Product merchandising tree: what is it?

Product management is a critical activity for the success of any company. That's why it's important to understand what a product merchandising tree is.

It is through this structure that you define what the product characteristics will be, how they will be positioned in the market and how they will be distributed.

An important tool to help with this task is the product merchandising tree. In this article, we will explain what this tool is and how it can help your company.

The product merchandising tree is also known by other names, such as:

1. Attribute tree: This term is used because the merchandising tree is a tool that allows you to break down a product's attributes and relate them to consumers' needs and desires.
2. Value tree: This term refers to the merchandising tree's ability to help the company understand and communicate the value its product offers to the market.
3. Category tree: this is a tool used in product management to organize and classify the various product categories offered by a company or by the market in general.

 

How does a merchandising tree work?

The product merchandising tree is a tool used in product management to help the company understand and communicate the attributes and benefits of its products in relation to the market and to customers.

It is a graphical representation that describes the relationship between customers' needs and desires, the product's attributes and benefits, and the characteristics of the market in which it operates.

The merchandising tree works as follows:

1. Identifying customer needs: The first step is to identify customers' needs and desires regarding the product in question. This can be done through market research, customer feedback or sales data analysis.
2. Identifying product attributes: Once customer needs have been identified, the next step is to list the product attributes that meet those needs. This includes aspects such as quality, price, design, functionality, among others.
3. Identifying product benefits: Once the product attributes have been identified, it is important to understand how they translate into benefits for the customer. This means analyzing how each attribute can meet customers' needs and provide value to them.
4. Identifying market characteristics: Finally, it is important to understand the characteristics of the market in which the product operates. This includes aspects such as market size, customer behavior, competition, among others.

Based on this information, it is possible to build the product merchandising tree, which graphically represents the relationships between customer needs, the product's attributes and benefits, and market characteristics. This tree helps the company define its product strategy, position its products against the competition and communicate their attributes and benefits more effectively to customers.

 

What are the main elements of the product merchandising tree and how do they relate to each other?

The product merchandising tree is composed of three main elements: customers, the product's attributes and benefits, and market characteristics. These elements are interconnected and relate to each other to enable the company to better understand customers' needs and desires and develop products that meet those needs.

Below, we detail each of these elements and how they relate to each other within the product merchandising tree:

1. Customers: The first element is the customer, who is at the center of the entire product merchandising tree. It is essential to understand who the potential customers are, what their needs, desires and expectations regarding the product are. To do this, it is necessary to conduct market research, data analysis and other methods to collect relevant information.
2. Product attributes and benefits: The second element is the product itself, including its attributes and benefits. Attributes are specific characteristics, such as size, color, functionality, quality, among others. Benefits, in turn, are the advantages offered to customers, such as time savings, comfort, safety, convenience, among others. It is important to identify the attributes that meet customers' needs and understand how they translate into benefits.
3. Market characteristics: The third element is the market in which the product operates. This includes competition, market segmentation, trends and changes in customer behavior, among others. Understanding market characteristics is essential to position the product properly and define the marketing strategy.

These three elements relate to each other to enable the company to better understand customer needs, develop products that meet those needs and position those products appropriately in the market. The product merchandising tree helps the company visualize these relationships and define its product and marketing strategy more effectively.

 

How to use the product merchandising tree in practice?

Here are some ways to use the product merchandising tree in practice:

Through market research, customer feedback or sales data analysis, the company can identify customers' needs and desires and map them onto the merchandising tree.

It is important to understand the characteristics of the market in which the product operates and to position the product appropriately relative to the competition. This includes aspects such as price, quality, design, brand, among others. The merchandising tree can help the company visualize how the product is positioned against the competition and identify opportunities to differentiate itself.

With the product merchandising tree in hand, the company can develop more effective marketing strategies to communicate the product's attributes and benefits to customers. This includes defining the target audience, creating advertising messages, choosing communication channels, among others.

Finally, it can be used to evaluate product performance over time and identify opportunities for improvement. For example, if sales data show that a certain product attribute is not generating the expected benefits for customers, the company can map this information onto the merchandising tree and identify opportunities to improve.

 

What are the benefits of using the product merchandising tree?

By using the merchandising tree, companies can increase customer satisfaction, build a strong brand and ensure the product's relevance and success in the market.

In addition to the benefits mentioned above, adopting the merchandising tree can also help companies identify opportunities to expand their product line, that is, new items that can be added to the existing line to meet customers' needs.

Based on the merchandising tree analysis, the company can identify which additional products would be most successful in the market and develop a plan for expansion.

Another advantage of adopting it is that it helps the company make more informed decisions about bringing new products to market.

 

Example of a merchandising tree

Let's suppose a supermarket company wants to create a new organic products category in its stores.

First, they would conduct market research to better understand their customers' needs and desires regarding organic foods. Based on this research, the company could create the following product merchandising tree for the organic products category:

• Category: Organic Products
  • Subcategory: Fruits and Vegetables
    • Product: Organic Apple
    • Product: Organic Orange
    • Product: Organic Tomato
  • Subcategory: Organic Meats
    • Product: Organic Chicken
    • Product: Organic Beef
    • Product: Organic Pork
  • Subcategory: Organic Grocery Products
    • Product: Organic Brown Rice
    • Product: Organic Whole Wheat Pasta
    • Product: Organic Beans

 

Based on this merchandising tree, the company can develop an action plan to create the organic products category in its stores, including selecting the products that will be offered, developing specific marketing strategies for each item and setting competitive prices.

In addition, the company can evaluate the performance of the organic products category over time, making adjustments to the product selection and marketing strategies as needed to ensure the category is successful and meets customers' needs and desires.

Here on our blog, you can also find information on how to carry out the onboarding of rural producers.

Techniques for Cleansing and Cleaning Up the Product Registry for Retail

The use of the merchandising tree can be compromised if your product registry contains duplicate, generic or inconsistent items.

Before activating your tree, it is important to cleanse the data and implement governance for the inclusion and modification of new products following pre-established rules.

Descriptive standardization of materials is a process used to uniformly define mechanical, physical, chemical and other characteristics of items.

It is used to certify the standards for the purchase and sale of products, allowing buyers and sellers to know they are receiving the correct material.

The process involves precisely describing the properties and advantages of the specified object.

It may be important to rely on a consultancy specialized in product registries. 

 

The product merchandising tree is an important tool for product management and can help your company define more efficient strategies for its business.

Through it, you can better understand the market, customers and competitors, and develop products that are more aligned with the needs of your target audience. If you don't use this tool yet, consider including it in your product management and reap the benefits.

By using the merchandising tree, it is possible to implement a more efficient SEO (Search Engine Optimization) strategy, since products are organized in a clearer and more objective way, allowing search engines to better find and rank the product pages on the company's website.

In the e-commerce context, it is especially important because it helps structure product categories in a way that makes it easier for users to navigate the website, making the shopping experience more pleasant and efficient. This can lead to an increase in conversion rates and customer loyalty.

In sales systems and ERPs, it can be used for more efficient inventory management, supporting decisions related to product replenishment, promotions and discounts, among other actions. In addition, structuring products into hierarchical categories can facilitate data analysis and report generation, making it easier to track the company's performance and identify business opportunities.

Therefore, it is an essential tool for retail companies seeking to optimize their sales, inventory management, marketing and data analysis processes, whether in sales systems, ERP or e-commerce.

That's it! Good business!

Read also TUTORIAL: How to implement PDM in your Company

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