher collects the data from the units in this sample. As stated above that research method which is used in the research comprises of surveys therefore data collected is of primary in nature and partly secondary since secondary data also be taken. 3.5 EVALUATING AND ANALYZING THE DATA. This step includes editing, coding, tabulation and processing of collected data. The Schedules are required to be edited during the field survey for necessary corrections. After the survey was complete they are required to be checked again for completeness, accuracy and uniformity. The next step was coding. Different categories were identified into which responses are classified. Then tabulation was done. Data was sorted into different categories and numbers of cases that belong to those categories were counted.
  • 26. 26 PROCESS FLOW OF THE PROJECT DESIGN OF QUESTIONNAIRE
  • 27. 27 PILOTING BASED ON QUESTIONNAIRE AFTER FEEDBACK REDESIGN THE QUESTIONNAIRE QUALITY CHECK GETTING QUESTIONNAIRE FILLED CORRECTION OF DATA DATA ENTRY DATA CLEANING ANALYSIS FINDINGS, RECOMMENDATIONS & CONCLUSION Digram-1 - P R O C E S S F L O W O F T H E P R O J E C T
  • 28. 28 CHAPTER - 4 DATA ANALYSIS AND INTERPRETATION
  • 29. 29 4.1 Data collected after survey  Researcher went to all those sample units for collecting data and found data from direct interviews and surveys from customers and retailers. Interview with Colorplus Ambattur factory outlet manager: Address of the Factory outlet (C10, Ambattur Estate, Chennai, Tamilnadu-600058) 4.2(a) Mr. Rajeev (Colorplus Merchandise Manager) has addressed on the topic that How Merchandising Assortment planning is carried out in their outlets. ASSORTMENT PLANNING: It involves determining the quantities of each product that will be purchased to fit into the overall merchandise plan. Details of colour, size, brand etc have to be specified.
  • 30. 30 The aim of the range plan is to create a balanced range for each category of products that the retailer chooses to offer. Good range planning should essentially take care of the following:  The number of items/options available to the customer should be sufficient at all times and should be such that it helps the customer make a choice.  The range planning process should ensure that overbuying and under buying is limited.  Sufficient quantities of the product are available, so that all the stores can be serviced and the product should be available at all stores across various locations. Colorplus Model stock plan: It gives the precise items and quantities that need to be purchased for each merchandise line. To arrive at the model stock plan, we needs to identify the attributes that the consumer would consider while buying the product, then decide on the levels under each attribute and finally, allocate the total money available or the units to the respective item categories. The following e.g.: illustrate the steps involved in preparing a model stock plan: Colorplus has allocated Rs.1 lakh for buying of shirts. Assuming that the purchase price of each shirt is Rs.100, he will be able to stock 1000 shirts in the store. Step 1:
  • 31. 31 The first thing that is we need to do is identify which factors affect the customers buying decision and the number of levels under each attribute. Step 2: Identify the number of levels under each attribute. Merchandise manager identifies the following attributes and the levels:  Type of shirt (Dress, Casual, Formal, Sport)  Size (small, medium, large, Extra large)  Sleeve Length (Full Sleeves, Short Sleeves)  Collar Type (Seville, Button down)  Colour (White, Blue, Cream, Grey)  Fabric (Cotton, cotton blend) Step 3: The third step is to be allocating the total units to the respective item categories. Thus the units that are recommended for each item are into direct proportion to the estimated demand patterns. MODEL STOCK PLAN IN COLORPLUS: Source: Colorplus Ambattur factory
  • 32. 32 MERCHANDISE FORECASTING IN COLORPLUS Forecasts are projections of expected retail sales for given periods. Is tomorrow’s expectation based on yesterday’s achievements and today's plan is the foundation of merchandise plans.  TYPES OF FORECASTS include  Overall company projections  Product category projections  Item-by-item projection  Store-by-store projections One way to forecast sales for narrow categories is to project sales on a company basis and by department and then to breakdown figures judgmentally into merchandise classifications. STEPS 1. Reviewing past sales- necessary to establish if there is any pattern or trend in the sales. It gives an indication of sales in the current and future period. 2. Analyzing the changes in the economic conditions- Economic conditions have a direct link to the consumer spending patterns. Economic slowdowns or increase in unemployment all affects business. 3. Analyze the changes in the sales potential- It is necessary to relate the demographic changes in the market to the store and the products to be sold. 4. Analysing the changes in the marketing strategies of the retail organization and the competition- is there a new line of merchandise to be introduced, existing store to be remodelled. All these factors to be taken into consideration. 5. Creating the sales forecast- After taking into consideration the above mentioned points, an estimate of the projected increase in the sales is arrived at.
  • 33. 33 The external factors, internal factors and the seasonal trends must be anticipated and taken into account. External factors (consumer behaviour, competition, economy and demography) Internal factors (addition and deletion of product claim, revised promotion, credit policy, changes in hours of work) and seasonality. After a yearly forecast is derived it should be broken into quarter or monthly. BENEFITS • Reduce the cost of inventory- We can avoid under stock and overstock. • Helps in setting sales target. • Helps in forming suitable advertisement and promotion programs. • It helps in forecasting short term financial requirements and long term financial requirements. • Helps in planning man power requirement. • Helps in planning of a new store or expansion of an existing store. • Helps to reduce the business risk. • Thus it helps to earn maximum profit.
