2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-02 13:48
Commodity characteristics include many methods for classifying goods, but one of the most important principles of sorting is the characteristics of the assortment. Basic indexes will help to identify significant differences between goods of various types, names and intended purposes.
Product range
A set of commodity items united by similar features can be divided into separate groups according to certain features:
- product location;
- breadth;
- nature of needs.
Let's consider these elements of the classification in more detail.
Groups of goods divided by location mean sorting products by commodity or industrial characteristics. Product categories include the entire main range of goods that are involved in the turnover of the point of sale - for 95% of stores, diversity is an absolute advantage. The exception is the network of highly specialized stores, sharpened to promote a brand - for example, the cosmetics store "IvRoche", garments from eminent ateliers, etc. Industrial classification sorts all products by industry - for example, car dealerships or food outlets, promote automotive and food industry products.
Breadth of coverage implies the formation of a simple or complex assortment. Simple is represented by a small number of brands and product groups that can satisfy the minimum requirements of buyers. For example, an optician offering glasses and contact lenses of various modifications is a classic example of a simple assortment. Complex is a large list of products, which is represented by many types, groups and names of commodity items that satisfy the needs of buyers. Supermarkets are classic examples of outlets that offer mixed stock.
According to the nature of needs, all presented products can be divided into the actual list, available in the specifications of suppliers, and the predicted one - an ideal assortment that fully satisfies the buyer.
Assortment indicators
In general, a product range can be called a set of different products, the choice of which is formed according to certain criteria, taking into account and satisfying the needs of each customer.
The product range has different indicators that characterize products according to various parameters:
- Latitude. So you can call a set of types, names, brands of various goods of heterogeneous orhomogeneous groups.
- Completeness. Characteristics of the product range according to the list of different types of the same type of products.
- New (update). The ability of the presented product range to meet changing customer needs through the introduction of new products.
- Sustainability. The ability of the presented product range to meet daily demand.
Examples
To conduct a practical analysis of assortment indicators, consider the assortment list of a small atelier that produces clothes.
At present, the garments provided by this manufacturer are limited to seven types of women's clothing, and each of the listed types is presented in four models. From here you can determine the depth of the assortment, which is calculated by the formula:
Number of species × number of patterns=7 × 4=28.
Determine the manufacturer's latitude factor. This parameter is defined by two indices:
- Wr – actual latitude as the actual number of items in stock.
- Шb - base latitude as a base indicator taken as a basis. This indicator is individual for each enterprise and is calculated based on the production capabilities of the manufacturer.
Current assortment breadth:
- Kw=Wr: Wb× 100.
If an enterprise sews twenty women's blouses, but has the ability to sew forty, then this coefficient will beequals:
- Kw=20: 40× 100=50%.
The calculation of assortment indicators will be incomplete without calculating the completeness parameter. This is the name of the manufacturer's ability to satisfy the same type of customer requests. Completeness depends on two indicators:
- Pr – the actual number of types of goods presented.
- Pb – the planned number of product types.
For example, the specification provides for 7 varieties of blouses for women, but in fact 4 have been put into sale. The completeness of the assortment is 0.57. The coefficient of completeness of goods can be represented as a formula:
- Kp=Pd: Pb x 100.
So, the completeness of the assortment will be 57%.
Indicators of the assortment of the enterprise include such a value as sustainability. This value (Set) characterizes the ability of the supplier to meet the demand for the goods available in the specification:
- Ky=Set: Шb × 100.
If our manufacturer is able to regularly provide customers with twenty-five blouses per month, then its sustainability factor will be:
- Ky=20: Шb × 100.
Or the "stability" property of the assortment will be: 25: 40 × 100=62.5%.
Expansion of the range is impossible without taking into account the parameter of product novelty - this is the name of the supplier's ability to quickly respond to the demands of the time and satisfy the changed wishes of customers. NoveltyThe assortment is characterized by actual renewal - the number of new items in the general specification (N) and the degree of renewal (Кн), expressed through the ratio of the number of new products to the total number of product items (or actual breadth).
