A Merchandise Management Analysis of Spar Supermarkets in Stellenbosch, South Africa

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1TABLE OF CONTENTS

1INTRODUCTION4
2THEORETICAL DISCUSSION4
2.1INVENTORY5
2.2PRICING AND ASSORTMENT5
2.3 WHY PLACE SO MUCH EMPHASIS ON MERCHANDISE MANAGEMENT6 2.3.1Interception Rate7
2.3.2Shopper Syndromes7
2.3.3Children as Shoppers7
3METHOD APPLIED8
3.1Direct (Reactive) Observation9
3.1.1Continuous Monitoring:9
3.1.2Time Allocation:9
3.2Unobtrusive Observation10
3.2.1Behaviour Trace studies:10
3.2.2Disguised Field Observations:10
3.3Conclusion10
4OBSERVATIONS11
4.1Private Labels11
4.2Space11
4.3Placement11
5OBSERVATIONS12
6INTERPRETATION OF FINDINGS14
7RECOMMENDATIONS18
8CONCLUSION19
9Bibliography19

2INTRODUCTION

Merchandise management is one of the most important aspects retailing; to attract shoppers, satisfy consumer demand and add value to customers. Through this we assume that the main focus of merchandise management for a retailer is to attract consumers by catering for their needs and wants. These needs and wants can be determined through demographical segmentation of the area around the retailer, focusing on an area of two kilometers around the retailer.

An underlying assumption for the project is then made which will be proved or disproved through the careful observation of two different retailers. The assumption is as follows:

The merchandise management of a retail store is directly influenced by the demographics of the area around the retail store, especially that area within two kilometers of the store.

Two retailers in different of the same company will be used in order to emphasis that the differences found within the retail stores stem from the demographics of the immediate area around the store. Observation research will be used to observe the management of inventory within the two retailers so that bias is limited to the observer and not influenced by consumers that are shopping within the store. This however has a disadvantage in that the findings cannot be generalized to all retailers.

The observations will be tallied in a table in order to easily determine the differences and through the interpretation of this information we will be able to determine the cause of the specific merchandise decisions and if it relates to the underlying assumption.

From the interpretation and the theory that has been acquired, recommendations about inventory management will be suggested in order to improve the amount of consumers that enter and shop at the retailer. Finally, a conclusion about whether the underlying assumption is supported by the evidence or in other words whether it is correct or not, will be made.

3THEORETICAL DISCUSSION

Managing merchandise In SUPERSPAR is a very particular exercise. There are many aspects of the merchandise and the store layout in order to maximize its efficiency as well as its sales with regard to the market that surrounds it. The grocery shopping experience is characterized by (1) multiple buying goals that must be achieved through the processing of a lot of in-store information such as products, brands, and point-of-purchase or POP information, and (2) repetition at regular time intervals (Whan Park, Iyer & Smith, 1989). This means that purchasing intentions and outcomes often differ because of a variety of factors relating to a customers situation or perhaps a group or segment of consumers’ situation.

There are two factors influencing the purchasing of goods by consumers, these are time pressure and the knowledge of the store environment. These two factors are positively related to each other in that the consumers have a good knowledge of a retail store then they can usually reduce the time it takes to purchase what they need. Thus the ease of finding a product has some influence on the effects of failing to make an intended purchase (Whan Park, Iyer & Smith, 1989). This indicates that the retail store needs to have a generic format so that consumers who are under...
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