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Category Management (Category Management (CM)
How retailers choose…
Category Management
Category Management (CM)
- How retailers choose what range they are going to sell,
- how they divide retail price,
- how they promote how they display,
- how the range is distributed across the variety of stores
A buying concept where products from retailers ranges are broken down into different discrete groups (categories)
Basic Level
- is about binding items
Managerial Level
- apply buying methods to buy more effectively
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Category
- A group of related goods defined by the customers that are presented in coherent way to shopper
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In large organisations
- have different buying managers for each category (CM) - they are responsible for negotiating deals for
Results in:
- wide range of prices between categories
- different schedules
- loss of economies of scale
- different agreements with different terms
- different quality
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Category Levers
- Range
- Price
- Promotion
- Display
- Distribution
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Look at KPIs
- ATV (Average Transaction Value) = how much an average customer spends
- AIC
- ACV (All Commodity Level) = annual sales volume of retailer that can be aggregated to individual stores
Range Hierarchy
- Good = entry level
- Better = mid market
Best = top of the market
Price
- EDLP = Everyday low value
Display vs VM
- Displays -> about navigations
Commercials
- No points being different & better -> if don't make profit