Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 1 CPG Cat Net The Next Wave of Best Practices Category Management Focusing on.

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Presentation transcript:

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 1 CPG Cat Net The Next Wave of Best Practices Category Management Focusing on the Shopper, on Execution and on Team Capabilities The Partnering Group, Inc Jeff Clow

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 2 CPG Cat Net Category Management  Concept introduced in the late 1980’s  Category Management has had global acceptance since it’s introduction  The 1995 US ECR Report documented the Best Practices definition and business process

© 2009 The Partnering Group, Inc. 3 Category Management Share Group May 2009 CPG Cat Net Category Management Process Category Definition Category Role Category Assessment Category Scorecard Category Strategies Category Tactics Plan Implementation Category Review

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 4 CPG Cat Net Adoption of Best Practices Spread Quickly Adoption 1993 Today The Best Practice Model provided a Platform for Global Adoption.

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 5 CPG Cat Net 15 years later it still is a Top Priority 98% of retailers and 89% of manufacturers consider Category Management critically important.

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 6 CPG Cat Net Key Reasons why CM Has Worked  Provided foundation for strategic retail marketing  Categories as Strategic Business Units  Aligning Company to Company strategies  Balanced portfolio of Category Roles  Linking Category Strategies and Tactics  Brought consumer focus to Retail Marketing and Merchandising  New Category Definitions and Structures  Consumer-driven Strategies and Tactics

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 7 CPG Cat Net Key Reasons why CM Has Worked  Provided a new and more effective model for collaboration through better information sharing  Expanded organizational capabilities  Attracted and developed new skills and talent  Roles and accountability  Scorecard-based performance  Delivered superior results  Retailers and Manufacturers  Sales, Profits, and ROI

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 8 CPG Cat Net Why CM Hasn’t Achieved It’s Full Potential  Inconsistent top management support  Too often used as a tactical tool rather than for achieving differentiation and strategic advantage  Scorecards have not changed enough to motivate and reward new behavior  Too project oriented – not a “continuous” process  Work cycles too long and time intensive  Process too data focused and template driven – not enough emphasis on insights

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 9 CPG Cat Net Why CM Hasn’t Achieved It’s Full Potential  Too much reliance on manufacturers – lack of retail ownership  Too headquarters focused – not enough store / shopper focus  Inconsistent implementation at store level  People competencies not systematically developed and maintained to sustain advantage  Lack of software supporting tools, especially in promotion and pricing tactics  New trends and competitive challenges have emerged

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 10 CPG Cat Net Trends Shaping The Next Generation of Category Management

© 2009 The Partnering Group, Inc. 11 Category Management Share Group May 2009 CPG Cat Net Scanning Space Management Category Management ECR Category Management Best Practices Next Generation Store Designs Shopper Marketing Shopper Marketing - The Next Wave Today

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 12 CPG Cat Net Introducing… Shopper & Category Development The Next Wave of Best Practices Category Management Publication: 2009

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 13 CPG Cat Net Shopper & Category Development Key Elements  Streamlined, robust for all categories  Consumer & shopper insight driven  Shopper-centric strategies  Loyalty Marketing integration  Breakthrough, differentiated initiatives  Global & local application  More emphasis on implementation

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 14 CPG Cat Net The Philosophy & Objective Remain The Same “A Retailer - Supplier Process of managing categories as Strategic Business Units, producing Enhanced Business Results by focusing on delivering Consumer/Shopper Value.” Consumer/ Shopper RetailerSupplier

© 2009 The Partnering Group, Inc. 15 Category Management Share Group May 2009 CPG Cat Net But the Process Has Evolved Category Definition Category Role Category Assessment Category Scorecard Category Strategies Category Tactics Plan Implementation Category Review Insight Generation Strategic & Tactical Planning Initiative Development Plan Launch Category Definition Category Role Plan Review

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 16 CPG Cat Net Best Practices Enhancements Category Definition Category Role Definition & Role remain as important “umbrella” elements of the process. Greater focus on strategic alignment and Destination categories. Performed as needed

