Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 1 CPG Cat Net The Next Wave of Best Practices Category Management Focusing on.

Category Management Share Group May 2009© 2009 The Partnering Group, Inc.1CPG Cat Net

The Next Wave of Best Practices Category Management

Focusing on the Shopper, on Execution and on Team Capabilities

The Partnering Group, IncJeff Clow

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.2CPG Cat Net

Category Management

Concept introduced in the late 1980’s

Category Management has had global acceptance since it’s introduction

The 1995 US ECR Report documented the Best Practices definition and business process

© 2009 The Partnering Group, Inc.3Category Management Share Group May 2009

CPG Cat Net

Category Management Process

Category Definition

Category Role

Category Assessment

Category Scorecard

Category Strategies

Category Tactics

Plan Implementation

Ca

teg

ory

Re

vie

w


Adoption of Best Practices Spread Quickly

Ad

optio

n

1993 Today

The Best Practice Model provided a Platform for Global Adoption.


15 years later it still is a Top Priority

98% of retailers and 89% of manufacturers consider Category Management critically important.


Key Reasons why CM Has Worked

Provided foundation for strategic retail marketing Categories as Strategic Business Units Aligning Company to Company strategies Balanced portfolio of Category Roles Linking Category Strategies and Tactics

Brought consumer focus to Retail Marketing and Merchandising New Category Definitions and Structures Consumer-driven Strategies and Tactics


Key Reasons why CM Has Worked

Provided a new and more effective model for collaboration through better information sharing

Expanded organizational capabilities Attracted and developed new skills and talent Roles and accountability Scorecard-based performance

Delivered superior results Retailers and Manufacturers Sales, Profits, and ROI


Why CM Hasn’t Achieved It’s Full Potential

Inconsistent top management support

Too often used as a tactical tool rather than for achieving differentiation and strategic advantage

Scorecards have not changed enough to motivate and reward new behavior

Too project oriented – not a “continuous” process

Work cycles too long and time intensive

Process too data focused and template driven – not enough emphasis on insights


Why CM Hasn’t Achieved It’s Full Potential

Too much reliance on manufacturers – lack of retail ownership

Too headquarters focused – not enough store / shopper focus

Inconsistent implementation at store level

People competencies not systematically developed and maintained to sustain advantage

Lack of software supporting tools, especially in promotion and pricing tactics

New trends and competitive challenges have emerged


Trends Shaping The Next Generation of Category Management

© 2009 The Partnering Group, Inc.11 Category Management Share Group May 2009

CPG Cat Net

Scanning

Space Management

Category Management

ECR Category Management Best Practices

Next GenerationStore Designs

ShopperMarketing

Shopper Marketing - The Next Wave

1975

1989

Today

1985

20001995


Introducing…

Shopper & Category Development

The Next Wave of Best Practices

Category Management

Publication: 2009


Shopper & Category Development

Key Elements

Streamlined, robust for all categories

Consumer & shopper insight driven

Shopper-centric strategies

Loyalty Marketing integration

Breakthrough, differentiated initiatives

Global & local application

More emphasis on implementation


The Philosophy & Objective Remain The Same

“A Retailer - Supplier Process of managing categories as Strategic Business Units,

producing Enhanced Business Results by focusing on delivering Consumer/Shopper

Value.”

Consumer/Shopper

RetailerSupplier


CPG Cat Net

But the Process Has Evolved

Category Definition

Category Role

Category Assessment

Category Scorecard

Category Strategies

Category Tactics

Plan Implementation

Ca

teg

ory

Re

vie

w

Insight Generation

Strategic & Tactical Planning

Initiative Development

Plan Launch

Category Definition

Category Role

Pla

n R

ev

iew


Best Practices Enhancements

Category Definition

Category Role

CATEGORY SUB-CATEGORIES SEGMENTS SUB-SEGMENTS

Definition & Role remain as important “umbrella”

elements of the process.

Greater focus on strategic alignment and Destination categories.

