International Retail Buying & Merchandising Essay Example

perspectives, although this may not always lead to direct purchases from the company.

The responsibilities of a retail buyer include analyzing market opportunities, understanding consumer behavior, creating a merchandise plan with various products, selecting and establishing relationships with suppliers for a competitive advantage, developing products that meet the desires of both the retailer and customers, packaging, presenting, and promoting these goods accordingly (Fernie et al. 2003). The buying role varies among companies depending on factors such as organization size, budget, product classification, number of employees, and store locations (Diamond & Pintel 2008). These characteristics determine the organizational structure used in approaching the buying process. In many cases, large chain stores prefer a centralized structure where a buying team at the Head Office makes all purchase decisions.

In general, buyers in companies often have different departments and focus on specific products like lingerie or footwear (Goworek, 2001). As a company grows, the buyer's responsibilities become more demanding as they handle larger amounts of money, a greater variety of products, and face increased competition. To lighten the workload, additional staff is hired, which separates the buying role from marketing. This can be seen as a drawback because buyers need to stay updated on promotions and merchandising choices (Rosenbloom, 1981).

On the contrary, there are various benefits to purchasing at the Head Office rather than at the store level. Stores with advanced point-of-sale data capture systems have the capability to gather real-time sales and purchasing data for each item, which enables more accurate predictions. This helps in negotiating better supply prices and establishes a centralized communication hub with suppliers. As a result, buyers have more

time to analyze market trends and explore new products for their customers.

To summarize, centralizing purchasing leads to lower costs due to economies of scale. It also allows for stricter quality control measures to enhance production and delivery efficiency, as well as standardized buying and stock control choices across all stores. This enables store managers to concentrate on motivating their staff and managing their store effectively (McGolderick, 2002). However, centralized purchasing may sometimes overlook the unique needs and demand variations of an individual store and its manager.

With buyers working from Head Office quarters, there is limited informal communication with the different units, which makes the organization less adaptable to marketplace and environmental changes (Stampfl, 1978). Each store will have its own customers and product assortment. However, since the retailer does not have control over buying the merchandise, they must work with the product allocated by the central buying team (Wang, L, 2010). This can discourage local-level managers as they feel that their input or contribution to the buying activities is not valued.

The main objectives of all buying teams in a centralised structure are to become the leaders in the market. Marks and Spencer, among many other chain stores, consistently assess their buying strategy to achieve "lower stock levels, shorter lead times, and greater flexibility" (marksandspencer.com, 2013). Independent retailers with stable customer demand often employ a decentralised merchandising approach. In these cases, store managers often handle local purchasing responsibilities along with various management tasks.

It is preferred when multiple decisions need to be made at the store level based on customer needs. Johnson ; Johnson, a well-known brand offering a

variety of healthcare products, follows this approach due to the varied businesses they are involved in with different customer desires. With over 250 autonomous units, the company has successfully modernized and grown, regardless of its size (Singer ; Abelson, 2010). This allows store-level management to have more control over the purchasing for their stores.

Implementing a decentralised method can enhance customer service and store efficiency, especially when compared to the centralized approach used by large companies. Decentralisation allows small retailers to fully meet the preferences of their local customers (Varley, 2005). By adopting a decentralised structure, stores gain the advantage of adapting swiftly to changes in the local market without requiring approval from a centralised buying team. Consequently, store managers' self-esteem is boosted as they feel their purchasing decisions hold significant influence.

According to the CEO of Johnson & Johnson, William Weldon, a negative aspect of a decentralised approach is the need for the company's head to establish trust with store managers in order to make correct decisions. Furthermore, spreading decisions across the company can result in inconsistency within the organization. However, Weldon also highlighted the advantages of a decentralised approach, such as the ability for the business to expand internationally by relying on local employees in foreign markets to make important business choices (Kokemuller, n.).
Another approach that retailers may adopt is a combinative structure, where purchasing occurs at both the central and local levels. In this method, central buyers acquire core lines for all stores, while local managers purchase products that cater to local needs. International food retailers have implemented this strategy by having their head office buy main brands sold in

all stores and allowing local management to procure goods from local suppliers in order to meet customer preferences.

In 2001, Waitrose, Asda, and Co-operative Group all encouraged the consumption of local produce (Morrell, 2010). Waitrose had a wide selection of over two thousand local products. They had a system where a central buying team would choose goods based on consumer preferences for store managers to select from. Although store managers did not have full control over product selection, they still had some influence in the decision-making process.

The franchise restaurant Subway is an example of this concept, where the Head Office oversees marketing, menus, and food quality, while store managers handle tasks like hiring and staff training (DuBrin, 2009). Similarly, the clothing brand Benetton offers various styles through its individual licensees. Although these licensees are restricted from purchasing from external suppliers, they can choose the clothes from the company's selection that they believe will align with their customer base (Diamond & Pintel, 2008).

The organization can meet the demands and expectations of customers by using a combinative method, which involves centrally buying to ensure competitive prices and also meeting the local taste (Bruce, 2004). The roles and responsibilities of a retail buyer can vary depending on the purchasing structure within a business. In small organizations, the buyer may be involved in sales and promotions, while in large chain stores, there are different positions at various levels such as buying directors, managers, buyers, buying assistants, and trainees (Goworek, 2001).

