Category Management

It’s been described as one of the most scientific approaches to decision-making in retailing because of its reliance on data. Grocery retailers across the world were the earliest to adopt it, but over the last few years retailers in all categories have looked at it as a tool for seeking sustainable competitive differentiation and advantage. The ‘it’ here is category management. And for the retailer striving to bring greater focus to the store and improve its management and measurement processes, category management is most often the answer.

So, just what is category management? Quite simply category management involves organising and managing promotions, merchandising and distribution activity around the way consumers view and buy a product. A more formal definition would be ‘Category management is a retailer-supplier process of managing categories as strategic business units (SBUs), producing enhanced results by focusing on delivering consumer value’. Which then brings us to the question – what is a category?

A ‘category’ is a distinct, manageable group of products or services that consumers perceive to be inter- related and\or substitutable. It must be noted here that the focus of both the category and category management is the consumer and providing her with a range of products and services that offer more value. Category management must not be run contrary to the will and interests of the consumer and should favour the consumer if need be: This is the Holy Grail of this aspect of retail management. Thus, the aims of category management are to:

• Satisfy the consumer
• Grow the category
(Image source: Dezeen.com)