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Assortment and Space Optimization
The Nielsen Company
Middle-East, North Africa, Pakistan
CATEGORY AND SPACE
MANAGEMENT
HO...
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
2
EXECUTIVE SUMMARY
This presentation has been designed in ord...
CATEGORY MANAGEMENT DEFINITION
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
4
CATEGORY MANAGEMENT DEFINITION
A joint retailer/supplier pro...
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
5
CATEGORY MANAGEMENT
CATMAN PROCESS: Nielsen Support Official...
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
6
CATEGORY MANAGEMENT
Benefits and Typical results of category...
IMPACT OF CATMAN INSIDE AN
ORGANIZATION
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
8
TAKING A STEP BACK
Supplier 1
Supplier 2 Supplier 3
Supplier...
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
9
FROM A PRE- OR EARLY CATMAN STRUCTURE…
General
Management
Co...
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
10
… TO CATEGORY ORIENTED TEAMS LEAD BY
CATEGORY MANAGERS
Gene...
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
11
SOME CONSIDERATIONS
• Buyers should not be the same people ...
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
12
• Buys to have products on
shelves with a max.
margin and t...
TOOLS & DATA
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
14
Workshop
MACRO SPACE PLANNING TOOLS
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
15
Workshop
ASSORTMENT DECISION TOOLS
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
16
Workshop
MICRO SPACE PLANNING
(MERCHANDISING)
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
17
Workshop
DATA FROM VARIOUS SOURCES IS CRITICAL TO
UNDERSTAN...
COST STRUCTURE
Copyright©2013TheNielsenCompany.Confidentialandproprietary.
19
COST STRUCTURE
3 Axis
Category
Management
Acquire
Knowledge...
Starting category management in an organization
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Starting category management in an organization

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This presentation has been designed in order
to better understand the added-value of implementing Category Management inside an organization and the prerequisite to do it in an efficient way,
in terms of knowledge, tools and data .

Published in: Retail
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Starting category management in an organization

  1. 1. Assortment and Space Optimization The Nielsen Company Middle-East, North Africa, Pakistan CATEGORY AND SPACE MANAGEMENT HOW AND WHY STARTING CATEGORY MANAGEMENT?
  2. 2. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 2 EXECUTIVE SUMMARY This presentation has been designed in order to better understand the added-value of implementing Category Management inside an organization and the prerequisite to do it in an efficient way, in terms of knowledge, tools and data . In order to achieve this goal, this deck has been created around the following parts: - Solution Design - Catman Definition - Impact of Catman within a commercial structure (+ key considerations) - Cost Structure - Cost Evaluation
  3. 3. CATEGORY MANAGEMENT DEFINITION
  4. 4. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 4 CATEGORY MANAGEMENT DEFINITION A joint retailer/supplier process of managing categories as strategic business units, producing enhanced business results by focusing on delivering consumer value. Distinct, manageable groups of interrelated products that satisfy the same consumer need categories
  5. 5. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 5 CATEGORY MANAGEMENT CATMAN PROCESS: Nielsen Support Official ECR’s original 8 steps process Category Definition How to define the Category? Category Role Destination, Preferred, Occasional, Convenience Category Assessment Market and Category analysis Category Scorecard Category KPIs Category Strategy Traffic Builder, Profit or Cash Generator, etc. Category Tactics Assortment, Space Planning, Pricing, Promotion Category Implementation Approval and implementation of plans Category Review Progress vs. plan 2-6 months (indicative)
  6. 6. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 6 CATEGORY MANAGEMENT Benefits and Typical results of category management • More systematic and strategic approach • Increased, tailored focus on evolving customers needs • Increased customer satisfaction • Reinforced overall company mission • More efficient investment in stock, space, promotions • Reduce waste (products, time, investment, people) • Improved sales & profit Workshop Increased sales and gross profits by 5% to 10% Increased ROI by 5% to 10% Reduced inventory investment by 10% to 20% Results published by ECR in the US
  7. 7. IMPACT OF CATMAN INSIDE AN ORGANIZATION
  8. 8. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 8 TAKING A STEP BACK Supplier 1 Supplier 2 Supplier 3 Supplier 8 Supplier 9 Supplier 5 Supplier 6 Supplier 7 Supplier 4 Supplier 1 Supplier 2 Supplier 3 Supplier 8 Supplier 9 Supplier 5 Supplier 6 Supplier 7 Supplier 4 Category From dealing with every supplier in isolation…. …to FIRST thinking about how to approach customers with the category BEFORE dealing with all the suppliers Especially as most suppliers always talk “consumer”, not “customer”
  9. 9. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 9 FROM A PRE- OR EARLY CATMAN STRUCTURE… General Management Commercial Department Buyers team Promotion team Space Planning team Pricing team Store Management Supply chain Management
  10. 10. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 10 … TO CATEGORY ORIENTED TEAMS LEAD BY CATEGORY MANAGERS General Management Commercial Department Category Manager Buying Promotion Space Planning … Category Manager Category Manager Stores Management Supply chain Management Customer Management
  11. 11. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 11 SOME CONSIDERATIONS • Buyers should not be the same people as Category Manager • Category Managers will have a full accountability of their categories • Although a separate function, Customer Management needs to be very close to the Category Management team • Support functions like Marketing, Corporate Pricing, Sales Analysis, Research don’t need a large headcount at start • Store Operations need to be involved in order to guarantee implementation and its compliance • Supply/logistics also need to be in close contact with the commercial teams
  12. 12. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 12 • Buys to have products on shelves with a max. margin and to maximise fees • Viewed as cost centre • Bonus based on overall corporate results • Typically a former Store Manager • Lower level of education • Detailed, tactical • Short-term focus Buyer • Buys to improve category growth, profits • Category P&L responsibility • Bonus based on category measurements • Finance, operations, & marketing experience • Higher level of education • Conceptual, strategic • 6 Mths to >1 year horizon Category Manager TYPICALLY, CATEGORY MANAGERS HAVE A BROADER SCOPE OF WORK
  13. 13. TOOLS & DATA
  14. 14. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 14 Workshop MACRO SPACE PLANNING TOOLS
  15. 15. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 15 Workshop ASSORTMENT DECISION TOOLS
  16. 16. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 16 Workshop MICRO SPACE PLANNING (MERCHANDISING)
  17. 17. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 17 Workshop DATA FROM VARIOUS SOURCES IS CRITICAL TO UNDERSTANDING CUSTOMERS • Retailer sales and transaction data / customer card data Data has to be as clean as possible: EAN on all products, accurate description, etc. • Retail audit measures • Customer behavior • Customer satisfaction Going from internal focused to more external focused
  18. 18. COST STRUCTURE
  19. 19. Copyright©2013TheNielsenCompany.Confidentialandproprietary. 19 COST STRUCTURE 3 Axis Category Management Acquire Knowledge Acquire Tools Acquire Data • Catman Workshop • Space Management Workshop • Tools Training • Spaceman Licenses • My.Spaceman Licenses • Picture Database • Products & Fixtures Database • Sales Data

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