Lesson Note

Subject: Marketing

Topic: Merchandising

Content:

Meaning of Merchandising

Features of Merchandising

Lesson Objective: By the end of the lesson, the learners should be able to:

  1. State the meaning of merchandising;
  2. List and explain the features of merchandising;
  3. State the benefits or importance of packaging, branding, and labelling.

Lesson Summary/Discussion

MEANING OF MERCHANDISING

Merchandise means goods bought and sold or trading of goods. Merchandising is an activity of selling and promoting particular goods.

Merchandising is a branch of marketing theory and practice concerned with maximizing product sales by designing, packaging, pricing, and displaying goods in a way that stimulates higher sales volume.

Merchandiser is a person who interacts with the buyer and seller, and also puts efforts into proper relation between buying offices/ buying agents/ agency and seller/exporter in terms of executing an order.

The underlying assumption in
merchandising is that consumers may have a general need for (or interest in) a certain class of product, and it is the
merchandiser’s task to present the product in a way that best captures consumers attention and persuades them that the product will fulfill their needs and wants.

FEATURES OF MERCHANDISING

The following are features of merchandising:

  • Packaging
  • Branding
  • Labelling

These are discussed below:

1. Packaging: Packaging is the science, art, and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging is the enclosing of a physical object, typically a product that will be offered for sale. It is the process of preparing items or equipment for transportation and storage and it also embraces preservation, identification and
packaging of products. Packing is
recognized as an integral part of modern marketing operation, which embraces all phases of activities involved in the transfer of goods and services from the manufacturer to the consumer. Packaging is an important part of the branding process as it plays a role in communicating the
image and identity of a company.

IMPORTANCE OF PACKAGING

The purpose of product packaging is to protect the product from being damage. Product packaging not only protects the product during transit from the manufacturer to the retailer, but it also prevents damage while the product remained on retail shelves. Most products have some form of packaging. For example, Soups must have a container and package while apples may have packaging for transport but not to sell the product
from the product department of the local grocery store.

  • Attraction: How a product is packaged may be what attracts the consumer to take a look at the products in the store shelves. For this reason, many companies conduct extensive research on colour schemes, designs and types of product packaging that is the most appealing to its intended consumer.
  • Promotion: Packaging also plays an important role for portraying information about the product. Outside packaging may contain directions on how to use the product or make the product.
  • Facilitates Purchase Decision: Packaging may also contain ingredients and nutritional information about the product. This information can help to sell the product because it allows potential customers to obtain the necessary information they need to make a purchasing decision. Information contained on a package may propel the reader to buy the product without even having to speak to a store clerk.
  • Differentiation: Packaging can also differentiate one brand of product from another brand. Because the product packaging can contain company’s names, logo and the colour scheme of the company. It helps consumers to identify the product as it sits among the competing products on store shelves. For example, as a shopper walks through the coffee aisle of the local grocery store, the bright orange, pink and white packaging of the Dunkin’ Donuts coffee brand may be easily recognised by the consumer and he is likely to grab one from the coffee shelf. The shopper may identify with the company brand, which propels him to buy the product. If the product packaging changes, it may alter the brand perception of the company, which does not mean that the consumer would not still purchase the product, but it may delay the purchase until the person is able to identify the product according to its new packaging.
  • Physical protection: The objects enclosed in the package may require protection from, among other things, mechanical shock, vibration, electrostatic discharge, compression, temperature, etc.
  • Information transmission: Packages and labels communicate how to use, transport, recycle, or dispose of the package or product. With pharma-ceuticals, food, medical, and chemical products. Some types of information are required by governments. Some packages and labels also are used for track and trace purposes.
  • Marketing: The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package graphic design and physical design have been important and constantly evolving phenomenon for several decades. Marketing communications and graphic design are applied to the surface of the package and (in many cases) the point of sale display, examples of which are shown here:
  • Convenience: Packages can have features that add convenience in distribution, handling, stacking, display, sale, opening, re-closing, use, dispensing, reuse, recycling, and ease of disposal.
  • Barrier protection: A barrier from Oxygen, water vapour, dust, etc., is often required. Permeation is a critical factor in design. Some packages contain desiccants or oxygen absorbency to help extend shelf life. Modified atmospheres or controlled atmospheres are also maintained in some food packages. Keeping the contents clean, fresh, sterile and safe for the intended shelf life is a primary function.
  • Security: Packaging can play an important role in reducing the security risks of shipment. Packages can be made with improved tamper resistance to deter tampering and also can have tamper-evident features to help indicate tampering. Packages can be engineered to help reduce the risks of package pilferage.

