Planograms – Meaning, its Need and Types of Product Placements


How do you think buildings are constructed ?

With the help of architectural drawings.

An architectural drawing creates a rough print of the building on paper which gives an idea about the floor plans, location of rooms, lobby and so on.

In retail, a planogram replaces architectural drawings. Once a retailer opens a store, he needs to have a rough idea about the store plan. A planogram helps in the same.

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Planograms are similar to architectural drawings and help the retailer to understand where the merchandise should be stocked in order to catch the customer’s attention and make the maximum impact.

Planograms are nothing but diagrams which give the retailer an idea how and where to place the merchandise to attract the customers into the store.

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Need for Planograms – Why Planograms ?

Presentation of product plays an important role at the retail store. With the help of Planograms; a retailer can actually know where to place the products for the maximum effect.

Planogram enables the retailers to stock the products at the right place and at the right time to attract the customers and prompt them to buy.

A retailer can make the best possible use of the available space with the help of planograms.

The merchandiser can actually create an attractive display to entice the customers with the help of planograms.

Planograms indirectly also contribute in maximizing the sale of the merchandise and thus generate revenues for the store. A cluttered store fails to attract the customers. The planograms help the retailer to arrange the products in the best possible way for the customers to pick up almost everything.

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When is a Planogram Prepared ?

A Planogram ideally should be prepared before the merchandise reaches the retail store. The retailer should be very clear where he wants to place his products to impress the customers.

How is a Planogram Prepared ?

There are various softwares available which help to create planograms. These softwares help the retailers to draw three dimensional diagrams of the store and help them visualize the overall image of the store.

Types of Merchandise Placement

Visual Product Placement – Visual Product Placement refers to a technique where the products are placed in a way to immediately catch the attention of the customers walking into the store.

Types of Visual Product Placement

  1. Horizontal Product PlacementAccording to horizontal product placement, products are placed side by side on shelves to offer a wide range of options to the customers.
  2. Vertical product placementThe vertical product placement displays the merchandise on more than one shelf level.
  3. Block PlacementAccording to block placement of products, the related products or merchandise belonging to a similar family are stocked at one place together under one common umbrella.
  4. Commercial Product PlacementCommercial product placement takes into account the brand value of the merchandise. Every customer has a perceived image of the merchandise which decides its placement in the store. A product which has several takers would definitely get the best position as compared to something which does not contribute much to the revenue of the store.
  5. Market share product placementMarket share product placement plan works on a simple strategy:A product which generates the maximum revenue for the store should ideally be placed at a prime location for the customers to notice it and immediately buy it.
  6. Margin Product PlacementAccording to Margin product placement, the more a product earns profit for the retailer, the better the location it is(managementstudyguide)