When range is defined as the total of all selected and offered goods (items) of a commercial enterprise . The compilation of different articles into an assortment is a specific service provided by retailers. (In the case of the entirety of the products of a manufacturing company , however, one speaks of the production program , in the case of the entirety of the products of an agricultural or horticultural company , one speaks of the product range).
The totality of the goods on offer, the structure of the assortment (the assortment structure or "assortment pyramid"), which significantly defines the retail company and its branch affiliation , can be broken down into: based on Rudolf Seyffert :
- Goods area = goods type group,
- Type of goods = type of goods group,
- Type of goods = article group,
- Article = variety group as well as
- Sort and piece (as smallest units).
In terms of time, the permanent product-service new combinations carried out as part of the product range policy make up the product range of the retail business. The specific and unmistakable performance of each trading company is expressed in the product range or range policy ( Schenk ). The questions of which product ranges should be created and at which locations, with which types of business and at what times, are essential components of the strategic marketing planning of retail companies.
Depth and breadth of the range
Depth of assortment
How deeply structured an assortment is essentially depends on how many varieties are offered as variants of an article within a product group.
The specialty shop for handicrafts can be considered a typical example of a deep assortment. In this z. B. Sewing, knitting and crochet needles of all types and designs are offered. Another example is a well-stocked wine shop that offers a very wide range of wines compared to a discounter, for example. The depth of the assortment is always specific to the product group, i. H. A shop can offer a very wide range in individual product groups and at the same time only have a very shallow range in other product groups.
Range of products
How broad an assortment is essentially depends on how many different product groups are carried. In the case of a department store (Karstadt, Kaufhof) one can speak of a very wide range, because there z. B. Food, tobacco, mail, drugstore items, furniture, curtains, carpets, fabrics, sporting goods, household goods, textiles, bicycles, children's equipment, jewelry, cosmetics, etc. are offered - "everything under one roof". Conversely, specialist retailers usually have a very narrow range, for example when concentrating on just one product group; This can, however, be broken down very deeply, as in the trade in fishing supplies, tobacco products, bicycles or records.
Note : The breadth and depth of the assortment (assortment dimensions) are common in commercial parlance, but they are non-operational relative terms , as no clear numerical delimitation of wide and narrow or deep and shallow assortments is possible. Nevertheless, these “range dimensions” can be used for retail management, namely a) as target or direction information and b) for comparative range analyzes: wider, narrower, deeper, flatter range. The assessment of whether an assortment is too narrow, too wide, too deep or too shallow depends on the range objectives of the retail business, the type of business chosen or on the customer’s range expectations.
In principle, all articles in the entire range of a retail company are in an economic network relationship. The division of the assortment into core or basic assortment and marginal assortment takes place in order to mark the main distribution of the sales over the different assortment parts. In contrast, the allocation of profit or contribution margins can be different, since high contribution margins can be achieved with articles in the marginal range.
The core range includes the actual range, the middle of the range, e.g. B. Sanitary products (bathtubs, showers, toilets) at the sanitary dealer. The goods in the core range are intended to secure the profitability of the respective trading company. The main sales of the respective company are generated with the core range. This is usually presented more positively than the respective other articles and advertises as a figurehead for specific shops.
The basic range is the range with which a large part of the turnover is achieved. The core range and the basic range can be identical. In some companies, however, they differ from one another. This would be the case, for example, if a company in the plumbing trade added lights to its range that generate a higher sales contribution than the original plumbing products.
Articles in the marginal range achieve a relatively low share of sales. They are not only used to achieve additional (higher) profit margins, but also for psychostrategic reasons, for example to trigger joint purchases, to offer customers an additional service and / or additional prestige and to raise the profile of their own range and gain an image advantage.
The design of the range as well as its operational management and control take place within the scope of the range policy . Basically, the following strategies can be pursued in the assortment policy: assortment constancy and / or assortment dynamics with numerous variants ( trading up as an increase in the quality level, trading down as a reduction in the quality level; assortment expansion or expansion; assortment contraction, restriction or adjustment; assortment substitution; assortment innovation; Diversification, ie adding new types of business to the range).
It is an extension of the range if a retail company decides to include goods or items that have not yet been listed in the range. For example, a sports shop could include high-quality diving equipment in its range, as a balance sheet has shown that the number of registrations at diving schools has increased. When the range is expanded, the suitability of the newly added articles for triggering a demand network must be checked.
Product range adjustment
An assortment adjustment is when the previous assortment is reduced by articles or types. This strategy (“discontinuation”) is suitable for B. for items with excessive storage time, a declining image, unattractive purchase conditions or shrinking trade margin.
Within the framework of modern merchandise management systems, all goods in the range can be subjected to a range analysis, in any classification from product areas to individual types. For each range are part of indicators to create a unique ranking, as the article groups, articles or varieties, calculated.
Indicators and rankings
The simplest yield-related indicator is e.g. B. the trade margin as a trade markup (HSp) into consideration. If this is multiplied by the turnover rate or the inventory turnover (UH), the result is the gross benefit figure (BNZ). An improvement in their informative value is achieved by taking into account the sales share (UA) of the product range units. To do this, the BNZ is divided by 100 and converted to the return on investment (ROI). If this earnings index (E) is additionally multiplied by the sales share (UA), this results in an informative value index (W) for each item group (or other reference objects). U. leads to a completely different ranking of the profit contributions. Using the example of an assortment analysis in the food retail sector, Oehme was able to demonstrate that the non-food product group, classified according to trade margin, ranked 1, according to yield index (E) ranked 5 and according to value index (W) ranked 6th, i.e. the last place of the six product groups examined . “In addition, other links are possible. So could z. B. from an image analysis for different parts of the assortment - for goods or article groups rather than for individual articles - image factors (weights) can be taken into account. The link between surcharge / inventory turnover / share of sales / image weight might result in a different ranking. "
Measures and influences
Assortment analyzes provide important indicators for a more or less successful assortment policy, especially if they are continuously updated. However, it is critical to take into account that these are only historical values and that interrelationships and effects from one product range to another are not taken into account. They also do not reveal the effect of internal measures (price label, special offer, placement, etc.) and neither do external influences (supplier and competitor marketing, changed customer preferences, change in values, etc.). After all, due to a lack of daily and item-specific cost allocation, the key figures do not provide any information about the proportions of the analyzed product range items related to operating profit or loss.
- Dirk Möhlenbruch: Assortment Policy in Retail , Wiesbaden 1994, p. 13
- See Ursula Hansen: Sales and procurement marketing of the retail trade , 2nd edition, Göttingen 1990, pp. 206-211.
- Hans-Otto Schenk: Psychology in Commerce , Munich / Vienna 2007, pp. 172f.
- Wolfgang Oehme: Handels-Marketing , Munich 1983, p. 211.
- Hans-Otto Schenk: Marktwirtschaftslehre des Handels , Wiesbaden 1991, p. 189.