CHAPTER 13 - BUYING MERCHANDISE Introduction After creating an assortment plan for the category, forecasting sales, and developing a plan outlining the flow of merchandise, the next step in the merchandise management process is to buy the merchandise. The first strategic decision that needs to be made is the type of merchandise to buy for the category: well-known national brands or private-label brands that are exclusively available from the retailer. Although buyers meet and negotiate with vendors and manufacturers each season concerning new merchandise, there is a trend toward developing long-term strategic relationships with key suppliers. I. Brand Alternatives Retailers and their buyers face a strategic decision about the mix of national and private-label brands sold exclusively by the retai A. TYPES OF BRANDS National Brands National brands , also known as manufacturer brands , are products designed, produced, and marketed by a vendor and sold to many different retailers. The vendor is responsible for developing the merchandise, producing it with consistent quality, and undertaking an advertising program to establish an appealing image for the brand. Some vendors use an umbrella or family brand associated with their company and a subbrand associated with the product. In other cases, vendors use individual brand names for different product categories and don't associate the brands with their companies. Some retailers their buying activities around national brands that cut across merchandise categories.
Despite some inefficiencies, managing a merchandise by vendor, rather than by category, gives the retailer more clout in dealing with the vendor. Private-Label Brands Private-label brands (also called store brands, house brands or own brand s ) are products developed by retailers. In many cases, retailers develop the design and specifications for their private-label products and then contract with manufacturers to produce those product. In other cases, national brand vendors work with a retailer to develop a special version of its standard merchandise offering to be sold exclusively by the retailer. In these cases, the manufacturer is responsible for the design and specification as well as the production of the merchandise. Categories of Private Lable Brands: Premium branding offers the consumer a private label that is comparable to, or even superior to, a manufacturer's brand quality, sometimes with modest price savings, such as Wal-Mart's Sam's Choice brand. Generic brands target a price-sensitive segment by offering a no-frills product at a discount price. Copycat brands imitate the manufacturer's brand in appearance and packaging, generally are perceived as
lower quality, and are offered at lower prices.
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