The document discusses category management in the retail industry. It defines categories as groups of interrelated products that meet consumer needs. Category management involves managing categories as strategic business units to deliver consumer value and improve business results across the supply chain. The key aspects covered include defining categories, assessing category performance, setting objectives and strategies, and implementing tactics like assortment, pricing, placement and promotion. The document provides an example analysis of categories like casual wear, formal wear, party wear and accessories in terms of demand clusters, roles, assessments, strategies and tactics.

1. SUDIPTA
DIVYA
ARPITA
NEHA
BANDANA

2. CATEGORY
A distinct, manageable group of
products/services that consumers perceive to be
interrelated and/or substitutable in meeting a
consumer’s needs.
Category
Management
The distributor/supplier process of managing
categories as strategic business units, producing
enhanced business results by focusing on
delivering consumer value.

3. Category management represents a
significant and proven opportunity to
achieve substantial business improvements 1
across the entire value chain - for
consumers, distributors and suppliers.
The Category Management business
process is a structured, measured set of
2 activities designed to develop and
implement a written category business
plan.
Category management is a retailing concept.

4. PRODUCT/CUSTOMER MANAGEMENT:
A CONCEPTUAL MODEL
MANUFACTURER RETAILER CONSUMER
PRODUCT CUSTOMER
MANAGEMENT MANAGEMENT
CUSTOMER
RELATIONSHIP
CUSTOMER PRODUCT MARKETING
MANAGEMENT MANAGEMENT
CATEGORY
MANAGEMENT

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

6. “CONSUMER BEHAVIOR CHANGES THE
CATEGORIES.”
The consumer drives what happens in the category.
The biggest change in category management over the years
has been more of a focus on the consumer.
The process is now less “PRODUCT-CENTRIC and more
“CONSUMER-CENTRIC”

7. THEREFORE THE NEW MINDSET OF THE
RETAILERS IS:
IF WE ARE NOT GETTING A FAIR SHARE OF THE
CATEGORY, CHANCES ARE WE’RE NOT DOING A
GOOD JOB OF UNDERSSTANDING CONSUMERS
AND SATISFYING THEIR NEEDS

8. The industry standard model for category management is the 8-
step process, or 8-step cycle
•Define the category (i.e. what products
are included/excluded).
•Define the role of the category within the
retailer.
•Assess the current performance.
•Set objectives and targets for the
category.
•Devise an overall Strategy.
•Devise specific tactics.
•Implementation.
•The eighth step is one of review which
takes us back to step 1.

9. Decision tree
Demand cluster

10. CATEGORY
DEFINITION
Product Groups/Categories is defined
based on the consumer’s needs and
purchasing habits.
FORMAL WEAR
WOMENS CASUAL WEAR
WESTERN
WEAR
PARTY WEAR
B

11. FORMAL WEAR
TROUSERS SKIRTS SHIRTS SCARVES
Full Half
sleeves sleeves

12. CASUAL WEAR
T-
JEANS SKIRTS SHORTS TOPS
SHIRTS
Flared jeans Pleated Skirts Cap sleeve
Pencil cut Mini Skirts Corset
Round Neck
bootcut Pencil Skirts Cowl neck
Polo T-shirts
highwaist Straight Skirts Crew neck
Casual Shirts
Straight fit Flared Skirts Double-tee top
3 quarter capri Halter top
Off shoulder
Tunic style
Wrap top

13. PARTY WEAR
GOWNS DRESS

14. Demand clustering
Monthly Casual wear Formal wear Party wear Scarves
income (rs )
Below 10,000 40 20 15 25
10,000-30,000 30 30 20 20
30,000-50,000 15 40 25 20
Above 50,000 15 10 40 35
NOTE:On the basis of sales demand clustering has been done

15. Lifestyle of women
Life style Casual wear Formal wear Party wear Scarves
Tier 1 15 45 35 5
Tier 2 30 30 35 5
Tier 3 40 25 30 5

16. Occupation of woman
Occupation Casual wear Formal wear Party wear Scarves
student 55 25 15 5
Working 20 45 30 5
House wife 50 15 30 5
b

17. CATEGORY ROLE
Destination category
This is the main selling category of the store .
Such categories have high purchase frequency
and high activity.
And our destination category is CASUAL WEAR

