martin vom stein kam2 gc ingles 1parte - … trends and evolution of category management rcm...

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PÓS-GRADUAÇÃO EM DIRECÇÃO COMERCIAL – KEY ACCOUNT MANAGEMENT | 2007

CategoryManagement


CV Martin vom Stein

Studies: • 1996: University Saarbrücken, Germany,

Master in Business Administration• 2005: Management Development Programme (PDD), IESE, Barcelona

Professional: • 1996: Sales Representative at Henkel Ibérica• 1997: Brand Manager, Marketing Dept. at Henkel Ibérica• 1999: Category Manager, Sales Dept. at Henkel Ibérica• 2000: International Category Manager, Henkel Germany• 2002: Director CM, Sales Dept. at Henkel Ibérica

Personal: • Married, 1 daughter of 2 ½ and 1 son of 5 months

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Agenda

Introduction• Evolution of the FMCG sector• Determinants of the FMCG sector

Definition of Category Management• Concept and application in the FMCG sector

Explanation of the Category Management process• The 8-step model

Latest trends and evolution of Category Management

CM Measurement

Learnings, Q&A

Case Study


1. Introduction

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What do we know about Category Management ?

(Open round contributions)


What do we know about Category Management ?

ECRAssortmentPlacementPromotion

Price

Shopper

Collaboration

Globalisation CRM

Trade Marketing

FMCG

Manufacturer and RetailerPOS Data

EAN

4


The FMCG market

The primary characteristic is the existence of 4 entities in the market:

Consumer Shopper

Retailer Manufacturer


What does the consumer do ?

The consumer looks for convenience:

• Not perceivable: • Satisfy subjective and objective needs• Immediate fulfilment of a desire• Time management

• Perceivable: • Conveniencie in the use of a product• Healthier and more wholesome products• Products adapted to age (society is ageing)• Innovation

• The consumer decides the products he wants depending on qualitative andquantitative criteria

5


What does the shopper do ?

The number of visits declinesHe spends more

He looks for the most economic

2,10,2

2.0

17,4

2,4

21,3

26,4

2,21.0

3,6

7.6

1,8

24,5

29,8

0,80,11.0

11,8

1.0

12.013,5

0

3 5

Buys at discount chainsBuys PL

Western Europe‘Big-5’

Other WesternEurope

Central/EasternEurope

U.S. ChinaAsia-Pacific Latin America

Food & beveragesHousehold carePersonal care

Shopping trips PL Share per region

• The shopper determines the turnover of the FMCG sector, but is more and more selective in his attempt to optimise the quality of life / price ratio


What does the retailer do ?Concentration, but still very national

Turnover in Bn. € Nº of countries per retailer

• The FMCG sector generates 3.700 Bn. € in turnover, but WalMart only achieves a 7,0 % share of it in few countries

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What does the retailer do ?


What does the manufacturer do ?

72,1

56,250,5

41,4 40,433,6

23,6 21,317,7 16,2 16,0 15,8 14,5 14,1 13,7 13,1 12,3 12,1 12,0 11,7

Altr

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roup

Inc.

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• In general, manufacturers are more international, but the big retailers achieve a far bigger turnover than they do

Concentration, but they lose weight in comparison to retailers

7


The conflict between retailer and manufacturer

• Due to the negotiation power of the retailer, they achieve more and more of the total profit, but due to the competition amongst them, the consumer needs lessand less of his total spending power for FMCG products


5,8

2,71,7 1,6

0,71,3 1,3

0,6 0,70,2 0,4 0,4 0,3 0,4 0,3 0,3 0,2

5,4 5,8

2,2

0,4 0,2 0,1

8,0

1,71,1 0,9 0,7 0,8 0,6 0,4

6,5

16,4

11,9

18,0

5,9

2,61,7 1,6

0,9 1,1 1,1 0,7 0,5 0,5 0,4 0,4 0,4 0,4 0,3 0,2 0,2

5,56,8

2,5

0,3 0,1 0,1

7,5

1,91,3 1,0 0,8 0,8 0,6 0,4

6,3

14,6

11,9

18,7

Car

refo

ur

Alca

mpo

Hipe

r Er

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Hip

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r

Rest

Hyp

erm

arke

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Supe

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ski

Cap

rabo

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Cham

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Cons

um

Dino

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MAT SEPT. 2004 MAT SEPT. 2005 Source: TNS Distribution 2005

