This presentation has been designed in order to better understand the added-value of implementing Category Managementinside an organization and the prerequisite to do it in an efficient way, in terms of knowledge, tools and data .

1. Assortment and Space Optimization
The Nielsen Company
Middle-East, North Africa, Pakistan
CATEGORY AND SPACE
MANAGEMENT
HOW AND WHY STARTING CATEGORY MANAGEMENT?

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EXECUTIVE SUMMARY
This presentation has been designed in order
to better understand the added-value of implementing Category Management
inside an organization and the prerequisite to do it in an efficient way,
in terms of knowledge, tools and data .
In order to achieve this goal, this deck has been created around the following parts:
- Solution Design
- Catman Definition
- Impact of Catman within a commercial structure (+ key considerations)
- Cost Structure
- Cost Evaluation

3. CATEGORY MANAGEMENT DEFINITION

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CATEGORY MANAGEMENT DEFINITION
A joint retailer/supplier process
of managing categories as strategic business units,
producing enhanced business results
by focusing on delivering consumer value.
Distinct, manageable groups of interrelated products
that satisfy the same consumer need
categories

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CATEGORY MANAGEMENT
CATMAN PROCESS: Nielsen Support Official ECR’s original 8 steps
process
Category
Definition
How to define
the Category?
Category
Role
Destination,
Preferred,
Occasional,
Convenience
Category
Assessment
Market and
Category
analysis
Category
Scorecard
Category KPIs
Category
Strategy
Traffic Builder,
Profit or Cash
Generator, etc.
Category
Tactics
Assortment,
Space Planning,
Pricing,
Promotion
Category
Implementation
Approval and
implementation
of plans
Category Review
Progress vs. plan
2-6 months
(indicative)

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CATEGORY MANAGEMENT
Benefits and Typical results of category management
• More systematic and strategic approach
• Increased, tailored focus on evolving customers needs
• Increased customer satisfaction
• Reinforced overall company mission
• More efficient investment in stock, space, promotions
• Reduce waste (products, time, investment, people)
• Improved sales & profit
Workshop
Increased sales and gross profits by 5% to 10%
Increased ROI by 5% to 10%
Reduced inventory investment by 10% to 20%
Results published by ECR in the US

7. IMPACT OF CATMAN INSIDE AN
ORGANIZATION

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TAKING A STEP BACK
Supplier 1
Supplier 2 Supplier 3
Supplier 8
Supplier 9
Supplier 5
Supplier 6
Supplier 7
Supplier 4
Supplier 1
Supplier 2 Supplier 3
Supplier 8
Supplier 9
Supplier 5
Supplier 6
Supplier 7
Supplier 4
Category
From dealing with every
supplier in isolation….
…to FIRST thinking about how to
approach customers with the category
BEFORE dealing with all the suppliers
Especially as most suppliers always talk “consumer”, not “customer”

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FROM A PRE- OR EARLY CATMAN STRUCTURE…
General
Management
Commercial
Department
Buyers team
Promotion
team
Space Planning
team
Pricing team
Store
Management
Supply chain
Management

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… TO CATEGORY ORIENTED TEAMS LEAD BY
CATEGORY MANAGERS
General
Management
Commercial
Department
Category
Manager
Buying Promotion
Space
Planning
…
Category
Manager
Category
Manager
Stores
Management
Supply chain
Management
Customer
Management

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SOME CONSIDERATIONS
• Buyers should not be the same people as Category Manager
• Category Managers will have a full accountability of their categories
• Although a separate function, Customer Management needs to be very close to
the Category Management team
• Support functions like Marketing, Corporate Pricing, Sales Analysis, Research
don’t need a large headcount at start
• Store Operations need to be involved in order to guarantee implementation and
its compliance
• Supply/logistics also need to be in close contact with the commercial teams

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• Buys to have products on
shelves with a max.
margin and to maximise
fees
• Viewed as cost centre
• Bonus based on overall
corporate results
• Typically a former Store
Manager
• Lower level of education
• Detailed, tactical
• Short-term focus
Buyer
• Buys to improve category
growth, profits
• Category P&L responsibility
• Bonus based on category
measurements
• Finance, operations, &
marketing experience
• Higher level of education
• Conceptual, strategic
• 6 Mths to >1 year horizon
Category Manager
TYPICALLY, CATEGORY MANAGERS HAVE A BROADER
SCOPE OF WORK

13. TOOLS & DATA

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Workshop
MACRO SPACE PLANNING TOOLS

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Workshop
ASSORTMENT DECISION TOOLS

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Workshop
MICRO SPACE PLANNING
(MERCHANDISING)

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Workshop
DATA FROM VARIOUS SOURCES IS CRITICAL TO
UNDERSTANDING CUSTOMERS
• Retailer sales and
transaction data /
customer card data
Data has to be as clean as possible: EAN on all products, accurate
description, etc.
• Retail audit measures
• Customer behavior
• Customer satisfaction
Going from internal focused to more external focused

18. COST STRUCTURE

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COST STRUCTURE
3 Axis
Category
Management
Acquire
Knowledge
Acquire
Tools
Acquire
Data
• Catman Workshop
• Space Management Workshop
• Tools Training
• Spaceman Licenses
• My.Spaceman Licenses
• Picture Database
• Products & Fixtures Database
• Sales Data