what is the most strategic layout for a retail store in positioning the products?

Question

In retail establishments, the objective of the “service layout” is usually the maximization of profits per unit of display space. Eye-level display is preferred because of maximum exposure to customers. With limited eye-level display spaces, which type of product will you display/position in such spaces:

a)Slow-moving products with higher profit margin (than fast-moving products)? Or

b)Fast-moving products with lower profit margin (than slow-moving products)?

Clearly specify and justify the basis/bases of your decision. Your answer/explanation should clearly show how the profit maximization objective is better pursued by your decision

Answer 1

Choice A.
1. Fast-moving products by definiton, do not need extra display space to be seen. They will remain "fast-moving"
2. The stated goal is profit maximization. If the higher profit margin items were anywhere but the eye level display, then the company would be losing out. Why? If the fast-moving products where there (which, as explained in 1. would reamin 'fast-moving' no matter where their placement), then that would take away from the profit. The slow-moving/high profit items would, as already being slow, be 'slower' if not placed in the dislay-->thus, even more chance loss on profitablity to be made.
3. The only acceptable place for the slow moving products is in the display case, if the goal is to maximze profit.

btw: if you use this answer, the guilt will get you if you do not acknowlege it in someway. If you don't acknowledge, just know then, I'm smarter than you. Sorry, this is always the disclaimer I give when i sense homework problems.

Answer 2

Hmm jsut a few tips I know from my associations with a certaing HUGE retailer. I'm futher seperating the catagories to 4 things.
Big-hi cost item,small-cheapy dollar store category,neccessary-toilet paper,diapers, milk, Unneccesarry-toys, sunglasses,
1. Alternate big and small unneccsary items, towards the front start with the small stuff, then work in larger items, remember once you get them to start putting stuff in their cart its easier to get them to add more.
2. Put all Neccessary's in the back, if they have to walk the lenght of the store to get the charmin, they'll be exposed to every item on the way back.
3. Put all unnecesary items in your high traffic areas as possible with step 1.
I think you'll find this similar to what large outlets and such do.

Answer 3

it is integral to know what you are selling. i improved my profit margin by 150,000 in 1 year by purely changing the layout but it was dependent on the product(ie. believe it or not some people want expensive and tacky