  • 34. 34 4.2(b) Raymond Apparel outlet According to Mr.Devendra G.Mehta, Store Manager of Raymond’s branch Doveton, “as technology advanced, a shift in consumer decision making influenced buying patterns. With the ability to research and purchase any commodity including apparels online, many consumers are no longer content to simply choose from a given selection in a particular store. Thus it becomes important for retailers like us to give the maximum number of variety to the consumers. The first challenge for retailers is to identify consumer preferences as accurately as possible. This can be done by capturing decision-making data from a variety of resources, ranging from in-store product performance to social networking options. We use this information to create differentiated, customer-appropriate, and profitable assortments.” He also said that they use specific software for assortment planning. This software offers the ability produce flexible, customizable solution. Assortment planning technology can sift through multiple options to generate plans based on product hierarchy or product attribute, such as theme, collection, promotions etc... The software Raymond use can also calculate optimal quantities based on space, rate of scale, initial distribution, and other user-defined parameters.
  • 35. 35 4.2(c) Mr.Balajiram Adidas Store manager, Purasawalkam In our company we follow Integrate chain level Merchandise and Location planning processes weekly. It means Merchandise & Store Plans feed the Store groupings and Assortment plans, for complete integration. Building targeted assortments based on customer focused location groups Plan assortments using placeholders and defined items is the key to our success. Assortment plans are initialized from targets and changes are spread down to item by store group to provide an accurate plan with very few entries. System generated item counts and plan based seeding keep assortments focused. Our Allocation Strategy allows users to look at the full assortment in advance of allocating, and after each allocation. Continuous review and updating original assortment plans by location group to reconcile with the latest store performance has enabled our merchandise much more efficient and effective.
  • 36. 36 4.2(d) Mr. Sanjeev Spykar Store Manager, Nungabakkam Our Integration with Merchandise & Store plans means that assortment roll-ups can be compared to higher level plans as changes in the assortment. We generate recommendation of items needed to meet plans or fit constraints. Group locations are usually based on attributes such as volume, space and climate to tailor assortments to different customers. We manage a product workflow and select a size profile that will optimize order constraints with store size need. Methods we follow to execute allocation using a best aligned with item has been an intangible asset for the store. Managing In-season Merchandise & Store projections has made us so distinctive in terms of customer service. Advice from specialist consultants with years of merchandise & assortment experience has developed best practice workflows. Systematic approach of our merchandise assortment is definitely a competitive edge in this competitive trend.
  • 37. 37 4.2(e) Mr.Ajay Derby Store Manager, Nungabakkam. Planning by merchandise delivery is too complicated. Merchandise plans are broken down by seasonality or launch collections, so that new and key item Assortment plans can be driven from higher level plans. Reviewing the assortment by multiple attributes (such as colour and fabrication) is dynamic yet simple for practice. Assortments are tailored to different climatic zones, and distribution timings which are then offset by store group. Reviewing Allocations of co-ordinate & linked items is a standard step before release of the allocations, meaning co- ordinates are correct by store and exception filtering allows for immediate attention or correction. The workflow integrates all modules transparently, so the user never needs to move out of the workflow steps. This has made our presence in better service category and customers as well acknowledged it very strongly.
  • 38. 38 4.3 Questionnaire for Retailers Q.1. Tell me something unique about your outlet and brand and about your vision and mission? BRANDS RETAILERS ANSWERS John players King of apparel giving more offers and excellent promotional strategies makes different among the competitors. Peter England The outlet prides itself on quality, assortment and detail. Adidas Universal Appeal and a very popular logo that signifies better quality. Reebok Lifestyle sports casual appeal, good service signifies the outlet. Spykar Many factors such as fair publicity, affordable prices, suitable range of colours and comfort that signifies the outlet. Venfield We offer a very broad assortment, with continual flow of newness that makes the outlet different. Cotton County Youth spot. Different variety with low price casual wear. Colorplus Good promotional strategies to attract customers and in terms of quality our Brand is the best. Kenith Parker Different variety with low cost signifies the outlet.
