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
  • Category

  • A group of related goods defined by the customers that are presented in coherent way to shopper

A buying concept where products from retailers ranges are broken down into different discrete groups (categories)

  • e.g. female jeans

Manage cluster of items -> and -> buy more effectively & save money 

  • Basic Level

  • is about binding items

Any group of items that company wishes to buy under a single deal 

  • Managerial Level
  • apply buying methods to buy more effectively

Buy on larger scale -> would cost less

  • 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

Forbes, 2015

  •  Structural Underpinning (Foundation)
  • Customers
  • Competitors
  • Commercials
  • Category Levers
  • Range
  • Price
  • Promotion
  • Display
  • Distribution
  • Category Action Plan

  • Commercials
  • No points being different & better -> if don't make profit
  • 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