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1、,CATEGORY MANAGEMENT,Session Objectives:,Define Category Management (CM) Describe Category Management as a Business Process Discuss Critical Issues Related to Successfully Developing a Category Management System,Category Management Process,Category Management Issues,Define Category Management,Defini
2、tion,Bringing Better Value to the Consumer is thePrimary Focus of Category Management.,“A Retailer-Supplier process of managing categories as Strategic Business Units, producing improved sales and profit results by focusing on satisfying consumer needs and delivering consumer value.”,Source: ECR Bes
3、t Practices Report,Category Management has expanding into durable goods and services.,Is Category Management just for the grocer? Durable Goods Auto Industry - GM Pontiac & Ford Service Industry Phone Service Financial Services/Banks,Definition,The ECR System,Timely, accurate, paperless information
4、flow,Supplier,Distributor,Retail Store,Consumer Household,Smooth, continual product flow matched to consumption,Definition,Efficient Promotion,Efficient Store Assortment,Definition,Category Management is at the at the core of ECR. CM provides a process & framework for collaboration.,Efficient New Pr
5、oduct Development,Efficient Replenishment,CATEGORY MANAGEMENT,Category Management as a Business Process is comprised of interrelated components both within and outside of the organization.,What is Category Management?,Definition,Information Technology,Strategy & Business Process,Scorecard,Collaborat
6、ive Relationships,Organization Capabilities,Core,Enablers,Enablers,CATEGORY MANAGEMENT: HOW IS IT DIFFERENT?,Category/Brand/SKU Management under one Decision Maker Consumer-Focused Strategies Data-based Decision Making Proactive Business Planning Collaborative Work Process Manage Category As Busines
7、s Unit Focused on Category ROI - NOT Sales or Gross Margin,Definition,SKILLS NEEDED TO BUILD BUSINESS THROUGH CATEGORY MANAGEMENT,Data analysis and technical mastery Shopper and consumer understanding Strategy development Financial and logistics expertise Innovation Total Systems Focus,Definition,De
8、finition,Why is it beneficial for Retailers and Manufacturers to Invest in Category Management?,Helps Retailers - Define customer needs Determine strategic issues Enhance category and store profits,Definition,Why is it beneficial for Retailers and Manufacturers to Invest in Category Management?,Help
9、s Retailers - Define customer needs Determine strategic issues Enhance category and store profits Helps Manufacturers - Position themselves as category captains for retailers Become an indispensable resource for the retailer Enhance brand profits,Road Map,Category Management as a Business Process,Ca
10、tegory Management Issues,Define Category Management,Process,Category Management as a Business Process.,Category Definition,Category Role,Category Assessment,Category Scorecard,Category Strategies,Category Tactics,Plan Implementation,Category Review,Source: The Partnering Group,What is a Category? A
11、distinct, manageable group of products/services that CONSUMERS perceive to be interrelated and/or substitutable in satisfying their need(s).,Process,Category Definition - critical in determining the products that make up the category and in establishing the segmentation strategy.,What is a Category?
12、 A distinct, manageable group of products/services that CONSUMERS perceive to be interrelated and/or substitutable in satisfying their need(s).,Process,Category Definition - critical in determining the products that make up the category and in establishing the segmentation strategy.,How does definin
13、g a category help? Produces better retailer/manufacturer alignment with the consumer Creates better manufacturer-retailer alignment Gives new perspectives on how to view a product and/or category,Process,Juices & drinks,Shelf stable,Refrigerated,Frozen,Glass/Plastic,Aseptic,Ready to Serve,Concentrat
14、e,Category Sub-Category Segment Sub-Segment,Defining a Category by Usage Segment,Lemon Juice Segmentation:,Source: Borden, Inc.,Process,Category Role (or purpose) defines how the consumer views the category.,Possible Category Roles:,Destination Convenience Routine Seasonal/Occasional,Process,Categor
15、y Assessment,Category Assessment involves conducting a complete analysis of the category by investigating its sub-categories, user-segments, brands, and SKUs. Such an analysis must be based on current consumer, distributor, supplier and market information.,Process,One example might be identifying th
16、e gap between the current sales and the potential sales of a category.,Source: Borden, Inc.,Process,Key Questions in Conducting a Category Assessment,Who is my target customer? How important is this category to that customer? What are the category trends? volume, share, profits? What are the key product segments? What are the least and most important SKUs?,Process,Key Questions in Conducting a Category Assessment (continued),How well is shelf space aligned to SKU movement? How do consumers view