  • 39. 39 Derby We give our customers the latest fashions at truly affordable prices. So these all apparel outlet have their own identification in market by their own brands, their own products features, varieties. And these all things give them competitive advantage and customers are also satisfied with them. 2. Which is your target market and what you doing to capture it? Ans. - As given in above question’s answer, these all retailers have their own target markets and their all efforts are focused on capture as high market share as possible. TARGET MARKET VARIOUS BRANDS Formals John Players, Peter England. Casuals Adidas, Reebok, Spykar, Cotton County. All family apparel market Kenith parker, Color plus, Venfield, Derby. Children’s market Gini & Jony, Lilliput. And they are adopting so many strategies for it, like pricing strategies, promotional strategies and most important merchandise assortment planning decisions. Q.3. Before taking decisions about your product varieties and range (Merchandise Assortment Planning), what factors you considered? Ans. - For selecting what and how much merchandise they have to purchase and they have to keep in their organization, they considers mainly-  Financial Objectives  Customer’s preferences and demand  GMROI figures  Retail brand’s image and good will  Seasonal demand and fashion
  • 40. 40 Q.4. Is there any proper strategy you are adopting for these decisions? Ans. - Some stores have their own strategic plans for capturing market and company’s management also helps these store owners in strategic planning. As all brands have their own vision and mission so mainly these apparel store owners also adopting same strategies for them. But as all customers have their own specialties so these retailers also have to change their strategies according to their own localities. As these retailers are getting their own sales plan for every year and for every month from companies. Then they make some modifications in the plan according to the local circumstances. Q.5. Is it important to make a prior planning or strategy for merchandise decisions? And if yes then why? Ans. - Without any planning or strategy, we can do any work but for be assure about the work’s success we should make some planning or strategies. Same is applicable in business context also. And merchandise decision is not a small aspect for any retail organization. Merchandise is the most important part for apparel industry. It shows the image of the company, the vision of company, customer’s satisfaction or dissatisfaction. So for create a good image in customer’s mind and for capturing most of the market share, they have to make a prior planning. Q.6. Are you facing any kind of problems or difficulties for these decisions and planning because I think in a city like Chennai, it is not possible to keep a deep variety and we can’t keep a limited range of variety also because of quickly changing customer’s preferences and competition? Ans. - Yes this thing is also very important for any apparel retailer. Sometimes because of brand’s image and influencing customers they have to keep that merchandise also which have no demand in market but often they prefer only that merchandise which has demand in local market.
  • 41. 41 Q.7. Are all decisions related with your outlet’s merchandise are independently taking by you or is there any interference or support by company’s side also? Ans. - From the above question it is clear that local retailer got support from company side too for their strategies and planning and they make some changes according to the local circumstances for their merchandise assortment planning. Q.8. Do you think your plans are going well according to your expectations? Ans. - Different approaches are followed by the retailers. As, Adidas, Reebok, John Players these are some of the outlets, which consists of high range of products with maximum prices. So in Chennai, customers sometimes prefer and sometimes do not prefer these types of clothing because of its high prices. And others retailers as Cotton County, Derby, have low range products also and people of Chennai like these products much so these retailers enjoy more price than high price showrooms in Chennai.
  • 42. 42 4.4 Questionnaire for Customers TABLE-3 Q.1. From where you prefer to buy apparels- a) Any traditional store (unbranded) or b) A branded retail outlet. Ans. - Mostly people from Chennai prefers branded clothing. 55 people from total 90 customers said this. And others prefer unbranded and traditional store clothing. Customer’s Preferences Percentage Branded 61 Unbranded 39 CHART-3 Inference: From the above statistical information it is clearly visible that people are more conscious about the brand they buy. So, they indulge in spending their valuable money on buying branded apparels rather than shelling money on un-branded apparels. In my intensive research, I have found that 61% of people choose to buy clothes from branded outlets.
  • 43. 43 TABLE-4 Q.2. What factors you are considering before taking any apparel purchasing decision, most- Ans. - As research is being conducted in Chennai so, here most people prefers Quality factor is most important thing for them. And they can compromise with Price but they want fashionable and good looks items. Most affecting factor for purchase No of people Price 24 Quality 43 Variety 7 Looks 5 Fashion & Trends 11 CHART-4 Inference: From the research undertaken by me, I found that the people are more concious towards the quality of the apparels they buy. They also give more importance to the price of the product which may be influenced by the present recessionary condition. Other notable factors that affect the purchasing decisions are Fashions & Trends, Variety and Looks. TABLE-5
  • 44. 44 Q.3. Are you satisfied with the services and varieties of products provided by these apparel outlets? Ans:- Choice of Customers No.of.Customers Highly Satisfied 17 Satisfied 34 Neutral 25 Dissatisfied 9 Highly Dissatisfied 5 CHART-5 Inference: From my research I have found that the consumers are quite satisfied with the purchase. Important thing is that they are getting large categories with low prices because of high competition. So customers are satisfied with all these retailing scenario because it is in favour of them. TABLE-6 Q.4 Which apparel outlet you prefer most for buying clothing? (To college students) a) Spykar
  • 45. 45 b) Ven field c) Adidas d) Reebok e) Kenith Parker f) Color plus g) Derby h) Cotton County i) Or any other organized or unorganized retail outlet Ans.- Favourite outlet(to college students) No. of male Youth Spykar 4 Ven field 11 Adidas 5 Reebok 7 Kenith Parker 6 Color plus 18 Derby 16 Cotton County 14 other organized or unorganized retail outlet 9 CHART-6
