Defining Category Management? The strategic management of product - - PowerPoint PPT Presentation
Defining Category Management? The strategic management of product groups through trade partnerships which aims to maximise sales and profit by satisfying consumer and shopper needs. Institute of Grocery Distribution ~IGD Category management is
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The strategic management of product groups through trade partnerships which aims to maximise sales and profit by satisfying consumer and shopper needs. Institute of Grocery Distribution ~IGD Category management is a process that involves managing product categories as business units and customising them [on a store by store basis] to satisfy customer needs. Nielsen
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A Distributor-Supplier process of managing categories as strategic business units, producing enhanced business results by focusing on delivering consumer value ECR via TPG
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Retailer and suppliers working together to strategically manage product categories to maximise mutual profits and satisfy customer needs. Key Points Retailer / Supplier partnership – working together and sharing information for mutual benefit. Product Categories – products grouped according to shopper/eater
Decisions based on fact and insight not gut feel. Focus on satisfying customer needs – consumer/shopper focused not production or retailer led.
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Production Push
Sales driven by production not consumer demand
Agriculture
“This is what we have grown”
Manufacturing
“This is what we have made – please sell it for us”
Retailing
“This is what we have to sell – take your pick”
Consumer Agriculture
“This is what we need to grow”
Manufacturing
“This is what we need to manufacture”
Retailing
“This is what we need to stock”
Consumer
“This is what we want to buy”
Consumer Pull
Sales driven by consumer demand
~T
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Measuring the Fair Share opportunity CDI = Category market share Grocery market share 17.2 = 0.87 19.8 Value of category in Retailer A £176.6m Incremental Category opportunity = category value – category value CDI
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More buyers Current buyers
Traffic Building Mechanics Transaction Building Mechanics Reward loyalty and improve awareness
i.e. Save 50p i.e. 2 for £3 i.e. Extra Free
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Transaction Building
Traffic Building
Improved Price Perception
money/quality
Consumer Protection
Image Enhancing
BOGOF aa BOGOHP aa a 2 For 3 aa a 2 For £3+ aa Half Price aa Save a Third a 50% Extra Free a a 100% Extra Free aa a 3 FTPO 2 a Link Save aa aa a Save 10p (to price point) a Save 20p, 30p, 40p a Save 50p & 60p > a a Save 10% & 20% a aa Save 25% aa a Save 33% & 50% aa Campaigns & events aa a a Magazine Advertorial a a P .O.P. advertising a
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