In this dissertation, we show how the firm can improve its revenue and competitiveness through segmenting the market by exploring consumer heterogeneity. In the first essay, we show that asymmetric assortment breadth among two competing retailers can emerge as an equilibrium when consumers differ in their prior knowledge about their product preferences and their shopping costs. Under this equilibrium, the full line retailer expands the market demand by attracting the uninformed consumers with large shopping costs and the single product retailer passes on the savings from a streamlined assortment to the informed consumers by setting a lower price. Therefore, the two retailers soften the competition between them and both achieve higher profits. In the second essay, we consider a setting in which consumers experience distinct instances of need for a durable product at random intervals and derive random amount of utility from each instance. Consumers are differentiated according to the frequency with which they experience instances of need. For a firm that provides a durable product to such a market, we consider the implications of selling versus renting on a per-usage basis. Selling minimizes transaction costs, but may result in inefficient utilization of units that are produced. Alternatively, per-usage rentals allow more utility to be generated per unit of product that is produced. Focusing on these trade-offs, we identify conditions under which the firm should sell, offer per-usage rentals, or offer a combination of the two. In the third essay, we continue to use the durable good framework to study how various forms of government subsidy programs shift consumer's demand patterns and thus generate different magnitude of additional savings in resource consumption. We give the conditions under which each type of cash rebate programs does the best in generating resource savings per dollar spent. / text

The purpose of this study is to examine and adjust as needed the Kang (1999) assortment planning model to fit the planning process of bridal retail buyers. Five buyers who are owners or managers of small, independent bridal retail businesses were selected purposively and participated in in-person interviews about their assortment planning practices. A model was developed for each company interviewed, depicting the order of the assortment planning steps as practiced by bridal retail buyers. The final models were confirmed with follow-up interviews. Findings from this study suggest that the assortment planning steps used by bridal retailers are similar to the steps used by women's dress buyers, as found in Kang's (1999) study. Bridal buyers use the six steps proposed by Kang to be included in the assortment planning process, however the bridal buyers' assortment plan is more intuitive, integrated, and loosely constructed than that of women's dress buyers. Three following variables were considered for their affect on the bridal retail buyer's process: (a) product-specific factors, (b) company-specific factors, and (c) buyer characteristics. Within the factors, the characteristics of product type and organization size were thought to have the most effect on the process. / Master of Science

The study aims at investigating how revenue management techniques can be applied in industries which offer multiple products. Most of the companies nowadays trend to produce multiperoducts and they try to find the best method of selling. Therefore, revenue management can be considered as a new direction which should be developed for these firms. In this study, multi-product firms are mainly referred as firms offering a bundle of products or substitute products. In this regard, models and techniques applied in multiproduct firms are discussed and it is tried to provide basic models to better understand the problems, variables, customer choice models and constraints. The main methodology in this study is literature review. In order to carry out the research first revenue management applications and techniques are discussed to find a fit to this kind of industries. The main findings of this study are (1) identifying and analyzing the most important factors affecting decision making regarding managing of bundling and substitute products and ultimately total revenue of multiproduct firms. (2) Summarizing the results and knowledge obtained from various studies within fields of bundling and substitute products. (3) Discussing the possibility of applying different revenue management techniques to these fields. (4) Identifying potentials and new directions for future study with respect to both revenue management techniques and multiproduct firms.

The cosmetic industry is characterized by having the ability to offer a wide range of differentiatedproducts. This leads in turn retailers to make strategic decisions regarding assortment planning. Itmeans choosing the right breadth and depth of products that should be allocated to a distributioncenter. This is essential to the ability to answer the needs of their customers. Besides the range ofproducts retailers also face the choice of the optimal location of the distribution center. Both the rangeof carefully chosen products and agglomeration economies affect efficiency, customer satisfaction aswell as transportation delays and costs. Therefore, in this research, we have developed a framework tooptimize both the ranges of products and agglomeration economies. To do this study, we havecollaborated with LYKO AB, a firm within the cosmetics industry offering highly differentiatedproducts with e-commerce solutions. We frame their problem by creating a three-step optimizationsolution. It is combined with a demand module, optimization module, and localization module. Theresult showed that 36 products within the selected subset had a high demand,10 out of these productsfurther maximized the profit of the firm. The localization module showed that among the fourconsidered countries in Europe (Germany, Netherlands, Poland, and Austria) the optimal geographicallocation to locate the warehouse was Germany. This result was based on logistic decisions such ascustomer population, best distance, and level of competition. In conclusion, to be able to optimize theassortment planning of highly differentiated products to maximize the profit based on localization andcustomer demand complexity one can use a three-step optimization solution.

