Next generation of category management
The Next Generation of Best Practices Category Management
The Partnering Group
Dr. Brian Harris John Clutts
Hallmark Cards Inc.,
Wayne Strickland
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Retail Marketing - The Big Waves
ECR Category Management Best Practices Next Generation Store Designs ShopperMarketing
Space Management Scanning
Category Management
Today 2000
1995 1989
1975
1985
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Category Management
Concept introduced in the late 1980’s Category Management has had global acceptance since it’s introduction The 1995 US ECR Report documented the Best Practices definition and businessprocess
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Adoption of Best Practices Spread Quickly
Adoption 1993
Today
The Best Practice Model provided a Platform for Global Adoption.
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It Spawned Related Best Practice Reports
1997 - Category Management –Building Organizational Capability 1998 – Advanced Category Management – A Pizza Category Case Study 1998 – Category Management in a Direct Store Delivery Environment 1999 – Micromarketing – A Tool for Category Management
Many other US and International reports followed.
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Category Management Filled A NeedProducts were not viewed as consumer-centric categories Lack of a formalized business planning process Underutilization of consumer research, data, and tools Data mining was in its infancy No formalized & balanced view of business performance Non-collaborative supplier relationships
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It Remains A Top Priority98% of retailers and 89% of manufacturers consider Category Management critically important.
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Key Reasons why CM Has Worked
Provided foundation for strategic retail marketing
Categories as SBU’s Aligning Company to Company strategies Balanced portfolio of Category Roles Linking Category Strategies and TacticsBrought consumer focus to Retail Marketing and Merchandising
New Category Definitions and Structures Consumer-driven Strategies and Tactics
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Key Reasons why CM Has Worked
Provided a new and more effective model for collaboration through better information sharing Expanded organizationalcapabilities
New skills and talent Roles and accountability Scorecard-based performance
Delivered superior results
Retailers and Manufacturers Sales, Profits, and ROI
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Industry Results
Grew Sales Improved Profitability Increased Market Share Improved Operational Efficiency Optimized Store Assortments Createda basis to evaluate new items
11% 10%
Category Definition Category Review Category Role Category Assessment Category Scorecard Category Strategies Category Tactics Plan Implementation
Retailer Revenue Growth
Retailer Profit Growth
Source: ECR Industry Report 2000
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Category ManagementResults
Category Management is now standard practice at nearly every U.S. supermarket, convenience store, mass merchant, and drug chain. And its use is growing because it works – at least from a dollars-and-cents standpoint.
Sales growth attributed to Category Management + 14% Retailers & Wholesalers + 8% Suppliers
Source: Business 2.0, Feb 2003 & 2002 Cannondale Studies
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