Rules of Merchandising.

Dear Friends,

It has been a very busy month. So could not put keyboard to word document.

Today we will discuss the importance of Merchandising in FMCG industry. Let us start straight away:

Power of Merchandising :

Have you ever noticed or experienced it almost everyday that when you visit a shop to buy some product you leave that shop by buying some other products which were not there on your shopping list or which you did not think you need. 

Or Think how many times it has happened that you exited shopping malls with the products or merchandise in your shopping bag which you did not intend to buy or had no idea to buy when you entered that mall just to buy some product/s needed by you or may be you entered that mall just to stroll and kill time.

Or remember a time when you went to a shop or sales counter to buy a product of a particular company but left the shop after buying the similar product of a different company. For example you went to buy Lifebuoy soap but ended up buying No 1 Soap of Godrej.

Or you visited a shop to buy a particular quantity of product buy left the shop after buying more quantity of shop. For example you went to shop to buy One shaving razon or Gillet but left the shop after buying four shaving razors of Gillete. 

Or you went to shop to buy a coke and chips packet but after buying a coke and chips packed ended up buying other products also as after entering shop or sales counter you remembered other products also which you may require in the near or immediate future.

Have you ever thought deeply as to why the products with great and tempting offers are always placed near the cash counter of a shop or check out counter of shopping mall ?

Have you ever wondered as to why  in some malls if you have to cross a space selling branded fashionwear by a renowned company ?

Ever wondered why it happens?

Still wondering who forced or coaxed or cajoled you into buying products which you did not intend to buy or worse buying products, a dress or other  stuff which you did not need. Think Who forced your thinking. Ponder over who took control of your mind and made you buy that product or  dress or other stuff that you did not need or did not intend to buy. Still thinking !

Aha now you got it , the COAXER might have been any one of the following :

That attractive sign “50% off on MRP” or

That nice looking and well fitted dress looking awesome on a mannequin made you look for and may be buy similar dress.

Or That  attractive Retail counter with well displayed products well illuminated with glittering lights

Or that poster of a product pasted on the counter of the shop announcing its tempting taste or other attribute of product or A Godrej 2 in 1 sopa which is offering 20% .

Or that Dangler hanging from the fan or tubelight of the outlet announcing that offer on Gillete shaving razon buy three get one free.

Or that attractive display of a particular product well decorated with matching color papers and other promotional material of the product. So while you were buying  coke and chips , that well decorated display of  Dove Shampoo made you remember depleting stock of shampoo in your closet and  you decided to buy Dove Shampoo also.

Or products of a company properly displayed “Neat and Clean” in the retail shelf of a SELF HELP departmental store or retail shelf of a shop or at shelf at a sales counter. This neat display of product may tempt you to switch your brand loyalty. 

So you went to buy Good Day biscuits but ended up buying “20;20 cookies from Parle” as the you could not find /locate Britania Good Day so easily. We are all hard pressed for time and it is our tendency to look for convenience in most of our endeavors.

All the activities or incidents mentioned above are part of merchandising.

Welcome to the world of Merchandising.

In any trade and for any product merchandising plays a very important role in final sale of any product from  a shop. Shop or an outlet or a counter is final place where a consumer and the products meet. Shop is the place the consumer visits to buy products to satisfy or meet his needs or the needs of his near and dear ones.

It is an open secret now that if you want to ensure faster sale of your products from shops or outlets then ensure effective merchandising of your products.

Merchandising means ensuring visibility of products by putting up attractive display of products or some other promotional material related to product, highlighting attributes or other salient features of products in the shop or sales counter. This promotional material can be in the shape of poster or a sticker or a  dangler or shelf card or wobler or shelf strip pasted or put up in a shop.

With increasing competition and with most of companies offering more or less similar products with less differentiation from the products being offered by their competitors, visibility has come to play a very prominent role in ensuring the off take or sale of the products from retail shelves.

It is gospel reality of the world today “ Jo Dikhta hai Wohi Bikta Hai” put simply “ Visibility Sells”.

