Category ManagementGroup 1

Akshatha NeerajeJuhi Chandwani

MVL ManikantanNaren Shetty

Nancy NegiRohan Bharaj

Ronak SharmaSaksham Yadav

Vibhu Gauba

What is Category ManagementCategory management is a retailing concept in which the range of products purchased by a business organization or sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as product categories. It is a systematic, disciplined approach to managing a product category as a strategic business unit.

• The phrase "category management" was coined by Brian F. Harris.

• Each category is run as a "mini business" in its own right, with its own set of turnover and/or profitability targets and strategies.

• Introduction of Category Management in a business tends to alter the relationship between retailer and supplier: instead of the traditional adversarial relationship, the relationship moves to one of collaboration, with exchange of information, sharing of data and joint business building.

Rationale for CM

•Retailers' desire for suppliers to add value to their (i.e. the retailer's) business rather than just the supplier's own

•The classification of products into separate category benefits the customers and makes their shopping a pleasurable experience.

•The customers as per their interest, pocket and need can walk up to the respective categories, check out the various options and decide what to buy and what not to buy.

Category Captain

• Closest and most regular contact with the retailer

• Forms an alliance with the retailer to help them develop consumer

• insight, so they can satisfy shopper needs, improve performance and increase profit.

• Expected to invest time, effort and often financial assets into development of the category.

• In return, the supplier will gain a more influential voice with the retailer

Role of Category Management•Capture customer’s focus

•Define category roles

–Destination

–Preferred

–Occasional

–Convenience

•Monitor competition and suppliers

•Strengthen operations and performance

Category Management Process

•Define Category: This step helps define the category, the consumer decision tree identifies the choices and the order of decisions customers make when they shop the category. Do they choose brand, sub-brand, quality, flavor/scent, packing, etc.?

•Category Role: Role identifies the importance of the category to the retailer. This is the role the retailer wants the category to play within their store. A category can be used to bring consumers into the store, increase foot traffic, support routine shopping needs, be a destination for seasonal/occasional purchases, a one-stop-shop or for convenience.

•Category appraisal: Knowing how the category performs at the retailer, within the market and across different outlets is the next step. This should include a pricing, promotion, placement and product assortment assessment.

•Category scorecard: Scorecard is the strategic allocation of work to be performed to reach the category goals and objectives. It is a summary of observations and analysis to help develop goals and targets for the category.

•Category strategies: Category strategies are designed to grow market share, increase sales, increase foot traffic, improve gross margin, increase return on investment, increase shopping basket size and gain customer satisfaction.

•Category tactics: Tactics include specific actions to be taken to achieve chosen category strategies. Promoting top brands on a front end cap three times a quarter at a hot price point with a feature is just one example.

•Implement plan: This is the action step that brings your strategies and tactics to life, where the proverbial rubber meets the road. The degree to which you accurately implement the plan will dictate its success.

•Review and assess performance: Analyze, measure and review the results. This should be ongoing and used to help you refocus and make changes if necessary.

Classification•Staples – frequently purchased item sand for regular use like Tshirts,Tops Vest etc

•Variety enhancers –mainly used to wear when going out or for special purpose shirts, blouses, special shirts

•Fill ins- used once in a while to make up for the range or variety like cargos and trousers

•Niches worn by certain type of customers and bought with certain regularity to maintain the look like dresses, skirts western wear

RETAILMARKETING

MIX

PRODUCT

PRICE

PEOPLE

PLACE PRESENTATION

CUSTOMER SERVICE

PROMOTION

Category Management in Apparel Store

Space planning- Consideration for layout decision

Latest collection to be placed in the front shelves

Seasonal needs to be considered in a dedicated aisles

high margin apparels to be placed in high traffic area

Shopping behaviour and operational considerations should be recognised

Category Management in Apparel Store

Visual Merchandising -Attracting patrons with visual cues

Shelving

Value /fashion image

Fixture type

Category Signage

Focus points in a Grocery Store

Lead Time and Reorder Level

Volume and Margins

Store Layout, Planogram & Visual Merchandising

Seasons and Festivals

Retail Servicescape

Meeting Consumer Needs

Maximizing the value of retail shelf space

Last words…

Thanks!