Category Management Name Roll No Aarti Bhatia 4 Renuka T 56 Deepak Ramakrishnan 8

Category Management What is a Category? Assortment of Items having common characteristics that the customer sees as substitutes Means different things to different retailers. Category Management-Defined A Retailer-Supplier process of managing categories as Strategic Business Units, to improve sales and profit by focusing on satisfying consumer needs and delivering consumer value

Category Management Objective Maximize the sales and profits of the entire category, not just a brand: eg Breakfast cereal vs. Kellogg Corn Flake. An individual manages the assortment of merchandize in the entire category and is responsible for its success/failure - The Category captain

Category captain The challenge… Selected vendor responsible for managing assortment of merchandise in a category. Vendors have more information and analytical skills about the category in which they compete than retailers. The challenge… Vendor category captain may have different goals than retailer.

Process Of Category Management

Factors involved in Category Management SKU targets by category segment- Target is to maximize profitability • Sales data & supplier performance analysis by segment • Consumer segmentation • Product selection/availability • Store & distribution center space optimization • Structured listing & delisting processes • Promotional plans • Industry trends • Shelf management

Importance of Category Management Foundation for strategic retail marketing Consumer focus to Retail Marketing and Merchandising Data Based Decision making Higher Operational Efficiency Optimized Store Assortments Basis to evaluate new items Focused on Category ROI - NOT Sales or Gross Margin Provided foundation for strategic retail marketing 􀂊 Categories as SBU’s 􀂊 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 Expanded organizational capabilities 􀂊 New skills and talent 􀂊 Roles and accountability 􀂊 Scorecard-based performance 􀂃 Delivered superior results 􀂊 Retailers and Manufacturers 􀂊 Sales, Profits, and ROI

Challenges The quality of the implementation and execution will determine the degree of competitive advantage gained. Used more as a tactical tool than an competitive strategic advantage Too much reliance on manufacturers – lack of retail ownership Inconsistent implementation at store level

Product Hierarchy Category Sub-category Brand Manufacturer

Product Hierarchy - Watches Category : Watches Sub-category : Leather/Steel/Steel- gold/Gold watches Brand : Titan/Nebula/ Octane/Edge/ Orion/ Raga Manufacturer : Titan Industries Ltd.

Product Hierarchy - Footwear Category : Footwear Sub-category : Mens/ Ladies/ Children/ Sports/ Accessories Brand : Ambassador/Hush Puppies/ Dr. Scholls/ Marie Clarie/ Power/ North Star Manufacturer : Bata India Ltd.

Product Hierarchy – Writing Instruments Category : Writing Instruments Sub-category : Ball pens/Gel pens/Fountain pen/Inks & Refills Brand : Vector/ Latitude/ Quink Manufacturer : Newell Rubbermaid Co

Beauty Shop

Beauty Shop Total Monthly Sale - 1crore Categories & contribution Skin care Color Cosmetics Fragrances Parlour Items & others Footwear Leather accessories Gift Items Hair care Brands Available Skin Care - 25 brands Color Cosmetics – 10 brands Fragrances - 15 brands Parlour Items – 5 brands

Category contribution at Beauty Center

In a beauty shop Category Skin care Color Cosmetics Fragrances (perfumes & deos) Parlour Items Stock Turn 5 times 4 times 3 times 2 times Estimated Sale total sale*% of category contibution 23 lakhs 22 lakhs 10 lakhs 3 lakhs Average Stock 4.5 5.5 3.3 1.5 % of share of category 23% 22% 10% 3%

Brand Contribution to Category

Brand v/s SKU Skin Care Lip Products Nails Face Eye

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