As end-consumers are surrounded by a tremendous number of multi-channel retailers and their products, clothing retailers are exposed to numerous clothing samples with a variety of styles in various price ranges, offered by onshore and offshore manufacturers. Although manufacturers or vendors offer well-salable products, a retail business may not be successful in maximizing profits without a strategic retail buying planning process. The purpose of this study is to develop a retail buying model for clothing retailers. In order to test the variables that comprise the retail buying model, the objectives of the study are to: (a) investigate important assortment decision factors for clothing retail buying; (b) segment clothing retail buyers by their decision factor uses; (c) characterize the segments by buyer (i.e., age, gender, education, experience, employment) and company demographics (i.e., types of products, type of store, size of the firm); (d) examine the relationship between these demographic variables and the factor uses; (e) examine the influence of the factor uses on the success of assortment planning; (f) examine the influence of the success of assortment planning on firm performance; and, (g) examine the influence of extraneous variables (i.e., retail environment) on firm performance. After two pilot tests, adjustments were made to wording in the questionnaire. Data collection, using a pen and paper questionnaire, was conducted using convenience and snowball sampling. Through this method, 425 clothing retail buyers, merchandisers, or store owners, who are involved assortment planning and buying in South Korea, participated in the survey. A variety of statistical analyses was used to test the hypotheses. For testing Hypothesis 1, the mean and standard deviation of the assortment factor items were used to rank important decision factors for assortment planning. To test Hypothesis 2, retail buyers were segmented by their assortment decision factor use through exploratory factor analysis and K-means cluster analysis. For Hypothesis 3, Chi-square was utilized to characterize the segments of buyers and merchandisers from Hypothesis 2, using buyer and company demographics. For Hypothesis 4, Pearson and Spearman Correlations were used to test if correlations exist between buyer and company demographic variables and decision factor use. For Hypotheses 5 to 7, a Structural Equation Model (SEM) was developed to test if causal relationships exist among assortment decision factor use, the success of assortment planning, firm performance, and retail environment. All Hypotheses were fully or partially supported. Based on the results of hypotheses testing, the finalized retail buying model was developed. The finalized retail buying model based on the use of assortment decision factors will benefit retailers by helping retail buyers to analyze available information and identify the need for additional decision factors. Due to the use of convenience and snowball sampling as well as the limited geographic location of the survey, the finding of the current study cannot be generalized to the general population of clothing retail buyers. Future studies using probability sampling methods, utilizing qualitative methods, and/or examining in different countries, are suggested to verify the current findings and confirm the validity of the framework. / Ph. D.

Dagens textilbransch karaktäriseras till stor del av snabbt föränderliga trender. Det råder en hård konkurrens på marknaden och kunden besitter i stor utsträckning en god kunskap och en medvetenhet, vilket ställer högre krav på det utbud som företaget erbjuder. Vidare har hemtextilbranschen under de senaste åren präglats av en ökad konkurrensnivå. Flera aktörer så som exempelvis stormarknader, färghandlare och byggvaruhus har utökat sitt sortiment med hemtextil och är därmed med och tävlar om hemtextilkunderna. I denna situation är det viktigt att ha ett välplanerat sortiment eftersom det bland annat speglar företagets affärsidé samt kommunicerar vad affärsidén erbjuder och till vem. Vidare kan en medvetenhet kring sortimentsstrategier användas för att kommunicera rätt image till kunden och dessutom vara ett viktigt konkurrensmedel.Syftet med uppsatsen är att beskriva hur ett hemtextilföretag bör arbeta med sin sortimentsplanering för att på en strategisk nivå använda sortimentet som ett konkurrensmedel. Vidare ämnar uppsatsen även undersöka hur ett sortiment kan påverka ett hemtextilföretags image.Uppsatsen bygger på en kvalitativ studie av hemtextilföretaget Hemtex med inriktning mot företagets babysortiment. Genom semistrukturerade intervjuer med en Business area manager på Hemtex, samt potentiella kunder för sortimentet har uppsatsen kartlagt vilka avsikter Hemtex har med babysortimentet samt hur det betraktas ur ett kundperspektiv.Resultatet av studien visar att sortimentets utformning har ett starkt inflytande över hur ett hemtextilföretag betraktas av kunden. Med stöd av den teoretiska referensramen visar studien att de intervjuade kunderna bygger en stor del av sin uppfattning om Hemtex på hur sortimentet är utformat samt hur det presenteras i butik. Slutligen försöker uppsatsen finna konkreta tanke- och tillvägagångssätt som ett hemtextilföretag kan tänkas tillämpa i sin sortimentsstrategi. Bland annat presenteras modeller gällande förhållningssätt för sortimentets utformning, vilka analyseras utefter fallföretagets förutsättningar. Studien visar att Hemtex nuvarande sortimentsstrategi gynnat babysortimentet. Företagets strategi att hålla sortimentet renodlat, med färre produktvarianter, visar sig vara god då de genom detta kan minimera produktionskostnaderna och hålla ett lägre pris. Slutsatsen blir att Hemtex i sin sortimentsstrategi bör eftersträva att bevara och förstärka sin image som ett företag som