category management
DESCRIPTION
TRANSCRIPT
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Category• Category is an
assortment of items which the consumer may perceive as substitute for each other.
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Category Management• Category
Management is the process by which a retail business is managed with the objective of maximizing the sales and profits of a category.
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Category Management• At the core of the
Category Management concept is a focus on a better understanding of consumer needs as the basis of the retailers’ and suppliers’ strategies, goals and work processes.
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Components of Category Management
• Components of Category Management are divided into two broad categories:
• 1. Core Components.• 2. Enabling Factors.
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Core Components of Category Management
• 1. The Strategy.
• 2. The Business process.
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Enabling factors of Category Management
• Performance Measurement.
• Information Technology.
• Organizational Capacities.
• Co-operative Trading Partner Relationships.
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Category Management Business Process
• 1. Category Definition:A Category definition must be based on how the customer buys, and not on how the retailer buys.
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Category Management Business Process
• 2. Defining the Category Role:
The category role determines the priority and the importance of the various categories in the overall business. This aids in resource allocation.
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Category Management Business Process
• 2. Defining the Category Role:
Four Categories have been Identified:
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Category Management Business Process
• a. Destination Category: This is the main product offering of the retail store.
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Category Management Business Process
• B. Routine or Preferred Category: These are the products that a customer buys from the retailer as a matter of routine or habit.
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Category Management Business Process
• C. Occasional or Seasonal Category: This includes products which are not purchased very often or are purchased when available or needed.
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Category Management Business Process
• D. Convenience Category: These are the products that a customer finds convenient to buy at a neighborhood retailer.
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Category Management Business Process
• 3. Convenience Assessment: The current performance of the category is evaluated with respect to the turnover, profits and return on assets in the category.
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Category Management Business Process
• Return on Assets = Net Profit / Net Sales * Net Sales / Total Assets.
• Return on Assets = Net Profit / Total Assets.
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Category Management Business Process
• 4. Category Performance Measures: The development of category performance measures involves the setting of measurable targets in terms of sales, margins and Gross Margin Return on Investment (GMROI).
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Category Management Business Process
• 5. Category Review: Review aids in the taking of decisions at the right point of time.
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Category Management• The Category
Management approach involves having a category manager to oversee every aspect of the merchandise management.
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Benefits of a Category Manager
• 1. The onus of responsibility for managing one category will lie in the hands of the category manager.
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Benefits of a Category Manager
• 2. The success or failure of a category will ultimately be the responsibility of the category manager.
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Benefits of a Category Manager• 3. Stores assortment
of merchandise will be represented with ideal combinations of sizes, which will earn the most profit from the allocated space.