Merchandising Service - Meaning, Importance & Example

Published in Marketing and Strategy Terms by MBA Skool Team

What is Merchandising Service?

Merchandising service is the solutions that is being provided by a firm to a company’s advertisers about how to manage their space allocation or have a proper layout design for placement of different products. Merchandising service helps them in increasing sales by maintaining a proper shop floor design. Merchandising service also includes providing solutions in terms of complete support and service network in terms of solving complex merchandising challenges by experienced and dedicated team of professionals.

This positioning of products using merchandising service greatly affects company’s sales. In the context of digital media, this service is being provided by communications media to the marketers regarding the proper placement of the advertisement. Also, merchandising service firms’ helps in store observation, risk assessment, forecasting, brand building, catering to customer satisfaction, optimizing budget, managing revenue properly and enhance store experience for customers. All these factors lead to the business’s growth and increased visibility in the market.

Merchandising Service

Importance of Merchandising Service

Merchandising service is important as it helps in store observations as customer’s perception towards a brand is not same as that of a marketer. With newer and newer innovation taking place at every moment, marketer needs to understands not just a single new initiative but should have ample amount of knowledge about what kind if disruptions are happening across a portfolio of brands. Most of the decisions made by the customers of buying a product is not pre decided rather that is driven by what they see while walking around the shop. With digitalization, Smart Store gives a realistic virtual environment to the shoppers providing them with a wonderful shopping experience.

It also makes the end-to-end process faster and increases flexibility. The merchandising service firms also help online businesses/retailers in advising them to place the right ads at right place so that viewers will be able to notice the ad and thus helps the company and the brand visibility, It helps the company to segment and target a particular consumer base on the basis of demographics, physiographic etc. and accordingly market their product. As nowadays, building and maintaining the brand equity is becoming more and more complicated, so merchandising services also comes up with providing solution by exploring into consumer’s preferences, expectations and meeting the needs and demands of the customers.

Advantages of Merchandising Service

1. Understanding customer’s needs and demands through continuous feedback system and help them in providing better services which increase customer satisfaction.

2. Greater visibility through merchandising service, hence more sales.

3. Helps in providing better shop floor design which helps the marketer to sell products which he find difficult to sell previously by giving a good visual merchandising.

Disadvantages of Merchandising Service

1. Expenses incurred in improving the appearance of the retail place. So during initial investment, one will not incur much profit.

2. Increasing need of staffs to handle daily customers.

Example of Merchandising Service

Let’s take an example of Merchandising Services Co (MSCO) who provides professional services and support to suppliers and retailers through product positioning, store support through placement of the products. Its clients were from diverse backgrounds of consumer goods manufacturers, retailers. They understand the problems faced by its clients and plan and strategize in order to cater to the needs and demands of the client’s consumer base in order to provide value added solutions to differentiate it from its competitors. It has a team comprising of its own employees rather than independent contractor who are led by a well experienced senior executive who provide continuous merchandising solutions to its client.

Hence, this concludes the definition of Merchandising Service along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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