Certificate II in Retail Learning and Assessment Material

SIRXMER001A MERCHANDISE PRODUCTS

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Contents
Types of promotions Sales promotion Promotional products Visual Display Tips Visual Display Tool Box Take time to plan the display. 3 4 5 6 6 6

Elements of Effective Visual Merchandising7 Pricing Questions involved in pricing What a price should do Definitions 7 8 9 10

Implement specific store security policies12 Monitor and assess security procedures 12 Implement store security procedures relating to theft of merchandise........................................................................14 Reporting matters likely to affect store security...........................................................................................................14 TRAINING AND ASSESSMENT ACTIVITIES AND QUESTIONS........................................................................................15 Assessment task 16

ASSESSMENT MODE A - Oral questioning 17 ASSESSMENT MODE B - Skills observation checklist....................................................................................................18 Off-the-Job Training Log Participant survey of materials Suggested Answers 21 22 23

Hinson Institute of Training

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SIRXMER001A

MERCHANDISE PRODUCTS

Element of competency: 1. Place and arrange merchandise 2. Prepare display labels and tickets 3. Place, arrange and display price labels and tickets 4. Maintain displays 5. Protect merchandise

Types of promotions
There is a huge array of promotional activities you can choose from, from the humble letterbox flier to skywriting, and everything in between. The following is a list of promotional activities and tools with which you may already be familiar: Brochures and newsletters Cash back incentives Celebrity endorsements Com petitions Conferences and seminars Coupons Direct mail-outs Discounts Exhibition displays Free gifts Free trials In-store marketing materials Loyalty card schemes Media advertising Media stories Money back guarantees Newspaper stories Open days Other advertising Personal networking Point of sale advertising
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Presentations Product demonstrations Product launches Product sampling Sales force promotions Show bags Special packaging Sponsorships Taste tests Two-for-one specials Websites and mailing lists

The main types of promotional activities are discussed in the following sections. Depending on the needs of your organisation, you may choose to use some or all of these activities to promote a product or service. While not all promotional activities are right for all products and services, or for all situations, by using different activities in combination, you can create a customised promotions strategy to meet your organisations needs and objectives. Deciding which type of promotions to use depends largely on the outcomes you want, the target audience, the type of product or service, how the product is distributed, and what your budget is.

Sales promotion
Sales promotion refers to marketing activities that add to the basic value of a product or service, encouraging people to buy. Sales promotions are directly aimed at increasing the sales of a specific product or service. They do not particularly aim to increase brand recognition, or change attitude. Examples of sales promotions include: Product coupons Trade deals Sales force incentives Two-for-one offers

These types of promotions can be used to: Clear stock; Boost sales in the short term; Encourage customers to try a new product; and
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Tempt customers to switch from a competitors product.

Sales promotions can target customers, suppliers, or even the sales force, through the use of special incentives. Customer sales promotions encourage customers to buy the product by discounting it, or through special offers, or aim to increase the customers spend by offering a discount for larger purchases (e.g. upsizing). Sales promotions aimed at suppliers and trade work in a similar way, and may include discounts for making large purchases or committing to longer contracts. Some companies offer suppliers free or discounted operational equipment (e.g. soft drink fridges) that display the brand logo. This not only helps the supplier save money on operating costs, it also works to promote the product at the point of sale. Common examples of these types of promotions include: Run out sales designed to clear old models of vehicles in preparation for the arrival of new models. Buy one, get one free offers. Mums night out restaurant deals, where the mother eats free, provided that the rest of the family pays for meals. Value offers, for example, getting 20 percent extra for the same price.

Promotional products
Aside from product samples, many promotions require additional promotional products. These may include: Posters and promotional display materials; Gifts and novelty items, such as pens, water bottles, stationery, mouse mats, badges, stickers, hampers, show bags, etc., printed with the company logo and/or promotional message; Special uniforms; Sales and training materials; and Brochures.

The type of products you require depends on the promotion itself, but remember to plan ahead and include the time and cost involved in purchasing these products in your action plan.

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Visual Display Tips

If your store front is fortunate enough to feature one or more windows, then you have one of the most proven (and least expensive) forms of advertising at your disposal. A creative display can draw the customer in, promote a slowmoving product, announce a sale, or welcome a season. Some stores located in a mall or other structure may lack windows, but don't despair. There are many places throughout the store to build beautiful displays.

