Trade policy - a set of measures and strategies aimed at identifying business goals and achieve them.It formulated an action plan in advance the company making any marketed products of some kind.Commodity policy includes assortment policy of the enterprise and use of trade policies.Trading strategy is determined by the overall strategic direction of the company.
assortment policy is the definition of a set of those product groups which are most preferred for the successful operation of the enterprise and ensure the cost-effectiveness of its activities, the formation of the product range to meet the needs of the market, the financial condition of the company and its strategic objectives.
In forming the assortment of products must:
- identified the relationship between the new products, which requires modifications and improvements of traditional products, as well as outdated;
- established range of products and planned quantitative and qualitative indicators;
- determined by the number of models, as well as modifications of the same product;
- determines the composition of the life cycle of each product, as well as prospects of updating of assortment.
assortment policy is formed in order to achieve long-term goals and is especially significant in the tough competitive conditions applicable to the product as the high demands on the range and quality.Her questions are taken at the strategic enterprise level and takes into account its overall strategic objectives.
assortment policy, its development and implementation created under the following conditions:
• requires the existence of a clear understanding of the overall strategy of the enterprise in the market;
• need a good knowledge of the market and the nature of the requirements of the target categories of buyers;
• must be a clear understanding of the resources and the enterprise as of today and in the future.
Assortment policy must be justified on the basis of common principles, providing access to the market at the same time the following commodity groups:
- basic - products that bring the company the bulk of profits;
- support - products that bring the company less profitable than the main, but always coming on the market and stabilizing revenues;
- strategic - products on which the company plans to make a significant profit in the future;
- tactical - products designed to promote the sale of the main commodity groups.
range changes can be based on three approaches:
1. Vertical changes in the product range.These processes are part of the vertical diversification of production activities and focused on the expansion or contraction of production of those components, which were previously purchased from suppliers, as well as creating its own distribution network to promote the products produced by this company.
2. Horizontal changes are one of the components of the horizontal diversification.So name change within the range of existing activities or in adjacent areas, or entering a new market within the framework of cooperation without transitions to adjacent levels.
3. Complex changes.Diversification is both horizontally and vertically.
Expanding or narrowing of the range may be due to two reasons.Usually it is an extension associated with the process of diversification, or narrowing caused by the need to integrate both horizontal and vertical.
