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The ultimate effectiveness of the planogram can be measured by sales volume.
The rules and theories for the creation of a planogram are set under the terms of merchandising.
A planogram allows visual merchandisers to plan the arrangement of merchandise by style, type, size, price or some other category.
A planogram defines which product is placed, in which area of a shelving unit and with which quantity.
Some of the activities to increase demand at shopper level include setting the right planogram, price announcements such as inserts, use of pop materials.
Using a planogram (known in the industry as a Pegman), Discount Drug computers showed store managers where and how products should be displayed.
The planogram originated with K-Mart.
Often, a consumer-packaged goods manufacturer will release a new suggested planogram with their new product to show how the product relates to existing products.
Target stores have a rigid "planogram": by October, their strategists already know what toy will be sitting in the center of Aisle 7B, third shelf up, next spring.
The introduction of category management imposed the condition that all actions undertaken, such as new promotions, new products, re-vamped planogram, introduction of point of sale advertising etc. were beneficial to the retailer and the shopper in the store.
Suppliers are expected, indeed in many cases mandated, to only suggest new product introductions, a new planogram or promotional activity if it is expected to have a beneficial effect on the turnover or profit of the total category and be beneficial to the shoppers of that category.
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