What is Merchandising?

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Staff Writers
Updated March 24, 2021

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Loosely used in a broad range of settings, you've probably heard of the term "merchandising" at some time. Most typically, you would have likely heard its use in some association with commercial sales or involving a company offering goods or services as its principle business. So, what exactly does this widely used business term mean? Let's get straight to the answers.

The Concept Defined

Merchandising may at first sound like a fancy term, but really, it is simply another phrasing to represent promotion and anything else that facilitates the ultimate goal of achieving sales. This is certainly a broad area of expertise, but it is one that is extremely critical to most businesses to some degree. In fact, the concepts of promotion and sales facilitation have arguably become a bona fide science, being the focus of everything from schools and degree programs, to entire company divisions today.

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So, how does it work? How exactly do businesses merchandise their goods and services? As it turns out, the wide variety of ways this is done can be easily categorized into two realms of application as we get into below.

On-Premise Applications

One very important application of promotion is seen on-premise, or on-site, at the company or store location. As this is the property of the seller, they then have the most ability and freedom of expression in promotion right here. Now ask yourself what kinds of things you typically see or experience when walking into a store of any kind? What are some of the most attractive elements you may encounter that attract you to continue entrance with a certain optimism for what is to come?

On-premise promotion is all about presentation and the psychology of influencing a sale. Signs at a storefront reel buyers in while well-placed goods and other luring elements are meant to continue to draw in the potential customer. Placement of signage and symbols, salesperson dispositions and approaches, and even store color palettes and background music may all serve the greater purpose of promotion as well. Today, even the sense of smell is being manipulated in on-premise promotion techniques to entice interest and an ultimate sale.

To take this a step further, however, when a company actively merchandises their goods or services, this may also take place in a behind-the-scenes sort of way that includes matters of research and development, marketing strategy, data canvassing and analysis, and more. More concisely put, when a business thoroughly engages in efforts to merchandise, it is attempting to engage in "sales promotion as a comprehensive function including market research, development of new products, coordination of manufacture and marketing, and effective advertising and selling." Such extents shine the light on the overall depth of the effort that some companies commit to in order to promote sales and effectively merchandise their offerings.

Off-Premise Applications

Off-premise promotional efforts refer to those that take place outside of the store or company property. These can include the use of commercials, flyers, word-of-mouth hype, and seemingly countless, other efforts. In addition, affiliated businesses may also help in another business' efforts here. This often occurs within the parameters of some sort of coalition or partnership formed between the two.

The ability to effectively sell a product or service is what entrepreneurship and modern commerce are all about. The associated ability to merchandise, promote, and facilitate these sales are, therefore, paramount to virtually all for-profit businesses. If you are interested in learning more about modern merchandising. and marketing techniques, the American Marketing Association, is a great authority with which to further inquire.

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