In single units, each store's management is in charge of all purchasing tasks. This approach is chosen because shop owners believe they can

offer customized products and services to their customers. Independent stores typically sell a limited range of products or quantities, which are bought by the store manager. In single units, the owner has multiple responsibilities. However, in chains with numerous stores, the buyer's role is more limited and focused primarily on purchasing (Diamond & Pintel, 2008).

Within a centralised structure, efficient communication is a crucial skill for the buying team as they constantly interact with suppliers and other departments. As the distance between stores increases, it becomes more difficult for buyers to visit each store frequently. In this structure, control is centralized at Head Office, with limited contact between buyers and store managers. The main methods of purchasing and communication include telephone and email, while information is also gathered through electronic reports (Diamond & Pintel 2008).

Smaller businesses have a wider range of merchandise for men's business-wear, including suits, shirts, and ties. On the other hand, larger chain stores like Bhs and Oasis offer a smaller selection, mainly focusing on men's shirts. This leads to increased pressure to increase sales for the specific department in these chain stores. In contrast, individual stores benefit from having a more flexible buyer who has a broader set of skills to assist with quality control.

The buyer's roles and responsibilities in a combinative structure involve the purchasing of core lines by the buying department at Head Office, while the store manager contributes by providing local goods that cater to customer needs. Managing this can be challenging as purchasing occurs at both levels. To ensure success, regular communication between the general manager and buying team is necessary to

maintain consistency in the store's merchandise.

Having a purchasing structure is essential for a retailing company to effectively offer a well-curated product range and gain a competitive advantage. Three main approaches - centralization, decentralization, and a combination of both - have been evaluated as suitable for different types of businesses. Centralization is typically used by larger retailers like chain stores, while decentralization provides a framework for independent retailers. By combining elements from both approaches, the company can establish a core line and include local produce. Ultimately, the objective is to generate profit for the retailing company.

When companies need to decide between handling data and merchandise, they must choose their preferred approach. A centralised approach allows for a larger buying department that is more efficient and focused on purchasing. However, some retailers consider this approach limiting as store managers have limited influence. In contrast, the decentralised approach offers a more flexible method.

After thoroughly evaluating all three structures, it was concluded that implementing a combination of both centralized and decentralized approaches would be a satisfactory method for most organizations. This is because the main ranges within a retailer would be overseen by Head Office, which would have an experienced buying department. Additionally, store-level managers would also play a role in the buying decisions since they possess expertise in understanding customer desires. References Aufreiter, N., N. Karch, and C. Smith Shi (1993) 'The engine of success in retailing'.

The text includes references to various sources on the topic of retail buying. These sources include:

- McKinsey Quarterly, which is referenced as volume 3, pages 101-116.
- Bruce's book "The Anatomy of Retail Buying," published by

Butterworth-Heinemann, specifically citing a case study approach. The book is published by Elsevier Ltd. and contains pages 64-68.
- Diamond & Pintel's book "The Buyer's Role," which is part of Vernon R.'s book "A Retail Buying." This is the 8th edition, published by Pearson Education Inc. and includes pages 3-32.
- DuBrin's book "Organizing," which is included in Calhoun, J and Acuna, M's book "Essentials Of Management." This is the 8th edition, published by South-Western Cengage Learning, and spans pages 219-295.
- The book "Principles of Retailing" by Fernie, J et al., published by Butterworth-Heinemann. This book does not specify page numbers but is cited on pages 145-150.
- Goworek's work from 2001. No specific details are provided about this source.

All of these references are contained within a paragraph with a style attribute indicating justified alignment.The Role of the Fashion Buyer. In: Blackwell Science Ltd Fashion Buying. Great Britain: DP Photsetting. 4-14.
Hirschman, E. C. ; Stampfl, R. W. (1980). Roles of retailing in the diffusion of popular culture: Microperspectives. Journal of Retailing 56
Kang, KY. (1999). Conceptual Framework: Retail Buying Process. In: Kang, KY Development of an Assortment Planning Model for Fashion Sensitive Products. 1-14.
Kokemuller, N. (n. d). Decentralized Company Business Structure. Available: http://smallbusiness. chron. com/decentralized-company-business-structure-20629. tml.
Marks and Spencer. (2013). Careers. Available: http://corporate. marksandspencer. com/mscareers/opportunities/head_office_roles/headoffice_buying.
McGolderick, P. (2002). Product Selection and Buying. In: Alcock, T and Howell, C Retail Marketing. 2nd ed. Berkshire: McGraw-Hill Education. 279-301.
Morrell, L. (2010). The benefits of local sourcing. Available: http://www. retail-week. com/in-business/supply-chain/the-benefits-of-local-sourcing/5010688. article.
Rosenbloom, B (1981). Retail Marketing. New York: Random House.
Singer, N and Abelson, R. (2010).

After several drug recalls, the focus of Congress is on the CEO of J. There is an article available

about this topic at "http://www. nytimes. com/2010/09/29/business/29tylenol. html? pagewanted=all;_r=0". Stampfl, R. W (1978) discusses structural constraints, consumerism, and the market concept in MSU Business Topics, 2 (4), pages 37-66. Varley, R. (2005) examines the role of product retail managers in the book "Retail product management: buying and merchandising" (2nd ed., Oxon: Routledge Ltd.), pages 21-41. Wang, L. (2010) explores buying committees in the Chinese retail industry in the Asia Pacific Journal of Marketing and Logistics, 22 (4), pages 492-511.