Post on 29-Apr-2015
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CATEGORY MANAGEMENTFor
WOMEN’S WEAR(NIFT,PATNA)
SUDIPTADIVYA ARPITANEHABANDANAKUMARI SWATI
Category Management
CATEGORY
A distinct, manageable group of products/services that consumers perceive to be
interrelated and/or substitutable in meeting a consumer’s needs.
The distributor/supplier process of managing categories as strategic business units, producing enhanced business results by focusing on delivering consumer value.
1
Category management represents a significant and proven opportunity to achieve substantial business improvements across the entire value chain - for consumers, distributors and suppliers.
2
The Category Management business process is a structured, measured set of activities designed to develop and implement a written category business plan.
Category management is a retailing concept.
RETAILERMANUFACTURER
PRODUCT MANAGEMENT
CATEGORY MANAGEMENT
CUSTOMER MANAGEMENT
CONSUMER
PRODUCT MANAGEMENT
CUSTOMER MANAGEMENT
CUSTOMER RELATIONSHIP MARKETING
PRODUCT/CUSTOMER MANAGEMENT:A CONCEPTUAL MODEL
Each category is run as a "mini business" (business unit) in its own right, with its own set of turnover and/or profitability targets
and strategies.
“CONSUMER BEHAVIOR CHANGES THE CATEGORIES.”
The consumer drives what happens in the category.
The biggest change in category management over the years has been more of a focus on the consumer.
The process is now less “PRODUCT-CENTRIC and more “CONSUMER-CENTRIC”
THEREFORE THE NEW MINDSET OF THE RETAILERS IS:
IF WE ARE NOT GETTING A FAIR SHARE OF THE CATEGORY, CHANCES ARE WE’RE NOT DOING A GOOD JOB OF UNDERSSTANDING CONSUMERS
AND SATISFYING THEIR NEEDS
The industry standard model for category management is the 8-step process, or 8-step cycle
•Define the category (i.e. what products are included/excluded).•Define the role of the category within the retailer.•Assess the current performance.•Set objectives and targets for the category.•Devise an overall Strategy.•Devise specific tactics.•Implementation.•The eighth step is one of review which takes us back to step 1.
Decision treeDemand cluster
WOMENS WEAR
WESTERN
FORMAL WEAR
CASUAL WEAR
PARTY WEAR
CATEGORY DEFINITION
Product Groups/Categories is defined based on the consumer’s needs and purchasing habits.
B
TROUSERSSKIRTSSHIRTSSCARVES
FORMAL WEAR
Full sleeves
Half sleeves
JEANSSKIRTSSHORTSTOPST-SHIRTS
CASUAL WEAR
Pleated SkirtsMini SkirtsPencil SkirtsStraight SkirtsFlared Skirts
Flared jeansPencil cutbootcuthighwaistStraight fit3 quarter capri
Round NeckPolo T-shirtsCasual Shirts
Cap sleeveCorsetCowl neckCrew neckDouble-tee topHalter topOff shoulderTunic styleWrap top
GOWNS DRESS
PARTY WEAR
Monthly income (rs )
Casual wear Formal wear Party wear Scarves
Below 10,000 40 20 15 25
10,000-30,000 30 30 20 20
30,000-50,000 15 40 25 20
Above 50,000 15 10 40 35
Demand clustering
NOTE:On the basis of sales demand clustering has been done
Life style Casual wear Formal wear Party wear Scarves
Tier 1 15 45 35 5
Tier 2 30 30 35 5
Tier 3 40 25 30 5
Lifestyle of women
Occupation Casual wear Formal wear Party wear Scarves
student 55 25 15 5
Working 20 45 30 5
House wife 50 15 30 5
Occupation of woman
b
Destination categoryThis is the main selling category of the store .Such categories have high purchase frequencyand high activity.And our destination category is CASUAL WEAR
CATEGORY ROLE
Preferred Categories
With the help of these types of categories , the owner/brand builds a distinct image of itself in the minds of the customers.