Example: Distribution landscape in Spain

Hypermarkets

18,3 %Top 4 = 93 % WD

Supermarkets

16,9 %Top 12 = 53 % WD

Discount

14,1 %Top 4 = 99 % WD

Mod. Drug.

29,7 %Top 8 = 69 % WD

• It is very difficult to achieve a high level of distribution due to the fragmentedretail market in Spain

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50 %Día

20 %Mercadona

70 %Mercadona

• The supermarket channel is fuelling market growth, mainly due to the expansionof discount chains like Mercadona and Día

• The Modern Drugstores also experiment higher growth

Source: Nielsen Bi-monthly 2005

41,3

2,5

8,8

13,0

17,0

23,526,8

8,4

41,5

2,3

8,1

12,5

18,6

23,826,8

7,9

42,2

2,1

8,011,9

20,223,5

27,0

7,3

1,6

7,2

5,1

15,7

1,4

6,3

4,0

8,5

Cum Super Supers < 100 m Supers 100 -400 m

Supers 400 -1000 m

Supers > 1000m

Hypermarkets Moderndrugstores

Trad. Drugstores

MAT 2003 MAT 2004 MAT 2005 Evol.

Example: Channel evolution in Spain


The beginning of FMCG Marketing

In the consumer goods distribution market, everything began to get more complicated when a new business model was created by reducing the valuechain in the 30s: the sales person is taken away!

Today, models that reduce the supply chain are once again fashionable: • Discount• Ikea• Zara (“lost fashion”)

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What is this all about?

E E E

E

E E E

E

E E

E E

Attraction

Convenience

Complication

• If someone should buy, make it attractive, if we want him to be informed, make it convenient, if we want him not to come back, make it complicated!


… but this is pure logic, isn’t it?Yes, but…

Domino

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Hide-and-seek MemoryFree-climbing

… but this is pure logic, isn’t it?Yes, but…


3 reasons why the logic fails

Strict rules for small things, lack of orientation for the big ones• Departmental view in the store• Aisle responsibles copy each other• Many actors at the same point (various manufacturers and retailer)

The traditional is applied to something that has already changed• Category development (for example: you do not look for a yoghurt any more), new

payment and charging systems, personalised service, but automatical• Example: first supermarkets online do not charge transport

We are framed by the short-term commercial spirit• The “quick-pick” client => many decisions like in the stock market, you never know if you

took the right one => but after-sales impression is key• The trade terms and conditions of the distributors today produce irrational decisions due

to their “financing” effect• It’s better to think of charing at the check-out than of the shopper as a strategic asset• Example: Internet => the first visit decides whether you will come back or not

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A propósito “espíritu comercial”Definición de una marca

Philip Kotler: “A brand, be it a name, a commercial brand, a logo or other symbol, is

essentially a promise of the selling part to consistently facilitate a conjoint of characteristics, benefits and services”

These characteristics include, in the case of Mass Market, the retail price• This is one of the main reasons for the debacle in the industry, because the

only way for a retailer to gain margin according to his size of business, hisadvertising effort etc. are the annual negotiations


1950

“Consumer Marketing”

Manufacturernational

Retailerlocal

Consumer

lists allproducts

distributes tofragmented

Trade

PUL L

Med

ia

“Buy me!”

1980

“Consumer Needs Marketing”

Manufacturermultinational

Retailernational

Consumer

lists allproducts

diversifies portfolioand distributes

to Trade

PUL L

Med

ia

“Buy this specific product for you!”