2. Branding: To understand branding, it is important to know what brands are. A brand is the idea or image of a
specific product or service that consumers connect with, by identifying the name, logo, slogan, or design of the company who owns the idea or image. Branding is when that idea or image is marketed so that it is recognizable by more and more
people, and identified with a certain
service or product when there are many other companies offering the same service or product. Advertising professionals work on branding not only to build brand recognition, but also to build good reputations and a set of standards to which the company should strive to maintain or surpass. Branding is an important part of internet commerce, as it allows companies to build their reputations as well as expand beyond the original product and service, and also add to the revenue generated by the original brand.

For example, the Nike brand name is
known throughout the world, people can identify the name and logo even if they have never bought any of their products. However, not only is the company name a brand, but the logo (The ‘tick’ symbol 1 ) is also a strong piece of branding in its own right. The majority of people that are aware of the company can also identify it (or its products) from this symbol alone.
The clothing and sports shoe company Adidas is well known for using three stripes on its range of products. This design branding feature allows people to identify their products, even if the Adidas brand name and logo is not present.

BENEFITS OF BRANDING
Recognition and Loyalty: The
main benefit of branding is that
customers are much more likely to
remember your business. A strong
brand name and logo/ image helps
to keep your company image in the
mind of your potential customers.

If your business sells products that
are often bought on impulse,a
customer recognising your brand
could mean the difference between
no-sale and a sale. Even if the
customer was not aware that you
sell a particular product, if they trust
your brand, they are likely to trust
you with unfamiliar products. If a
customer is happy with your products or services, a brand helps to build customer loyalty across your business.

Image of Size: A strong brand will
project an image of a large and established business to your potential customers. People usually associate branding with larger businesses that have the money to spend on advertising and promotion. If you can create effective branding, then it can make your business appear to be much bigger than it really appears.

An image of Size of an establishment can be especially important when a customer wants reassurance that it will still be available in a few years time.

Image of Quality: A strong brand
projects an image of quality in your
business, many people see the the
brand as a part of a product or service that helps to show its quality and value.
It is commonly said that if you show
a person two identical products,
only the one which is branded will
be patronised; they will almost always believe the
branded item is of higher quality.
If you can create effective branding,
then over time the image of quality
in your business will usually go up.
Of course, branding cannot replace
good quality, and bad publicity will
damage a brand (and your businesses image), especially if it continues over a long period of time.

For example: The Sunny Delight
drinks brand was one of the biggest
in the UK just a year after its launch.
However, constant bad publicity
about the quality of the product has
severely damaged the image of the
brand, and sales have dropped for
each of the past several years.

Image of Experience and Reliability: A strong brand creates an image of an established business that has been around long enough to become well known. A branded business is more likely to be seen as experienced in their products or services, and will generally be seen as more reliable and trustworthy than an unbranded business.
Most people will believe that a
business would be hesitant to put
their brand name on something that
was of poor quality.

Multiple Products: If your business has a strong brand, it allows you to link together several different products or ranges. You can put your brand name on every product or service you sell, meaning that customers of one product will be more likely to buy another product from you. For example, Sony sells televisions, music equipment, consoles, camcorders, DVD players, video players, etc all under the Sony
brand name.

3. Labelling: A Label is a carrier of
information about the product.
Labels are attached on the product
package to provide information
about the product such as
manufacturer of the product, date of
manufacture, expiry date, its
ingredients, how to use product and
its handling

High quality labelling, like packaging, requires research, planning and consultation from a variety of sources. AS well, package and label design must be integrated. It is important that they both send the same message to the consumer.

Your ultimate goal is to produce a
label that is educational and user-
friendly. It should also adequately
market your product within legal
specifications. And, of course, your
label needs to be an integrated part
of your strategic marketing approach. Before you create a label, you should know:

  • all the regions where your product will eventually be sold, and through which distribution channels;
  • information your customers would find helpful;
  • the colours and promotional appeals that are suitable for your audience (your designer can give you input on this);
  • how the label will be applied,.

See previous lessons in Marketing

Lesson Evaluation/Test

  1. What is merchandising?
  2. Who is a merchandiser?
  3. Mention and explain the features of merchandising.
  4. State the importance of the following: packaging, branding, labelling.

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