Visual Display Tool Box

Before designing a product display, put together a visual display tool box to keep on hand. By having all of these items in one location it will save time in actually preparing the display. Scissors, Stapler, Two-Sided Tape, Pins Hot glue sticks and glue gun Monofilament Fishing Line Tape Measure Razor Blade/Utility Knife Hammer, Nails, Screwdriver, Screws Notepad, Pencil, Marker Signage, Sign Holders Glass Cleaner/Paper Towels Props (Non-merchandise Items)

Take time to plan the display.

Consider what you want to accomplish, develop a budget and determine a central theme. You may even want to sketch your display on paper. Gather your visual display tool box, the merchandise and any props. Make sure all materials and location (tables, windows, racks) are clean. Choose a slow time of the day or build the display after hours.

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Elements of Effective Visual Merchandising

Balance: Asymmetrical rather than symmetrical balance with the display. Size of Objects: Place the largest object into display first. Colour: Helps set mood and feelings. Focal Point: Where product and props/signage and background come together. Lighting: Should accent focal point, if possible. Simplicity: Less is more so know when to stop and don't add too many items.

Once the display is finished, add appropriate signage. Take photos of the display and keep record of the product sales during the display's existence. Save your information in a file folder for easy reference. By documenting its success, you can re-create the display next year or if it flops, you can make sure you don't repeat the same mistakes. Your local community may have individuals or visual merchandising companies you can hire to dress your window, but if you're concerned with saving money, these tips will help you create an attractive display. Like any other aspect of retailing, creating an attractive display takes skill and lots of trial and error. As your store changes, so will your opportunities for visual displays. Keep working at designing eye-catching and innovative ways to make your retail store profitable through visual merchandising.

Pricing
Pricing is one of the four p's of the marketing mix. The other three aspects are product management, promotion, and place. It is also a key variable in microeconomic price allocation theory. Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors.

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Questions involved in pricing

Pricing involves asking questions like: How much to charge for a product or service? While this is the way most businesses think about pricing, since it focuses on what the business sells, the real question is how much do customers value what they are buying? What are the pricing objectives? Do we use profit maximization pricing? How to set the price?: (cost-plus pricing, demand based or value-based pricing, rate of return pricing, or competitor indexing) Should there be a single price or multiple pricing? Should prices change in various geographical areas, referred to as zone pricing? Should there be quantity discounts? What prices are competitors charging? Do you use a price skimming strategy or a penetration pricing strategy? What image do you want the price to convey? Do you use psychological pricing? How important are customer price sensitivity and elasticity issues? Can real-time pricing be used? Is price discrimination or yield management appropriate? Are there legal restrictions on retail price maintenance, price collusion, or price discrimination? Do price points already exist for the product category? How flexible can we be in pricing? : The more competitive the industry, the less flexibility we have. The price floor is determined by production factors like costs (often only variable costs are taken into account), economies of scale, marginal cost, and degree of operating leverage
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The price ceiling is determined by demand factors like price elasticity and price points Are there transfer pricing considerations? What is the chance of getting involved in a price war? How visible should the price be? - Should the price be neutral? (ie.: not an important differentiating factor), should it be highly visible? (to help promote a low priced economy product, or to reinforce the prestige image of a quality product), or should it be hidden? (so as to allow marketers to generate interest in the product unhindered by price considerations). Are there joint product pricing considerations? What are the non-price costs of purchasing the product? (eg.: travel time to the store, wait time in the store, disagreeable elements associated with the product purchase - dentist -> pain, fish market -> smells) What sort of payments should be accepted? (cash, cheque, credit card, barter)

What a price should do

A well chosen price should do three things: Achieve the financial goals of the firm (eg.: profitability) Fit the realities of the marketplace (will customers buy at that price?) Support a product's positioning and be consistent with the other variables in the marketing mix

Price is influenced by the type of distribution channel used, the type of promotions used, and the quality of the product Price will usually need to be relatively high if manufacturing is expensive, distribution is exclusive, and the product is supported by extensive advertising and promotional campaigns A low price can be a viable substitute for product quality, effective promotions, or an energetic selling effort by distributors From the marketers point of view, an efficient price is a price that is very close to the maximum that customers are prepared to pay. In economic terms, it is a price that shifts most of the consumer surplus to the producer.

