Professional Documents
Culture Documents
By
Navneet Juneja
7NBGN018
By
Navneet Juneja
7NBGN018
Page No.
1. Declaration 5
2. Certificate 6
3. Acknowledgement 7
4. Abstract 8
5. Introduction
i. Retailing Overview 10-15
ii. In Apparel Segment and Merchandise Assortment 16-17
Planning
iii. Objectives 18
iv. Limitations 19
v. Benefits to. 20
6. i. Research Design/Methodology 22-24
ii. Process Flow of the Project 25
7. Review of Literature 27-28
8. Empirical Analysis 30-32
9. Findings and Suggestions 34-48
10 Conclusion 50-51
.
11. Appendices
i. Questionnaire for retailers 53
ii. Questionnaire for customers 54-56
iii. Assortment plan example of Spykar 57
iv. Ladies’ Wear 58-59
v. Men’s Wear 60-61
12 References 63
.
13 Glossary 65-67
.
The empirical information of this report is based on my own research and observation.
Any part of this project has not been reported or copied from any report of any university
and others.
CERTIFICATE
ACKNOWLEDGEMENT
It has been a great challenge but a plenty of learning and opportunities to gain huge
knowledge on the way preparing this management thesis. I would not succeed without
Mr. Nilesh Arora, my amazing faculty supervisor, who seemed to be with me always;
and prepared to give me feedback and guidelines whenever I needed it. Thank You Sir!
I also would like to thank all my friends, my colleagues and all those persons whom I met
in this time period for all feedback and help which they provided to me. And of course to
all those executives from various apparel outlets whom I interviewed for all their help
and support. Thank You all!
I have learned a lot during this time period of preparing this thesis and I hope you will
find my working as interesting and knowledge earning as I have and that this report is
presenting to all. And it will be useful for others wanting to learn about apparel industry
and retailers’ policies and strategies about merchandise assortment planning.
NAVNEET JUNEJA
(7NBGN018)
ABSTRACT
The variety and assortment of merchandise offered by a store play a major role in
attracting customers. Merchandise comes in a variety of sizes, colors, makes and models.
So any retailer, big or small, take many decisions regarding what to purchase and what to
made the goods available to customers. This is called systematic merchandise planning.
So basically merchandise decisions are related to what type of product they are going to
offer and assortment planning is related to the varieties of product and goods offered by
them in their outlets.
Because of high cut-throat competition, when all market players are fighting with each-
other for attracting and retaining customers. But today customers are also very smart and
they know the value of their money; and a lot of choices are available in the market for
them. Especially in apparel industry, a lot of brands and a wide range of fashion are
available so it’s too difficult for customers to taking the purchase decision. So it’s
necessary for every retailer to provide the best and biggest possible range of product to
customers. And researcher studied these all in preparing this thesis and found that these
decisions and planning are continuously adopting by every big and small retailer; because
it is the demand of current time.
i. Retailing Overview
ii. In Apparel Segment and Merchandise
Assortment Planning
iii. Objectives
iv. Limitations
v. Benefits to.
Retailing Overview-
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 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.
Global retail sales are estimated to cross US $ 12 trillion in 2007, reflecting the growth in
the world economy, global retail sales grew strongly in the last five years (2001-06) at an
average nominal growth of about 8 per cent per annum in dollar terms. This is in contrast
to near stagnant global retail sales during the previous five years, 1996-01. Grocery
dominates retail sales with a share of approximately 40 per cent which varies from about
30 per cent in rich Japan to an average of 60 per cent in poor Africa. Retail sales through
modern formats have been rising faster than total retail sales; the share of modern retail
has risen from about 45 per cent in 1996 to over 52 per cent in 2006.
The growth of the retail trade in India is associated with the growth in the Indian
economy. Gross domestic product (GDP) grew by an annual rate of 6.6 per cent during
1994-00 but the growth slackened to 4.7 per cent per annum during the next three years
before the growth remarkably rose to 8.7 per cent per annum in the last four years. This
meant a substantial rise in disposable income of Indian households since the mid-1990s.