Performed as needed



✔ Focus is on finding key opportunities versus “boiling the ocean”

✔ Heavy emphasis on shopper understanding & behavior

✔ Business question driven versus filling in templates

Insight Generation



Plan Launch

Pla

n R

ev

iew



✔ Strategies/Tactics are more

integrated for optimal linkages

✔ Greater focus on the consumer

and shopper

✔ Strategies are differentiation

focused

✔ Tactical Blueprints are key

output

✔ Provide tactical guidance of

initiatives

✔ Provide direction for Core and

Local category planning

Insight Generation



Plan Launch

Pla

n R

ev

iew


Blueprints identify “The How” Link each category strategy to the key tactics Establish the core tactical elements (that can then be

customized locally)

Tactical Blueprints



✔ Focus on differentiating,

more sustainable category

initiatives

✔ Rigorous cost/benefit

analysis & prioritization

✔ Formal Identification of Plan

Requirements

✔ Secures internal / supplier

commitment and resources

Insight Generation



Plan Launch

Pla

n R

ev

iew

Importance of Initiatives Deliver differentiation and innovation to Category

Plan Create focus on implementation and success

measurement


Full-faceOn Top Captions

to Simplify Shoppingand Improve Conversion

Consumer Driven Arrangement Organized by Occasion and

Recipient

Lower Density and Vertical Blocking to Improve Shopping

Driving Quick Conversion and

Encouraging Multiple Purchases

Ready To Go Gift Bags to

Drive Transaction

Size

Simplified Shopping Initiative Insight Generation



Plan Launch

Pla

n R

evie

w

Improved leverage & recognition of brand existence in the store


CPG Cat Net

Greeting Cards Category

Shopping Initiative - Example



✔ Detailed implementation

planning tied to each

initiative

✔ Formal approval & executive

commitment process

✔ Improved scorecard target

setting & measurement

Insight Generation



Plan Launch

Pla

n R

ev

iew


CPG Cat Net

Moving Beyond Traditional Category Plans

Insight Generation



Plan Launch

Category Definition

Category Role

Pla

n

Rev

iew

TraditionalCategory

Plans

PortfolioPlans

ShopperSegment

Plans


Competency Based Curriculum

Course Delivery Course Delivery

Category Management : Shopper & Category Development - The Planning Process

:Problem Solving : Tactical Blueprint & Initiative Development :

Consumer & Shopper Insights : Consumer / Shopper Analytics & Actionable Insights :General Data Definitions :

Fundamentals Of Assortment Planning :Retail New Item Decision Making : Managing Complex Product Assortment (including

Store Clusters):

Fundamentals Of Shelf Management : Promotional Merchandising :Front-End Merchandising :

Foundation Advanced

Competency

Retail Merchandising & Service

Product Development & Assortment

Strategy & Business Planning

Analysis & Insights

Blended Delivery

Enabling S&CD: Competency-based Curriculum w/ Blended Delivery Across Levels

Exa

mp

leDo employees have the necessary

information & systems to support the tasks?

Do employees have the knowledge, skills, etc.

to do the tasks?

Does the decision making process reflect knowledge, experience and

have a bias for action?

Do the reward & recognition programs create the desired

behaviors?

Does the structure permit the right people to work

together on the tasks?

Are specific tasks clearly identified which will lead to achieving the

strategies and goals?

Do employees have the necessary information & systems to

support the tasks?

Do employees have the knowledge, skills, etc.

to do the tasks?

Does the decision making process reflect knowledge, experience and

have a bias for action?

Do the reward & recognition programs create the desired

behaviors?

Does the structure permit the right people to work

together on the tasks?

Are specific tasks clearly identified which will lead to achieving the

strategies and goals?


Advanced

Mastery

Foundation

Demonstrates base level of capability.

Has the potential to perform adequately.

Applies basic knowledge to daily work.

Demonstrates an advanced level of capability.

Has the potential to perform at an above average level.

Can execute all primary tasks and functions.

Decision-making reflects application of knowledge.

Application of learning produces desired results.

Demonstrates extraordinary level of capability.

Has the potential to be the top performer and resident expert.

Demonstrates mastery of best practices.

Applies deep knowledge to the most challenging situations with breakthrough results.

Has the potential to be seen as a thought leader in the industry.

Is able to bring strategic insights to opportunities.

• New personnel (all key functions)• Category Managers• Buyers• Account Executives• Analysts• Select Support Staff

• Category Managers• Sr. Buyers• Sr. Analysts• Account Executives• Customer Marketing Personnel

• Category Managers / Director-VP’s• Sr. Buyers / VP Merch• Sr. Analysts, Director Insights• Sr. Account Execs/ Regional VPs• Sr. Marketing personnel

Test

Test

Practicum

TPG’s Consumer Products Leadership Program


Is your team ready for the next wave?

Thank you!Jeff Clow

(940) [email protected]

Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 1 CPG Cat Net The Next Wave of Best Practices Category Management Focusing on.

Documents

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