Find out ‘What is Category Management?’ and ‘How to Bake a Better Pie’:
‘Flaky’ Pastry Thinking
What is Category Management? Or ‘Cat Man’? Some say Category Management is dead, others say it’s very much alive. We agree with the latter and that true Category Management is lived and breathed each day. Not something that is touched once every 6 months in a vain effort to demonstrate an artificial understanding of a category and its shoppers.
We have seen many companies dabble with Category Management. They buy some data, produce some charts & tables and present to an audience, their flacky interpretation of the output shaped to their own benefits and agenda. They still have the thinking ‘of old’, where Production Push mentality hasn’t moved to Consumer Pull. The shopper and eater are most certainly not at the centre of their thinking. The Category Management Model below explains how this has changed over time.
To find out more about the above see our Category Management Training Masterclass
If The ‘Choux’ Pastry Fits
So what is Category Management?
The Category Management definition, as cited by the Category Management Association, is trading partners collaborating to determine the point of optimisation in pricing, promotion, shelving, and assortment to maximise profitability and shopper satisfaction. Successful Category Management draws on the latest industry trends, leverages available data and looks to identify opportunities and deliver recommendations.
In essence ‘What is Category Management’ is about retailers and suppliers working together to strategically manage product categories to maximise mutual profits and satisfy customer needs. Category Management and Category Management Tools are no longer projects that are visited once or twice a year. They are now business as usual, and widely accepted as a key part of day to day collaboration to jointly deliver shopper and eater satisfaction. Gone are the days (or they should be) of oppositional relationships between suppliers and retailers. Moving far more towards a relationship of trust, collaboration, sharing of data, insight and joint business planning to achieve the above.
The original Category Management Process is still relevant today, but in a more streamlined version and more applicable only when you are doing a ‘Big Category Plan’.
Free Download of Category Management Competency Frameworks
Download your Free Competency Frameworks for Category Management because you can measure your performance. Each Competency Framework has been built using over 100 years of experience of the UK Grocery Industry.
Now we know the definition of what is Category Management, we need to appreciate the differences to its sister ‘Marketing’. This is often seen as an analytical difference, Category Management is about understanding data and facts to drive change and by contrast shopper marketing is more about understanding emotions or motivations to drive change.
True Category Management, whilst data led, is also about mind set and living in the shoppers, preparers and eaters shoes and then validating or identifying opportunities. These in turn then drive total category sales not just the suppliers own product mix. In this age of data we are both fortunate and unfortunate in the amount of information we have available. At no time in history have we had access to more ‘data’. Retailers have got wise to this giving suppliers ‘the reins’ on data and research acquisition, analysis and insight generation. Meaning their expertise about the market and available resources (people) could be leveraged. A symbiotic relationship is still required for no matter how good the analysis, observations or insights generated, there still needs to be a two way relationship to then allow anything to happen.
Shortcrust or Short-term
Imagine a pie, the pie is a category and is often supplied by multiple companies, varying sizes of slices make up the whole supply requirements. It is intrinsically the NAM’s – National Account Managers role to negotiate on the size of their slice and this will fluctuate over time as deals are won and lost in tenders, supply base rationalisations and changes in distribution shares. The overall pie stays roughly the same size in terms of sales value or volume.
Puff out your Chest Pastry
The role of the Category Manager has a different agenda to the NAM, albeit still on the same payroll. The Category Manager has the potential to grow the whole pie. Thus giving exponential growth opportunities beyond the 5-10% +/- fluxes in slice size that are often see over a 3 year period for any given supplier. They truly know what is Category Management and how to leverage the opportunities within a category to achieve supplier excellence.
[In] Hot Water Crust Pastry
It’s a brave company that invests in its people to grow their competitor’s sales …or is it? That is the underlining issue with good Category Management and why some companies see it as a reason not to adopt its core principals. Yet looking beyond this will deliver not only sales and profit increases for all those involved, but often those immeasurable benefits.
Category Captaincy and such associated titles, where a supplier as a whole is recognised and rewarded for their efforts. At a basic level this is ‘first port of call’ for advice on category direction by the retailer, through to ‘preferred’ supplier of new launches and the intangible inner circle of trust where the ‘heads up’ is given on pending opportunities, tenders and requirements. Hopefully you have a clearer understanding of what is Category Management, how about considering your next step:
- Are you new to Category Management or want to understand what is Category Management & what great looks like? – Assess your category using our scorecard.
- Would you like to generate sustainable growth for your category through better Category Training and insight generation? – How about investing in a 1/2 day Masterclass?
- Are you already in Category Management and would like to improve your Category Manager Training and/or learn new Category Management Techniques? – See our Category Management Academy training programme
- If you want to share your thoughts or discuss improving your skills, then click contact us or comment below!
To read our Ultimate Guide to Category Management visit here.