Category management ppt

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Category management ppt

  1. 1. SUDIPTADIVYAARPITANEHABANDANA
  2. 2. CATEGORY A distinct, manageable group of products/services that consumers perceive to be interrelated and/or substitutable in meeting a consumer’s needs. Category ManagementThe distributor/supplier process of managingcategories as strategic business units, producingenhanced business results by focusing ondelivering consumer value.
  3. 3. Category management represents asignificant and proven opportunity toachieve substantial business improvements 1across the entire value chain - forconsumers, distributors and suppliers. The Category Management business process is a structured, measured set of 2 activities designed to develop and implement a written category business plan. Category management is a retailing concept.
  4. 4. PRODUCT/CUSTOMER MANAGEMENT:A CONCEPTUAL MODELMANUFACTURER RETAILER CONSUMER PRODUCT CUSTOMER MANAGEMENT MANAGEMENT CUSTOMER RELATIONSHIP CUSTOMER PRODUCT MARKETING MANAGEMENT MANAGEMENT CATEGORY MANAGEMENT
  5. 5. Each category is run as a "mini business" (business unit) in itsown right, with its own set of turnover and/or profitability targets and strategies.
  6. 6. “CONSUMER BEHAVIOR CHANGES THE CATEGORIES.” The consumer drives what happens in the category.The biggest change in category management over the years has been more of a focus on the consumer.The process is now less “PRODUCT-CENTRIC and more “CONSUMER-CENTRIC”
  7. 7. THEREFORE THE NEW MINDSET OF THE RETAILERS IS:IF WE ARE NOT GETTING A FAIR SHARE OF THECATEGORY, CHANCES ARE WE’RE NOT DOING AGOOD JOB OF UNDERSSTANDING CONSUMERS AND SATISFYING THEIR NEEDS
  8. 8. The industry standard model for category management is the 8-step process, or 8-step cycle•Define the category (i.e. what productsare included/excluded).•Define the role of the category within theretailer.•Assess the current performance.•Set objectives and targets for thecategory.•Devise an overall Strategy.•Devise specific tactics.•Implementation.•The eighth step is one of review whichtakes us back to step 1.
  9. 9. Decision treeDemand cluster
  10. 10. CATEGORY DEFINITION Product Groups/Categories is defined based on the consumer’s needs and purchasing habits. FORMAL WEARWOMENS CASUAL WEAR WESTERN WEAR PARTY WEAR B
  11. 11. FORMAL WEARTROUSERS SKIRTS SHIRTS SCARVES Full Half sleeves sleeves
  12. 12. CASUAL WEAR T- JEANS SKIRTS SHORTS TOPS SHIRTSFlared jeans Pleated Skirts Cap sleevePencil cut Mini Skirts Corset Round Neckbootcut Pencil Skirts Cowl neck Polo T-shirtshighwaist Straight Skirts Crew neck Casual ShirtsStraight fit Flared Skirts Double-tee top3 quarter capri Halter top Off shoulder Tunic style Wrap top
  13. 13. PARTY WEARGOWNS DRESS
  14. 14. Demand clusteringMonthly Casual wear Formal wear Party wear Scarvesincome (rs )Below 10,000 40 20 15 2510,000-30,000 30 30 20 2030,000-50,000 15 40 25 20Above 50,000 15 10 40 35 NOTE:On the basis of sales demand clustering has been done
  15. 15. Lifestyle of womenLife style Casual wear Formal wear Party wear ScarvesTier 1 15 45 35 5Tier 2 30 30 35 5Tier 3 40 25 30 5
  16. 16. Occupation of womanOccupation Casual wear Formal wear Party wear Scarvesstudent 55 25 15 5Working 20 45 30 5House wife 50 15 30 5 b
  17. 17. CATEGORY ROLEDestination categoryThis is the main selling category of the store .Such categories have high purchase frequencyand high activity.And our destination category is CASUAL WEAR
  18. 18. Preferred CategoriesWith the help of these types of categories, the owner/brand builds a distinct image ofitself in the minds of the customers.Our preferred categories is Formal wear