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Definitions
The effective price is the price the company receives after accounting for discounts, promotions, and other incentives. Price lining is the use of a limited number of prices for all your product offerings. This is a tradition started in the old five and dime stores in which everything cost either 5 or 10 cents. Its underlying rationale is that these amounts are seen as suitable price points for a whole range of products by prospective customers. It has the advantage of ease of administering, but the disadvantage of inflexibility, particularly in times of inflation or unstable prices. A loss leader is a product that has a price set below the operating margin. This results in a loss to the enterprise on that particular item, but this is done in the hope that it will draw customers into the store and that some of those customers will buy other, higher margin items. Promotional pricing refers to an instance where pricing is the key element of the marketing mix. The price/quality relationship refers to the perception by most consumers that a relatively high price is a sign of good quality. The belief in this relationship is most important with complex products that are hard to test, and experiential products that cannot be tested until used (such as most services). The greater the uncertainty surrounding a product, the more consumers depend on the price/quality hypothesis and the more of a premium they are prepared to pay. The classic example of this is the pricing of the snack cake Twinkies, which were perceived as low quality when the price was lowered. Note, however, that excessive reliance on the price/quantity relationship by consumers may lead to the raising of prices on all products and services, even those of low quality, which in turn causes the price/quality relationship to no longer apply. Premium pricing (also called prestige pricing) is the strategy of pricing at, or near, the high end of the possible price range. People will buy a premium priced product because: 1. They believe the high price is an indication of good quality; 2. they believe it to be a sign of self worth - "They are worth it" - It authenticates their success and status - It is a signal to others that they are a member of an exclusive group; and 3. They require flawless performance in this application - The cost of product malfunction is too high to buy anything but the best - example : heart pacemaker

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The term Goldilocks pricing is commonly used to describe the practice of providing a "gold-plated" version of a product at a premium price in order to make the next-lower priced option look more reasonably priced; for example, encouraging customers to see business-class airline seats as good value for money by offering an even higher priced first-class option. Similarly, third-class railway carriages in Victorian England are said to have been built without windows, not so much to punish third-class customers (for which there was no economic incentive), as to motivate those who could afford second-class seats to pay for them instead of taking the cheaper option. The name derives from the Goldilocks story, in which Goldilocks chose neither the hottest nor the coldest porridge, but instead the one that was "just right". More technically, this form of pricing exploits the general cognitive bias of aversion to extremes. Demand-based pricing is any pricing method that uses consumer demand based on perceived value - as the central element. These include: And Premium pricing. Price skimming, Price discrimination and yield management, Price points, Psychological pricing, Bundle pricing, Penetration pricing, Price lining, Value-based pricing, Geo

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Implement specific store security policies

Within this step we will be looking at implementing store security policies and procedures for the following: Customers Staff/staff property Visitors, sales representatives, contractors, vendors Stock/records Cash and cash movement Equipment and premises Opening and closing of premises Theft/armed robbery Events likely to endanger customers or staff.

The focus of this Step looks at implementing store policy and procedures. Before being able to implement these, it is first necessary to identify and collect those policies and procedures which currently exist within the workplace, dealing with the issues as listed.

Monitor and assess security procedures

This step looks at the monitoring and assessment of current store security procedures in terms of: Customers - identifying areas where customers are not permitted or identifying the actions and activities of customers which are prohibited. Staff - identifying activities or actions of staff which are prohibited. Staff property - identifying the security of staff property together with items/articles which are prohibited from being brought into the store. Visitors, sales representatives, contractors, vendors - access to various locations within the store, delivery and removal of products/equipment. Stock/records - maintenance and safekeeping.

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Equipment and premises - presentation of equipment and premises, to ensure the safety of all persons coming into contact with or using them. Opening and closing of premises - the sequence of procedures ensuring that unauthorised persons are not in a position to be on premises during prohibited periods. Armed robbery - to ensure the safety of staff and customers should the event occur. Other events likely to endanger customers or staff - events such as the occurrence of a fire or some other event requiring the evacuation of people from the store.

As a reminder, the issues of theft and cash movement have been excluded as they constitute the greatest threat to store security and as such are dealt with specifically later. The best and most effective way to monitor store security procedures for these issues is to prepare a checklist which identifies the essential requirements. Checklists can be used to assess how effectively store security procedures are being applied within the workplace. Checklists provide a visual summary of the issues involved in security and provide an overview of the most common deficiencies. The checklist can be used as a tool to identify whether staff have the required skills and knowledge and how they apply these skills and knowledge in the workplace. As such, a checklist is a valuable aid in determining any training required by the team and can help to identify what methods could be used to address any deficiencies for example, group training, individual counselling.

