CategoryManagementCaseStudy.ppt

CategoryManagementCaseStudy BasedonECRTaiwanCategoryManagementPilotProject CaseStudyAgenda ObjectivesoftheCaseStudyCategoryManagementModelWorkthroughtheCatManProcess Scorecard Tactics WriteaCategoryPlan ObjectivesoftheCaseStudy UnderstandtheCategoryManagementModel UnderstandthelinkagebetweentheStepsintheModelbyworkingthroughCatManProcess UnderstandPracticalApplicationofCategoryManagementbyAgreeingaCategoryPlan ThisCaseStudy IstheInternationalProcess IsbasedonrealSKU sandmarket butDatadetailischangedforconfidentiality InternationalCategoryManagementModel HandoutMaterial Pages3 4 CategoryDefinitionCategoryRole ThesearegenerallyagreedbySupplier Retailermanagementinadvance CategoryDefinition Structure FabricCare FabricsCare FabricsCleanser Fabrics Conditioner Bleach Pretreater MainWash DelicateWash RinseSoftener IroningAids Normal Color Cleanser Conventional Concentrate HeavyDutyLiquid LightDutyLiquid CaseStudyFocus FabricsConcentrate Signature Destination Priority Basic Routine Occasional Seasonal Fill in Convenience CategoryRole TheCategoryisPrioritybecauseofit simportancetoSalesandProfit plusit scompetitiveimportance CategoryRole MostCategoriesareBasicorPriority VeryfewareSignaturebecauseofthehighinvestmentcosttomaintainthatposition SeePage4foradetaileddescriptionof priority CategoryRole CategoryAssessment WhatisthecurrentperformanceoftheCategoryandSegments HowdoestheperformancecomparetotheMarket WhataretheOpportunitiesforImprovement LossofShare WorsethanTotalRetailerSales ProfitMaintained CategoryAssessment Page5 Under performingSegments CategorySegmentAssessment Sales ClearOpportunitiesforImprovement CategorySegmentAssessment Profit Winners HH Sleepers HL OpportunityGaps LH Questionable LL SizeofBubbleequalsSizeofSegment Onlyoneclear Winner segment andit ssmall CategoryAssessment RetailerPerformanceinMarket but ClearopportunitiestoIncreaseSales OpportunityGaps LH Winners HH Sleepers HL Questionable LL CategoryAssessment FourLargestSegments CategoryScorecard Whataretheoverall TopLine targetsfortheCategory ThesemustbediscussedandagreedwiththeSeniorManagement 448 6m 5 3 35 0m 7 8 Thisis16 5 growth butthisRetailerwantsGrowth MarketShare CategoryScorecard Page8 RepeattheexerciseforeachSegment 120 0m 5 3 4 9m 4 1 ShouldwetryandretainshareinSegmentswithmorethan FairShare DEFINITELYYES ButnotattheexpenseofMargin SegmentScorecard Page9 CategoryStrategies Page11 WeassigndifferentStrategiestoeachSegmenttoensurewehaveabalancedBusinessPlan CategoryStrategies Page11 WeuseadifferentmixofStrategies foreachCategoryRole AssignStrategiestoSegments Page12 SegmentswithhighsharesareusedforProfitGeneration HighUnitpriceand RelatedSale segmentsareusedforTransactionBuilding CategoryTactics BasedontheRole ScorecardandtheStrategies wenowconfirmtheTacticstouseineacharea RangingPricingPromotionShelving RangingTactics AsaPRIORITYCategory weshouldstockaBROADRANGEofSKU s PricingTactics AsaPRIORITYCategory weshouldadoptSTRONGLYCOMPETITIVEpricing ShelvingTactics AsaPRIORITYCategory weshouldadoptQUALITYlocation withaslightlyhigherthanaveragespaceallocation PromotionTactics AsaPRIORITYCategory weshouldBUILDsalesvolumes usingMajorBrandsandSKU s StrategicSummary Page15inthehandoutsummariseswhatisagreedsofar ThisistheBlueprintformanagingtheCategory ThisisthereferenceforALLactionsanddecisionsasweworkthroughtheoperationaldetailofthePlan SegmentRangingReview Concentrates Page16detailstheSKU savailableinthemarket whatisstockedintheRetailerschannel theRetailer andhisCompetitors NotethatCompetitor1has19SKU s Isthistoobroad Howmuchofthemarketiscoveredbytheexisting14SKU s SegmentRangingReview Concentrates Page17rankstheSKU sbysalesshareforcomparisonbetweentheRetailerandtheMarketaverage Notethat15SKU scovers95 ofthemarket 3SKU s 9 11 12 arenotstocked Theretailer lowest2SKU sarepoorperformersinthemarket RangingRecommendation 3 09m 1 90m 1 78m 0 47m 0 11m 6 19m AdditionalAnnualSalesof 6 19m 5 3 increaseonthisyear 5 46 MarketShare SegmentPromotionReview Frequency Page18detailsthePromotionFrequency TypeandPricePointfortheRetailerandhisCompetitors NotethedifferenceinFrequencyandMix PromotionFrequency 44836 22418 22418 1129 115 1 15 1129 Thereisno perfect answer Clearlythe mix needsadjustingtobecompetitive AligningBrandFrequencytomarketshareisagoodstart SegmentPromotionReview PricePoint Almostallpromotionpricepointsarehigherthanthecompetitors Page19outlinesthecurrentPricePointdifferentialbetweentheRetailerandhisCompetitors PromotionReviewImpact Inmostcases PriceElasticityandOn SaleMixarenotwellunderstood TherecommendationisESTIMATEtheimpact andMEASUREtheActualResultforinputtothenextreview SegmentPricingReview Page20detailsthecurrentpricingfortheRetailer andhisCompetitors WhiletheRetaileriscompetitiveagainstComp1 ahigh lowretailer heisnotcompetitiveonshelfforthemajorcomponentsofthesegment ALLpricesnowcompetitive withNOmarginloss ShelfPlacementReview Programssuchas Spaceman and Apollo assistgreatly KeyelementsareBalancing DaysofSupply onshelf UsingMinimumFacingsRulesandMaximumDOStorecommenddeletions Allocatingany spare spacetoSKU sthatsupporttheSegmentStrategy BalancethePlan EachTacticalDecisionhasproducedachangeinSales Profit AddupthevalueofeachchangeandcomparewiththeoriginaltargetsintheScorecardsection Adjusttheplans AgreewithManagementthattheresultisacceptable Implementation CommunicatetheObjectives TargetsandStrategiestoEVERYONEinvolvedinimplementation SetandAGREEimplementationtiming Dotestsin storeforshelvingchanges Check check checkthatagree