Based on the Market Information Survey of Households (MISH) of the National Council
of Applied Economic Research (NCAER), the number of people in the income groups of
“aspirers” and the middle class with annual income ranging from Rs. 90,000 to one
million, more than doubled from 157 million to 327 million during the last decade 1995-
96 to 2005-06.3 The data from the Central Statistical Organization (CSO) indicate that
the growth of real private final consumption expenditure, which dipped from an average
of 5.7 per cent per annum during 1994-00 to 4 per cent per annum during 2000-03, shot
up to 6.7 per cent per annum during 2003-07. Retail sales (in nominal terms) in the
country also followed a similar pattern: a high annual growth of 13.6 per cent during
1994-00, a low growth of 4.8 per cent during 2000-03 and a smart pick up in the last four
years, 2003-07 at around 11 per cent.
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.
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,
colors, makes and models. Retailers should be very careful while deciding on the amount
EXHIBIT: C
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
Colors Light blue Dark blue Light blue Light blue Blue
Black Indigo Black Black Black
Black Deep blue
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.
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 fulfill demands of customers.
• 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.
• Because all research is related to Sri Ganganagar city only and here a limited
scope is available for these types of studies.
• 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.
i. To Self-
• Knowledge earning.
• 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.
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.
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 can be conducted using both qualitative and quantitative technique.
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 Sri Ganganagar context this research is an attempt to know the perception of Sri
Ganganagar people and the apparel store retailers.
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.
Secondary data studies: This is concerned with the analysis of already existing data that
is related to the research topic in question.
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,
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.
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.
Since in Sri Ganganagar, 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 13 for apparel outlets to study their merchandise
assortment planning and around 50-60 for customers to understand their preferences.
Sampling Unit: John Players, Adidas, Oxemburg, Spykar, Reebok, Peter England,
Lilliput, Sportking, Gini & Jony, Monte Carlo, Priknit, Cotton County, Koutons.
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 will be used in the research
comprises of surveys therefore data collected will be of primary in nature and partly
secondary since secondary data will also be taken.
DESIGN OF QUESTIONNAIRE
REDESIGN THE
QUESTIONNAIRE
QUALITY CHECK
CORRECTION OF DATA
DATA ENTRY
DATA CLEANING
ANALYSIS
Digram-1 - P R O C E S S F LO W O F T H E P R O J E C T
REVIEW OF LITERATURE
And for this topic, the areas of literature should be examined are-
The concept of merchandise and assortment(stock keeping units and categories),
Organizing the buying process by categories,
Category management,
Levels of buying organizations,
Financial objectives,
Gross margin return on inventory investment( GMROI),
Sales forecasting
Product mix trends.
And on this topic, here in Sri Ganganagar before this study, never a research has been
conducted and because Sri Ganganagar is not a big city so here sources are limited but
scope for these type of study is very huge.
But now here so many apparel outlets are available for making this research successful
like John Players, Adidas, Oxemburg, Spykar, Reebok, Peter England, Lilliput,
Sportking, Gini & Jony, Monte Carlo, Priknit, Cotton County, Koutons and many more.
EMPIRICAL ANALYSIS
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 he 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 colors product is available.
(apparel segment)
Before these decisions a retailer considers so many other factors too like
sales targets, financial objectives etc.
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 Rahul
Bhutna and Vinod Verma.
And Mr. Gagandeep 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-staller in front of Peter England outlet, Mr. Pappu said he also wears
Peter England shirts and the store owner also provides him a high rebates for
it and in this he feel more confident.
Mr. Deepak Bhardwaj said he prefer the goodwill/ brand name for purchasing
any new apparel. As he said he prefers Peter England and John Players more
than Koutons or Cotton County.
Miss Anisha said when John Players launched their new segment, Miss
Players, from that time she prefers Miss Players outlet for a new purchase.
