Week 5: Merchandising

Merchandising

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​Week 5

​Purchasing

• Develop sales objectives and sales plan

  •  Evaluate nature of market (See Small Business Management Outline)

  • Evaluate sales history

    • Consider the cremation rate

    • Consider the demographics of your geographic market

    • What is the average household income of the families served?

      • Many factors to consider when developing a relevant strategy regarding sales objectives.

​Purchasing

• Considerations regarding merchandise to be offered

  • Availability of product

  • Price

  • Quality

  • Eye appeal

  • Supplier recommendations

  • Consumer demand

• Product mix/service mix

  • Thorough market analysis in the spending habits of the market served will dictate the merchandise a funeral firm offers to its families.

  • What sells in one market, may not sell in every market.

  • Conduct surveys-Know what the consumer wants before planning the product mix.

​Purchasing

• Select suppliers (See Small Business Management Outline)

• Payment terms for purchases (See Small Business Management Outline)

  • Cash discounts-Incentive offered for paying the bill by the due-date

  • Quantity discounts-An incentive offered when certain items are purchased in quantity(ex: A family purchased 10 of the same keepsake and the funeral director offers a discount.

  •  Rebates- A refund offered to the consumer by the manufacturer (Ex: Batesville offers $200 back to families who purchase a specific casket)

  • Consignment- The retailer agrees to pay seller for merchandise after the items sell (ex: a local artisan who makes urns wants to display their product in your funeral home and will take payment when a family purchases them)

 Pricing

• Recognize the relationship between the pricing of merchandise and pricing of service

• Pricing strategies

  • Customer value based pricing-setting prices primarily based on a consumer's perceived value of a product or service.

  • Cost based pricing-A markup is added to the product over the cost of production.

  • Competition based pricing-price points are heavily influenced by those of your competitors.

 Pricing

• Pricing methods

  • Markup

    • Fixed multiple or times factor-A price determination method whereby item cost is multiplied by a constant factor.

    • Percent-We might also call this a profit margin.

      • Caskets are typically marked up 100%, the funeral home will double the wholesale price of the casket, but this may vary depending on the casket and the funeral home.

    • Fixed dollar amount- Pricing determined by the amount of profit necessary on each sale.

 Pricing

• Graduated recovery

  • A pricing method where markup varies.

    • Increase- Lower end merchandise receives a lower markup and higher end merchandise receives a higher markup.

    • Decrease- Upper range merchandise receives a lower markup and lower end products receives a higher markup

    • Modified-Similar to decreasing graduated recovery but, lower end items receive a less aggressive markup.

• Use of sales frequency data

  • The number of times sales in a given price bracket occurs over a fixed period of time. This requires listening to consumers.

    • If merchandise is turning over in a specific bracket, then a funeral may want to reconsider their pricing structure.

 Pricing

• Price quotation

  • Itemization-Method of price quotation by which each unit of service or merchandise is prices separately.

  • Package pricing-Method of price quotation which groups together selected services or merchandise.

  • Bi-unit pricing-Method of price quotation that shows the price of the service and the price of the casket.

  • Functional pricing- Method of price quotation that is broken down into several major component parts such as person services, facilities, automobile, merchandise, etc.

  • Unit pricing-a method of price quotation in which one price includes both service and casket.

 Pricing

• Cash advance items

  • Any item obtained from a third party and paid for by the funeral home on the purchaser's behalf.

    • Obituaries

    • Cemetery Opening and closing

    • Death Certificates

    • Honorarium to Clergy

 Pricing

• Statement of Funeral Goods and Services

  • Itemized statement for retention

    • This is an FTC requirement and a legally binding document between you and the customer

      • The arrangement conference does not end without this!

 Pricing

• Verify Method of Payment

  • Never feel guilty about securing payment for a funeral!

    • Always clarify which forms of payment your funeral home will accept

      • Cash

      • Credit

      • Insurance Assignment

      • But always secure payment with families during the arrangement conference.

Display

• Merchandise

  • Caskets

  • Outer burial containers

  • Sundry items

  • Cremation merchandise

  • Memorialization products and personalization

  •  Green, natural, or environmentally friendly

Display

• Methods of merchandise presentation

  • Funeral home-merchandise presentation should be on the 1st floor or the same floor as the arrangement conference

  • Casket manufacturer’s selection room

    • Full-size caskets and other merchandise can be expensive to keep in stock

    • Manufacturers (Batesville, Wilbert, Doric, etc.) agree to create merchandise displays in funeral homes in exchange for funeral homes agreeing to exclusion sales agreements.

