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 substitutesMeans different things to different retailers.

Category Management-DefinedA 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

• 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

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.

• 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 - Footwear

• Category : Writing Instruments

• Sub-category : Ball pens/Gel pens/Fountain

pen/Inks & Refills

• Brand : Vector/ Latitude/ Quink

• Manufacturer : Newell Rubbermaid Co

Product Hierarchy – Writing Instruments

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

Hair Care12

Leather5

Footwear5

Skin care 23

Gift Items10

Male grooming5

Soaps5

Parlour Items & others

3Fragrances 10

Color Cosmetics

22

Gift ItemsMale grooming

SoapsHair CareLeatherFootwear

Skin care Color Cosmetics Fragrances

Parlour Items & others

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%

In a beauty shop

Contribution Of Top brands

Chambor11%

Others7%

Lakme38%

Revlon24% Loreal

20%

Lakme

Loreal

Revlon

Chambor

Others

Brand Contribution to Category

Brand v/s SKU

• Skin Care

• Lip Products

• Nails

• Face

• Eye

Microsoft Office Excel Worksheet

Thank You