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Merchandising is the methods, practices, and operations used to promote and sustain certain categories of commercial activity.

Promotional merchandising

In retail commerce, visual display merchandising means maximizing merchandise sales using product design, selection, packaging, pricing, and display that stimulates consumers to spend more. This includes disciplines in pricing and discounting, physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time.

This annual cycle of merchandising differs between countries and even within them, particularly relating to cultural customs like holidays, and seasonal issues like climate and local sporting and recreation.

In the United Statesmarker for example, the basic retail cycle begins in early January with merchandise for Valentine's Day, which is not until mid-February. Following this, Easter is the major holiday, while springtime clothing and garden-related merchandise is already arriving at stores, often as early as mid-winter. Mothers Day and Fathers Day are next, with graduation gifts (typically small consumer electronics like digital cameras) often being marketed as "dads and grads" in June (though most semesters end in May). Summer merchandise is next, including patriotic-themed products with the American flag, out by Memorial Day in preparation for Independence Day (with Flag Day in between).

By July, back-to-school is on the shelves and autumn merchandise is already arriving, and at some arts and crafts stores, Christmas decorations. By September, the summer merchandise is on final closeout and overstock of school supplies is marked-down some as well, and Halloween (and often even more of the Christmas) merchandise is appearing. As the Halloween decorations and costumes dwindle in October, Christmas is already being pushed on consumers, and by the day afterward retailers are going full-force with advertising, although the "official" season does not start until the day after Thanksgiving. Christmas clearance sales now begin even before Christmas at most retailers, and continue on to as little as New Year's Day or as long as February.

Merchandising also varies within retail chains, where stores in places like Denvermarker, Minneapolismarker, or Buffalomarker might carry snowblowers, while stores in Floridamarker and southern California might instead carry beach clothing and barbecue grills all year. Coastal-area stores might carry water skiing equipment, while ones near mountain ranges would likely have snow skiing and snowboarding gear if there are ski areas nearby.

Trading industry

In Eastern Europe, particularly in Russia, the term “merchandising” is commonly used within the trading industry and denotes all marketing and sales stimulation activities around PoS (point of sale): design, creation, promotion, care and training of the sales staff. Basically a merchandiser is someone who is continuously involved in business promotion by buying and selling of goods.

Retail supply chain

In the supply chain, merchandising is the practice of making products in retail outlets available to consumers, primarily by stocking shelves and displays. While this used to be done exclusively by the stores' employees, many retailers have found substantial savings in requiring it to be done by the manufacturer, vendor, or wholesaler that provides the products to the retail store. In the United Kingdommarker there are a number of organizations that supply merchandising services to support retail outlets with general stock replenishment and merchandising support in new stores. By doing this, retail stores have been able to substantially reduce the number of employees needed to run the store.

While stocking shelves and building displays is often done when the product is delivered, it is increasingly a separate activity from delivering the product. In grocery stores, for example, almost all products delivered directly to the store from a manufacturer or wholesaler will be stocked by the manufacturer's/wholesaler's employee who is a full time merchandiser. Product categories where this is common are Beverage (all types, alcoholic and non-alcoholic), packaged baked goods (bread and pastries), magazines and books, and health and beauty products.For major food manufacturers in the beverage and baked goods industries, their merchandisers are often the single largest employee group within the company. For nationwide branded goods manufacturers such as The Coca-Cola Company and PepsiCo, their respective merchandiser work forces number in the thousands.

Licensing

In marketing, one of the definitions of merchandising is the practice in which the brand or image from one product or service is used to sell another. Trademarked brand names, logos, or character images are licensed to manufacturers of products such as toys or clothing, which then make items in or emblazoned with the image of the license, hoping they'll sell better than the same item with no such image. For the owners of the intellectual property in question, merchandising is a very popular source of revenue, due to the low cost of letting a third party manufacture the merchandise, while the IP owners simply sit back and collect the merchandising fees.

Children

Merchandising for children is most prominently seen in connection with films and games, usually those in current release and with television shows oriented towards children.

Merchandising, especially in connection with child-oriented films and TV shows, often consists of toys made in the likeness of the show's characters (action figures) or items which they use. However, sometimes it can be the other way around, with the show written to include the toys, as advertising for the merchandise. The first major example of this was the TV show "He-man and the Masters of the Universe," in the early 1980s, but this practice has been common in children's broadcasting ever since.

Sometimes merchandising from a television show can grow far beyond the original show, even lasting decades after the show has largely disappeared from popularity. In other cases, large amounts of merchandise can be generated from a pitifully small amount of source material (Mashimaro).

Adults

The most common adult-oriented merchandising is that related to professional sports teams (and their players).

A smaller niche in merchandising is the marketing of more adult-oriented products in connection with similarly adult-oriented films and TV shows. This is common especially with the science fiction and horror genres. (Examples: Star Trek, McFarlane Toys) Occasionally shows which were intended more for children find a following among adults, and you can see a bit of a crossover, with products from that show oriented towards both adults and children. (Gundam model kits)

Sometimes a brand of non-media products can achieve enough recognition and respect that simply putting its name or images on a completely unrelated item can sell that item. (An example would be Harley-Davidson branded clothing.)

Prop replicas

Yet another path official merchandising follows sometimes is the one so-called prop replica market. Mainly focused on fan-made articles, prop replicas are becoming more and more famous as users tend to collect those pieces of movie memorabilia that med/big companies do not mass-produce, reaching even higher levels of quality than certain 'licensed' replicas.

See also



References

  1. ABC News: Coffins bearing baseball team logos. (accessed 2007-01-06)



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