was successfully added to your cart.
Category Management, Category Plan, Category Management Training

Find out ‘What is Category Management?’ and ‘How to Bake a Better Pie’:

‘Flaky’ Pastry Thinking

Category Management should not be something that is only considered every six months. It should not be hurried to show a false understanding of the category and its shoppers before an important meeting.

Some say Category Management is dead, others say it’s very much alive. We agree with the latter. True Category Management lives and breathes each day.

Here at MBM, we have seen many companies experiment with Category Management. They might buy some data and produce some charts and tables for a presentation. However, it will often result in flaky interpretations shaped to a specific agenda. Typically, they still have the thinking ‘of old’. Production Push mentality still hasn’t moved to Consumer Pull. To put it another way, the consumer is not at the centre of their thinking.

The Category Management Model below explains how this has changed over time:

Production Push to Consumer Pull - What is Category Management?

 

 

 

 

To find out more about the above see our Category Management Training Masterclass

MBM Category Management Masterclass Tin Can

If The ‘Choux’ Pastry Fits

So what is Category Management? Or ‘Cat Man’? The Category Management Association defines it as:
 
‘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.’
Put simply, it is a retailing concept whereby the range of products sold is broken down into subgroups. These groups, known as product categories, contain similar or related products. For example, canned soup.
Category Management requires retailers and suppliers to work together. It is a disciplined approach, which treats each category as a strategic business unit. This allows maximisation of mutual profits and better meets consumer needs.

Category Management should no longer occur in isolation once every six months. Mutual collaboration needs to be a key part of day-to-day product management. There should be a relationship of trust, and the sharing of data, insight, and ideas. Gone are the days of oppositional relationships between suppliers and retailers.

 

The 8 Step Process

This is the industry standard model used for Category Management. It was developed by The Partnering Group and follows the following steps:

  1. Define the category (i.e. what products are to be included/excluded).
  2. Define the role of the category within the retailer (i.e. which are the most important for driving footfall and sales).
  3. Assess the current performance (this should be done periodically).
  4. Set objectives and targets for the category (these should be achievable and measurable).
  5. Devise an overall Strategy (e.g. cash generating – large volume sales / high turnover).
  6. Devise specific tactics (this will include: pricing, Promotions, Penetration and Product Assortment)
  7. Implementation.
  8. Review (this will require regular monitoring and changes).

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’.

Category Management 8 Step Cycle

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.

Filo Facts

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.

What is Category Management Pie Chart

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.

Andy Palmer

About Andy Palmer

Andy started at the coal face with eight years in food retailing. Prior to joining MBM he then spent five years in the supply base in positions of category analysis, category management and account management. He works as part of the team enabling suppliers to UK supermarkets to secure more profitable wins through people development. He specialises in Category Management Training and is a qualified HBDI practitioner.

3 Comments

  • Alex Smith says:

    Great post, the Category Management Model was very useful in explaining how change has occurred over time. Very easy to read and well explained.

  • Ella Mcneill says:

    Really liked the comparison diagram, as well as the use of analogies. Also, helpful links at the bottom of the article, to further detailed posts.

  • Lee Cook says:

    Helpful to see how the change has occurred over time, from production push to consumer pull. Well worth the read and as stated above, really good use of analogies.

Leave a Reply