True Category Management

Are you effectively utilizing category management strategies to grow your business?  Does your category manager provide recommendations and strategic business development solutions?

The term true category management is used to differentiate between the common perception of most as opposed to the measurable results category management can offer.  Some people believe that category management means simply keeping a shelf full of products while others believe that category managers produce basic reports and pretty presentations with graphs and charts.  The reality is that true category management, when done properly, can determine your level of success in the marketplace and so much more.

Category management provides strategies to better connect with consumers, develop brands, manage trade spending, optimize product placement, and grow sales.  Category management is the science and art of combining business intelligence, logistics data, syndicated and POS data, consumer data, etc. to maximize business results.  It should touch every aspect of your business from research and development all the way through to the end consumer.  It is the essential process that most companies either overlook or say they can’t afford to invest in.  This is particularly true in the natural organic channel.

Let’s break down several of the components in category management:

Analytics: Analytics, both advanced and basic, are at the heart of category management.  It encompasses all aspects of trade management, business planning, assortment analysis, consumer awareness, etc.  Analytics go well beyond producing pretty charts and graphs and when applied correctly, provide invaluable business insights and actionable recommendations.  Analytics are the road map to achieving your goals.

Trade Marketing Support: Trade marketing encompasses all aspects of promotion, pricing, product placement, assortment, merchandising, and brand development.  Trade marketing includes analysis of historical events and it also includes projections for future sales trends.

Consumer Insights: Consumer insights encompass all consumer-related information including consumer buying and shopping habits, etc.  Consumer insights provide an invaluable look into customer needs and wants, allowing manufacturers and retailers to focus on strategies.  From reducing long checkout lines to providing the best selection of merchandise at the best possible price, the ultimate goal is to improve customer satisfaction.

Database Management: Database management, also known as business intelligence, encompasses several different data sources including internal and external data sources, syndicated data, retailer point of sales data, consumer data, marketing data, etc.  Talented category managers can help you manage all of the different data sources bringing them together in a useful way. This maximizes efficiencies within the organization while building a strong sales story to help you win at shelf.

Shelf Management: Shelf management encompasses product placement and merchandising on retailer shelves.  Shelf management helps the retailer maximize sales per linear foot, drive foot traffic to their stores, increase customer shopping basket size, and gain a competitive advantage in the marketplace they serve.

Category Reviews: Category reviews serve as a review of category performance.  They provide the framework for retailers and manufacturers to work together in setting goals, expectations, and strategic plans for future category growth.  Scorecards can be used to help obtain and measure category growth objectives.

Retail Sales Support: Category managers can and should support sales at retail.  Category management should offer an unbiased objective with the purpose of increasing retailer’s sales.  Category managers provide fact-based selling to help support the traditional sales efforts.

Category management truly is the glue that unites the different business functions.  It helps retailers identify opportunities for sustainable growth, increased sales, and increased foot traffic.  Bottom line? When done correctly, it grows brands.

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By |2018-07-03T20:47:48+00:00July 2nd, 2018|Category Leadership|

About the Author:

Daniel Lohman, CPSA is Strategic Advisor in the CPG and Organic Industry. His company, Category Management Solutions (CMS4CPG LLC), provides innovative ideas, actionable insights and strategic solutions for companies interested in gaining a significant competitive advantage. He assists companies in expanding their retail distribution and improving their merchandising. His extensive knowledge and expertise reaches far beyond traditional category management and has earned him recognition throughout the industry as an expert, speaker, trainer and thought leader. Daniel can be reached at Connect with me on LinkedIn.

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