Merchandise refers to products sold and bought to fulfill a specific function or desire. Aside from the tangible quality, though, merchandise also involves the services and intangible benefits that consumers benefit from in the process.
The benefits of a piece of merchandise may be those inherent to its utility. However, some products are also able to provide some kind of psychological satisfaction, depending on the personality and needs of the consumer. Other factors include the quality and packaging of the product, as well as additional services and warranties that may be offered. Product management addresses these things by coming up with ways of increasing product demand.
To guarantee a high rate of transfer of merchandise from the seller to the consumer, companies should be able to ensure the visibility of their products. It is also important that these appeal to the consumer. Techniques for achieving these, or the factors in a marketing mix (packaging, placement, pricing, and promotions), fall under merchandising.
Merchandising can also involve the method through which products are created and sold because of another existing brand. This is true in the case of cartoons and movies for which toys and souvenir items are produced. The usual case is for the program or movie to gain popularity first, then for the merchandise to be created and distributed as this takes place. However, it is also possible for this to take place vice-versa, such as a show created to serve as advertising for the released products.