Retailers are grappling constantly with a vast number of brands and items, as also the continual requests to list an ever increasing parade of new products. Their space is finite — as new items get listed, some items on the shelf need to be de-listed.
One approach to optimizing assortment is on the basis of sales volume, sales value and profitability. This is covered in detail across sections in Chapter Sales and Distribution. It is important also for the retailer to examine the proportion of shoppers who buy (% buyers), and particularly those who exclusively buy listed items. A low selling item might have relatively high base of shoppers who exclusively buy it. If the item is de-listed, some of the shoppers may switch to other stores, in which case the retailer stands to lose their total spend in store.
Exhibit 29.5 depicts an analysis of exclusive buyers and cumulative duplicate buyers of items for some category. The items are listed in order starting from the item with the biggest base of buyers. Observe, at the tail end, items r and v have a high proportion of exclusive buyers. Since these shoppers exhibit high loyalty to items r and v, the retailer should probably refrain from de-listing them; or do so only after careful consideration.
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Marketing has changed. More so in practical terms, and marketing education is lagging.
The fundamental change lies in the application of analytics and research. Every aspect of the marketing mix can be sensed, tracked and measured.
That does not mean that marketers need to become expert statisticians. We don't need to learn to develop marketing mix models or create perceptual maps. But we should be able to understand and interpret them.
MarketingMind helps. But the real challenge lies in developing expertise in the interpretation and the application of market intelligence.
The Destiny market simulator was developed in response to this challenge. Traversing business years within days, it imparts a concentrated dose of analytics-based strategic marketing experiences.
Like fighter pilots, marketers too can be trained with combat simulators that authentically reflect market realities.
But be careful. There are plenty of toys that masquerade as simulators.
Destiny is unique. It is an authentic FMCG (CPG) market simulator that accurately imitates the way consumers shop, and replicates the reports and information that marketers use at leading consumer marketing firms.
While in a classroom setting you are pitted against others, as an independent learner, you get to play against the computer. Either way you learn to implement effective marketing strategies, develop an understanding of what drives store choice and brand choice, and become proficient in the use of market knowledge and financial data for day-to-day business decisions.