category to that customer? l What are the category trends?
volume, share, profits?
l What are the key product segments? l What are the least and most
A distinct, manageable group of products/services that CONSUMERS perceive to be interrelated and/or substitutable in satisfying their need(s).
Category Definition - critical in determining the products that make up the category and in establishing the segmentation strategy.
Auto Industry - GM Pontiac & Ford
Service Industry Phone Service Financial Services/Banks
The ECR System
Definition
Timely, accurate, paperless information flow
l Describe Category Management as a Business Process
l Discuss Critical Issues Related to Successfully Developing a Category Management System
Bringing Better Value to the Consumer is the Primary Focus of Category Management.
Source: ECR Best Practices RБайду номын сангаасport
Category Management has expanding into durable goods and services.
Definition
Is Category Management just for the grocer? Durable Goods
One example might be identifying the gap between the current sales and the potential sales of a category.
Category: Candy Market: Columbus Store: Kroger
Road Map
Define Category Management
Category Management as a Business
Process
Category Management
Issues
Category Management as a Business Process.
Process
Why is it beneficial for Retailers and
Definition
Manufacturers to Invest in Category Management?
Helps Retailers l Define customer needs l Determine strategic issues l Enhance category and store profits
Helps Manufacturers l Position themselves as category captains for retailers l Become an indispensable resource for the retailer l Enhance brand profits
Supplier
Distributor
Retail Store
Consumer Household
Smooth, continual product flow matched to consumption
Category Management is at the at the core of ECR. CM provides a process & framework for collaboration.
Definition
“A Retailer-Supplier process of managing categories as Strategic Business Units, producing improved sales and profit results by focusing on satisfying consumer needs and delivering consumer value.”
Total Dollar Sales - Columbus Market $1,000,000
Total Dollar Sales - Kroger Columbus
$150,000
Kroger Market Share - Total Groceries
20%
Kroger Market Share - Candy
Possible Category Roles:
l Destination l Convenience l Routine l Seasonal/Occasional
Category Assessment
Process
Category Assessment involves conducting a complete analysis of the category by investigating it’s sub-categories, user-segments, brands, and SKUs. Such an analysis must be based on current consumer, distributor, supplier and market information.
Category Definition - critical in determining the products that make up the category and in establishing the segmentation strategy.
Process
What is a Category?
15%
Gap (%) Gap ($)
5% $50,000
Source: Borden, Inc.
Process
Key Questions in Conducting a Category Assessment
l Who is my target customer? l How important is this
product and/or category
Defining a Category by Usage Segment
Process
Lemon Juice Segmentation:
Refrigerated
Juices & drinks
Shelf stable
Glass/Plastic
Frozen
Aseptic
Ready to Serve Concentrate
Category
Sub-Category Segment
Sub-Segment
Source: Borden, Inc.
Category Role (or purpose) defines
Process
how the consumer views the category.
Process
What is a Category? A distinct, manageable group of products/services that CONSUMERS perceive to be interrelated and/or substitutable in satisfying their need(s).
How does defining a category help? l Produces better retailer/manufacturer
alignment with the consumer l Creates better manufacturer-retailer
alignment l Gives new perspectives on how to view a
CATEGORY MANAGEMENT: HOW IS IT DIFFERENT?
Definition
Category/Brand/SKU Management under one Decision Maker
Consumer-Focused Strategies Data-based Decision Making Proactive Business Planning Collaborative Work Process Manage Category As Business Unit Focused on Category ROI
- NOT Sales or Gross Margin
SKILLS NEEDED TO BUILD BUSINESS Definition THROUGH CATEGORY MANAGEMENT
Data analysis and technical mastery Shopper and consumer understanding Strategy development Financial and logistics expertise Innovation Total Systems Focus