  • 46. 46 Inference: From the research I have found Color plus is highly preferred among college going students. They also have options like Derby, Cotton County, but they don’t prefer brands like Adidas, Spykar much. TABLE-7
  • 47. 47 Q.5. Which apparel outlet you prefer most for buying clothing? (To male young professionals) a) John Players b) Peter England c) Derby d) Cotton County e) Color plus f) Or any other organized or unorganized outlet Ans.- Favourite Brands No. of. male Young Professionals John Players 14 Peter England 6 Derby 22 Cotton County 9 Color plus 28 other organized or unorganized outlet 11 CHART-7
  • 48. 48 Inference: From the research I have found Colorplus is highly preferred among young Professionals. They also have options like Derby, Cotton County, but they don’t prefer brands like Cotton County, Peter England much. TABLE-8
  • 49. 49 Q.6. Which apparel outlet you prefer most for buying clothing? (For children apparel purchasing) a) Lilliput b) Gini & Jony c) Or any other organized or unorganized outlet. Ans. Favourite brands(children apparels) No. of. Customers Lilliput 24 Gini & jony 6 Other Organized & Unorganized Retailers 51 CHART-8
  • 50. 50 Inference: From the Research I have found that parents purchase clothing for their children in Organized & Un-organized retail apparels rather than purchasing it from branded outlets. It reveals that they are price conscious but brand name is not preference to them. TABLE-9
  • 51. 51 Q.7. Do you think in organized retail store, a customer have less opportunities for bargain, less number of choices, high prices, less knowledge and so many other negative factors? a) Yes b) No c) We can ignore them. Ans.- CHART-9 Inference: From the Research I have found that people don’t have much opportunity to bargain. Thus, people are compelled to buy the apparel at a price charged by the retailer. I have found that the greater portion of the sample size has no other option other than to buy at a fixed price. TABLE-10
  • 52. 52 Q.8. Then what you think is this new retailing scenario, good for India? As in India, literacy rate is so low, people are not so much aware about new retail concept. So in this time does it has a good future in India or not? a) Yes, definitely b) No, not at all c) Can’t say anything now, let see in future. Ans.- Retailing Scenario No. of Customers Yes, definitely 43 No, not at all 19 Can’t say anything now, let see in future. 28 CHART-10 Inference: From the research I have found that India has a good retailing future mainly due to the size of population and the increased purchasing power. Growing western culture in wearing the apparels is yet another reason for the bright future. TABLE-11
  • 53. 53 Q.9 So do you want to keep your loyalty with your favourite brand or can switch? Customer Loyalty towards No. of customers brands Brand Loyal 51 Any Brand, no matter 22 strictly based on recommendations 17 CHART-11 Inference: From the research I have found that the People are more brand conscious in urban side. It is due to the high income level and people relate a brand to themselves. It was found that 46 people out of 80 people prefer branded items, 19 don’t give importance to brand and the remaining strictly make their purchasing decision based on the recommendations of others. TABLE-12
  • 54. 54 Q.10. If you have to give marks to your favourite brand from out of 10, then how much will you give? Ans. MARKS NUMBER OF CONSUMERS GIVEN MARKS IN THIS CATEGORY 10 7 9 17 8 19 7 15 6 11 5 8 4 6 3 4 2 3 1 0 CHART-12
  • 55. 55 TABLE-13
  • 56. 56 Q.11. List out the Top 5 Brands that you prefer with specific “Top of Mind Recall” for those preferred brands with reason: Brands Reasons 1. ………………………….. …………………………. 2. ………………………….. …………………………. 3. ………………………….. …………………………. 4. ………………………….. …………………………. 5. …………………………... ………………………….. Top Brands & Reasons No. Of. People Colorplus (Esteem look) 36 Derby ( offer price) 27 louisphillipe(attraction) 13 levis (gentle look) 8 Spykar (best fit) 6 CHART-13
  • 57. 57 Inference: From the research I have found that Colorplus holds a strong brand recall which inturn adds to the brand value. Derby comes next followed by louis phillipe, levis and spykar. 4.5 Experts mail interview:
  • 58. 58 Mail interview has been conducted with Experts in apparels and Marketing Professionals working in different organizations to get their feedback. 1. What is your idea on when one should start with the Merchandising assortment planning process? First we have to know the Depth and Breath of our available stock. 2. How do you think that merchandising assortment planning process fits into the rest of the Business? If the assortment process is good enough the conversion of prospects to buyers is easy. 3. Can you share your views on GMROI and how does it impact business? It plays a major role in Retail Business, we can easily identify in which category the business is making more profit, So that we can give preference for that particular Brand or category 4. Can I have some inputs on merchandising assortment planning for lean Sales? We can give some offers to that particular Articles or make it as bundle offer like 1 Plus 1, 2 for 1 like tat. Name of the Expert: P.Balajiram Designation: Adidas Retail Store Manager (Purasawalkam) Contact number: 9840354893
  • 59. 59 1. What is your idea on when one should start with the Merchandising assortment planning process? We put the effort into Merchandise Planning "in order to increase profitability". Profitability is the key driver of most businesses. At the end of the day though, it is the business requirements that dictate where should start. By making sure that our efforts are targeted and attainable, we can be sure that our starting point is a good one. 2. How do you think that merchandising assortment planning process fits into the rest of the Business? Merchandise Planning needs to span the activities between setting long term, high level goals for sales, margin and investment for the business, right down to the allocation of space within an individual store for a defined S.K.U. By using the concept of merchandise planning in our retail outlet conversion of prospects to buyers is easy and this is how it fits into the business. 3. Can you share your views on GMROI and how does it impact business? Gross Margin Return on Investment (G.M.R.O.I.) that can provide invaluable insight into merchandise performance. More preference can be given to the product which is moving and less preference to the product which is not moving so that it can reduce the space outlet and stock holding pattern. 4. Can I have some inputs on merchandising assortment planning for lean Sales? Buy 1 get 1 free, purchase 4 shirts and pay the highest amount among the 4 shirts etc and a good customer service that satisfy customers. Name of the Expert: Mr.Srinivasan Designation: General Manager of Hi-style
