Assortment decisions

Assortment management

In case of distributors and retailers the assortment management module is critical, as it specifies all the elements visible to the shoppers at store. Because of possible assortment offer width (number of products) this module has built-in filters, which enable focusing on limited assortment range at once. All the information on products is gathered in the main table. Its upper part lists the own brand products (if you have them!), then the other products. The information you can see in the table covers:

  • Product listing, specifying whether the specific product is offered in your store. Its presence in the main table means that you actually aim to include it in your offer. Removal (cross sign on the right end of each row) is equivalent to removal of the product and its price label off the shelf, and allocation of the shelf space to different products. If there are any products offered by your suppliers which are not in your offer, you can add them to your assortment by selecting from the list visible above the filters (the drop down list is visible only if you have some products to add).
  • Selling price per item. While deciding about prices you need to make sure the price is well-positioned both against the buying price, and as compared to your competitors. You can find the buying prices in the products buying decision module, which you can easily reach by clicking configure buying link on the right end of each row.
  • Shelf allocation in %, for all listed products should sup up to 100%. The higher the shelf share allocated to a product, the higher visibility to the shoppers. In case of retailers, the shoppers react significantly to this visibility. In case of distributor it is important if its customers buy from more than one source - the higher the shelf space, the higher share in the retailer purchase.
  • Product category, informative.
  • Supplier, specified only for own brand products (since it can be manufactured only by one). For other products you can find the link to the supply sources module.

Since with the increasing number of products the shelf gets increasingly complicated (so its management), the game offers a couple of supporting mechanisms. First of all - after the decisions on shelf allocation is made, the sum of all shelf shares over all products should score 100%. Whatever the sum would be - before re-calculating the decisions impact, the shelf share is to be scaled proportionally to yield 100%. You can also use automatic allocation algorithm, which takes into consideration BTL investments made by the brand owners at your store, and allocates fair chunk of the shelf.

Own brand

Similarly to manufacturers, distributors and retailers can manage their own assortment. Because they cannot manufacture themselves, it is necessary to order the products from manufacturers. The basic concepts related to own brand management are:

  • brand, is a mark/signage of a product/group of products/business, and in the game it's represented by a name, which is to be associated by the shoppers and customers with very specific values offered. The brand strength is built by sustained reliability and quality, but it is supported by marketing investments. Each company in the game has a name, which is also its default brand. For business customers (other players) you build the brand strength by consequence, stability, and predictability in the business cooperation. To build the awareness and desired image among shoppers and consumers you'd use marketing investment. Technically each business has a default brand named the same as the business, and might manufacture (or order for manufacturing) products marked with this brand. Moreover, every business (apart from independent retailers) might define new brand or brands for their products by giving a name.
  • product from the manufacturer's point of view is characterized by a couple of parameters:
    • brand = what common name or signage we use for it
    • subbrand = what variant/flavor/taste we gave to the product
    • subcategory = what we'd like to manufacture and sell, and what production cost profile is allocated to it
    • unit volume = how big the single product is
    • quality rate = how premium or superior in quality the product is. The quality rate influences the reception of the product among consumers, so the higher the quality, the higher intent to buy a product., especially among the demographic groups with higher disposable income. At the same time this quantity affects strongly the manufacturing cost - the base production cost is multiplied by the quality rate.
    • selling price = base selling price, common to all customers

In the own brand management module you make decisions related to your own brand products:

  1. Add new brand: is defining new brand in your portfolio. At this stage it's just naming it.
  2. New product: for each brand from your portfolio you can order a new product. Adding it is followed by (one-time) R&D cost of 100000 Ŋ. Ordering the product requires filling a form with specifying products parameters listed above, and the manufacturers we'd like to send the request to.
  3. Managing the own brand assortment. Since these products are manufactured by other business, you cannot modify its production parameters or the buying prices. It's a contract, and modifying requires signing a new one to vary these parameters. Here you can pause ordering, or terminate the own brand contract with the manufacturer. The other (trading) parameters might be changed in the assortment management module.