Now flashback and recall that in most of circumstances of impulsive or unintentional buying “Visibility of products” made you buy those products.

So Now you understand the power of visibility. Need any other proof.

Better and effective merchandising plays a big role in increasing the sales of products or ensuring trials of new products. A company which goes out of its way to ensure better visibility of its products thru creative, attractive and strategic merchandising can outsmart its competition.

Better merchandising helps generate more trials or sales by capturing more eyeballs. More eyeballs may result in more impulsive purchase from customers.

Good quality products backed by good visibility at retail shelves can make winners out of rank new companies.  Merchandising has become new competitive edge in today's over crowded market place.

It is because of this huge impact of merchandising on the sales of their products that all companies offering any kind of products be it books, CDs, or cosmetics, or personal care products, or food items or snack or confectionery products, or fashion wear are paying a lot of attention to ensure better visibility of their products at the last mile of sales i.e. retail shelves.

All well established companies are going out of their ways to get necessary eyeballs for their products by ensuring better visibility of its products at almost all the strategic locations that their target customer might visit. 

So next time you visit your gym and see Posters/sticker/ of Healthy Snacks or Healthy Milk or Muscle building products there then be clear about the motive of that poster.

It is in this backdrop that almost all good companies have made provision for and recruit Merchandisers in their team. These merchandisers put up company product displays or putting company signage at customer points.

Let us discuss better and effective ways for merchandising and role of a merchandiser from perspective of FMCG companies.

All retail shops or sales counters realize the importance of merchandising and they know the role it plays in increasing sales of products of company. Powered by this knowledge nowadays shopkeepers demand a monthly fee from companies for allowing companies to display their products. 

Shopkeepers “Rent out” shelfs in their shops to companies for allowing companies to put up display for their products. They even charge money from companies for allowing them to highlight their product at the cash counter.

Rules for Better Merchandising:

“Seek Permission First”

With new companies entering almost every month in all product categories value of space in the outlet has increased. Now to meet demands of his customers a shop keeper has to stock more no of skus (packsizes) of more no of products or more no of companies in his outlet. It is in this backdrop that the shop keeper has become aware of strategic value of every inch of space of space in his shop.

Some shopkeepers do not allow utilization of POP/POS of any company in their shop as pasting of POP/POS on their retail counter or shop walls soils their shop interior or exterior.

Because of this the first rule of merchandising is to take permission of the shop keeper or manager for utilizing POP/POS of your company’s products.Taking prior permission from the shop keeper or manager helps you win his trust and he may suggest you a better place for putting up POP/POS of products of your company. This first positive impression puts a good impression of your company’s products on shop keeper or manager’s mind.

But on the other hand if POP/POS is put up in shop without permission of the shopkeeper or his manager then he may get angry on your POP/POS spoiling newly whitewashed or newly prepared retail counter or his well maintained shop interiors.This bad experience of shop keeper or manager may put up a negative impression on his mind about your products.

So repeating again “Take permission first”

“Eye Level is the best Level”

POP/POS ( meaning Poster or dangler or sticker or inflatable) of any product should be pasted or hung at “Eye Level”. Eye level means a space in the shop or sale counter where any visitor to the shop can easily view it. 

A poster or dangler pasted or hung “too High” or too low in the shop may not be noticed by the customer who visit the shop. So to get desired mileage the POP/POS should be used at Eye Level.

Most strategic location for pasting or sticking poster or sticker of a product is the wall behind the place behind the cash counter. 

All customers reach cash counter to pay for their purchases. A product staring out of poster or sticker pasted on the wall behind cash counter can hardly escape attention of the customer.

Most of shop owners or manager may demand money for putting up POP/POS behind cash counter but with persistent request and better relations this can be done without paying any money.

Do not put POP/POS of your products on the POP/POS of other companies products.

Normally most of sales staff or merchandisers of most of companies put up POP/POS of their company’s products on the POP/POS of other companies. It should not be done. It is not ethical.

These are the golden rules of Merchandising. In our next blog we will discuss the responsibilities of a merchandiser in a FMCG company.

Till then have a pleasant journey called life.

Malhan M.

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