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Implement store security procedures relating to theft of merchandise

Theft of merchandise by customers or employees represents the single highest reason for loss to retailers. One issue to highlight is that theft is theft, no matter who steals. The process for dealing with theft should be the same whether the offender is a customer or an employee. The only difference between customer theft and employee theft is that in the case of employee theft, dismissal is an additional option. Look at your store security policy on theft and answer the following questions: Does the policy: Apply to customers and employees? Identify a process for denying the opportunity for theft? Identify a process for delaying the opportunity for theft? Identify the process for deterring the opportunity for theft? Identify the process dealing with theft should it occur?

Should you answer no to any of the questions listed above, revisit your policy and make amendments so that the no answers change to a yes response.

Reporting matters likely to affect store security

Throughout any workplace coaching delivery or group training process, issues associated with store security arise. It is essential that when such issues are dealt with they result in some form of action. In most situations the type of action generated results in a report being prepared for management.

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TRAINING AND ASSESSMENT ACTIVITIES AND QUESTIONS

The Trainee will be required to demonstrate competence on the job, in practical demonstration; observation, question/answer and role-play situations, incorporating verbal questions and written work, including completing workplace forms, either to the RTO Trainer or Supervisor, under the guidance of the RTO Trainer. Element of competency: 1. Place and arrange merchandise 2. Prepare display labels and tickets 3. Place, arrange and display price labels and tickets 4. Maintain displays 5. Protect merchandise 1. What are promotional activities?

2. What determines the kind of promotional activity to be used?

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3.

How should you time your advertising?

4.

What does promotional pricing refer to?

Assessment task
Demonstrate for your workplace assessor, your ability to safely and effectively: Place and arrange merchandise Prepare display labels/tickets Place, arrange and display price labels and tickets Maintain displays Protect merchandise

You may like to prepare a portfolio of your merchandising works to assist your assessor with assessment of this unit.

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ASSESSMENT MODE A - Oral questioning

Trainee name: Name of Workplace: RTO Trainer name: Unit/s of competency: Unit Name: Date of training/ assessment visit: SIRXMER001A MERCHANDISE PRODUCTS

Instructions: In addition to written answers provided above, the trainee is required to provide verbal answers to the following questions that will be asked by the RTO Trainer. Read the questions prior to the Trainers visit, and be prepared to answer them, obtaining help where necessary. Did the trainee satisfactorily answer the following questions:
1. What are promotional activities? 2. What determines the kind of promotional activity to be used? 3. How should you time your advertising? 4. What does promotional pricing refer to? 5. What should you consider before constructing displays? 6. How do you ensure that promotional stock is replenished? Yes No

The trainees underpinning knowledge was: Satisfactory Notes/comments : Question 1: Question 2: Question 3: Question 4: Question 5: Question 6: RTO Trainer signature: Trainee signature: Date of assessment: Not Satisfactory

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ASSESSMENT MODE B - Skills observation checklist

Trainee name: Name of workplace: RTO Trainer name: Unit/s of competency: Unit Name: Date of training/ assessment visit: SIRXMER001A MERCHANDISE PRODUCTS

During the demonstration of skills, did the trainee:

Unpack merchandise according to store policy and procedures and legislative requirements Place merchandise on floor, fixtures and shelves in determined locations according to OHS and other relevant legislative requirements Display merchandise to achieve a balanced, fully-stocked appearance and promote sales Identify damaged, soiled or out-of-date stock and take corrective action as required according to store procedure Place stock range to conform with fixtures, ticketing, prices or bar codes Rotate stock according to stock requirements and store procedure Ensure stock presentation conforms to special handling techniques and other safety requirements Prepare labels and tickets for window, wall or floor displays according to store policy Prepare tickets using electronic equipment or neatly by hand according to store procedures Identify soiled, damaged, illegible or incorrect labels and tickets and take corrective action Use and maintain electronic ticketing and labelling equipment according to design specifications Store ticketing equipment in a secure location Place labels and tickets visibly and correctly on merchandise Replace labels and tickets according to store policy Maintain correct pricing and information on merchandise according to store procedures, industry codes of practice and legislative requirements Reset and dismantle special promotion areas Assist supervisor in selection of merchandise for display Arrange and face up merchandise as directed and according to layout specifications and load-bearing capacity of fixtures Identify, reset or remove unsuitable or out-of-date displays as directed Identify optimum stock levels and replenish stock according to store policy Maintain display areas in a clean and tidy condition Remove excess packaging from display areas Identify and apply correct handling, storage and display techniques according to stock characteristics and legislative requirements

Yes

No

N/A

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The trainees performance was: Feedback to trainee:

Not Satisfactory

Satisfactory

-----------------------------------------------------------------------

Trainee signature:

RTO Trainer signature:

I confirm competence for this unit SIRXMER001A

_________________ (Manager signature) _________________ (Date)

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COMPETENCY RECORD - SIRXMER001A

After assessment the assessor, the supervisor and participant should sign the competency record. If competency is not achieved at the first attempt, strategies to address the performance gaps need to be identified and a time for re-assessment organized.