    • Dedicated arrangement rooms- merchandise displays are created in in the arrangement rooms, often based on the final disposition that the the family has chosen. , such as having a "Cremation-specific" and a "Burial-specific" arrangement room

Display

• Catalog

  • Most Funeral homes, regardless of the style of selection room, will also use a catalog to enhance their selection offerings

    • Electronic

      • The modern version of the catalog is the digital, online, or electronic catalog. This allows the funeral director to offer a wider range of merchandise to the client, while saving space.

    •  Price lists

      • The FTC requires that a CPL and/or an OBCPL be provided to the customer anytime there is discussion of caskets or Outer Burial Containers. Here is what the FTC has to say about Price Lists in detail.

Display

• Location of merchandise display

  • Within funeral home

  • Separate building

  •  Off premises

Display

• Order of preference within building

  • Main level- Or on the same level as the selection room

  • Upper level

  • Lower level

    • If the selection room has to be on either the upper or lower lever, it should be accessible to all guests.

Display

• Type of display

  • Full size display

• ​Fractional display

Display

• Type of display

  • Miniature display

    • Most commonly used with OBC

​Catalogs

•  Electronic

• Photographic display

• Many vendors will offer an online version of their merchandise catalogs

  • Batesville provides a pdf version of their Cremation, jewelry, Choices, and their Dimensions Catalogs

  • Some funeral homes post a digital versions of their merchandise offerings on their website.

Display

• Selection room environmental enhancements

  • Focal point(s)-Floral arrangements, artwork

  • Color-Floor and wall coverings should be neutral in color to not distract from the merchandise

  • Lighting-Should highlight the merchandise and enhance he client experience.

Display

• Selection room environmental enhancements

  • Display fixtures

    • Caskets should be displayed at a height which allows the consumer to view the entire unit with ease, 26-30 inches above the ground

      • Bier-For displaying a casket for viewing

      • Church Truck-Wheeled, collapsible

      • Casket Stand-Displays one Casket

      • Casket Rack-Displays two caskets for storage or in the selection room

​Bier

​Church Truck

Display

• Selection room environmental enhancements

​Casket Stand

​Casket Rack

Display

• Selection room environmental enhancements

  • Signage

    • Should include the casket name, price, construction material, interior fabric, and any code which allows the consumer to cross-reference the casket to the Casket Price List (CPL).

  • Decorations

  • Audio / visual equipment-Use in the arrangement room enhances the arrangement but also helps families who might be threatened by the selection room.

Display

• Modern merchandise display

  • Fractional display

    •  Space utilization

    •  Consumer discomfort minimized

Display

• Theme displays and vignettes

  • Displaying caskets with a theme, encourages families to share stories about their loved one and helps to personalize the service.

• Customization presentation-The more we learn about our families, the more we can customize services!

Display

• Traditional selection room (full size caskets)

  • Recommended number of caskets

    • Minimum 12

    • Maximum 30

  • This number is significant!

  • This is your target number of caskets for your Merchandising Project!

• Size

  • One room is preferable for casket selection

  • 40-60 square feet per casket recommended

Display

• Arrangement of merchandise

  • Furniture group-Well-placed furniture throughout the selection room, so the family can regroup during the process.

  • Traffic flow- Walkways should flow, merchandise signage should be clear and merchandise groupings (caskets, vaults, urns, etc) should flow)

  • Consecutive method- placing caskets for selection in their order of increasing or decreasing value.

  • Demonstration or educational group- A grouping of merchandise that the funeral director uses to introduce the family to the selection room.

Display

• Grouping methods

  • Material-Most basic differentiation

  • Style- shell design, ends, corners, body panels, and closure method- gasketed vs non-gasketed.

  • Appearance-Colors, designs, interior, etc.

  •  Price-One of the most common

Display

• Lighting

  • Direct lighting-  illumination directly shining on an object.

    
    

  • Indirect lighting- reflected illumination of an object.

Display

• Light sources

  • Fluorescent lighting-will appear cold and cause items to appear flat

  •  Incandescent lighting- Warmer, but has a yellowing impact

  • Halogen lighting- Clean, bright, white, close to daylight-Commonly used in selection rooms because it shows the true color of products

  • LED lighting-Energy Efficient, considered a "geen" light source

  • Natural lighting