Category management is a strategic approach in retailing that organizes products into related groups to enhance customer satisfaction and increase sales. It involves defining categories, setting objectives, and continuously reviewing performance, often led by a 'category captain' supplier. The process aims to maximize profitability, reduce inventory issues, and improve customer relations.

1. CATEGORY MANAGEMENT
Definition, need and Importance
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2. Category
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 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

3. Category Management
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 Category management is a retailing and purchasing
concept in which the range of products purchased by
a business organization or sold by a retailer is broken
down into discrete groups of similar or related
products
 It is a systematic, disciplined approach to managing
a product category as a strategic business unit

4. Category Management- Definition
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 Category management is a process that involves
managing product categories as business units and
customizing them [on a store by store basis] to satisfy
customer needs- Nielsen
 The strategic management of product groups through
trade partnerships which aims to maximize sales and
profit by satisfying consumer and shopper needs-
Institute of Grocery Distribution

5. Significance of Category Management
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 Increased sales, goodwill and market share
 Proper care and devotion to each item of
merchandise
 Increased sales further lead to increased turnover
 Maximize shelf efficiencies
 Less inventory shrinkage
 Recognizes procurement opportunities
 Enhances customer knowledge level

6. Significance of Category Management
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 Improves return on investment (ROI)
 Decreases chances of out-of-stock positions
 Enhances return on money invested in marketing
efforts
 Classifies the performance of brands as doing well,
not doing well, problem brands, etc.
 Purchasing merchandise exercise becomes easy and
cost effective

7. Prerequisites of Category Management
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 Category should be divided and arranged as per
consumers’ ease not because of retailer’s convenience
 CM should be based on differentiation and
uniqueness
 CM should drive multiple item purchases at the same
time
 It should result in better customers’ relations rather
than relations with suppliers
 Category division should be based on the basis of
product response, space, time and profitability

8. Category Management- 8 Steps

9. 8-Step process defined
 Define the category (i.e. what products are
included/excluded).
 Define the role of the category within the retailer.
 Assess the current performance.
 Set objectives and targets for the category.
 Devise an overall Strategy.
 Devise specific tactics.
 Implementation.
 The eighth step is one of review which takes us back to step 1

10. Category Captain
 It is commonplace for a particular supplier in a
category to be nominated by the retailer as a
category captain
 The category captain will be expected to have the
closest and most regular contact with the retailer
 He will also be expected to invest time, effort, and
often financial assets into the strategic development
of the category within the retailer
 In return, the supplier will gain a more influential
voice with the retailer

11. Category Captain
 The category captain is often the supplier with the
largest turnover in the category
 Traditionally the job of category captain is given to
a brand supplier, but in recent times the role has
also gone to particularly switched-on private label
suppliers