Class: Senior Secondary School 1 (SS1 / SSS1)
Term: 3rd Term
Week: 8
Age: 15 years
Duration: 45 minutes
Subject: Marketing
Curriculum Theme: Trade
Previous Lesson: Merchandising: Meaning And Features of Merchandising.
Topic: Merchandising
Subject Matter: Warehousing cost, Inventory reduction cost, Transportation cost, Handling cost

Specific Objectives

By the end of the lesson, pupils should be able to:

Cognitive Domain:

Define merchandising costs.
Identify and explain different types of merchandising costs.
State components of warehousing cost.
List factors influencing transportation cost.

Affective Domain:

Appreciate the importance of managing merchandising costs effectively.
Value strategies that help reduce merchandising expenses.

Psychomotor Domain:

Give examples of each type of merchandising cost.
Suggest ways to minimise specific merchandising costs.

Participate in discussions about cost-saving measures in merchandising.

Reference Materials

The following resources were used in planning this lesson:

9 Years Basic Education Curriculum (Senior Secondary School Marketing)
State Unified Scheme of Work for Marketing (SSS 1)
Marketing for Senior Secondary Schools by O. A. Adebayo and F. O. Olaniyan

Instructional Materials

The teacher will teach this lesson with the aid of:

Calendars
Magazines
Catalogues
Various products

Rationale for the Lesson

This lesson helps pupils understand the various costs involved in bringing products to consumers. Knowing these costs enables them to appreciate how businesses manage expenses and how efficient management can affect product prices and business profitability.

Prerequisite/Previous Knowledge

Pupils are familiar with the concept of trade and basic business operations, including buying and selling goods.

Lesson Content/Board Summary

Merchandising Costs

Introduction to Merchandising Costs

Merchandising involves all activities related to promoting and selling products to customers. Merchandising costs are the expenses incurred in these activities, from getting products to the store to displaying them for sale.

Warehousing Cost

Warehousing cost refers to the expenses associated with storing goods in a warehouse or storage facility. These costs are incurred to protect products before they are sold.

Some components of warehousing cost include:

Rent or mortgage payments for the warehouse.
Utility bills (electricity, water).
Insurance for the stored goods and facility.
Maintenance and repair of the warehouse building.
Security services.

Inventory Reduction Cost

Inventory reduction cost refers to the expenses or losses that occur when a business tries to reduce its stock levels. While reducing inventory can save money on storage, some costs can arise during the process.

Examples of inventory reduction costs are:

Markdowns or discounts given to sell off excess stock quickly.
Disposal costs for obsolete or expired inventory.
Increased risk of stockouts if inventory is reduced too much, leading to lost sales.
Administrative costs of managing the reduction process.

Transportation Cost

Transportation cost is the expense incurred in moving goods from one location to another, for example, from the manufacturer to the warehouse, or from the warehouse to the retail store.

Factors influencing transportation costs include:

Distance of travel.
Mode of transport (road, rail, air, sea).
Weight and volume of the goods.
Fuel prices.
Insurance for goods in transit.
Labour costs for drivers and handlers.

Handling Cost

Handling cost refers to the expenses related to the physical movement, loading, unloading, and rearrangement of goods within a warehouse, store, or during transport. These costs are associated with the labour and equipment used to manage products.

Types of handling costs include:

Wages for warehouse staff, loaders, and unloaders.
Cost of operating equipment like forklifts, hand trucks, and conveyor belts.
Maintenance and repair of handling equipment.
Packaging and repackaging costs.
Damage to goods during handling.

Teaching Methods/Instructional Techniques

Discussion, Lecture, Demonstration, Question and Answer, Visual Aids

Instructional Procedures

Step 1: Introduction

Time: 5 minutes
Teaching Skill: Set Induction
Teacher’s Activity: The teacher displays various products (e.g., packaged food, stationery, clothing) and asks pupils how these products got to the classroom or store. The teacher then introduces the topic of Merchandising and its associated costs.
Pupils’ Activity: Pupils observe the products and share their ideas on how products reach consumers.
Learning Point: Pupils are introduced to the concept of merchandising and understand that there are costs involved in getting products to the market.

