Category -and its importance ( with example)

1. ROLE OF CATEGORY MANAGEMENT & IT’S FUNTIONAL PLAY OVER THE
ORGANIASATION

2. category
A distinct, manageable group of products that
consumers perceive to be interrelated and/or
substitutable in meeting a consumer’s needs.
Category
Management
The distributor/supplier process of managing categories as
strategic business units, producing enhanced business results
by focusing on delivering consumer value.

3. Define Merchandise Categorywithin scope
ofbusiness:
Sub
Category
Brand
Mix
Gents a. Chappal General
b. Beach Sandal
c. Gents Hawaii
Shoe a. Formal,
b. Sports
c. Outdoor
Gents Chappal General British Walkers
Lazard
Softouch
Category

4. RETAILERMANUFACTURER
PRODUCT
MANAGEMENT
CATEGORY
MANAGEMENT
CUSTOMER
MANAGEMENT
CONSUMER
PRODUCT
MANAGEMENT
CUSTOMER
MANAGEMENT
CUSTOMER
RELATIONSHIP
MARKETING
PRODUCT/CUSTOMER MANAGEMENT:
A CONCEPTUALMODEL

5. EACH CATEGORY IS RUN AS A "MINI BUSINESS" (BUSINESS
UNIT) IN ITS OWN RIGHT, WITH ITS OWN SET OF TURNOVER
AND/OR PROFITABILITY TARGETS AND STRATEGIES.

6. HOW IT CAN WORK !!!
Total Budget FY 18-19
(in pair and value) Define by
Corporate
Ladies Kids
Acces
sories
ShoeGents GirlsBoys
Spread of Budget amount into different category
Chappal General
Beach Sandal
Hawai
Each of the sub category got fraction of budget
from its parent Category
British Walkers
Softouch
Lazard
Each Brand get a
Fraction budget
from its Sub

7. When Every Business unit (Retail Store ) get the yearly Budget as Target in
terms of volume and pair and the total volume and pair spread out into
different Category(Rack) , Sub Category (MC) and at last Brand .Estimate for
every category and sub-category performance are pre-determined and will set
at the first of the Financial year .
Category , subcategory and Brand wise estimate through spread by zone
wise> then state wise > then area wise > then single business unit (retail)
Figure of volume and pair are share to both for Operation team and Logistics
Team . It’s a operational target for operation team and souring target for
Logistics Team.

9. Maintain the optimum stock level for Warehouse and as well as
Store level for reach the predetermined budget.
Analysis the demanded price point, mean price point and its
standard deviation for each category ,and required stock to
maintain the demanded price point.
Easy accessible Return over Asset (ROA), Gross margin over space
(sq ft) (GMROS)
CATEGORY
ROLE & IMPORT
ANCE

10. CATEGORYASSESSMENT
• Profitability (Net Profit Margin , or net profit in
%,ROI)

11. ASSESSMENT
Particulars Shoe-British
Walkers
Shoe-Softouch Shoe-Lazard Shoe-Khadims
Grosssale 19,78,000
Returns
(Through RPL
and fresh
damage)
12,000
Tax (18%) 3,56,040
Net sales 16,09,960
Costof goods
sold
8,00,000
Grossmargin 8,09,960
Expenses
(cobbler )
1000
Net profit 8,08,960
Net profit in% 40.89
ASSET 10,00,000
ROA 1.978

12. particulars SHOE-BW SHOE-SFT SHOE-LZD SHOE-KD
Grossmargin 19,78,000 9,40,000 12,40,000 20,49,000
Space(sqft) 2,000 2,000 2,000 2000
GMROS 989 470 620 1024
B

13. SCORE
CARD
• Sell through analysis
• Stockturnover ratio
B
category (Maxi
mum
score
)
Shoe-
BW
Shoe-
SFT
Shoe-
LZD
Shoe-
Khadi
ms
GROSS
MARGIN
5 4
ROA 5 4
STOCK
HOLDING
DAYS
5 4
TOTAL 12
(GOOD
)
Self Assessment

14. STRATEGI
ES
Define the Category , Sub
Category for under
Performance . (Not
perform as per the
projected Budget)
Monitoring the problem
for under performance
Stock Problem,
Supply Problem, SKU
Problem, Pricing Problem,
Placement Problem.
Solution
Increase the better
supply , , Inter retail
stock transfer for better
ROA.
Define the Category , Sub
Category for Average
Performance .
To make the decision to
more improve it and get
the yellow status.
Red (Under Performer) Green (Average) Yellow(Good )
.
Monitoring the scope for
increase the price point
further .
Search the more supply
to get a more sale
Define the Category ,
Sub Category for good
Performance .
Monitoring the scope for
increase the price point
further .
Search the more supply
to get a more sale

15. Shoe-British
walkers
Good
(Yellow
Signal)
Sku Variety
ok
ok
Sku Style
Category Status
price range
starting from
2499 to 3799
INR
ok
Price Point
ok
ok
Supply
Pricing
Shelf
placement
ok
Any Other
NA
Stock
CATEGORY
TACTICS(TACTOGRAM)

16. IMPLEMENTATION
We will implement in out strategy in category choosing
Planogram will be developed on the basis of the cluster we have
identified
Requirement Level for a single SKU under a Category or
sub-category (called NORMs) has to be Half-Centralized ,
means during budget preparation when supply for each
category are predetermined for a particular area/zone ,
then from the side of a business unit(store) has restricted
pair norms for each category and sku and it may be 30 %
or 40% higher than the budgeted pair .
And then only this model will get successful.

17. PROMOTIONAL STRATEGIES
For Under Performer Category/Sub –Category
,SKU from one store can be transfer from one
business location to other business location to
get a better performance.
To fall under Discount for Non-Performing
SKU for the respective Category.

18. THANK YOU