Assessment Strategies
C U R R E N T C O M P E T E N C I E S

Assessor Comments

Oral/written questions Activities Workplace project Supervisor/3rd party report Self-Assessment Other

_____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________

The evidence supplied is: Valid Sufficient Authentic Current

The participant is competent has shown competence in all of the following elements:

Trainee Signature: Supervisor Signature: Trainer Signature The Trainee is

NOT YET COMPETENT: Strategies to address gaps in trainee performance:

Place and arrange merchandise Prepare display labels/tickets Place, arrange and display price labels and tickets Maintain displays Protect merchandise
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D A T E _ _ _ _ _ _ _ _ _

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D A T E _ _ _ _ _ _ _ _ _

D A T E

F O R

R E A S S E S S M E N T :

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Off-the-Job Training Log

Trainee Name: ____________________________________ Supervisor signature: _________________________________ Date: ______/______/200____

Company: __________________________________________________________________
Certificate: II III IV in Civil Construction Process Manufacturing Extractive Industries Retail Operations

Business (Office Admin/Admin) Hospitality TDT (Warehousing)

Food Processing TDT (Road Transport) _________________

Telecommunications (Call Centres)

List below the times allocated to Off-the-Job training for:

Activity code Activity code Activity code

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Activity code

Date

Duration

Date

Duration

Date

Duration

Date

Duration

Activity Code
1. 3. 5. 7. 9. 11. 13. 15. 17. Read self-paced guides Met with Workplace Coach Discussion on phone Researched store policy and procedures Researched workplace policies and procedures Observed other staff member/s merchandising products Other research Staff training Complete appropriate paperwork relevant to task 2. Developed knowledge of use and safety requirements 4. Worked on assessment tasks 6. Discussed assessment tasks 8. Researched legislative requirements 10. Researched industry codes of practice 12. Performance appraisal 14. Read relevant industry publications 16. Talking to the supervisor 18. Other: (specify) __________________________________________

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Participant survey of materials

Unit code: SIRXMER001A Date.. Instructions:
Please complete the questionnaire by circling the one number that best describes your answer to each question. Please read each question carefully. For mailed surveys, place the completed questionnaire in the enclosed reply paid envelope and post it back within seven days

Unit name: Merchandise products

Q1.

Thinking in general about the material you were given for this unit, how would you rate it overall?

Circle only one answer Poor .... 1 Fair .. 2 Good ... 3 Very Good .. 4 Excellent ..... 5 Dont know ........ 6
Q2. How strongly do you agree or disagree with the following statements about the unit material?

Circle one answer only for each statement

Neither Agree nor Disagree Dont know / NA 6 6 6 6 6 6 6 6 6 6 Strongly Agree 5 5 5 5 5 5 5 5 5 5

Strongly Disagree

Disagree

a. The layout of the reading material made it easy to use/read b. The layout of the assessment material made it easy to use/read c. The font size of the material was large enough d. The reading material assisted me to complete the assessment e. The material was easy to understand f. The graphics/pictures were useful g. The graphics/pictures were sufficient in number h. The graphics/pictures were legible i. The materials was free from typing errors j. The material was relevant to my job/workplace

1 1 1 1 1 1 1 1 1 1

2 2 2 2 2 2 2 2 2 2

3 3 3 3 3 3 3 3 3 3

Comments: Please expand on the above points if you rated any of them less than 3
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Agree 4 4 4 4 4 4 4 4 4 4

______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________

Suggested Answers SIRXMER001A Merchandise products

1. What are promotional activities? Broadly speaking, promotional activities are marketing tools that aim to raise the profile a product or service in the eyes of the targeted customer. There are a variety of promotional activities you can undertake to promote a product or service. 2. What determines the kind of promotional activity to be used? The type of promotional activities you choose will be determined by the objectives of the promotion, the type of product and its position in the market, and organisational requirements, including timing, budget, and industry codes of practice. 3. How should you time your advertising? As with any part of a promotional campaign, the timing of your advertising should correspond with the purchasing habits of your target audience, and with your distribution and supply capabilities. 4. What does promotional pricing refer to? Promotional pricing refers to an instance where pricing is the key element of the marketing mix.

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