tillhandahåller prisvärda produkter.The current textile industry is highly characterized by rapidly shifting trends. The market involves a high level of competition as well as consumers who possess a lot of knowledge about the products. These elements increase the demands on what a company is required to offer. Today’s home textile market has also increased its level of competition since many more companies, such as supermarkets, paint dealers and builders’ merchants are expanding their assortments to include textile products. In these circumstances a well-planned assortment is very important since it reflects the company’s business concept. The assortment communicates what is involved in the business concept and the target audience. A company may then use an awareness of different assortment strategies to communicate the right image to the appropriate audience. This may also be used as an important competitive weapon.The purpose of this essay is to describe how a home textile company can use assortment strategies in order to use their product-mix as a competitive device. This paper also intends to investigate how a company´s image will be affected by the assortment. This essay is based upon a qualitative study of the home textiles company Hemtex, with a focus towards the company´s Baby assortment. This study was carried out through semi-structured interviews with a Business Area Manager at Hemtex and a number of potential customers within the category of baby products. With the information gained from the interviews, the essay has mapped out how the Baby assortment is regarded from a customer´s perspective. The result of the study identifies that assortment strategies have a strong affect on a consumer´s perception of a home textile company. With support from the theoretical framework the study shows how the interviewed consumers build a significant part of their opinion about Hemtex upon the design and presentation of the assortment. In the final chapter of the essay, it attempts to find concrete strategies for planning and implementing favorable assortment strategies. Theoretical models relating to assortment design are evaluated according to the conditions of Hemtex. The study shows that the company´s baby assortment has performed better since implementing the present strategy. Keeping the baby assortment refined, with a smaller range of varieties, has proven to be a well-suited strategy. This is particularly important since the customers place a strong emphasis on good value for money. The conclusion is that Hemtex should strive to maintain and further strengthen their image as a company that provides a product worth its price. / Program: Textilekonomutbildningen

Kläder i samma storlek från samma företag kan skilja sig radikalt mot varandra men det kan även skilja sig mellan olika företag. Som konsument kan du beställa samma storlek från två olika företag och motta produkter som skiljer sig stort i upplevd passform. Trots att flertal studier gjorts på storleksstrategin har vi inte kunnat hitta någon studie som kombinerar och ser på helheten av företags storleksstrategi. Därav är studiens syfte att undersöka svenska företags storleksstrategi inom deras damsortimentet och hur en förändrad strategi kan påverka företagets returer. Studien bidrar till en större förståelse för inköpare inom modeindustrin och om hur strategier gällande storleksurval och information till kund gällande storlekar kan komma att påverka företagets returer. Studien kommer också undersöka hur svenska företag storleksstrategier motsvarar kundernas förväntningar på klädernas passform och storlek. För att besvara studiens frågeställning genomfördes semistrukturerade intervjuer med tre svenska modeföretag, samt en en enkätstudie mot kvinnliga konsumenter mellan 20-84 års ålder. Detta för att få en syn på problemet ur både ett företagsperspektiv och ett konsumentperspektiv. De teman som undersökts är prover, måttlista, returandel, förbättrad passform och lönsamhet. Resultatet från fyra intervjuer och 96 enkätsvar visar på att det finns en dissonans mellan företags arbetssätt och konsumenters förväntningar på företagen. Möjlighet till att minska denna dissonans hade varit ifall företagen hade ändrat i sina storleksstrategier genom att alla utgår ifrån samma måttlista och storlekssystem. Vidare att företag implementerar sina mönsterkonstruktioner internt för att motverka variationer i passform på grund av varierande leverantörer. Genom att upprätthålla virtuella provrum för konsumenterna ger det dem chansen att testa plagg online innan köp, vilket hade kunnat eliminera många av de returer som på grund av att man beställer samma plagg i fler än en storlek. Således hade egna mönsterkonstruktioner resulterat i färre returer och påverkat lönsamheten positivt, då företagen hade kunnat erbjuda storlekar och passform som inte beror på val av leverantör. / Clothes of the same size and from the same company, can differ radically from each other. Likewise, the same size and fit can also differ between different companies. A consumer can order the same size and receive products that differ greatly in perceived and actual fit. Although there have been studies made on different parts of companies size strategy, there has not been any study that combines them and looks at the different strategies as a whole. The purpose of this study is therefore to examine the size strategies of Swedish fashion companies’ ladies assortment and whether a change in strategy would affect the returns. Furthermore, this includes whether companies’ size strategies correspond to the customers’ expectations on size and fit. The method was conducted by semi-structured interviews with three different Swedish fashion companies and by a quantitative survey-study towards female consumers above the age of 20. This was made in order to get