8 Steps To Category Management

1. Define category

This step is perhaps the most important, as it will define your understanding of the retailer, their customers and the consumers who buy your brand.

The key question – How do customers shop the category?

The consumer decision tree identifies the choices and the order of decisions customers make when they shop the category.

• Do they choose brand, sub-brand, quality, flavor/scent, packing, etc.?
• Do they choose complementary products during the same trip? For example, a customer shopping for your 24-oz. bottle of vanilla scented shampoo might also purchase your 24-oz. bottle of vanilla scented conditioner.

2. Category role

Role identifies the importance of the category to the retailer. This is the role the retailer wants the category to play within their store.

A category can be used to:

• bring consumers into the store
• increase foot traffic
• support routine shopping needs
• be a destination for seasonal/occasional purchases
• a one-stop-shop for convenience.

Retailers may assign different roles to categories within the stores depending on the customers they want to attract.

3. Category appraisal

Knowing how the category performs at the retailer, within the market, and across different outlets is a step. This should include a pricing, promotion, placement and product assortment assessment. How does the category performance compare to the competition?

4. Category scorecard

Scorecard is the strategic allocation of work to be performed to reach the category goals and objectives. It is a summary of observations and analysis to help develop goals and targets for the category. It should include an assessment of consumer buying habits.

5. Category strategies

Strategies are used to fine-tune the category role to meet scorecard objectives. Category strategies are designed to grow market share, increase sales, increase foot traffic, improve gross margin, increase return on investment, increase shopping basket size and gain customer satisfaction.

6. Category tactics

Tactics include specific actions to be taken to achieve chosen category strategies. Promoting top brands on a front end cap three times a quarter at a hot price-point with a feature is just one example.

7. Implement plan

This is the action step that brings your strategies and tactics to life… where the proverbial rubber meets the road. The degree to which you accurately implement the plan will dictate its success.

8. Review and assess performance

Analyze, measure and review the results. This should be ongoing and used to help you refocus and make changes if necessary.