Step 2: Explanation of Merchandising Costs

Time: 7 minutes
Teaching Skill: Explanation/Definition
Teacher’s Activity: The teacher defines merchandising costs and introduces the specific types that will be discussed. The teacher writes “Merchandising Costs” on the board.
Pupils’ Activity: Pupils listen attentively and copy the definition into their notebooks.
Learning Point: Pupils understand what merchandising costs are in general.

Step 3: Warehousing Cost

Time: 8 minutes
Teaching Skill: Explanation/Elucidation
Teacher’s Activity: The teacher explains warehousing costs, discussing what they entail and listing common components such as rent, utilities, and insurance. The teacher uses the board summary for this.
Pupils’ Activity: Pupils listen, ask questions for clarity, and take notes.
Learning Point: Pupils understand warehousing costs and their components.

Step 4: Inventory Reduction Cost

Time: 7 minutes
Teaching Skill: Discussion/Examples
Teacher’s Activity: The teacher explains inventory reduction costs, providing examples like markdowns or disposal costs for old stock. The teacher encourages pupils to think of situations where a business might incur such costs.
Pupils’ Activity: Pupils contribute to the discussion and note down examples.
Learning Point: Pupils understand the expenses associated with reducing inventory.

Step 5: Transportation Cost

Time: 6 minutes
Teaching Skill: Illustration/Questioning
Teacher’s Activity: The teacher discusses transportation costs, highlighting factors that affect them such as distance, mode of transport, and fuel prices. The teacher may use pictures from magazines or calendars to illustrate different modes of transport.
Pupils’ Activity: Pupils identify different modes of transport and discuss how they affect costs.
Learning Point: Pupils understand transportation costs and the factors influencing them.

Step 6: Handling Cost

Time: 5 minutes
Teaching Skill: Explanation/Demonstration
Teacher’s Activity: The teacher explains handling costs, focusing on the physical movement of goods. The teacher might demonstrate simple handling actions or show pictures of equipment like forklifts.
Pupils’ Activity: Pupils relate to the physical movement of goods and note down key points.
Learning Point: Pupils understand handling costs and their components.

Step 7: Evaluation/Review

Time: 5 minutes

Teaching Skill: Questioning/Assessment

Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

Define merchandising costs.
List three types of merchandising costs.
State two components of warehousing cost.
Explain one way a business might incur inventory reduction costs.

Pupils’ Activity: Pupils answer orally and in writing.

Learning Point: Pupils demonstrate understanding of the lesson.

Step 8: Conclusion

Time: 2 minutes
Teaching Skill: Summarization
Teacher’s Activity: The teacher summarises the lesson by reiterating the importance of understanding and managing merchandising costs for business success. The teacher gives pupils an assignment to research ways businesses minimise these costs.
Pupils’ Activity: Pupils listen to the summary and copy the assignment.
Learning Point: Pupils consolidate their understanding and are given further work to deepen their knowledge.

Lesson Keywords

Merchandising – All activities involved in promoting and selling products to customers.
Warehousing Cost – Expenses for storing goods in a facility.
Inventory Reduction Cost – Expenses or losses from reducing stock levels.
Transportation Cost – Expense for moving goods between locations.
Handling Cost – Expenses for physical movement and management of goods.

Differentiation

For pupils who grasp concepts quickly, the teacher will encourage them to research practical examples of businesses that successfully manage their merchandising costs. For those who need more support, the teacher will provide simplified definitions and more direct examples.

Note for teachers using this lesson plan

Teachers should ensure to bring actual product samples or clear images to enhance pupil engagement. Encourage interactive discussions and real-life scenarios to make the lesson relatable.