LECT 3 Category Management PDF

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Category Management – EXAM QUESTION 

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Val ueCr eat i on–Pr os pec tTheor y o Bal anci ngbenefit sandcos t s  Hi ghqual i t ypr oduc t s ,f av our i t ebr ands ,wi der angeofpr oduct s , appeal i ngs hoppi ngenv i r onment  Money ,Shoppi ngTi me,Tr av elTi me,Phy s i c aleffor t ,s t r es s ,r i s k t osaf et y o Cr eat ea pr oductr ange t hatout wei ghst he c ost sofbuyi ng t he i t em benefit sshoul dbemor et hant heeffor tandcosti nv ol v ed Cat egor y o A di s t i nct ,manageabl egr oupofpr oduct st hatcons umer sper cei v et o be i nt er r el at ed and c an ser v e as s ubs t i t ut es t o meeta par t i c ul ar c onsumerneed o Gr oupofpr oduc t st hatar ei nt er r el at ed  Logi s t i calr equi r ement segFr oz enFood  T ar getgr oupsegs t udent swor k i ngs i ngl es  Subst i t ut i onal r el at i onsbet weenpr oduct s  I nt endedpur poset ousebr eakf as tpar t yHal l oween  Mar k et i ngs t r at egybeerc har coal f orBBQ Shoppi ngMi s s i ons o Mi nds ett heor yofac t i onsphas es  Par t i c ul ars et sofact i v at edcogni t i v epr ocedur eswhi c hr esul ti n par t i c ul arway sofpr oc es si ngi nf or mat i on o Shopper s engaged i n abst r actshoppi ng t r i ps seek t o mak et he maj or i t yoft hei rpr oductcat egor ydec i s i onsasear l yaspos si bl ei nt he s hi ppi ngpr oces sbef or eent er i ngt hes t or e  I mpl ement al mi nds etl eadst omor eabs t r acts hoppi ngt r i ps o Shopper sac knowl edget hepr oduc tr el at edr eas onsf orast or ev i si t sby maki ng expl i c i tr ef er ences t ot hei ri nt ended pur c hases as di s t i nc t pr oduc tent i t i esof t ensummar i s ed att hepr oduc tcat egor yl ev elIna s hoppi ng l i s tf orr ef er ence and gui dance.Thi st ac t i ci s par t i c ul ar l y c ommonf ors hoppi ngt r i psunderani mpl ement alshoppi ngmi ndset i n whi c hs hopper s ex pl i c i t l y ack nowl edge t hei rpur c has es pr i ort o ent er i ngt hes t or e o I n c ont r as ts hopper under del i ber at i v e mi nds et sc ons t r ue t hei r pur c has esi mpl i c i t l yandmak et hei rcat egor ychoi cesi nt hes t or e

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Abs t r acts hoppi ngi mpor t antf r om ar et ai l er ’ spoi ntofv i ew Ther et ai l er sdes i gnt hecat egor y ’ sandpr omot i onar oundt hemi nds etoft hei r s t or et oencour agec us t omer st oshopmor e

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Shoppi ngMi s s i ons Theser es ul t sr ev ealt hatt r i psofr el at i v el yconc r et eabs t r act nessconst i t ut ea l ar ge por t i on ofs t or ev i s i t s .Howev er ,ev en i ft he pr opor t i on ofr el at i v el y c oncr et es hoppi ngt r i psdec r easesf orl ar gers t or ef or mat s ,t hei ri mpor t ancei n t er msoft ot als har eofbas k et sandr ev enuegener at edr emai nshi gh( 50% f or hyper mar k et s ) .Si x pr edomi nants hoppi ng mi s s i ons emer ge f ort he s t or es underc onsi der at i on:“ br eakf ast , ”“ meal , ”“ snack , ”“ cl eani ng, ”“ coffee, ”and“ l i ght meal &hor sd' oeuvr es . ”

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Cat egor yManagement o Acat egor yi ss t r at egi cal l ymanagedpr oductgr oup o Cat egor ymanagementr el i esont r adepar t ner shi ps  Suppl i er sar ebui l ti nt ot hi s o Cat egor ymanagementai mst omaxi mi ses al esandpr ofit s( gr owt h! )  Mar k et er sar eal s obui l ti n o Cat egor ymanagementsat i s fiesc ons umerneeds  Whyi st hecons umeri nt er es t edi nt hepr oducthowdot heyus ei t o Cat egor ymanagementr equi r esadi ffer entv i ew t owar dst hes uppl i er ANDt hec ust omer I GDDefini t i on o The s t r at egi c management of pr oduct gr oups t hr ough t r ade par t ner s hi ps whi c h ai m t o maxi mi s es al es and pr ofitby sat i s f y i ng c onsumerands hopperneeds  T ak e al lt he 3 component st oget her r et ai l er s uppl i er and c onsumerper s pect i v e

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Char ac t er i s t i cs is underpinned by a structured process which provides a framework for retailers and suppliers to work together strategically; • … is a long term business philosophy, often approached through a series of short term projects; • … involves a close working relationship and sharing of information by retailers and suppliers; • … promotes cross functional working between retailers and suppliers and will generally involve people from buying, finance, supply chain, trade marketing, space planning, store operations, sales, product development, marketing and category management. Ret ai l er sands uppl i er sneedt os har emor ei nf or mat i onast heyar et r yi ngt o ac hi ev et hes amegoal ands at i s f yt hecus t omer

