Commodity matrix: definition, rules of formation, basis for filling with examples, necessary programs and ease of use

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-17 18:37

The success of any outlet - from a supermarket to a kiosk - is calculated by the efficiency of the circulation of goods without the accumulation of illiquid assets or expired products. For the most accurate preparation of the sales plan, a product matrix (product gride) is formed, in literal translation - a product grid.

What for?

Depending on the size of the outlet, its location, the company's trade and purchasing policy and the format of the store, an assortment or product matrix is compiled. It is an essential marketing tool. But before forming an assortment, the necessary research is carried out.

1. Determine the format of the store, its area, evaluate the peculiarity of the location, the preferences of the area where the outlet is located, the traditions of the city. For example, a boutique is better located in the city center or in the prestigious outskirts of the private sector, and points with inexpensive goods - in industrial areas or in the countryside.
2. Study the portrait of your consumer, the demand that already exists and is not yet realized; sum upfinancial position and average income per consumer.
3. Assess the capabilities of competitors, their advantages and weaknesses at the level of pricing and assortment policy, development prospects.
4. Develop your own pricing and product policy, select suppliers.
5. Create a general and detailed classification of goods based on the data on customer demand.

As a result of a preliminary study, a product matrix of the store is formed, which will reflect data on suppliers and goods, their packaging, quantity and properties of goods, and conditions for cooperation with suppliers.

Groups as a strategy

The optimal assortment that satisfies consumer needs of a diverse target audience consists of several main product groups. This determines the formation of a commodity matrix into the following groups of the assortment sold:

1. Leading. This product group includes well-known products with stable prices, such as milk. This is the most important category with which the formation of a commodity matrix begins. This product group is usually familiar to the buyer, it is she who will play a decisive role in the desire of the consumer to make purchases from you. The average market price with an additional discount will convince the consumer of the veracity of the company's promotional offers better than any advertisement. Thus, by attracting a buyer, you can earn on related products.
2. Accompanying products are highly profitable groups whose product matrixis fixed as a reliable and sought-after business support, that is, like a cake for tea or an addition of syrup to ice cream.
3. Prestige – VIP items look expensive compared to mid-price FMCG. Sellers of premium goods always remember that there is always someone who loves expensive purchases. Against the background of a status item, all the rest seem affordable, so the buyer takes ordinary premium goods without being capricious, making excessive demands on a premium product. Thus, in some cases, the price and satisfaction of refined consumer desires also decorate the product.
4. Substitute or alternative products, eg butter-margarine, organza tulle, Egypt-Tunisia, lemon-grapefruit. The more substitute products an outlet offers, the more convincing it looks in the eyes of the buyer. However, the search in assortment offers is also not very good and can confuse a potential buyer. Everything must be balanced.
5. Products-partners is the formation of a product matrix in combination with marketing programs of partner outlets to develop the consumer market, the introduction of partner discounts and goods into the assortment of your store. For example, in a computer equipment store - selling phones from another company with a partner discount and vice versa. Or, in a hat store, offer partner discounts on bags and shoes from partner companies. Shops for bags or shoes will do the same.
6. Offer package - many products are very good in themselves, but supplemented by some product,are bought even better and increase the average bill of the outlet.

Assortment management tasks

If the theater begins with a hanger, then in the store the role of such a hanger is played by the commodity matrix.

Having determined the main groups of goods, it is necessary to analyze the following indicators:

1. Average market prices for selected product groups. The sum of the price indicator below and above the market.
2. Target audience. The sleeping area will require a convenience store, prices slightly above average are possible. A large supermarket will offer a wide range of products with low prices and special discounts, in fact, the supermarket has a different commodity-market matrix.
3. Suppliers. Different suppliers allow you to diversify prices for goods of the same product group.
4. Split groups into subgroups, categories, separate positions. Buyers go for a specific product, usually constituting a small share in the product group. For example, for milk 1.2% fat and 10% sour cream from a local manufacturer. Guided by the logic of the target audience, you can manage the product matrix. For example, if you have a discount store, you will need an assortment of well-known brands and brands, but at low prices. The boutique, on the contrary, does not focus on prices, but focuses on the variety, quality and assortment of goods of all brands declared in advertising booklets.

This is the depth, this is the width, or the question ofbalance

Analysis of the product range is carried out in two directions, taking into account the depth and width of each group.

1. Depth - the store's revenue is greater, the more items in the product group. For example, the product matrix of a women's clothing store consists of business suits, which bring 60% of revenue. They are diversified with trouser, skirt options, colors and fabrics.
2. Width - the product-assortment matrix changes with the help of related products. For example, in the same women's clothing store by expanding the group through blouses, accessories.