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 17 CPG Cat Net Best Practices Enhancements ✔ Focus is on finding key opportunities versus “boiling the ocean” ✔ Heavy emphasis on shopper understanding & behavior ✔ Business question driven versus filling in templates Insight Generation Strategic & Tactical Planning Initiative Development Plan Launch Plan Review

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 18 CPG Cat Net Best Practices Enhancements ✔ Strategies/Tactics are more integrated for optimal linkages ✔ Greater focus on the consumer and shopper ✔ Strategies are differentiation focused ✔ Tactical Blueprints are key output ✔ Provide tactical guidance of initiatives ✔ Provide direction for Core and Local category planning Insight Generation Strategic & Tactical Planning Initiative Development Plan Launch Plan Review

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 19 CPG Cat Net  Blueprints identify “The How”  Link each category strategy to the key tactics  Establish the core tactical elements (that can then be customized locally) Tactical Blueprints

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 20 CPG Cat Net Best Practices Enhancements ✔ Focus on differentiating, more sustainable category initiatives ✔ Rigorous cost/benefit analysis & prioritization ✔ Formal Identification of Plan Requirements ✔ Secures internal / supplier commitment and resources Insight Generation Strategic & Tactical Planning Initiative Development Plan Launch Plan Review Importance of Initiatives  Deliver differentiation and innovation to Category Plan  Create focus on implementation and success measurement

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 21 CPG Cat Net Full-face On Top Captions to Simplify Shopping and Improve Conversion Consumer Driven Arrangement Organized by Occasion and Recipient Lower Density and Vertical Blocking to Improve Shopping Driving Quick Conversion and Encouraging Multiple Purchases Ready To Go Gift Bags to Drive Transaction Size Simplified Shopping Initiative Insight Generation Strategic & Tactical Planning Initiative Development Plan Launch Plan Review Improved leverage & recognition of brand existence in the store

© 2009 The Partnering Group, Inc. 22 Category Management Share Group May 2009 CPG Cat Net Greeting Cards Category Shopping Initiative - Example

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 23 CPG Cat Net Best Practices Enhancements ✔ Detailed implementation planning tied to each initiative ✔ Formal approval & executive commitment process ✔ Improved scorecard target setting & measurement Insight Generation Strategic & Tactical Planning Initiative Development Plan Launch Plan Review

© 2009 The Partnering Group, Inc. 24 Category Management Share Group May 2009 CPG Cat Net Moving Beyond Traditional Category Plans Insight Generation Strategic & Tactical Planning Initiative Development Plan Launch Category Definition Category Role Plan Review Traditional Category Plans Portfolio Plans Shopper Segment Plans

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 25 CPG Cat Net Competency Based Curriculum Blended Delivery Enabling S&CD: Competency-based Curriculum w/ Blended Delivery Across Levels Example

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 26 CPG Cat Net Advanced Mastery Foundation Demonstrates base level of capability. Has the potential to perform adequately. Applies basic knowledge to daily work. Demonstrates an advanced level of capability. Has the potential to perform at an above average level. Can execute all primary tasks and functions. Decision-making reflects application of knowledge. Application of learning produces desired results. Demonstrates extraordinary level of capability. Has the potential to be the top performer and resident expert. Demonstrates mastery of best practices. Applies deep knowledge to the most challenging situations with breakthrough results. Has the potential to be seen as a thought leader in the industry. Is able to bring strategic insights to opportunities. New personnel (all key functions) Category Managers Buyers Account Executives Analysts Select Support Staff Category Managers Sr. Buyers Sr. Analysts Account Executives Customer Marketing Personnel Category Managers / Director-VP’s Sr. Buyers / VP Merch Sr. Analysts, Director Insights Sr. Account Execs/ Regional VPs Sr. Marketing personnel Test Practicum TPG’s Consumer Products Leadership Program

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 27 CPG Cat Net Is your team ready for the next wave? Thank you! Jeff Clow (940)