Assortment policy of the enterprise

Trade policy – is a set of actions and strategies aimed at defining business goals and achieving them. This is a pre-formulated plan of action of the company that produces or promotes the market of particular goods. In the product policy also includes assortment policy of the enterprise and trademark strategies. Commodity strategy defines the overall strategic direction of the company.

Assortment policy is a definition of a set of those product groups which are most preferred for the successful operation of the enterprise and ensure the economic efficiency of its activities, the formation of the product range in accordance with market needs, financial condition of the company and its strategic objectives.

When forming the product product must:

— to reveal the relationship between new products that require modifications and enhancements, products of traditional, and outdated.

— set the range of produced products and planned quantitative and qualitative indicators;

— determine the number of models as well as versions of the same products;

— determine the lifecycle of each of the manufactured products and the prospects of renewal of the range.

Assortment policy formed to achieve long-term goals and is especially important in a tough competitive conditions, bringing the product to the high requirements both for range and quality. Her questions are taken at the strategic enterprise level and takes into account its overall strategic objectives.

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Assortment policy, its development and implementation is created when the following conditions are met:

• the existence of clear ideas about the overall strategy of the enterprise in the market;

• must have a good knowledge of the market and the nature of the demands of the target buyers;

• you need a clear view on available resources and capabilities of the enterprise today and in the future.

Assortment policy should be justified on the basis of General principles, providing access to the market the following commodity groups:

- major — products that bring the company the bulk of the profits;

- support — products that bring the company less revenue than the basic, but always coming onto the market and stabilizing revenue.

- a strategic — goods, from which the company plans to make significant profits in the future;

- tactical — of goods designed to promote the sale of the main product groups.

Change range can be based on three approaches:

1. Vertical changes of the product range. Such processes are part of vertical diversification of production activities and is directed on expansion or contraction of production of those components that were purchased from vendors, and create its own sales network to promote manufactured by the company products.

2. Horizontal changes are one of the components of horizontal diversification. The so-called changes of the product range within existing activities or in related fields or entering a new market in the framework of cooperation without transitions on adjacent levels.

3. Comprehensive changes. Are diversifying both horizontally and vertically.

The broadening or narrowing of the range may be due to two reasons. This is usually the extension that is associated with the diversification process, or contraction caused by the need to integrate both horizontal and vertical.