Given the different roles of product groups and their impact on the buyer, you can check the balance of the range. For example, the focus of impact on groups and the expansion of the product matrix in depth and width can be characterized as follows:

1. Rare items are products that work for the style and feature of the store, usually fall into the impulse purchase category.
2. Main - products that bring more than 50% of profits, the main locomotive for attracting visitors.
3. Basic - a group of fast commodity turnover, which brings from 40 to 60% of revenue.
4. Seasonal - high seasonal profits and a varied assortment.
5. Comfortable - this group is usually included in the "company" purchase complex. For example, in a shoe store, more than 70% of women tend to buy socks or stockings, tights or trendy leggings with stripes. The product assortment matrix will certainly reflect these needs upon the operation of the outlet.

Chemistry of sales, or how to make a commodity matrix?

No one can say for sure what assortment or grid of goods is needed for a particular store. There are many options and role models to choose from.

Commodity matrix, an example of its compilation for a grocery store can be seen from the attached table.

Item	Commodity group	Product category	Code	Commodity item name	Supplier
1.	Dairy Group
milk	56 4747	"Vkusnoteevo" 1, 5% fat 1 l	Rostov Dairy Plant LLC
56 4745	"Vkusnoteevo" 3, 5% fat 1 l	LLC "Rossoshansky…"
sour cream	57 3030	"Vkusnoteevo" 10% fat 200g	OOO….

The main idea of such a table is to highlight each product category within the assortment direction, for example, "cottage cheese" in the "dairy group" group.

Assortment management takes into account various indicators that affect the success of the implementation.

The table can be replenished with various indicators, separatelydisplaying suppliers, country of origin, container or packaging.

Therefore, before building the assortment matrix, the concept of trade is determined, the main stages of development to determine the optimal balance between the depth and width of the assortment. Analysis of the commodity matrix shows that:

1. A wide range (with a large number of product categories) orients the distribution of goods to various consumer requirements.
2. And the number of positions in any of the product categories, that is, the depth, as a product-assortment matrix, allows you to take into account the needs of customer groups in one type of product.

These properties and methods of assortment formation optimize the use of retail space, warehouses, and contribute to the formation of a wide range of prices. Thus, the main goal is achieved - the creation of a balanced assortment list of goods.

Roadside shop or secret drogerie

Small shops "close to home" are called drogerie, translated from German - drug store. These are self-service stores that sell household chemicals, cosmetics, he alth products, children's products, over-the-counter drugs, jewelry, etc.

Drogerie are non-food products that are convenient to buy close to home. Goods for drogerie stores usually with a wide range of products, in European stores reaches several thousand items, prices are affordable, largestorage period for different types of goods.

Management of the drogerie product matrix starts with customer characteristics:

Indicator	Type of customer
Social Group	1. Middle-income women aged 30-40, children 2-3. 2. Women aged 50-65 with an average financial level, a family of 2-3 people.
Buyer Goal	Homework, being a good housewife and mother. Quality and effective beauty and household products.

According to participation in profit, the assortment list is formed as a commodity matrix, the definition of which regulates the profit share of each group. A small shop of 100-150 m22 drogerie format usually includes the following types of goods:

1. Detergents, cleaning preparations.
2. Personal care products.
3. Cosmetics, perfumes, toiletries - more than 10% of revenue.
4. Body care.
5. Packaged food category: tea, candy, coffee, biscuits, drinks, sparkling wines.
6. Products for children.
7. OTC drugs.
8. Fashion jewelry and accessories.
9. Seasonal items, special assortment for promotions.

To attention in the following table of product groups, as a commodity matrix, an example of the proposed ratio of assortment and profit:

pos.	Product group category	Share in drogerie store revenue
1.	Cosmetics	10, 6
2.	Hair dye	5, 1
3.	Haircare	6, 4
4.	Paper and cotton products	1, 7
6.	Detergents, laundry	5, 4
7.	Men's care products	2, 2
8.	Hosiery	8, 2
9.	Body Care	9, 0
10.	Feminine hygiene products	4, 9
…	……Total	….100 %

Analysis of the drogerie commodity matrix shows that 90% of the turnover is provided by local and regular customers who walk to the store no more than 10 minutes. Of the total number of buyers, 95% are women from 25 to 50 years old - this is the core of the target audience, they run the household, take care of the family and work.

The most famous drogerie stores in Russia are MagnitCosmetics”, “Rainbow Smile”, “Southern Yard”, “Girlfriend”.

The main advantage of these stores is the work without a warehouse, saving on electricity, advertising, maintenance personnel. The disadvantage is sometimes overpriced.

Cutting costs or optimizing inventory

Reducing the cost of maintaining inventory, optimal differentiation of the assortment with similar positions, the choice of key suppliers of the required minimum depends on the effective management of the assortment matrix.

On the example of an optics store, we can consider the issue of planning and optimizing inventory.

The commodity matrix in the optics salon is a document that includes the entire list of commodity items sold in it, as well as the requirements for the assortment minimum.

The tool for tracking and controlling the movement of goods allows you to analyze the following positions of the store:

• remaining goods in stock;
• required quantity of goods for ordering;
• accelerated procurement planning;
• Optimizing inventory with the ability to return to suppliers.