And according to Mr. Mangi Lal, because of Hrithik Roshan, as a brand
ambassador of John Players, he also prefers John Players.
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.
Q.1. Tell me something unique about your outlet and brand and about your vision
and mission?
Ans.- For answering this questions, all retailers told about their own outlet’s
specialties.
As John Players and Peter England have a good name in formal apparels
and they have a good brand name also.
While on other side Adidas, Reebok, Spyker, Oxemburg have a huge
impact on youths, they are named as fashionable and casual apparel
brands.
And on other side some brands are there, those focuses on all family
apparel needs like Sportking, Monte Carlo, Priknit, Cotton County,
Koutons.
Same as Gini & Jony and Lilliput focuses only on children’s apparels.
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.
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
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.
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 Sri Ganganagar, 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.
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.- As in above questions’ answers given, local retailer got support from company side
too for their strategies and planning and they make some changes according to the local
circumstances.
Q.8. Do you think your plans are going well according to your expectations?
Q.4. Which apparel outlet you prefer most for buying clothing? (To college/school going
youths.)
a) Spykar
b) Oxemburg
c) Adidas
d) Reebok
Q.5. Which apparel outlet you prefer most for buying clothing? (To young professionals.)
a) John Players
b) Peter England
a) Lilliput
Ans.
MARKSGIVENBYCONSUMERSTOTHEIRFVORITEBRANDS
0
2 4
3
4 3
7
MARKS
6 11
8
8 12
9
10 3
0 5 10 15
NUMBEROFCONSUMERS
CONCLUSION
From all findings collected by researcher, he reached to the conclusion that in this quick-
moving environment, now retailers also have realized that they need to work strategically
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 wanna a long-term business then
they have to fulfill all demands of customers and follow all required patterns either it is a
big giant or a small business unit.
That’s why in a city like Sri Ganganagar also, retailers are very much aware about these
things and they are doing their business according to it. And here also customer can get
all those qualities and varieties which before some years they were only thinking in
dreams or watching in TVs, Movies. Now all branded items available here only because
of emerging market situations and customer-friendly market.
And if we talk about favorite brand of Sri Ganganagar people then on the base of research
findings, we found that-
∗ Spykar is most famous between college/school going youths.
∗ John Players is most favorite 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. Here same
famous Darwin’s Law (on Evaluation Theory) is applicable on retailers also,”the most
powerful and quick updating creature, according to the circumstances will remain
But ultimately these all things are going in favor of customers and customer will be
benefited at last.
APPENDICES
Appendix-1
Appendix-2
2. What factors you are considering before taking any apparel purchasing decision,
most-
f) Price,
g) Variety
h) Quality
i) Looks
j) Fashion/trend
3. Are you satisfied with the services and varieties of products provided by these
apparel outlets?
f) Highly Satisfied
g) Satisfied
h) Neutral
i) Dissatisfied
j) Highly dissatisfied
4. Which apparel outlet you prefer most for buying clothing? (To college/school
going youths.)
j) Spykar
k) Oxemburg
l) Adidas
m) Reebok
n) Sportking
o) Monte Carlo
q) Cotton County
r) Or any other organized or unorganized retail outlet
5. Which apparel outlet you prefer most for buying clothing? (To young
professionals.)
g) John Players
h) Peter England
i) Koutons
j) Cotton County
k) Monte Carlo
l) Or any other organized or unorganized outlet
6. Which apparel outlet you prefer most for buying clothing? (For children apparel
purchasing)
d) Lilliput
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?
d) Yes, definitely
e) No, not at all
f) Can’t say anything now, let see in future.
9. So do you want to keep your loyalty with your favorite brand or can switch?
d) Brand loyal,
e) Nothing like loyalty, just like this brand (on the base of past sales and
observation) but can switch if found any other good option,
f) Any brand no matter; just it should satisfy their needs.
10. If you have to give marks to your favorite brand from out of 10, then how much
will you give?
Ans. - ……………………………………………
11. Do you wanna anything change in their operations or wanna something more
from them then you can tell me?