For example, in the above problem about the sewing shop, out of twenty-five blouses on sale, 7 models are new. The share of new products in the general specification will be:
- Kn=N: Shr × 100,
or in numerical equivalent:
- Kn=7: 20× 100=35%.
Expansion of the assortment due to renewal takes place in two stages:
1) introduction of new stock items;
2) exclusion from the State Register of obsolete goods.
Assortment list
Selecting the required product for a given outlet forms an assortment list. This is the name of the minimum number of eligible goods that must be presented in this trading place. The assortment list should be characterized by such parameters as depth, variety of trade brands represented, wide choice.
Classification of the assortment of a trade enterprise is usually represented by products of both industrial and commercial groups. But all this product must be consistent with the assortment list. A minimum set of consumer goods must be available at each outlet. In turn, representatives of retail chains shouldcoordinate it with local authorities.
Important! Ignoring the assortment list can lead to serious administrative fines.
Indicators of the assortment of goods determine the structure of the choice. So you can call the numerical proportions of various commodity items in the general commodity list. The indicators of the assortment and its structure are expressed in monetary or natural terms, calculated as a percentage of individual groups, brands, types and own names to the total weight of the entire product list at the outlet.
Assortment management
Various activities and activities aimed at establishing, maintaining and providing a certain variety of goods on the shelves of stores and other outlets are called assortment management. The indicators of the assortment of goods directly depend on the structural transformations associated with the turnover of products, its logistics - from the manufacturer through distributors and the retail network to the final consumer.
The structure of the entire available assortment (C) can be described as the specific share of each type or article of goods in the total mass of items sold at the outlet. The parameters of the assortment structure have natural and monetary indices and are expressed as a percentage. They can be represented as a fraction, the numerator of which will be the index of the number of individual goods of individual goods (A), and the denominator - the total number of all goods available in the assortment (S):
C=A / S
How to manage inventory
Control technologyassortment directly depend on the general technical progress, on the stage of development of agriculture and industrial production, on the achieved level of scientific progress, which allows us to offer consumers various technical innovations, etc., on the welfare index of citizens. The completeness of the assortment presented at the outlet is achieved using various formulas used in the trade to achieve the most acceptable level of stocks of goods and optimal turnover.
Assortment formation
Quality satisfaction of the needs of the population contributes to the rational formation of the range. Its modernization should overtake demand, thereby taking a direct part in its formation. On the other hand, it is impossible to lag behind the current demand, because in this case, the market, through the introduction of new positions in the product range, will be able to directly influence the tastes of buyers. A large assortment of obsolete products will be the beginning of a continuous series of losses - the buyer will not buy obsolete household appliances, and the manufacturer will not take them back. The basis for updating the list of goods offered for sale is moral and physical wear and tear.
The foundation for assortment management is the ability of different manufacturers to offer a certain specification in a timely manner. The presented groups of goods must correspond to the direction of the economic activity of the manufacturing enterprise and, at the same time, fully satisfy the needs of certain segments.buyers.
The basis for the selection of the commodity list is the planning of virtually all major activities aimed at selecting goods for further production and subsequent sales. The other side of the selection of the assortment is the adjustment of the characteristics of the various properties of a particular thing or product to the wishes of potential buyers. The selection of goods on the basis of a well-developed assortment is a constant continuous action that continues throughout the full cycle of the life of a commodity unit. A similar process begins from the moment the concept of the existence of a particular type of product is born. The last point will be the washing out of this unit from the shelves of retail chains, the withdrawal from the manufacturer's product specification.
10 principles of the assortment system
The principle of creating an assortment list includes the following points:
1. Determination of current and probable requests, requirements of potential buyers, analysis of the possibilities of using this type of product and the principles of consumer choice in the respective markets. For example, in the pharmaceutical industry, current seasonal needs (autumn colds or seasonal flu) must be met by an expanded assortment of pharmacies, which includes a large number of cold medicines.
2. Consideration and analysis of existing product analogues offered by competitors.
3. Critical assessment of the proposed goods in the same range as in paragraphs 1 and 2, but already from the point of view of the consumer (very few, enough, inexcess).