Our preferred categories is Formal wear
Convenience Categories
This category only adds to the bill value of the customer as customer pick up this category unplanned
Low purchase frequency and low penetration.
And our convenience categories is scarves
Occasional/ Seasonal Categories
Meets the seasonal/ occasional needs of the customers.
And our seasonal category is partywear
Destination category- Casual wear
Occasional category-Party wear
Convenience category-Accessories
Preferred category-formal wear
CATEGORY
CATEGORY ASSESSMENT
• Profitability (Net Profit Margin , or net profit in %, ROI)
Assessment Particulars casual Formal Party Scarves
Gross sale 30,00,000 25,00,000 20,00,000 3,00,000
Returns 12,000 20,000 10,000 1,000
Discounts 10,000 40,000 50,000 …………
Net sales 29,78,000 24,40,000 19,40,000 2,99,000
Cost of goods sold
10,00,000 12,00,000 10,00,000 50,000
Gross margin 19,78,000 12,40,000 9,40,000 2,49,000
Expenses 50,000 40,000 35,000 10,000
Net profit 19,28,000 12,00,000 9,05,000 2,39,000
Net profit in % 64.74 49.18 46.64 79.93
ASSET 15,00,000 15,00,000 15,00,000 1,00,000
ROA 1.285 0.8 0.60 2.39
particulars Casual wear Formal wear Party wear Scarves
Gross margin 19,78,000 12,40,000 9,40,000 2,49,000
Space (sqft) 2,000 1,500 1,000 500
GMROS 989 836.66 940 498
B
Score card
• Sell through analysis• Stock turnover ratio
B
category wt Formal wear
Casual wear
PARTY WEAR
SCARVES
PROFIT 3 3 4 2 3
ROA 5 4 4 3 1
GROSS MARGIN
2 3 2 2 3
WA 11.6 12 8.3 6.6
Strategies Red cluster (A) Green cluster (B) Yellow cluster(C)
Casual wear: the maximum revenue is from non earning group, and in tier 3 cities, the assortment will be trendy , with wide variety and the price range will be kept low.
Formal wear: incomeGroup of 30,000- 50,000 mainly in tier 3 cities and the working group, the assortment will be staple , and classy
Party wear: mainly for working class with income above 50,000. high range products in assortment.
Casual wear: from income group of 10, 000- 30,000 and in tier 2 cities. mainly jeans , mid length skirts, half and full sleeves tops will be kept in assortment.
Formal wear: for people in income group of 10,000 – 30,000 in tier two cities .Slight variations in assortment
Party wear: assortment according to income group above 30,000 for people in tier 2 and 3 cities both for working and non working therefore assortment will be wide and high range products
We will try to find out the gap as the sale is less in this cluster. Assortment with wide variations in variety , price and quality will be provided. Customer demand surveys is to be done.
Casual wearwide varietyCompetitive in market
Party wear
Wide breadth but narrow depth of the category
Category Assortment
Fixed price range starting from 199 to 2999 INR
main store location,Higher shelf space
Competitive
In the store isles and the center display unit of the store
PricingShelf
placement
Advertising , In store promos,Hoarding,TV ads
Catchy window display
Promotion
CATEGORY TACTICS(Tactogram)
Formal wearWide variety with depth and breadth
ScarvesLimited breadth and depth
Category Assortment
Same price almost everytime other than end of season sale
At the back end of the store
Competitive
Near billing counter
PricingShelf
placement
window display.
No
Promotion
IMPLEMENTATION
We will implement in out strategy in category choosing
Planogram will be developed on the basis of the cluster we have identified
Promotional Strategies
SCHEMES:• If purchase amount is unto Rs 30,00 then we
offer special gift vouchers• If Purchase amount is more than Rs 5,000, we
are offering special gift such as fashion jewellery.
• For purchasing of Rs10,000 we offer 10%off on next purchase.