Design and Merchandising
What the exam tests
This domain links design decisions to the customer, range plan and commercial calendar. Expect questions on elements and principles of design, target markets, assortment planning and retail calculations such as markup and margin.
Core rules and concepts
- Design elements are colour, line, shape, texture and space; principles are balance, rhythm, proportion, emphasis and unity.
- Merchandising starts with the target customer, season, price architecture and competition. A range plan balances fashion, basics and sizes.
- The merchandising calendar sets deadlines for trend research, sampling, buying, production and delivery.
- Markup on retail = (retail price - cost) ÷ retail price. Markup on cost = (retail price - cost) ÷ cost. Maintained margin uses the actual selling price after markdown.
- Open-to-buy = planned sales + planned ending inventory - beginning inventory - on order.
Worked example
A kurta costs ₹450 and is priced at ₹900. Markup on retail = (900 - 450) ÷ 900 = 50%. Markup on cost = (900 - 450) ÷ 450 = 100%. If it is marked down to ₹750, maintained margin = (750 - 450) ÷ 750 = 40%. The reasoning is that the same rupee difference gives different percentages depending on the base; retail markup and maintained margin use selling price as the base.
Traps that cost marks
Confusing markup on cost with markup on retail, ignoring markdowns, planning for personal taste rather than the target customer, and missing calendar deadlines cost marks.