The 8 Step Category Management Process

The category management process typically consists of eight steps. These eight steps provide a systematic approach for you to utilize and apply to each and every product in a store.

But before we talk further to this process, perhaps we should understand the function of category management.

Category Management can be described as the primary platform from which CPG brand owners interact with retailers. It provides the dialogue, process framework and analytics for communicating tactics with retailers.

Essentially, category management is a process that you need to understand and effectively apply to ensure success for your brand.

The category management process looks something like this:

1. Category definition

This starting point is incredibly important. You need to determine what you will include and exclude from this category. A good way to determine this is to put yourself in your customers’ shoes. Think about their perception of categories. Think about their needs and how they are met.

The customer decision tree (CTD) is an important tool. It provides insights into customer’s buying habits. A CTD helps us better understand the decision-making processes that take place during purchasing.

For instance, when a customer is purchasing body wash, do they look at the brand, sub-brand, price, packaging and size? No two shoppers are alike! They have different behavioural drivers and these impact their decision-making processes.

2. Category role

In the second part of the category management process, you determine the role the category will play with the retailer. Keep in mind, different categories may be assigned different roles by the retailer.

For instance, a category may be used as a drawcard, bringing customers to the store. Or a category may be assigned the role of convenience, a one-stop shop. Perhaps it is seasonal or or used to increase foot traffic.

The motive behind defining category roles is to thoroughly understand the purpose of each category. In this way, all efforts are consistent and singular in their purpose or “role”.

3. Category assessment

The big question here is who buys the category? What are they buying? The retailer will conduct an analysis which will be used to determine strengths, weaknesses, opportunities and threats.

The retailer can then use this information to map the way forward. The assessment will assist in determining:

should you continue with the present category categorization or not
whether additional investments are required
what opportunities exist
gaps in category performance
how does the category perform in relation to competitors?

4. Category scorecard

In this fourth step, you look at the goals and objectives of the category as well as determining how you will measure success.

The scorecard provides a summary of the observations and analysis of the category. Here you develop a benchmark and set measurable targets.

5. Category strategy

Once your category has been assessed, goals and objectives outlined, the next step is to look at strategies to deliver on these objectives. Here you will fine-tune the category role.

These strategies may aim to:

draw customers’ attention
defend your category sales
increase sales
generate profits
create excitement
generate cash flow
enhance the retailer’s image.

6. Category tactics

Next we look at category tactics. Tactics are the elements of the plan or the specific actions that ensure the category strategies are achieved.

The tactics are driven and informed by shopper insights and drive shopper marketing. Commonly tactics include store presentations, price, promotions and assortments.

7. Plan implementation

Now, we do! We breathe some life into the strategies and tactics that we have mapped out. A hugely important step of the process, the accuracy of plan implementation determines the level of success you achieve.

Typically, the plan details:

what needs to be done
when these tasks should be done
where should they be done
who will do them.

8. Review

This last step should be on-going. When you review the category management process, you are able to gauge the success by analyzing, measuring and reviewing the results of your endeavours.

Remember that in these times of rapid changes, adaptation is necessary in the face of opportunities or threats. Plans and strategies are fluid, and will change – keep this in mind when conducting a review.

To learn more about the category management, sign up for our Certified Professional Category Analyst Program or Certified Professional Category Manager Program.