  • 60. 60 1. What is your idea on when one should start with the Merchandising assortment planning process? To increase the profit margin we can startup with Merchandise assortment planning because that will increase the sales and avoid pitfalls. 2. How do you think that merchandising assortment planning process fits into the rest of the Business? To control the business critical success factor will be defined and achievement against these will be measured using Key Performance Indicators. Setting of key performance indicators will lead targets for buying-in margin, stock-holding levels and mark-down percentages. The implementation and monitoring of a plan to meet these success factors will hopefully result in the eventual purchase by a customer of a specific item in a store. 3. Can you share your views on GMROI and how does it impact business? In simple terms it tells us how many times over a year we get our stock investment returned with a given margin. GMROI is used as an important application in which it gives a greater potential to a product which sells more than other product in specific branch, From this we can make better informed decisions as to which should have more space allocated to them, be better supported by stock or have ranges expanded or contracted. 4. Can I have some inputs on merchandising assortment planning for lean Sales? To attract customers more discounts and offers are given. Today branded outlets put more offers and compliments to attract customers. Name of the Expert: Mr.Javeed Designation: Store manager of Cotton County Contact number: 9941344980
  • 61. 61 1. What is your idea on when one should start with the Merchandising assortment planning process? There are two major areas of profit leakage in retail. Firstly lost sales resulting from lack of stock and secondly forced margin reductions due to excessive stock. So in order to sustain and to overcome from this leakage is good way to start with Merchandise Assortment planning. 2. How do you think that merchandising assortment planning process fits into the rest of the Business? To increase the sales and profit margin Merchandise assortment planning is useful. On the other side it gives customer satisfaction. 3. Can you share your views on GMROI and how does it impact business? GMROI as a potential metric that we might consider in our assortment planning. Gross margin % gives us a measure of relative profitability without taking into account the costs of stockholding investment. Weeks cover tells us how effectively we turned our stock without informing us about relative profitability. This enables us to forecast the business at which it credits more profit and concentrate on it. 4. Can I have some inputs on merchandising assortment planning for lean Sales? Offers will be provided when there is huge stock E.g. Aadi sale. End-of-season “must- ship” logic to push excess inventory. Name of the Expert: Dinesh G. Mehta Designation: Manager of Raymond shop in Doveton.
  • 62. 62 Contact number: 9283161144 1. What is your idea on when one should start with the Merchandising assortment planning process? Once the outlets are established and the time we come to know about our customer exact needs and the customer base and their capabilities of the customer in that locality we could go in for the merchandising assortment planning. 2. How do you think that merchandising assortment planning process fits into the rest of the Business? The MAPP fits almost the same way for the rest of the business except for we do more for merchandising the Brand name rather than to the assortment in the capital business. 3. Can you share your views on GMROI and how does it impact business? The impact is it enhances the growth of the business as this makes easy and comfortable for the customers to choose their preferences according to their needs with spending less amount of time. Definitely the ROI is seen growing and achieved faster. 4. Can I have some inputs on merchandising assortment planning for lean Sales? For lean sales, we can do, compliment sales, more discount, make customer feel the value for the money paid, good customer service, increased guarantee and couple it with some good sales. Name of the Expert: J.Jambukeswaran
  • 63. 63 Designation: Carl Zeiss India Chennai Branch Service Manager - South Contact number: 9340043773 CHAPTER - 5 FINDINGS
  • 64. 64 FINDINGS Business is like a coin that termed as a coin which has two sides, considering one side as bane and other side as boon. Some factors which are continuously affecting every business, they are Growing economy, globalization, retail trends, increasing income levels, healthy life-style, technical advancement; So we can say this is a golden period for business world. But on the other side because of increasing competition, inflation, high customization; these business persons are finding some new and effective ways to overcome these problems. And in apparel segment, it is world’s biggest business industry. Clothing is one of the basic needs of a common person. So in every circumstance, this is a sector which is definitely going to make profit. And it will increase more and make a brand leader of this segment only by adopting some latest strategies i.e. Merchandise Assortment planning. As researcher have taken interviews from some executives from various apparel outlets, from that collected data and analyzed that- About retailers-  Retailers are very much aware about this and they are making their all strategies according to it.  There are so many factors which came in front of taking these decisions i.e. price, quality, fashion/trends, looks, brand name. And after considering these all, retailers choose the best product mix for their outlets.  And it is not a story of only big giants, even small players and traditional shopkeepers also now adopting these strategies to attract and retain customers.  Now a customer can find all those features and product which he thinks, in a single store only because of these planning. For example, in a single outlet a range of various styles in various sizes in various colours product is available. (apparel segment)
