Category Management Approach Usually Applied in A Trade Chain
Category Management Approach Usually Applied in A Trade Chain
Category Management Approach Usually Applied in A Trade Chain
2015
• Multi format stores
• More than 30.000 feet squares
• More than 20.000 SKUs
• Oversupply
• High competitiveness
So..
Evaluation Evaluate gap and opportunities for our categories compared with the
market
Targets Set a clear and achievable target for each category in terms of
sales and margins, considering market trends.
Definition Departement
Role
Family Family Family
Category Flow
Evaluation
Actions
BranBdrand
Execution SizeFormati
SKURseferenz
e
Definition:
Sparkling Wine
Fortified Wine
Light Aperitifs
Other Wines
Beer Alcoholic Beers
Non-alcoholic Beers
Cider
Definition:
WINE
RED WHITE
May be 13 or 8 digits
Loyalty Driver
Definition (Frequency, Sensibility
of consumers)
Pasta
Role Gelati
Category Flow
Routine Destination
Evaluation Biscotti
Caffè
Succhi
Targets Birra
di frutta
Verdura
Strategies Surgelat
Te
Convenience
Dolci
a Occasional
Actions Pesce
Surgelato
Execution
Profit contribution
(Margins,Contribution)
Role:
The Role of categories is set considering:
-the importance for the customer (frequency,
sales, price sensibility)
- trade interests (margin, profit, contribution)
Mozzarelle Omogen
Sugar
Salt
Bread
Aperitifs Tomatoes sauce
Champagne
Profit contribution
(Margins,Contribution)
Role:
Loyalty Driver
(Frequency, Sensibility)
Routine Destination
• Daily needs • Loyalty and sales
• Store Traffic • Need for
generator differentiation
• Price • Competitive
Competition advantage
Convenience Occasional
• Occasional needs • Emotional
• Niches purchasing
• Service for • New
markets
consumers • Customer
Satisfaction
Profit contribution
(Margins,Contribution)
Evaluation:
Definition
Fair Share
Role
Category Flow
Evaluation
Targets
Strategies
Actions
Sales
Execution
Market share
Evaluation:
Comparing internal and external data it is possible
to find points of strength and points of weakness:
- Market Share for each category (Fair Share);
- Market Share for leader brands;
- Market Share for private labels;
- Frequency and Sales in cut prices;
- Number of SKUs in each Category;
- Price Average;
- Margins;
- SKUs opportunities in the market;
Targets
:
Targets Tree
Definition
Category Category Category
Role
+ 5%
Category Flow
Evaluation
Targets
Segment Segment Segment
Strategies + 11% + 6% + 3%
Actions
Execution + 11% + + 6% + + 3% = + 5%
Targets
: in terms of gross margin (sales
We have to set targets
x margin%). Managing the sales mix is the best way to
achieve our targets. So we need to influence the sales
of every brand.
Strategies:
Definition
TRAFFIC Strategies for increase the number of
customers in the category
Role
Category Flow
Destination
Routine
Occasional
good margin
Definition
Category Plan
Deepness of
Evaluation category
mechanics,
frequency,
Targets deepness
Strategies Shelf
Extra Shelf
Promotion
Actions al
high competitiveness,
medium competitiveness,
low competitiveness
Execution
Actions
Frequency of actions:
Definition
Category Review
Role
Category Flow
Evaluation Test
Targets
Strategies Roll-out
Actions
Execution Monitoring
Category Management