Merchandising encompasses methods, practices, and operations designed to promote and sustain specific categories of commercial activity. Broadly, merchandising involves practices that facilitate the sale of products to retail consumers.
At the retail in-store level, merchandising refers to the variety of products available for sale and their display in a manner that stimulates interest and entices customers to make a purchase.
Merchandisers, also known as retailers, purchase products from wholesalers and manufacturers, add a markup or gross profit amount, and sell the products to consumers at a higher price than what was paid.
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Effective Beverage Merchandising Methods
Beverage operations, particularly those involving alcoholic beverages, yield a high profit ratio; hence, every effort should be made to maximize sales. A robust merchandising program is essential. Some effective merchandising methods to promote internal beverage sales include:
- Decor and Atmosphere
- Visual Selling
- Tent Cards
- Package Pricing
- Proper Staff Training
- Special Promotions
1. Decor and Atmosphere
A welcoming decor and atmosphere are crucial, as they consistently encourage customers to return.
2. Visual Selling
Visual selling is achieved through displays using trolleys, carts, special outlets, and similar setups. A compelling display of well-presented or popular drinks can significantly boost sales. Effective displays are essential in self-service situations or occasions, as they attract customer attention and strongly encourage impulse buying.
3. Tent Cards
Tent cards serve as valuable internal sales tools. They are often placed on dining tables, cocktail bars, or other locations where guests are likely to pick them up and read them, advertising special wines or drinks.
4. Package Pricing
Package pricing is another frequently used method in beverage merchandising. For instance, offering a second drink at half price, including a beer, cocktail, or wine with the price of a meal, or charging half price for all drinks during a specific period of the day.
5. Proper Staff Training
Training staff to be alert and responsive to customer needs is vital for sales promotion. A waiter unobtrusively inquires if the patron wishes to reorder as soon as glasses are empty. If the patron does not wish to reorder at that moment, they are informed that the waiter will be nearby when they are ready.
6. Special Promotions
Organizing special promotions for guests, such as tastings of local wines or lobster and champagne evenings, can significantly enhance sales figures.
7. Additional Sales Tools
A variety of other internal sales tools can be employed to boost sales, including drink mats, cocktail sticks, and matches.
8. Beverage Cost Calculations
The calculation of beverage cost and beverage cost percentage mirrors that of food cost. First, compute inventory amounts, calculate the cost of beverages sold, and then divide the cost by the total sales revenue to obtain the percentage.
9. Components of Beverage Cost
Beverage costs include only alcoholic beverages, such as liquor, beer, and wine, as these are subject to government taxes. Iced tea, soft drinks, milk, and coffee, although beverages, are considered food items and are not taxable.
The markup and pricing of beverages are consistently higher than food. Beverage cost percentages typically range from 15% to 25%, though they may be higher if a restaurant is running a special at a lower price or attempting to sell inventory.
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Key Terms in Beverage Cost Calculation
i. Beverage Cost: Refers to the cost of all beverages incurred in preparing the served drink.
ii. Beverage Cost Percentage: Represents the cost of beverages sold, expressed as a percentage of beverage sales.
iii. Beverage Gross Profit: Denotes the excess of sales over the cost of the beverage, expressed as a percentage or in financial terms.
Calculating the Cost of Straight Drinks
Method I
Total number of ounces in bottle ÷ Standard portion size (ounces) = Number of drinks per bottle
Cost of bottle ÷ Result from Step 1 = Standard drink cost
Method II
Cost of bottle ÷ Total number of ounces in bottle = Cost per ounce
Result from Step 1 × Standard portion size = Standard drink cost
Adjustments to Beverage Cost
i. Added to Beverage Cost: Food to bar (directs), storeroom issues, mixers.
ii. Subtracted from Beverage Cost: Managers’ drinks, special promotions.
Calculating Bottle Sales Values
Determine bottle size and drink size. Calculate drinks per bottle. Multiply drinks per bottle by drink price to obtain sales value per bottle.
Example
Bottle size: 1 liter
Drink size: 1 ounce
33.8 drinks per bottle
33.8 × N3.00 = N101.40
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