  • 65. 65  Before these decisions a retailer considers so many other factors too like sales targets, financial objectives etc.  In merchandise assortment planning, for these retail outlets, apparel companies are also providing support to them so that they can make profits for themselves and for company too.  Basically apparel industry is based on latest fashions and trends. And fashion remains for a little time of period. So it is too difficult to keep a wide number of varieties in their stores for retailers. As fashion become outdated their stock of inventory will become waste. So they are very much considering merchandise assortment planning and other benefit providing by apparel companies to them. If it happened that fashion will become outdated then companies will also provide full support to these outlets and they share loss also with them. Customer’s preferences about it-  The main thing which researcher found about customer’s perception about it that they said, “When we wear any branded apparel then automatically they feel a sense of satisfaction, a sense of grace in them.” Said by Sathish and Ajay.  And Mr. Krishnan said they prefer mainly the discounts or any offers in outlets. According to him because now in market all companies are providing a good and similar quality, so why not we go for a discount store.  A tea-staler in front of Peter England outlet, Mr. Arokia swamy said he also wears Peter England shirts and the store owner also provides him a high rebate for it and in this he feel more confident.  Mr. Deepak said he prefer the goodwill/ brand name for purchasing any new apparel. As he said he prefers Peter England and John Players more than Kenith Parker or Cotton County.  Miss Anitha said when John Players launched their new segment, Miss Players, from that time she prefers Miss Player’s outlet for a new purchase.  And according to Mr. Shah, because of Hrithik Roshan, as a brand ambassador of John Players, he also prefers John Players.
  • 66. 66 Different customers have their own demands and needs so their preferences also varied from each other.  But mostly youth/ college going Students of Chennai prefer Colorplus and Spykar Outlet for apparel purchase.  While young business persons and professionals prefer Colorplus, Derby and John Players for apparel purchase.  And in children’s segment, a surprising result came after research that is mostly parents prefer traditional outlets for children’s apparel purchasing. Because in these outlets, they will found more varieties and apparel categories then a branded outlet and they can make here a high bargaining also.  But if we see overall result, so today even so many branded outlets are here in market then also mostly people prefers traditional outlets for purchasing apparels. One thing is that also these branded clothing is available in these unbranded outlets too and on these unbranded outlets, customer found these clothing at much cheaper rate then their own brand’s outlet.(Mostly people think this) So researcher analyzed so many important and some funny aspects also but these all analysis shows the booming stages of retailing in India. And for these retailers so many things are important for making profits as brand name, brand ambassador, quality, price, displays/advertising, discounts and categories of merchandise. And researcher found that Merchandise assortment is a vital need for them. After adopting these strategies now they are feeling the change in terms of customer base, in terms of brand equity, in terms of profits and in terms of happiness.
  • 67. 67 CHAPTER - 6 SUGGESTIONS
  • 68. 68 SUGGESTIONS During the period of my extensive research I have come to know that there are few weaknesses in the Apparel outlet. Customers have several problems regarding some products and service offered by the retailers, which the apparel outlets should overcome. The following strategies will help the retailers to retain their existing customers.  Range of clothes differs from one outlet to another outlet of the same brand and so perception of customer gives bad credit to the brand. So the company should take decision to make it available in all the branches to satisfy the customers.  In Chennai youth is aware about the National & International brands but due to tough competition with Unorganized Apparel outlet so companies should expand their branch and distribution networks.  To be more precise Apparel outlets can use Software for Merchandising Assortment planning because that will increase the Sale and reduce time when it is done automatically.  The parking space should be extended because customers feel discomfort when they park their vehicle outside. ("When these apparel shops can have more than six floors to showcase their products, why cannot they provide just one floor for parking?" wonders a shopper.)- addressed in Hindu Business line internet Edition. Source: - http://www.thehindubusinessline.com/2005/11/01/stories/2005110102050800.htm
  • 69. 69  The number of trial rooms available at Apparel outlets is very less as compared to the number of people coming. This usually results in long queues and waiting by customers CHAPTER - 7 RECOMMENDATIONS
  • 70. 70 RECOMMENDATIONS  Consumer of the Indian market are very price conscious ,due to very high prices of some international brand consumer is not able to afford that particular brands ,so companies should make some of the stuffs of apparels available at the affordable price as per the geographical regions.  Most of the youth make the decision of buying the apparels when they aw that celebrity is using & wearing that particular brands like john player brand is promoted by Hritik Roshan. So companies should promote their brands by endorsing the Celebrity whose personality is matching with the brands.  It is also observed that in the changing retailing environment, understanding the psyche of customer is critical to success in retailing. Aggregate level picture may be misleading, as it averages the beats and the valleys. Hence, individual understanding is desirable.  Indian consumers are still family-driven entities. Shopping, entertainment and eating out are family events. Since these decisions are normally group decisions, hence a marketer has to address family sensibilities more rigorously to woo Indian customers.  Indian customers have become more sensitive to quality, customer service and status. She/he is ready to pay, sometimes; astronomical sums provided their needs are satisfied. They are basically looking for an experience, which is more of cognitive than physical.  To increase more footfalls more promotional activities must be carried out. For this Apparel outlets can either offer more discounts or increase their advertisements. Increase in the number of footfalls will lead to increase in sales.
