Category management is defined as:
There are two key elements of category management:
- Category management aims to provide the shopper and consumer with what they want, where they want it, and when they want it.
- Products are grouped together into categories to reflect customers needs based on how the product is used, consumed or purchased.
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A category could be made up of similar products |
or be occasion based...
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Category management is a continual, long term business philosophy, often approached through a series of short term projects involve a close working partnership and the sharing of information by retailers and suppliers.
- A supplier uses its expertise about who purchases (the shopper), who consumes, what they want, need and how they behave.
- A retailer uses its knowledge of its customers, the way they shop, and their purchasing behaviour.
Category management promotes cross functional working between companies and will generally involve people from buying, finance, supply chain, trade marketing, space planning, store operations, sales, product development and marketing & of course category management.
A category’s role and marketing positioning should align with a retailers corporate goals with the overall look and feel in-store mirroring the image of the retailer.
The Category Management Process
Category Management is underpinned by a structured process which provides a framework for retailer & supplier to work together strategically. A formal 8-step category management process was developed just over a decade ago by the Partnering Group.
The Category Management Process
As companies developed their Category Management approach they have created their own streamlined processes that deliver benefits in a shorter, less resources intensive timescale. However our 2007 Category Management Survey below shows a significant move from a tactical approach in 2005 to strategic & innovative in 2007.
Which of the following statements best describes how your company practises category management? (UK versus Rest of World)
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2005
UK only |
2007
UK only |
2007
Rest of World |
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Strategic (full 8-step process, cross-functional collaboration, customised research & initiatives, strategic alignment |
22% |
28% |
41% |
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Innovative (shorter streamlined process, little customised research, selective investment, test new initiatives) |
31% |
35% |
22% |
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Tactical (informal process, tactical quick wins, ranging and merchandising, promotions) |
40% |
31% |
31% |
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Transactional (sales focused approach only, minimise costs) |
5% |
5% |
0% |
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Do not practice Cat Man |
2% |
0% |
6% |
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Don't Know |
1% |
1% |
0% |
Source: IGD Research 2007
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