The market capacity of optical salons in Russia is 49 billion rubles. Here you can add the work of the Internet in the field of optics, lens mats, and this is more than 50 billion rubles.

By product groups, the share of participation in income within categories is distributed as follows:

• optics care products – 9.9%;
• contact lenses – 2, 2%;
• spectacle frames –17, 9;
• sunglasses - 28.1%;
• glass lenses - 8.6%

Views of commodity resources

Optimizing the assortment to achieve higher revenues is usually only possible with changes in the organizational structure of the company.

To analyze, use several commodity angles:

1. Classifier - assortment matrix or product catalog.
2. Category specialist or category manager settings.
3. Information settings about suppliers (manufacturers) of goods.
4. Any other company-specific settings.

All settings are made not only for categories and subcategories of products, but also at lower levels - for subgroups and individual products.

In this case, an Excel product matrix sample with automatic calculation of the given formulas may come in handy.

Each compiled matrix requires adjustments depending on changes in demand, the composition of buyers, the formation of fashion and taste, the amount of income and, in general, due to the economic situation in the region.

Only the following indicators remain stable:

1. Store format.
2. Outlet capacity.
3. List of main (basic) commodity groups.

It is not recommended to change them.

In order to plan purchases and fill the store with a certain assortment, they make up enlarged product views, combined according to the main features. In this case, goods of different subgroupscan be combined into one group, which correlates with subcategories and categories of other products and, accordingly, make up all kinds of product views.

Use of information resources

Resource scheduling and sales performance are managed by enterprise information systems or ERP management system.

The management system must meet the requirements of the time and correspond to the tasks of the store, it is understandable and easy to manage. Often, saving on the automation of modules, the company loses time, and purchasing managers, logisticians have to manually create Excel spreadsheets.

As a result, inaccurate data may appear, some unreliable information due to the influence of the "human factor". However, if there is a uniform information system, such errors can be avoided, data entry will be similar at all levels to the required tasks and specified parameters.

It is important that all employees of the company can work correctly with the database, reflect the information received in a single system for analyzing the assortment matrix, and master the standards for using information technology.

After all, all the data must match in order to be able to effectively manage the assortment. Internal and external movements of goods must be carefully recorded, reflected in the information systems adopted at the enterprise.

Having understood the structure of the assortment, having debugged all related business processes and ideas, we can conclude thatthe extent to which the information base of the store corresponds to the goals and objectives of the business, how accurately and correctly the records of the movement of goods are kept. All this will be reflected in the effective analysis of the assortment matrix.

In order to properly analyze and manage the assortment, you need to know, for example, the following about goods suppliers:

• what is attractive about this or that supplier;
• how the supplier relates to the execution of the order, in particular to the ordered product range;
• timely delivery;
• backup suppliers and additional commitments;
• how effective is the sale of a product compared to the cost of its purchase;
• optimization of work with suppliers.

In addition to the above issues, the manager controls the mandatory performance of the store:

• compliance with the rules for displaying goods in the hall;
• politeness and professionalism of sellers;
• convenience of entering and exiting the store and from the store;
• availability of parking spaces near the outlet.

Inventory optimization can be useless if there are no parking spaces near the store, and customers simply cannot visit it.

Currently, all large supermarkets are starting to create retail premises with the equipment of parking spaces, the more there are, the more visitors tend to visit this store.

External attractiveness of the store, polite and competent staff, accessibility - all this increases the efficiency of using assortment matrices in activitiescompany.

Strategy and evaluation, coherence principles

The structure of the created commodity matrix assigns its values to all commodity indicators.

In the process of its formation, not only a category manager is involved, but also accounting, logistics departments, and financiers. For example, the calculation of prices is carried out by the marketing department, the calculations of profit and turnover of goods are carried out by the accounting department. Therefore, it is so important that there are no blank cells in the matrix structure.

The assortment of the store developed on the basis of the product matrix should be comparable with its strategic objectives and goal.

Therefore, when analyzing the effectiveness of the assortment, statistics are necessarily kept for all commodity items with an assessment of the development of a category or subcategory over time.

The following product range categories are judged:

1. Consistency of goods.
2. Rationality of trade turnover.
3. Timely update and uniqueness of the assortment.
4. Stability and competitiveness of product content.

It is recommended for the effective operation of a trading company to update the assortment at least once every six months, at the same time, large supermarkets in Europe achieve the success of a complete renewal of the assortment once a year.

Updating the assortment consists in introducing new and promising commodity items into circulation, removing weak and inefficient ones.

The assortment matrix and working with it is to analyze a large amount of information, so you need to use ready-made softwareprovision, carry out work in several stages.

This will allow you to organize the work of the store efficiently and get a stable income from the company's activities.

As you can see, the areas of management for the formation of the assortment are interconnected, because management is a system property. Any changes in one control will inevitably lead to changes in all other components.

Development of the optimal product range is today one of the main components of the purchasing and marketing activities of companies, ensuring and maintaining the competitiveness of any commercial enterprise.