  • 71. 71  Allowing more space between the entrance of a store and a product gives it more time in the shopper’s eye as he or she approaches it. It builds a little visual anticipation. CHAPTER - 8 CONCLUSION
  • 72. 72 CONCLUSION From all findings collected I have reached to the conclusion that in this quick-moving environment, now retailers also have realized that they need to work strategically for their survival. That’s why now they are taking merchandise assortment decisions seriously and spending their time and efforts for it. And it is vital for them to consider it also before doing any business. It is not only for apparel industry but now for every business segment it is necessary. Today’s scenario has totally changed from past. Now market is totally customer-centric and highly competitive. So if any company wants to alive here and want a long-term business then they have to fulfil all demands of customers and follow all required patterns either it is a big giant or a small business unit. While there are obstacles, there are clear opportunities in modern retailing in India. In such a scenario, preparedness of Indian retailers in terms of having appropriate formats, scalable processes, appropriate technology and relevant organization capability would be crucial to success. Now in Chennai all branded items available only because of emerging market situations and customer-friendly market.
  • 73. 73 And if we talk about favourite brand of Chennai people then on the base of research findings, we found that- ∗ Spykar is most famous between college/school going youths. ∗ Colorplus is most favourite brand for Professionals. ∗ And in children’s segment, parents prefer traditional outlets mostly. And all other brands are still there in market and fighting each other for attracting more and more customer market towards them. And this high retailing scenario affects traditional unorganized outlets business too and now they are also giving a high competition to these organized retailers. So for keep their presence with a great margin of profits also, all organized and unorganized retailers are facing a high cut-throat competition with each other. But ultimately these all things are going in favour of customers and customer will be benefited at last. HAPPY RETAILING
  • 74. 74 CHAPTER - 9 BIBLIOGRAPHY
  • 75. 75 BIBLIOGRAPHY List of books and articles- I. Retail Management, IIPM Library, II. Retail Management Review, IIPM Library III. Cases of Retail Management, Prentice-Hall Publications. IV. Retailing Environment in India, Tata-McGraw Hill Publications. List of websites articles- • www.google.com • www.wikipedia.com • www.johnplayers.com • www.koutonsindia.org • www.cottoncounty,com • www.customerresearch.com • www.researchindia.org • www.adidas.com • www.priknit.com • www.rbk.com • www.lilliput.com • www.oxemburg.com • www.montecarlo.com • www.answers.com • www.managementjuice.com
  • 76. 76 • www.businesscases.com • www.prenticehall.com • http://www.indiainbusiness.nic.in/ CHAPTER-10 APPENDICES
  • 77. 77 Appendix-1 Questionnaire for Retailers- As this project study is totally based on detailed research on topic Merchandise Assortment Planning so here researcher has used open ended and free response questions in questionnaire, those areas- 1. Tell me something about your outlet and brand’s you deal? 2. What are your target markets and what do you do to address these markets? 3. Before taking decisions about your product varieties and range (Merchandise Assortment Planning), what factors do you consider? 4. What are the important strategies you are adopt? 5. Is it important to make a prior planning or strategy for merchandise decisions? And if yes then why? 6. Are you facing any kind of problems or difficulties for these decisions and planning because I think in a city like Chennai, it is not possible to stock extensive variety and neither you can be content with a limited range .How is this situation addressed? 7. Are all decisions related with your outlet’s merchandise are independently taken by you or is there any support by brand owners as well? 8. How often your plans change? 9. Do you like to give any other specific inputs or details, that aren’t covered in this questionnaire/interaction? If so, please do specify.
  • 78. 78 Appendix-2 Questionnaire for Customers- 1. From where you prefer to buy your apparels- a) Any traditional store (unbranded) or b) A branded retail outlet. 2. What factors do you consider before making a purchase decision, most- Please go by priority: a) Price, b) Variety c) Quality d) Fashion/trend 3. Are you satisfied with the services and varieties of products provided by these apparel outlets?
  • 79. 79 a) Highly Satisfied b) Satisfied c) Neutral d) Dissatisfied e) Highly dissatisfied 4. Which apparel outlet you prefer most for buying clothing? (To college/school going youths.)  Spykar  Ven field  Adidas  Reebok  Kenith Parker  Colour Plus  Derby  Cotton County  Or any other organized or unorganized retail outlet 5. Which apparel outlet you prefer most for buying clothing? (To young professionals.) o John Players
  • 80. 80 o Peter England o Derby o Cotton County o Color plus o Any other organized or unorganized outlet 6. Which apparel outlet you prefer most for buying clothing? (For children apparel purchasing) o Lilliput o Gini & Jony o Any other organized or unorganized outlet 7. Do you think in organized retail store, a customer have less opportunities for bargain, less number of choices, high prices, less knowledge and what other factors influence a customer preference? ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… …………………………. 8. Then what you think is this new retailing scenario good for India? As in India, literacy rate is so low, people are not so much aware about new retail concept. So in this time is it has a good future in India or not?
