CATEGORY MANAGEMENT AND ITS IMPLICATIONS

Retail Management||Section Z||Group 4

UM14321: Kanakesh Gupta
UM14322: Kanumury Akshita Taruni
UM14323: Kishor Chandra Sahu
UM14325: Marut Kumar Mishra
UM14326: Neetesh Singh
UM14327: Nibedan Kumar Bhawsinka

INTRODUCTION
Category :
A Category is a group of similar or related items which the customer would ideally like to
find together in a store.
Categories are mainly used as organizational aids to better manage and monitor predefined
groups of products.

Category management:

BASIC PRINCIPLES OF CATEGORY MANAGEMENT

SIX COMPONENTS OF CATEGORY MANAGEMENT

Core Components (essential)
Strategy

Enabling Components (assisting)

Scorecard

(Overall company strategies provide a

infrastructure for category level strategies)

Business Process

(A formal, disciplined set of activities designed to

produce a specified output)

(A tool that defines, measures and monitors the

progress of Category Business Plans)

Organization Capability

(Development of the organizations core competencyskill/knowledge)

Information Technology

(Need data-driven, fact-based analysis and

performance measurement)\

Collaborative Relationships

(Common objective -- delivering superior consumer

value more profitability)

CATEGORY MANAGEMENT PROCESS

The Strategic Planning Process
Category
CategoryDefinition
Definition

CategoryReview
Review
Category

Category
CategoryRole
Role
Category
CategoryAssessment
Assessment
Category
CategoryScorecard
Scorecard
Category
CategoryStrategies
Strategies
Category
CategoryTactical
TacticalPlans
Plans
Implementation
ImplementationPlan
Plan

KEY AREAS OF CATEGORY MANAGEMENT

Category Management includes :
Space Planning to ensure desired display space.
Assortment Planning to facilitate the achievement of required financial objectives.
Visual Merchandising to optimize display efficiency and aid walk-ins/conversions in a store.
Inventory Management to ensure required stock cover and avoid being out of stock.
Product Groups/Categories should be defined based on the consumers needs and
purchasing habits.

SPACE PLANNING
Considerations for Layout Decisions :
High margin items should be placed in
high traffic areas.
High demand items should be placed in
low traffic areas.
Complementary items should be placed
near each other.
Seasonal needs should be considered.
Items needing frequent restocking should
be placed near storerooms or cash
registers.
Larger departments should be placed in
lower traffic areas.
Impulse items should be placed in closer
to billing.
Shopping behavior and operational
considerations should be recognized.

Benefits of Space Planning

SPACE PLANNING

ASSORTMENT PLANNING
The assortment plan defines the revenue stream, impacting not only the top
lines and bottom lines but also the working capital locked in inventory

VISUAL MERCHANDISING
It is the art of attracting patrons with visual cues, is central to a retailers
ability to generate sales. Visual Merchandising got its start at the turn of the
century, when department stores began using theatrical set design and lighting
to create exotic displays. Today, the way the departments are arranged, the
location of the escalators, the lighting--all are carefully planned to earn the
store more sales per square foot.

STORE DISPLAY DECISION

INVENTORY MANAGEMENT
Push System:

Inventory in a PUSH system is

managed at the corporate level
where all buying decisions are
made and then pushed to the
distribution centers for allocation
to stores.

Pull System:

Inventory in a PULL system

involves store requirements to
be
consolidated
at
the
corporate level via the DC and
then procured.

COMPLETE PROCESS FLOW

IMPLICATIONS
Category Management represents a business oriented approach to achieving
business results - both for distributors and suppliers.
Inviting store layout improves walk-ins into the store.
Improved circulation space within the store allowing for accessibility
to all products.
Improved conversion rates by better product visibility and display.
Reduction in shrinkage.
The store layout can impact the customers perception of the stores
positioning.
Improved sales presentations & closure results.
Increased consumer appeal of product displays.
Better brand awareness through consistency.
Improved efficiency of shelf space allocations.
Improved financial performance of assortments.
Faster, more accurate replenishments.
Quicker inventory resets.
Much better marketing through targeted displays.

Thank
You