![]() the retailer's) business rather than just the supplier's own. One key reason for the introduction of category management was the retailers' desire for suppliers to add value to their (i.e. Wal*Mart's Store of the Community, implemented in North America, is one of the few examples of where product offerings are tailored right down to the specific store. Nevertheless, most grocery retailers will segment stores at least by size, and select product assortments accordingly. The Nielsen definition, published in 1992, was prescient for its time in that customizing product offerings on a store by store basis is logistically difficult and is now not considered a necessary part of category management it is a concept now referred to as micromarketing. marketing strategy in which a full line of products (instead of the individual products or brands) is managed as a strategic business unit (SBU)." (Business Dictionary) "The strategic management of product groups through trade partnerships which aims to maximize sales and profit by satisfying consumer and shopper needs" (Institute of Grocery Distribution) "Category management is a process that involves managing product categories as business units and customizing them to satisfy customer needs." (Nielsen) Three comparative mainstream definitions are as follows: Category management lacks a single definition thus leading to some ambiguity even among industry professionals as to its exact function. ![]() The notion of responsibility category seeks to determine whether a business is fulfilling not only its economic responsibilities, but also its legal, ethical, and discretionary responsibilities. Definition of category management (retail) The concept originated in grocery (mass merchandising) retailing, and has since expanded to other retail sectors such as DIY, cash and carry, pharmacy, and book retailing. Suppliers are expected, indeed in many cases mandated, to only suggest new product introductions, a new planogram or promotional activity if it is expected to have a beneficial effect on the turnover or profit of the total category and be beneficial to the shoppers of that category. The focus of all supplier negotiations is the effect on turnover of the category as whole, not just the sales of individual products. Introduction of Category Management in a business tends to alter the relationship between retailer and supplier: instead of the traditional adversarial relationship, the relationship moves to one of collaboration, with exchange of information, sharing of data and joint business building. 7 Governmental concerns about category managementĬategory management in a retail context Įach 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.5 The category management 8-step process (retail).2 Definition of category management (retail).1 Category management in a retail context.
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