a perspective on the different size strategies from both companies and consumers. The themes examined throughout this paper are samples, measurement charts, returns, consumers, improved fit and profitability. The result from the four interviews and the 96 survey answers shows that there exists a dissonance between the way companies work and customers’ expectations on sizes and fit that companies offer. Opportunity to reduce this dissonance would have been if all companies changed their size strategies and instead started using the same measurement list och size system. Furthermore, companies could implement their pattern design on the internet to avoid different variations in fit due to the use of different suppliers. Likewise, to maintain virtual test rooms for consumers gives them a chance to test a garment online before purchasing. By offering virtual testing rooms online, it would have been possible to avoid several of the returns that occur due to the need of ordering the same garment in different sizes. Creating their own patterns would result in fewer returns and thus a positive effect on profitability, as the companies should be able to offer sizes and fits that did not depend on their choice of supplier. The report is written in Swedish.

The short life cycles and highly variable demand in the fast fashion market causes various challenges in a retailer’s supply chain management processes. The essential task at hand is to provide the right product, at the right time, and at the right place. Due to this inherent difficulty, the bullwhip effect is a major issue in the fashion supply chain. To enhance customer satisfaction and increase the alignment between the supply and market place demand, companies have been pushed towards exploiting big data, supply chain analytics and AI techniques for better business decision making. One such critical but intrinsically complex decision is the development of a future apparel assortment; in particular defining its optimal breadth and depth. This thesis investigates how such AI techniques can be applied to develop a new assortment aligned with the future customer demands- and choice behavior. The research was conducted through firstly performing a qualitative case study at a fast fashion retailer. This explored the critical business decisions in the supply chain lacking AI support. The findings, revealing the assortment planning process as one such critical area, guided the second part of the thesis: a systematic literature review exploring the AI techniques used in this process in the retail - and fashion industry. An appropriate framework of planning a static apparel assortment in the fast fashion industry was developed and used as a guide throughout the study. The thesis discovered that there exists significant research in the field of applying AI techniques to generate and integrate knowledge about consumer demand- and choice behavior in the planning process of a future assortment. The main components to consider in this procedure is a) fashion forecasting, b) forecasting midterm demand, and c) forecasting product selection, incorporating the effects of substitution and complementarity at all times. This is believed to increase the alignment between supply and the marketplace demand, consequently reducing the bullwhip effect. The critical area for future research is how the discovered models are to be integrated in one singlemodel. Namely, simultaneously utilizing consumer choice behavior models and fashion forecasting to predict future demand of new items. Thus, the risk of suboptimization may be mitigated. / Modeindustrins korta produktlivscykler och högt varierande efterfrågan efter rådande trender skapar stora utmaningar i försörjningskedjan hos företag i branschen. Det essentiella målet för företagen är att tillhandahålla rätt produkt, vid rätt tidpunkt och på rätt plats. De komplexa karaktärsdragen i modeindustrin, där bland den fluktuerande efterfrågan, har gjort bullwhipeffekten till en stor utmaning i branschen. För att öka kundnöjdhet och anpassningen mellan marknadens utbud och efterfrågan har företag drivits mot utnyttjandet av big data i avsikt att förbättra kritisk affärsbeslutsfattning genom användandet av analytics och AI. Ett kritiskt ochkomplext beslut är utvecklingen av ett nytt produktsortiment, där definieringen av sortimentetsbredd och djup är särskilt viktigt. Denna uppsats undersöker hur AI-modeller kan tillämpas för att hjälpa företag inom modeindustrin i utvecklingen av nya sortiment anpassade efter kundens beräknade efterfrågan och val. Detta arbete inleddes med utförandet av en kvalitativ fallstudie hos en stor aktör verksam inom modeindustrin. Detta gjordes för att identifiera kritiska affärsbeslut i företagets försörjningskedja som saknade AI-stöd. Resultatet påvisade att sortimentsplanering var ett sådant kritiskt beslutsområde. Följaktligen utfördes en systematisk litteraturstudie i andra delen av arbetet i syfte att undersöka AI-modeller som appliceras i sortimentsplanerings-processen i såväl detaljhandeln som modebranschen. För att konceptualisera processen av att planera ett statiskt produktsortiment utvecklades ett ramverk som användes som en guide under hela arbetet. Studien visade att det finns betydande forskning inom tillämpningen av AI-modeller i syfte att planera ett optimalt sortiment efter konsumenternas efterfrågan. De huvudsakliga faktorerna att överväga innefattar prognostiseringen av efterfrågan, trender samt substitution- och komplementeffekter. Ett kritiskt område för framtida forskning är hur de upptäckta modellerna ska integreras i en enda modell som inkluderar dessa faktorer i ett tidigt såväl som sent skede av planeringen. Det som eftersträvas i en integrerad modell är att mildra risken av suboptimering som identifierats i nuvarande litteraturs angreppssätt.

