Assortment policy of the enterprise
Commodity policy is a set of measures, andAlso, strategies aimed at determining the goals of the business and their achievement. This is a plan formulated in advance by the company, which produces or promotes products of a certain type. The product policy includes the assortment policy of the enterprise and the use of commodity strategies. Commodity strategy is determined by the general strategic course of the enterprise.
Assortment policy is a definitiona set of those product groups that become the most preferred for the successful operation of the enterprise and ensure the economic efficiency of its activities, the formation of a range of products in accordance with the needs of the market, the financial condition of the enterprise and its strategic goals.
At formation of assortment production should:
- identify the relationship between new products that require modification and improvement, traditional products, as well as obsolete products;
- to establish the nomenclature of products and planned quantitative and qualitative indicators;
- determine the number of models, as well as modifications of the same products;
- determine the composition of the life cycle of each product, as well as the prospects for updating the range.
Assortment policy is formed forachievement of long-term goals and is particularly significant in tough competitive conditions that impose high demands on the product both in terms of assortment and quality. Its questions are taken at the strategic level of the enterprise and take into account its overall strategic goals.
Assortment policy, its development and implementation is created under the following conditions:
• There must be a clear idea of the overall strategy of the enterprise in the market;
• Good knowledge of the market and the nature of the requirements of the target buyer category are necessary;
• It is necessary to have a clear idea of the available resources and capabilities of the enterprise, both today and in the future.
The assortment policy should be justified, proceeding from the general principles providing for the simultaneous entry of the following commodity groups into the market:
- the main - goods that bring the enterprise the bulk of the profits;
- supporting - goods, which bring the enterprise less profit than the main ones, but constantly enter the market and stabilize the revenue;
- strategic - goods, from which the company plans to receive significant profits in the future;
- tactical - goods, designed to stimulate the sale of the main commodity group.
Changes in the assortment can be based on three approaches:
1. Vertical changes in the assortment.Such processes are part of the vertical diversification of the company's production activities and are aimed at expanding or narrowing the production of those components that were previously purchased from suppliers, as well as the creation of its own trading network in order to promote the products produced by this company.
2.Horizontal changes are one of the components of horizontal diversification. This is the name of the change in the assortment within the existing activities, either in related areas or entering a new market within the framework of cooperation without crossing over to adjacent levels.
3. Comprehensive changes. They are diversification both horizontally and vertically.
Expansion or narrowing of the range can beThere are two reasons for this. Usually this expansion, associated with the process of diversification, or a narrowing, caused by the need for integration, both horizontal and vertical.