Getting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAI
Category Management
1.
2. is an assortment of items
which the consumer may
perceive as substitute for
each other.
3.
-is the process by which a
retail business is managed
with
the
objective
of
maximizing the sales and
profits of a category.
4.
- is a distributor/supplier process
of managing categories as
strategic
business
units,
producing
enhanced
business results by focusing on
delivering consumer value
5.
Categories are managed as strategic
business units
Categories are managed strategically
through category plans and strategic
roles
Category Managers control their share
of company assets
Asset Returns measure performance and
establish priorities
6.
Responsibility for category
performance/ownership is clearly
defined and not fragmented across
organization
Category Management leverages
distributor and supplier expertise for
mutual benefit … neither party can
do the job alone
9.
Categories are strategic business
units
Overall company strategies provide a
infrastructure for category level
strategies
Strategies must be clearly
understood throughout the Retailer’s
organization
10.
11.
A formal, disciplined set of activities
designed to produce a specified
output
Development and implementation
of Written Category Business
Plans
12.
A tools that defines, measures
and monitors the progress of
Category Business Plans
13.
Development of the
organization’s core competency
Through organizational
structure
Roles/Responsibilities
Skill/Knowledge development
Reward Systems
14.
Critical elements of the
Category Business Planning
Process
Need data-driven, fact-based
analysis and performance
measurement
15.
Relationships with suppliers
who acquire unique
perspectives, resources and
skills
Common objective -- delivering
superior consumer value more
profitability
16. - Category Management is underpinned
by a structured process which provides
a framework for retailer & supplier to
work together strategically. A formal 8step category management process was
developed just over a decade ago by
the Partnering Group.
17.
18.
Category Definition is the 1st step in the
procedure. The definition of the category
has a significant impact on the
subsequent steps. A category definition
ought to be based on how the customer
buys, and not on how the retailer buys.
The trading partners need to define the
new category with a name
What is it?
What are the sub-categories?
19.
The distributor (with supplier input) would
define the overall role the selected category
is going to play in the distributor’s total
business
How important is the category?
How to leverage the importance?
The category role determines the priority and
the importance of the numerous categories in
the overall enterprise. These aids in resource
allocation. Traditionally, four categories have
been identified. They are:
20.
To be the primary category provider and
help define the retailer as the store of
choice by delivering consistent, superior
target consumer value
To be one of the preferred category
providers and help develop the retailer as
the store of choice by delivering
consistent, competitive target consumer
value
21.
To be a major category provider, help
reinforce the retailer as the store of
choice
by
delivering
frequent, competitive target consumer
value
To be a category provider and help
reinforce the retailer as the store of
choice by delivering good target
consumer value
22.
Category Assessment: In this step, the existing
performance of the category is evaluated with respect
to the turnover, profits and return on asses in the
category. It involves an assessment of the buyers, the
marketplace, the retailer and the suppliers.
The process of Category Assessment
Consumer Assessment
Market Assessment
Retailer Assessment
Supplier Assessment
23.
Establishment of the performance measures
by which the category manager will measure
the quality of the execution of the plan
What are the goals & objectives?
How is the progress?
The development of category performance
measures involves the setting of measurable
targets in terms of sales, margins and Gross
Margin Returns on Investment (GMROI).
24.
Typical Category performance
measures include:
Good performance measures
are characterized by:
Sales
Profits
A balanced Architecture of
Measurement
Total system
Allow for comparison of
Performance Over time
Timely, Accurate, Understanda
ble Measures
Related to Corporate Strategy
Market Share
Inventory Turnover
Changes in the Assortment
Consumer Transactions
25.
Assignment of specific strategies to key elements of
the overall category
What is the business plan?
How will it achieve the role & scorecard?
The purpose of this step is to help the retailer and
supplier to develop methods that capitalize on
category opportunities by means of creative and
efficient use of the resources that are accessible to
the category. Category strategies can be aimed at
developing traffic or transactions, generating
cash, generating profit, enhancing the image or
developing excitement.
26.
The seven most typical category marketing strategies
are:
Traffic Building
Transaction Building
Turf Defending
Profit Generating
Cash Generating
Excitement Creating
Image Enhancing (Price, Quality, Service & Variety)
27.
Specific activities supporting the category
strategies
which
would
include
item
variety, everyday and feature price targets, shelf
presentation, etc.
What do we do to achieve the strategy?
Who does what?
Category tactics are developed in the areas of
assortment pricing, promotions and the
presentation of the merchandise in the store.
28.
29.
A specific implementation schedule
is developed and responsibilities are
assigned. Accurate implementation
is the key to the success of the
Category Management.
30.
Key Components of Plan Implementation
Approval Process
Strategic Fit
Scorecard Impact
Resource Allocation
Impact on Other Areas
Assigning Responsibilities
Scheduling
31.
Ongoing review and measurement
of the progress of the plan toward
the category role and scorecard, and
modification of the plan when
appropriate
32.
Category captains is a supplier who forms an alliance
with the retailer to enable the latter to develop
consumer insight , satisfy consumers and improve
performances and profit across the entire category.
Category captains receive downstream data for all
SKUs, including competitor products, in the category
they manage. The category captain advises the
retailer on the best way to price, display, and
promote all products in a category, including those of
competitors. While this arrangement ensures retail
efficiency, it does raise concerns about possible
misuse of power by the category captain.
33.
34.
The grocery industry is in a major
state of transition. This change is a
function of a complex mix of
consumer,
technological
and
market factors.
Category Management represents a
business oriented approach to
achieving business results -- both
for distributors and suppliers
