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Questions and Answers
What is the primary objective of Merchandise Financial Planning?
What is the first step in Merchandise Financial Planning for Brands?
What is the purpose of assortment planning in Merchandise Financial Planning?
What is the objective of replenishment in Merchandise Financial Planning?
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What is the purpose of end-of-season activities in Merchandise Financial Planning?
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What is the total revenue target for the Brand in APAC?
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What is the purpose of the 'building-blocks' concept in sales plan calculation?
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What is the expected contribution of the DTC channel to the overall APAC revenue target?
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What is considered in the planned contribution ratio by gender within key categories?
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What is the purpose of collaborative efforts between the Brand Planning teams and Digital Hub Team?
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Study Notes
Merchandise Financial Planning (MFP)
- Guides product decisions from a financial angle across different stages of the GTM (Go-To-Market) to ensure profitability and revenue maximization.
- Provides financial framework for assortment planning, allocation, replenishment, and end-of-season activities.
Goals of MFP
- Break down revenue target into achievable goals for channels (DTC, ecommerce, DTP, and Wholesale).
- Allocate investments to meet or exceed revenue goals while maintaining profitability.
Channel Breakdown
- Channels refer to Distribution channels (DTC, ecommerce, DTP, and Wholesale).
- Product Type refers to categories (e.g., Men's Sandals).
Annual Revenue Target Breakdown
- Based on Strategic channel revenue growth targets (top-down Brand Target) and Channel growth forecast (bottom-up commercial Forecast).
- Example: DTC Channel is expected to contribute 10 million to the overall APAC revenue target of 100 million for the Brand.
Channel Contribution
- Considerations: historical sales by store cluster, revenue growth estimates, product pipeline, and Brand-specific assumptions.
- Planned contribution ratio by gender within Key Categories combines top-down and bottom-up planning approaches.
Translating Revenue Goals into Strategic Sales Plans and Budgets
- Collaborative effort between Brand Planning teams and Digital Hub Team.
- Involves business analysis, forecasting, and consumer insights.
- Ensures Sales plans and budgets are aligned with revenue targets and optimized to minimize markdowns and maintain lean End-of-Season Inventory.
Sales Plan Calculation
- Utilizes building-blocks concept, incorporating 4 out of the 5P's of strategic planning (Place, Promotion, Product, Price).
- Focuses on adjustments versus previous season or long-range plan (e.g., portfolio changes, sell out mechanics, and product offering).
- Consider brand-specific factors to be considered in the sales plan calculation.
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Description
MFP is a process guiding product decisions from a financial angle across stages of the GTM, ensuring profitability and revenue maximization. It provides a financial framework for assortment planning, allocation, and distribution.