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Pl ansandor gani sedact i v i t i est hatcr eat esapr oductr anget hati sbenefi ci alf or s uppl i er s ’ r et ai l er sandconsumer s  Cons umer sev al uat enegat i v el oss esmor ei nt ens i v el yt hatpos i t i v el y

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J I Tr equi r es a l otofcoor di nat i on and t he ai m i si tr educ es c os t s and max i mi s escus t omers at i s f act i onandr educesc ost Wor k edwi t hcons ul t ant st ocomeupwi t ht hi ssol ut i on

Cat egor y managementr eal l yt ak es i nt o ac countt he r el at i ons hi p wi t ht he s uppl i er

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I si twor t ht heeffor t ? o Mor ei nt ensi v eCM i mpr ov esr esul t s o Us eofCat egor yc apt ai ni nc r easesCM effor t sandr es ul t s o Ret ai l swi t hmor er es our c esr el yl es sonCat egor yCapt ai ns o Goal oner et ai l er smi s soutonper f or manc ebenefi t s Cat Capt ai nandt hel eadsuppl i er swi t hi nt hec at egor y Hav er eput at i oni nt hemar k et

Cat egor yManagementPr oces s  8St eps o 8f or malst epscat egor ymanagementpr oc es sdev el opedj us tov era dec adeagobyt hepar t ner i ngGr oup o I nv ol v esst r at egi c al l ymanagi ngpr oductgr oupsorc at egor i est oens ur e t hes hopperandc onsumerneedsar ef ul l ymetorex c eededatpoi ntof pur c has e 

Cat egor yDefi ni t i on( whatgoest oget her ) 

Det er mi ne t he pr oduct st hatmak e up t he cat egor yand i t ssegment at i on. Pr oduc t s ar e gr ouped t oget heri nt o cat egor i es t or efl ectc us t omer sneeds bas edonhow t hepr oduc ti s( 1)used,( 2)consumedor( 3)pur chased.Can be made up ofs i mi l arpr oduct s( e. g.f r es h pr oduc e,r eady meal s )orbe oc cas i onbas ed( e. g.Mot her sDay ,Foodont heMov eet c . ) .

Cat egor yRol e( whati st her ol ewi t hi nt her et ai l pr ofi l e)  Det er mi ni ngt hepur poseoft hec at egor yi nt her et ai l er spor t f ol i o  Shoul dal i gnt ot her et ai l er ’ sc or por at egoal swi t ht heov er al ll ookandf eeli n s t or emi r r or i ngt hei mageoft her et ai l er o WhoandHowi twi l l s er v e

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Candefi necat egor yt hr oughmer chs t at ementt oo Cashfl ow o Shav i ngcr eam s hampoous edr egul ar l yast heyar er out i nepr oduc t s

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Cat egor yas sess ment o Anal y s i soft hec at egor yper f or mance o Under s t andi ngt hemar k et  Cat egor yt r ends  PEST echi s s ues o Under s t andi ngt hes t or es  Sal esar epr ofil esnumber s  Ar et heys i mi l ari nl ay outorqui t edi ffer ent ?  Rangecar r i eds i mi l ar  Sal espr ofil ess i mi l ar Shoul dy oubr i ngi nmor eofl eav es ome

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Cat egor yper f or mancemeasur ement  Cat egor y per f or manc e measur es det er mi ne t he cat egor yt ar get s and obj ect i v es s etf ort he s ucc ess f uli mpl ement at i on oft he cat egor ybus i nes s pl an.Requi r esmeasur abl et ar get si nt er msofsal es ,mar gi ns ,ROIet c T act i cs

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Theac t i onpl ans Det er mi ne t he opt i malpr oduc t ss hel fmanagementpl acementpr omot i ons pr i c i ngands uppl yt act i c st hatwi l l ac hi ev er ol es cor ec ar dands t r at egy Val i dat est hespeci fi cac t i onst hatwi l l bet ak ent oi mpl ementcat egor ys t r at egy Det er mi neswhati sdoabl eandwhati snot

Pl ani mpl ement at i on  A wr i t t en pl an t o ens ur et ac t i csac hi ev ecat egor yr ol est r at egi esand meet s cor ecar d  How apl annedac t i v i t yi sputi nt opr act i c eorex ecut ed–t oens ur epl ansar e puti nt opr act i c ei ns t or e  I mpl ementi st heeffec t i v epl anni nganddel i v er yofcat egor yact i v i t y 

I mpl ementbar r i er s–us ef oress ay

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I mpr ov ei tt hr ough o Comms o I nc r eas edr es pons i bi l i t y o Et c

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Cat egor yr ev i ew o Fi nalst ep–r ev i ew oft hepr ogr es sandact ualachi ev ementoft ar get s s etf ort hec at egor y o Meas ur e moni t orand modi f yt he cat egor y ’ s pr ogr ess i nl i ne wi t h out comes Cat egor yc apt ai n o Rev ol v esar oundt hepar t ner s hi pbet weent hes uppl i erandt her et ai l er . Manyr et ai l er sf ol l ow t he met hod ofappoi nt i ng cat egor ycapt ai nst o dev el opac at egor yandf ur t hert hepar t ner s hi p o CC i sas uppl i erandai dst her et ai l eri ndev el opi ngt hec at egor y .Ver y of t enhei st hel eadi ngmanuf ac t ur ef orpr oduc t si nt hecat egor ywhoi s r equi r edt ot ak eanov er al lv i ew oft hec at egor yandc r eat eapl anf or t hec at egor yi ncl udi ngnat i onal br andsandpr i v at el abel s

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