4. Solving questions about what exactly should be included in the main assortment, and which positions should be excluded from it due to changes in the offers of competing enterprises and the general state of the sales market. For example, rumors about the introduction of an additional tax on the sale of imported medicines can significantly narrow the assortment of a pharmacy - because in this case it will be more profitable to sell domestic medicines.
5. Analysis of incoming proposals regarding the creation of a new range of products, modernization of the existing product base, as well as analysis of new opportunities for using products.
6. The appearance of updated specifications of improved products or goods that first appear on the market, in accordance with existing requirements.
7. Cost-benefit analysis of new or improved products.
8. Testing (testing) of new products, taking into account the opinions and requests of potential buyers. Such testing is carried out in order to find out how the new product meets the needs of the market.
9. Development of special instructions and recommendations for the production sectors of the company, including the required parameters of quality, model, cost, name, packaging, pre-sales service, etc. Such recommendations are written based on the results of tests confirming the acceptability of product characteristics, and are agreed upon in government services.
10. Analysis of the entire existing range.
Inventory management is part of any marketing
Evenwell-designed marketing and advertising plans will not be able to nullify the consequences of omissions and shortcomings that may have been made in the development of the assortment list. Assortment management involves coordinated actions of interrelated segments - project and technical, holistic sales analysis, signing contracts with distributors, subtleties of service, advertising, demand stimulation.
The complexity of solving such issues lies in the difficult combination of all of the above positions to achieve the desired results: optimization of the assortment, taking into account the capabilities of the business entity and the marketing goals set. If this goal is not achieved, the product list will include products designed for the needs of the company and its divisions rather than for a potential client. Basic marketing principles point out this contradiction and provide recommendations for a current action plan. The main goals of planning and assortment formation are first of all to approve the required "customer" specification with a list of finished products, give it to the development sector, and then ensure that the prototype is tested and brought to the level of current customer requests. When compiling the list of finished products, the marketing managers of the enterprise should have the last word, who will provide clarifications on when it is more appropriate to invest in the modernization of the finished product, and not bear the increasingthe cost of promoting obsolete products or lowering their cost. It is up to the marketing manager to answer the question of whether it is time to introduce new products to replace existing products in the assortment, or is it better to update the old specification with modified products.
Marketing and assortment building
A large range of products offered can be formed by various methods. It mainly depends on:
- product sales volumes;
- specifics of the offered goods;
- tasks and final goals facing the manufacturer.
All three parameters are united by the fact that assortment management should report to the head of marketing. Updating or modifying a product allows you to more fully use the "absorbing" capabilities of markets, taking into account the specifics of their requirements in certain areas, to fill those product niches where there is no competition (or it is small). But the designation of upcoming tasks in the assortment strategy is a rather costly business, the main aspects of which are related to the need for a significant upgrade and expansion of production capacities, the purchase of new equipment, and a deep restructuring of established sales networks for expanding the entire existing marketing mix. The use of uniform rules in the production of products, differentiation of individual groups of goods or their combination depends on the individual conditions of the manufacturer's activities and is determined only after summing up. At the end of a certain period, the results are summed up:how much the level of economic efficiency of sales has changed, whether the sales volumes that were planned using these methods have increased, whether the financial result has improved. After that, conclusions are drawn about the profitability of the production of this product and the prospects for its further production are determined.
Good Governance
Rational use of the product range allows the company to:
- reduce the number of sales lost due to the lack of necessary goods;
- accelerate the rate of turnover of goods at the point of sale;
- reduce excess merchandise;
- Reduce the risk of end-of-life write-offs; Minimize total inventory costs.
If you look at the processes of assortment formation from the point of view of delivery and storage of goods (logistics), then competent correlation of inventory is a constant balancing on the fine line between two mutually exclusive parameters: reducing the costs associated with transportation, storage and accounting of goods and ensuring the necessary (minimum) inventory, which will be sufficient for uninterrupted sales.
At the same time, an increase in the inventory of unsold products makes sense as long as the economic effect exceeds the cost of maintaining additional inventory and spending working capital on it.
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