Appendix-3
Appendix- 4
Ladies Wear
An item of apparel in order to protect regular clothing.
Apron Generally made of cotton & may be decorative. It is
fastened at the back using straps.
Men's Wear
Hip length jacket with drawstring hem & waist with zip
Anorak
front. Often quilted or fur lined, designed for cold weather.
It is a wraparound robe styled with long sleeves, a shawl
Bathrobe collar held by sash at the waist. Generally made of terry
cloth.
Jacket with a low waist line & usually shorter than hip
Blouson length and gathered into flat waistband or pulled by
drawstring.
Shorts with elasticated waistbands similar to those worn by
Boxer
boxers & often printed in interesting motifs made up of
Shorts
cotton or synthetic material.
Coats, generally of hip length with full front opening. May
Carcoat be single or double breasted with long sleeves. These are
utility coats comfortable for driving.
Named after 7th earl of cardigan, generally it is a knitted
Cardigan item which is open with ribbed cuffs and hem. May be half
or full sleeves.
Night
Styled for sleeping time and worn over night suit. It is
Gown /
generally made of silk or cotton. With string fastening at
Dressing
the waist.
Gown
Sleeping outfit generally made of cotton. The shirt being
Night Suit front open and loose fitted while pants are with drawstring
waist and wide bottom.
Men's coat, heavier than topcoat and designed for very
Overcoat
cold weather. Often fully lined, with fur or without fur.
Knitted apparel item- round, crew or V-neck pulled on over
Pullover the head. May be in interesting knit structures such as
purl, cable, and jacquard.
Apparel for the upper part of body. Usually worn with pants
& buttoned left over right for men. Attached with collars in
Shirts
different styles such as button down or cut away & worn
casually or formally.
Pants shorter than knee length mainly worn by adults &
Shorts
children as sportswear and casual wear.
Skisuit As the name suggests, it is generally worn for winter sports
REFERENCES
GLOSSARY
Allowances- The additional discounts and price reductions that are given to customers by
the retailer.
Analog Model- It is used to estimate the potential sales of a new store on the basis of the
revenues of existing stores in identical areas, the competition at a prospective location,
the expected market share of the new store at the proposed location, and the size and
density of the primary trade area of the location.
Balance Sheet- It is a snap shot of the financial position of the retailer at that moment of
time. The balance sheet consists of three components Assets, Liabilities and Owner’s
equity (Net Worth). The balance sheet is based on a simple concept, i.e., in order to
acquire assets, a firm (retailer) must pay for them with either debt (liabilities) or with the
owner’s capital (shareholders’ equity).
Chain Stores- Stores that have two or more retail outlets that are commonly owned and
controlled. These stores have a centralized buying, and merchandising system and sell
similar lines of merchandise.
Combination Store- A blends of a super market and a general merchandise store, where
the general merchandise contributes more than 40 percent of the sales.
Hypermarket- A large retail store that offers products at a low price. It is a combination
of a discount store and a food based supermarket.
Main Store approach- Main store approach in this approach, the main store or the parent
organization control the operation of the branches.
Market Positioning- The kind of image the retailer wants to establish among its target
group and the group of firms with which it wishes to compete and coexist.
Market Segment- A group of customers whose needs will be satisfied by the same retail
offering because they have similar needs and go through similar buying processes.
Resellers- Retailers who buy merchandise in large quantities at discounted prices from
the retailers, and sell them at normal prices in their shops.
Shopping Goods- Shopping goods are bought less frequently than convenience goods.
These goods include clothing and electronic goods etc.
Specialty store- A specialty store is a type of general merchandise store that sells limited
lines off closely related products or services to a select group of customers.
Store Image- Image of a store comprises how the consumer feels about the store.
Therefore, retailers must be sure about how they want their store to be perceived by the
customers.
Warehouse stores- are discount food retailer with a size of 100,000 square feet. They
cater to customers who look for low price deals.