Sortiment är hos många företag väldigt stort vilket leder till att företag inte kan hantera sina produkter rätt. Problematiken är att kunderna får för mycket valmöjligheter när det erbjuds ett helt produktsortiment. Varje företag behöver ifrågasätta sig hur de ska hantera sitt sortiment när kunderna har för mycket att välja mellan. I denna situation hjälper sortimentsreducering att öka effektiviteten och lönsamheten i förtaget. Ett välplanerat sortiment är en viktig faktor för kundens köpbeslut eftersom för många produktval i sortimentet kan leda till överbelastning. Studien är en fallstudie med syfte att ta fram faktorer och processer som bör beaktas vid en sortimentsreducering hos ett producerande företag. Studien kommer att avgränsas mot att studera sortimentsreducering hos ett svenskt företag som tillverkar kontorsmöbler. För att besvara syftet och frågeställningarna utfördes fyra semistrukturerade intervjuer och ett studiebesök med anställda som hade relevant kunskap inom området. I metoden har abduktion antagits som vetenskapligt angreppsätt. Den teoretiska referensram togs fram genom litteratursökningar via databaser och böcker som sedan diskuterades i en jämförelse mot den sammanställda empirin som analyserades och diskuterades. Studiens slutsats visade vilka faktorer och processer som företag bör beakta vid en sortimentsreducering. De framtagna faktorerna var sortimentets djup och bredd, företagsimage, flexibilitet, kategoristyrning samt implementering av modulära och standardiserade produkter. Genom att integrera dessa faktorer kan företag göra en reducering effektivt. Studien visade tre processer med hjälp av modeller vid hänsyn till sortimentsreducering som skulle kunna implementeras på företag. Dessa modeller är ABC-analysen, Porters femkraftsmodell och sortimentsplaneringsmodellen. Genom att integrera de olika faktorer och processer för sortimentsreducering kan företaget göra en lönsam reducering i sortimentet. / Many companies have a large assortment, where most are incapable of correctly handling their products. Result of such assortment usually is overload of customers with an abundance of options. Every company needs to question themselves how to handle their assortment when customers has to many choices to pick. In this situation assortment reduction helps to increase efficiency and profitability of organizations. A well-planned assortment is an important factor for the customers purchase decision as too many choices in the assortment can lead to overload.   This study is a thesis written with the purpose of developing factors and processes to take into account for a products assortment reduction at a producing company. This study is limited to studying product assortment reduction at a Swedish company that manufactures office furniture. The purpose and questions are answered through four semi-structured interviews and a study visit accompanied by employees with relevant knowledge to thesis. In the method, abduction has been adopted as a scientific approach. A theoretical frame of reference was developed through literature searches through databases and books, which were the discussed in a comparison with the compiled empirical data that were analyzed and discussed.  The study´s conclusion showed which factors and processes companies should take into account in an assortment reduction. The factors developed were assortment depth and breadth, corporate image, flexibility, category management, implementing modular and standard products. By integrating these factors, companies can make a reduction effective. The study showed three processes using models with regard to product assortment reduction that could be implemented in companies. These models are the ABC-analysis, Porters five forces and the assortment planning model. By integrating the various factors and processes for product assortment reduction, the company can make a profitable reduction in the assortment.