This story kicks off a nine-part series exploring the components of true category management.
Category management is typically an eight-step process. The best solution for your business is the one that encompasses all of the strategies needed to make your brand successful.
The process you choose will significantly help you achieve the goals you set for your brand. It will be your roadmap to success. This process will establish your brand as a true leader in the category and differentiate you from the competition.
Your goal is to understand your retailer and become an expert with regard to their needs, goals and objectives for the category, their profit and margin expectations, etc. Aligning your process with their category management strategy will help you stand out in their eyes and establish you as a true partner and potentially, the category captain.
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 is: how do customers shop the category? Help you define 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.
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 or for convenience. Retailers may assign different roles to categories within their stores depending on the customers they want to attract.
Knowing how the category performs at the retailer, within the market and across different outlets is the next step. This should include a pricing, promotion, placement and product assortment assessment. How does the category performance compare to the competition?
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.
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.
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.
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.
Analyze, measure and review the results. This should be ongoing and used to help you refocus and make changes if necessary.