Information about Merchandising

Merchandising refers to the methods, practices and operations conducted to promote and sustain certain categories of commercial activity. The term is understood to have different specific meanings depending on the context.^[1]

Licensing

Trademarked brand names, logos, or character images are licensed to manufacturers of products such as toys or clothing, who then make items in or emblazoned with the image of the license, hoping they'll sell better than the same item with no such image.<ref name="CoffinLogo" >ABC News: Coffins bearing baseball team logos. (accessed 2007-01-06)

Entertainment and mass media

Children

One definition of merchandising is a marketing practice in which the brand or image from one product or service is used to sell another. It is most prominently seen in connection with films, usually those in current release and with television shows oriented towards children.

Merchandising, especially in connection with child-oriented films and TV shows, often consists of toys made in the likeness of the show's characters (action figures) or items which they use. However, sometimes it can be the other way around, with the show written to include the toys, as advertising for the merchandise. The first major example of this was the TV show "He-man and the Masters of the Universe," in the early 1980s, but this practice has been common in children's broadcasting ever since.

Sometimes merchandising from a television show can grow far beyond the original show, even lasting decades after the show has largely disappeared from popularity. In other cases, large amounts of merchandise can be generated from a pitifully small amount of source material (Mashimaro).

Adults

The most common adult-oriented merchandising is that related to professional sports teams (and their players).

A smaller niche in merchandising is the marketing of more adult-oriented products in connection with similarly adult-oriented films and TV shows. This is common especially with the science fiction and horror genres. (Examples: Star Trek, McFarlane Toys) Occasionally shows which were intended more for children find a following among adults, and you can see a bit of a crossover, with products from that show oriented towards both adults and children. (Gundam model kits)

Sometimes a brand of non-media products can achieve enough recognition and respect that simply putting its name or images on a completely unrelated item can sell that item. (An example would be Harley-Davidson branded clothing.)

Promotional merchandising

Merchandising, as commonly used in marketing also means the promotion of merchandise sales, as by coordinating production, marketing and developing advertising, display, and sales strategies to increase retail sales. This includes disciplines in pricing and discounting, physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time.

Trading industry

In Eastern Europe, particularly in Russia, the term “merchandising” is commonly used within the trading industry and denotes all marketing and sales stimulation activities around PoS (point of sale): design, creation, promotion, care and training of the sales staff.

Retail supply chain

Another definition of Merchandising is the Supply Chain practice of making products in retail outlets available to consumers, primarily by stocking shelves and displays. While this used to be done exclusively by the stores' employees, many retailers have found substantial savings in requiring it to be done by the manufacturer, vendor, or wholesaler that provides the products to the retail store. In the UK there are a number of organisations that supply merchandising services to support retail outlets with general stock replenishment and merchandising support in new stores, an example is Recruit Retail Services. By doing this, retail stores have been able to substantially reduce the number of employees needed to run the store. While stocking shelves and building displays is often done when the product is delivered, it is increasingly a separate activity from delivering the product. In Grocery Stores, for example, almost all products delivered directly to the store from a manufacturer or wholesaler will be stocked by the manufacturer's/wholesaler's employee who is a full time merchandiser. Product categories where this is common are Beverage (all types, alcoholic & non-alcoholic), Packaged Baked Goods (Bread & Pastries), Magazines & Books, and Health & Beauty products. For major food manufacturers in the Beverage and Baked Goods industries, their Merchandisers are often the single largest employee group within the company. For nationwide branded goods manufacturers such as The Coca-Cola Company and [PepsiCo], their respective merchandiser work forces number in the thousands.

References

See also

• Tie-in