Effective category management: Can it save on advertising costs?

We recently asked our Skill UP! Master Black Belt, Bob Wong to explain whether effective category management can help save on advertising costs.

His answer was a resounding “Yes!” and this is why.

“The key to category growth is understanding points of shopper influence along the path-to-purchase in this omnichannel world. This understanding helps inform how our advertising efforts can be optimized, including but not limited to:

Does the message resonate with consumer needs, aspirations, expectations?
When can we influence shoppers most through advertising: Pre-store, to-store, in-store?
To what media do our target shoppers skew highest?
What channels and retailers do our target shoppers prefer to shop in?
Are there opportunities to cross-promote with other products that, when combined, solve the need state?”

So let’s expand on Bob’s explanation.

Does the messaging resonate with consumer needs, aspirations, expectations?

By utilizing the Category Management process, you ensure that you have a deep understanding of the shopper. In the first phase of the process, as you determine your category definition, you gain a thorough understanding of your customer. With this, you are able to submit an informed advertising brief. This brief will explain how the target market thinks, their needs and so on.

This knowledge and understanding will play a critical role in determining the direction of the advertising messaging. Your team will not be shooting into the dark, hoping to have a campaign that resonates with the customers. Due diligence has already been applied. Which will result in insights that benefit the advertising efforts.

When can we influence shoppers the most through advertising: Pre-store, to-store, in-store?

Again, the information gleaned through the category management process will be used to inform more effective advertising decisions. During the category management process, the team gains insight into what is known as the customer decision tree (CTD).

The CTD is an important tool that provides insights into shopper’s buying habits. It helps better understand the decision-making processes that take place. These in turn, inform where you should concentrate your advertising efforts.

Not only does the CTD inform in-store decisions such as assortment planning and planograms, it also allows us to understand the entire decision-making process.

For instance, is the decision made before the shopper sets a foot into the store? Or is it determined last minute, at the shelf?

What media do our target shoppers skew highest to?

In the fifth step of the category management process, the teams create a category strategy. In this strategy, promotional and communication efforts are determined.

These proposed activities are informed by and based on the research conducted on the target market up to this point. When selecting the media to best influence our customers, the strategy should play a pivotal role. By making informed decisions, a higher advertising return on investment can be expected.

What channels and retailers do our target shoppers prefer to shop in?

A correctly deciphered category management strategy will outline the shopper’s preference. No organisation can effectively advertise using every retailer in every channel. This would require an extraordinary spend with a minute return.

Effective targeting will allow teams to target specific retailers via specific channels based on their target shopper’s behavior.

Are there opportunities to cross-promote with other products that combine to solve the need state?

Cross-promotion has numerous advantages. It is more efficient. You have a shared budget and opportunity to reach a new audience. However, this is not a decision to be taken lightly.

The wrong partnership could lead to wasted spend or in drastic cases, the loss of reputation and sales.

So, as you can see, effective category management, which involves the systematic application of a proven process will lead to lower advertising costs.

If you would like to learn more, Learning Evolution offers a range of accredited and comprehensive category management training. Gain the knowledge and skills that will set you apart and ensure you succeed.