18. Preferred Categories
With the help of these types of categories
, the owner/brand builds a distinct image of
itself in the minds of the customers.
Our preferred categories is Formal wear

19. Convenience Categories
This category only adds to the bill value of the
customer as customer pick up this category
unplanned
Low purchase frequency and low penetration.
And our convenience categories is scarves

20. Occasional/ Seasonal
Categories
Meets the seasonal/ occasional
needs of the customers.
And our seasonal category is
partywear

21. Destination
category- Casual
wear
CATEGORY
Preferred
category-formal
wear
Occasional category-
Party wear
Convenience
category-
Accessories

22. CATEGORY ASSESSMENT
• Profitability (Net Profit Margin , or net profit in
%, ROI)

23. Assessment
Particulars casual Formal Party Scarves
Gross sale 30,00,000 25,00,000 20,00,000 3,00,000
Returns 12,000 20,000 10,000 1,000
Discounts 10,000 40,000 50,000 …………
Net sales 29,78,000 24,40,000 19,40,000 2,99,000
Cost of goods 10,00,000 12,00,000 10,00,000 50,000
sold
Gross margin 19,78,000 12,40,000 9,40,000 2,49,000
Expenses 50,000 40,000 35,000 10,000
Net profit 19,28,000 12,00,000 9,05,000 2,39,000
Net profit in % 64.74 49.18 46.64 79.93
ASSET 15,00,000 15,00,000 15,00,000 1,00,000
ROA 1.285 0.8 0.60 2.39

24. particulars Casual wear Formal wear Party wear Scarves
Gross margin 19,78,000 12,40,000 9,40,000 2,49,000
Space (sqft) 2,000 1,500 1,000 500
GMROS 989 836.66 940 498
B

25. Score card
• Sell through analysis
• Stock turnover ratio
category wt Formal Casual PARTY SCARV
wear wear WEAR ES
PROFIT 3 3 4 2 3
ROA 5 4 4 3 1
GROSS 2 3 2 2 3
MARGIN
WA 11.6 12 8.3 6.6
B

26. Strategies
Red cluster (A) Green cluster (B) Yellow cluster(C)
Casual wear: the maximum Casual wear: from income We will try to find out the gap
revenue is from non earning group of 10, 000- 30,000 and as the sale is less in this
group, and in tier 3 cities, the in tier 2 cities. mainly jeans , cluster. Assortment with wide
assortment will be trendy , mid length skirts, half and full variations in variety , price and
with wide variety and the price sleeves tops will be kept in quality will be provided.
range will be kept low. assortment. Customer demand surveys is
to be done.
Formal wear: income Formal wear: for people in
Group of 30,000- 50,000 income group of 10,000 –
mainly in tier 3 cities and the 30,000 in tier two cities .Slight
working group, the assortment variations in assortment
will be staple , and classy
Party wear: assortment
Party wear: mainly for according to income group
working class with income above 30,000 for people in tier
above 50,000. high range 2 and 3 cities both for working
products in assortment. and non working therefore
assortment will be wide and
high range products

27. CATEGORY TACTICS(Tactogram)
Shelf
Category Assortment Pricing Promotion
placement
Fixed price Advertising ,
range main store In store
wide variety starting from location, promos,
Casual wear Competitive 199 to 2999 Hoarding,TV
Higher shelf
in market INR space ads
Wide In the store
breadth but isles and the Catchy
Competitiv
Party wear narrow center window
e display unit
depth of the display
category of the store

28. Shelf
Category Assortment Pricing Promotion
placement
Same price
almost
Wide variety At the back window
everytime
Formal wear with depth other than end end of the display.
and breadth of season sale store
Limited Competitiv Near billing
Scarves breadth and counter No
e
depth

29. IMPLEMENTATION
We will implement in out strategy in category
choosing
Planogram will be developed on the basis of
the cluster we have identified

30. Promotional Strategies
SCHEMES:
• If purchase amount is unto Rs 30,00 then we
offer special gift vouchers
• If Purchase amount is more than Rs 5,000, we
are offering special gift such as fashion
jewellery.
• For purchasing of Rs10,000 we offer 10%off
on next purchase.