  • 81. 81 o Yes, definitely o No, not at all o Can’t say anything now, let see in future. 9. So do you want to keep your loyalty with your favourite brand or can switch? o Brand loyal, o Nothing like loyalty, just like this brand (on the base of past sales and observation) but can switch if found any other good option, o Any brand no matter; just it should satisfy their needs. 10. List out the Top 5 Brands that you prefer with specific “Top of Mind Recall” for those preferred brands with reason: Brands Reasons 1. ………………………….. …………………………. 2. ………………………….. …………………………. 3. ………………………….. …………………………. 4. ………………………….. …………………………. 5. …………………………... ………………………….. 11. If you have to give marks to your favourite brand from out of 10, then how much will you give?
  • 82. 82 Appendix-3 Assortment Plan For Boys’ Jeans Style Straight-leg Straight-leg Straight-leg Loose-fit Loose-fit Retail price 999 1399 1799 1299 1599 (in Rs.) Type of Regular Stone Tinsel- Broken twill Over dyed Fabric denim washed Lyera based denim denim Colours Light blue Dark blue Light blue Light blue Blue Black Indigo Black Black Black Black Deep blue Figure: Assortment Plan for Boy’s Jeans at Spykar Source: Data collected from Spykar team.
  • 83. 83 Thesis Response sheet RESPONSE SHEET-1 1) Name: V.Arun Kumar 2) ID Number: FW79/01109/MKT 3) The Topic of the study: “Merchandise Assortment for Apparel Outlets and Retail Counters in Chennai to Cater to Customer Preferences”. 4) Questionnaire made to collect Primary Data (in the first or the second response sheet): Collected input to frame the questionnaire. 5) Date when the Guide was consulted: 06.06.09 6) The outcome of the discussion: • Framing questionnaire • Analysis 7) The Progress of the Thesis: 1st discussion of thesis, started the thesis based on the input given by External guide Mr. Muralidharan S.S
  • 84. 84 RESPONSE SHEET-2 1) Name: V.Arun Kumar 2) ID Number: FW79/01109/MKT 3) The Topic of the study: “Merchandise Assortment for Apparel Outlets and Retail Counters in Chennai to Cater to Customer Preferences”. 4) Questionnaire made to collect Primary Data (in the first or the second response sheet): Please attach the same 5) Date when the Guide was consulted: 15.06.09 6) The outcome of the discussion: Literature review and data analysis
  • 85. 85 7) The Progress of the Thesis: 2ndst discussion of thesis, a valuable suggestions and corrections for literature review and data analysis RESPONSE SHEET-3 1) Name: V.Arun Kumar 2) ID Number: FW79/01109/MKT 3) The Topic of the study: “Merchandise Assortment for Apparel Outlets and Retail Counters in Chennai to Cater to Customer Preferences”. 4) Questionnaire made to collect Primary Data (in the first or the second response sheet): Framed the Questionnaires and External guide has approved it. 5) Date when the Guide was consulted: 24.06.09
  • 86. 86 6) The outcome of the discussion: • Analysis • Gaining knowledge to develop Questionnaire 7) The Progress of the Thesis: 3rddiscussion of thesis, taking survey. RESPONSE SHEET-4 1) Name: V.Arun Kumar 2) ID Number: FW79/01109/MKT 3) The Topic of the study: “Merchandise Assortment for Apparel Outlets and Retail Counters in Chennai to Cater to Customer Preferences”. 4) Questionnaire made to collect Primary Data (in the first or the second response sheet): • Tips to conduct interview. • Tips to collect secondary data 5) Date when the Guide was consulted: 30.06.09 6) The outcome of the discussion: • Analysis • Getting appointments with managers of apparel brands and making note of their feedback.
  • 87. 87 7) The Progress of the Thesis: 4th discussion of thesis, conducting Interviews. RESPONSE SHEET-5 1) Name: V.Arun Kumar 2) ID Number: FW79/01109/MKT 3) The Topic of the study: “Merchandise Assortment for Apparel Outlets and Retail Counters in Chennai to Cater to Customer Preferences”. 4) Questionnaire made to collect Primary Data (in the first or the second response sheet): Please attach the same 5) Date when the Guide was consulted: 25.08.09 6) The outcome of the discussion: Findings and Recommendations 7) The Progress of the Thesis: Reviewed by the faculty, added value to the findings & recommendation and asked to proceed further. RESPONSE SHEET-6 1) Name: V.Arun Kumar 2) ID Number: FW79/01109/MKT
  • 88. 88 3) The Topic of the study: “Merchandise Assortment for Apparel Outlets and Retail Counters in Chennai to Cater to Customer Preferences”. 4) Questionnaire made to collect Primary Data (in the first or the second response sheet): Please attach the same 5) Date when the Guide was consulted: 30.06.09 6) The outcome of the discussion: Final report ready 7) The Progress of the Thesis: Final report checked by the faculty.

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