  19. 19. Convenience CategoriesThis category only adds to the bill value of thecustomer as customer pick up this categoryunplannedLow purchase frequency and low penetration.And our convenience categories is scarves
  20. 20. Occasional/ SeasonalCategoriesMeets the seasonal/ occasionalneeds of the customers.And our seasonal category ispartywear
  21. 21. Destination category- Casual wearCATEGORY Preferred category-formal wear Occasional category- Party wear Convenience category- Accessories
  22. 22. CATEGORY ASSESSMENT• Profitability (Net Profit Margin , or net profit in %, ROI)
  23. 23. AssessmentParticulars casual Formal Party ScarvesGross sale 30,00,000 25,00,000 20,00,000 3,00,000Returns 12,000 20,000 10,000 1,000Discounts 10,000 40,000 50,000 …………Net sales 29,78,000 24,40,000 19,40,000 2,99,000Cost of goods 10,00,000 12,00,000 10,00,000 50,000soldGross margin 19,78,000 12,40,000 9,40,000 2,49,000Expenses 50,000 40,000 35,000 10,000Net profit 19,28,000 12,00,000 9,05,000 2,39,000Net profit in % 64.74 49.18 46.64 79.93ASSET 15,00,000 15,00,000 15,00,000 1,00,000ROA 1.285 0.8 0.60 2.39
  24. 24. particulars Casual wear Formal wear Party wear ScarvesGross margin 19,78,000 12,40,000 9,40,000 2,49,000Space (sqft) 2,000 1,500 1,000 500GMROS 989 836.66 940 498 B
  25. 25. Score card• Sell through analysis• Stock turnover ratio category wt Formal Casual PARTY SCARV wear wear WEAR ES PROFIT 3 3 4 2 3 ROA 5 4 4 3 1 GROSS 2 3 2 2 3 MARGIN WA 11.6 12 8.3 6.6 B
  26. 26. StrategiesRed cluster (A) Green cluster (B) Yellow cluster(C)Casual wear: the maximum Casual wear: from income We will try to find out the gaprevenue is from non earning group of 10, 000- 30,000 and as the sale is less in thisgroup, and in tier 3 cities, the in tier 2 cities. mainly jeans , cluster. Assortment with wideassortment will be trendy , mid length skirts, half and full variations in variety , price andwith wide variety and the price sleeves tops will be kept in quality will be provided.range will be kept low. assortment. Customer demand surveys is to be done.Formal wear: income Formal wear: for people inGroup of 30,000- 50,000 income group of 10,000 –mainly in tier 3 cities and the 30,000 in tier two cities .Slightworking group, the assortment variations in assortmentwill be staple , and classy Party wear: assortmentParty wear: mainly for according to income groupworking class with income above 30,000 for people in tierabove 50,000. high range 2 and 3 cities both for workingproducts in assortment. and non working therefore assortment will be wide and high range products
  27. 27. CATEGORY TACTICS(Tactogram) Shelf Category Assortment Pricing Promotion placement Fixed price Advertising , range main store In store wide variety starting from location, promos,Casual wear Competitive 199 to 2999 Hoarding,TV Higher shelf in market INR space ads Wide In the store breadth but isles and the Catchy CompetitivParty wear narrow center window e display unit depth of the display category of the store
  28. 28. Shelf Category Assortment Pricing Promotion placement Same price almost Wide variety At the back window everytimeFormal wear with depth other than end end of the display. and breadth of season sale store Limited Competitiv Near billingScarves breadth and counter No e depth
  29. 29. IMPLEMENTATIONWe will implement in out strategy in categorychoosingPlanogram will be developed on the basis ofthe cluster we have identified
  30. 30. Promotional StrategiesSCHEMES:• If purchase amount is unto Rs 30,00 then we offer special gift vouchers• If Purchase amount is more than Rs 5,000, we are offering special gift such as fashion jewellery.• For purchasing of Rs10,000 we offer 10%off on next purchase.

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