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,CATEGORYMANAGEMENT,SessionObjectives:,DefineCategoryManagement(CM)DescribeCategoryManagementasaBusinessProcessDiscussCriticalIssuesRelatedtoSuccessfullyDevelopingaCategoryManagementSystem,CategoryManagementProcess,CategoryManagementIssues,DefineCategoryManagement,Definition,BringingBetterValuetotheConsumeristhePrimaryFocusofCategoryManagement.,“ARetailer-SupplierprocessofmanagingcategoriesasStrategicBusinessUnits,producingimprovedsalesandprofitresultsbyfocusingonsatisfyingconsumerneedsanddeliveringconsumervalue.”,Source:ECRBestPracticesReport,CategoryManagementhasexpandingintodurablegoodsandservices.,IsCategoryManagementjustforthegrocer?DurableGoodsAutoIndustry-GMPontiac&FordServiceIndustryPhoneServiceFinancialServices/Banks,Definition,TheECRSystem,Timely,accurate,paperlessinformationflow,Supplier,Distributor,RetailStore,ConsumerHousehold,Smooth,continualproductflowmatchedtoconsumption,Definition,EfficientPromotion,EfficientStoreAssortment,Definition,CategoryManagementisattheatthecoreofECR.CMprovidesaprocess&frameworkforcollaboration.,EfficientNewProductDevelopment,EfficientReplenishment,CATEGORYMANAGEMENT,CategoryManagementasaBusinessProcessiscomprisedofinterrelatedcomponentsbothwithinandoutsideoftheorganization.,WhatisCategoryManagement?,Definition,InformationTechnology,Strategy&BusinessProcess,Scorecard,CollaborativeRelationships,OrganizationCapabilities,Core,Enablers,Enablers,CATEGORYMANAGEMENT:HOWISITDIFFERENT?,Category/Brand/SKUManagementunderoneDecisionMakerConsumer-FocusedStrategiesData-basedDecisionMakingProactiveBusinessPlanningCollaborativeWorkProcessManageCategoryAsBusinessUnitFocusedonCategoryROI-NOTSalesorGrossMargin,Definition,SKILLSNEEDEDTOBUILDBUSINESSTHROUGHCATEGORYMANAGEMENT,DataanalysisandtechnicalmasteryShopperandconsumerunderstandingStrategydevelopmentFinancialandlogisticsexpertiseInnovationTotalSystemsFocus,Definition,Definition,WhyisitbeneficialforRetailersandManufacturerstoInvestinCategoryManagement?,HelpsRetailers-DefinecustomerneedsDeterminestrategicissuesEnhancecategoryandstoreprofits,Definition,WhyisitbeneficialforRetailersandManufacturerstoInvestinCategoryManagement?,HelpsRetailers-DefinecustomerneedsDeterminestrategicissuesEnhancecategoryandstoreprofitsHelpsManufacturers-PositionthemselvesascategorycaptainsforretailersBecomeanindispensableresourcefortheretailerEnhancebrandprofits,RoadMap,CategoryManagementasaBusinessProcess,CategoryManagementIssues,DefineCategoryManagement,Process,CategoryManagementasaBusinessProcess.,CategoryDefinition,CategoryRole,CategoryAssessment,CategoryScorecard,CategoryStrategies,CategoryTactics,PlanImplementation,CategoryReview,Source:ThePartneringGroup,WhatisaCategory?Adistinct,manageablegroupofproducts/servicesthatCONSUMERSperceivetobeinterrelatedand/orsubstitutableinsatisfyingtheirneed(s).,Process,CategoryDefinition-criticalindeterminingtheproductsthatmakeupthecategoryandinestablishingthesegmentationstrategy.,WhatisaCategory?Adistinct,manageablegroupofproducts/servicesthatCONSUMERSperceivetobeinterrelatedand/orsubstitutableinsatisfyingtheirneed(s).,Process,CategoryDefinition-criticalindeterminingtheproductsthatmakeupthecategoryandinestablishingthesegmentationstrategy.,Howdoesdefiningacategoryhelp?Producesbetterretailer/manufactureralignmentwiththeconsumerCreatesbettermanufacturer-retaileralignmentGivesnewperspectivesonhowtoviewaproductand/orcategory,Process,Juices&drinks,Shelfstable,Refrigerated,Frozen,Glass/Plastic,Aseptic,ReadytoServe,Concentrate,CategorySub-CategorySegmentSub-Segment,DefiningaCategorybyUsageSegment,LemonJuiceSegmentation:,Source:Borden,Inc.,Process,CategoryRole(orpurpose)defineshowtheconsumerviewsthecategory.,PossibleCategoryRoles:,DestinationConvenienceRoutineSeasonal/Occasional,Process,CategoryAssessment,CategoryAssessmentinvolvesconductingacompleteanalysisofthecategorybyinvestigatingitssub-categories,user-segments,brands,andSKUs.Suchananalysismustbebasedoncurrentconsumer,distributor,supplierandmarketinformation.,Process,Oneexamplemightbeidentifyingthegapbetweenthecurrentsalesandthepotentialsalesofacategory.,Source:Borden,Inc.,Process,KeyQuestionsinConductingaCategoryAssessment,Whoismytargetcustomer?Howimportantisthiscategorytothatcustomer?Whatarethecategorytrends?volume,share,profits?Whatarethekeyproductsegments?WhataretheleastandmostimportantSKUs?,Process,KeyQuestionsinConductingaCategoryAssessment(continued),HowwellisshelfspacealignedtoSKUmovement?Howdoconsumersviewbrands?BrandnamesversusstorebrandsWhentheymakeapurchase,Howlargeisit?Whatelsedotheybuy?Howdoesthecategoryspricingcomparetotherestofthestore?,Process,KeyQuestionsinConductingaCategoryAssessment(continued),Howdoesthecategoryspricingcomparetothemarket?Whatpercentageofvolumeissoldonpromotion?Whatistheimpactoffeaturinganddisplay?Whatbrandsandsizes“define”and/orbuildthecategory?,Process,TheCategoryScorecardmeasuresandmonitorstheprogressandperformanceofthecategorybusinessplan.Targetsorhurdleratesmustbeclearlystated.,Revenue,MarketShare,Consumption(Equiv.Volume),Out-of-stocks,Profit,TargetConsumerShare,ROI,Process,CategoryStrategiesdefinethemarketing,productsupply,andinstoreservicerequiredtomeettargetsorhurdlerates.,TransactionEfficiency/TrafficBuilderShopping/InformationEntertainment,Typesofstrategies:,Source:RobertC.Blattberg,1996,Process,CategoryTacticsaretheactionstakentoimplementthecategorystrategies.,Transactionefficiency/TrafficBuilderLowprice/convenienceCategoryshop-ability,Source:RobertC.Blattberg,1996,Process,CategoryTacticsaretheactionstakentoimplementthecategorystrategies.,Transactionefficiency/TrafficBuilderLowprice/convenienceCategoryshop-abilityShopping/informationUniqueofferings/highserviceEasyaccesstoproductinformation,Source:RobertC.Blattberg,1996,Process,CategoryTacticsaretheactionstakentoimplementthecategorystrategies.,Transactionefficiency/TrafficBuilderLowprice/convenienceCategoryshop-abilityShopping/informationUniqueofferings/highserviceEasyaccesstoproductinformationEntertainmentStimulation/excitementCreativemarketing/broadassortmentChangingvarietyofproducts,Source:RobertC.Blattberg,1996,Process,Categorymanagementplansareoflittlevalueunlesstheyreceivehighqualityimplementation.,KeyComponentsofPlanImplementation:,CommonLanguageBuy-inatALLlevelsClearApprovalProcessClearAssignmentofResponsibilitiesImplementationSchedulePredeterminedIndicatorsofSuccess,Process,CategoryReviewistheongoingmeasurementoftheprogressoftheplanandmodificationwherenecessary.,StagesofCategoryReview:,OpportunityanddiscoveryprocessInput,analysis&implementationMeasurement,adjustment&learning,CATEGORYMANAGEMENT,ReviewingtheCategory,TargetingConsumers,PlanningMerchandising,ImplementingStrategy,EvaluatingResults,Process,RoadMap,CategoryManagementProcess,CategoryManagementIssues,CategoryManagementDefinition,CategoryManagementisasourceofcompetitiveadvantage.,Ifitissoeasytodoandeveryoneisdoingit,whereistheadvantage?CategoryManagementisaboutstrategicchoices.Thequalityoftheimplementationandexecutionwilldeterminethedegreeofcompetitiveadvantagegained.,Issues,CategoryManagementisadynamic,evolvingpractice.,Isthereoneapproach?no.Fundamentalprinciplesandprocesses.Implementationdependsuponthecapabilitiesandcurrentpracticesoftheorganizations.Todayspracticesaretomorrowsfoundationsforimprovement.,Issues,SuccessfulCategoryManagementhelpstodefineapartnership.,AbilityandcommitmenttodevelopthecategoryAvisionofthepotentialofthecategoryAdequateinformationtechnologycapabilityandsharinginformationMultifunctionalteamsupportcapabilitiesBuy-infromtopmanagementClearlydefinestheroleofthemanufacturerwithregardtoCategoryManagementTrust,Issues,HowtodevelopasuccessfulCategoryManagementrelationship.,DevelopacommonlanguageforCategoryManagementTranslatethegoalsofthepartnershipintoausableandmeasurableplantheutilizesfact-basedCMdecisionsandpractices.Educateeveryoneinvolved,buyersandsuppliers,ontheapproachbeingtakenforgrowingthecategory.Developfact-basedpresentationsrepresentingtheentirecategory.Developasystemofregular
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