1995

“CustomerMarketing”


Retailermultinational

Consumer

sells similar products anddiscovers shopper needs

to convince Trade

PUS H

Con

sum

erpr

omo t

ion

“Buy one get one for free!”

PUSH

Trad

epr

omo t

ion

Shopper

selects top products

PULL

Med

ia

seeks best offer

2010

?

The evolution of FMCG Marketing

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Manufacturer

Retailer

Shopper

Consumer

• More concentration• More umbrella brands

• Strategic alliances• Reduction of sales force

• POS Management• 1to1 Marketing

• More concentration• Positioning consumer• Discount boom

• Assortment reduction• Price and place• More chain development

• Loyalty schemes• Private labels• Category killers

• Convenience (place, service)• Better selection, not wider

• Information through internet• Customised offer

• Expenditure reduction

• Top brands or price• Innovation

• Convenience in usage• Media coverage more expensive

Major trends


“Customer Management”


Retailermultinational

Consumer

Develops umbrella brandssatisfying all major

consumer needs throughfocussed consumer /

shopper investigation andhelps retailer to composethe correct assortment

PAR T

NER

ING

Cons

u mer

/ Sh

opp e

rin

vest

igat

ion

“Get what you expect by chosing ‘your’ ideal retailer!”

PUSHChannel benefits + promotion Shopper

PULLMedia +

Information (Internet)

Consumer needs investigation

POSIntegrated communication

platform

Shopper needs investigation

Chooses shopping typesolutions

Chooses brandsolutions

A new business model

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• A fierce competition in the market with many multinationals on both the retailer as well as the manufacturer side

• 2 industries serving the same final client, the “consumer”• The war for the consumer at the moment only knows one front: the price• In the end: the consumer wins

Summary introduction


2. Category ManagementDefinition

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4 P’s

Product Price

Place Promotion

Introduction


1st problem: You have to do it twice!

Introdcution

Retailer

4 P’s

ProductProduct PricePrice

PlacePlace PromotionPromotion

Consumer

4 P’s



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2nd problem: You will never know the reality aboutyour consumers! You have to guess…

Introduction

Consumersssss

4 P’s


PlacePlace PromotionPromotion4 P’s



4 P’s



4 P’s



4 P’s



4 P’s



4 P’s



4 P’s



4 P’s



4 P’s



4 P’s



4 P’s




3rd problem: Space costs money!

Introduction

Marca A

4 P’s

ProductProduct PricPric

PlacePlace PromoPromo

Marca A

4 P’s

ProductProduct PricPric

PlacePlace PromoPromo

Marca B

4 P’s

roductroduct PricePrice


Marca B

4 P’s

roductroduct PricePrice


Marca C

4 P’s

ductduct PricePrice

aceace PromotionPromotion

Marca C

4 P’s

ductduct PricePrice

aceace PromotionPromotion

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4 P’s



Category Management manages space!

Space in the consumer’shead

Space in the consumer’swallet

Space in the shelfSpace in the P&L of the

retailer and the manufacturer

Introduction = Management Summary


Unpredictableconsumer

Saturatedmarkets

“Fierce”competition

Retail pricedecreases

Reduction ofconsumer spent

Legislativeregulation

Time pressurein the market

Economiesdon’t grow

Determinants of distribution

• We have to find integrated solutions between manufacturers and retailers

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... ECR is the solution!

The current situation …


Category Management is part of the ECR movement …

What is Category Management ?

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The objective of Efficient Consumer Response (ECR) is

to find ways to create the environment and the tools

that allow retailers and manufacturers to work

together more effectively and efficiently and thus be

able to supply the consumer with a superior value in

products and services.

Definition ECR


In all markets there are attempts of collaboration between manufacturers and retailers to achieve higher efficacy

The first standardised model * of

Efficient Consumer Response (ECR)

is documented in the USA in is documented in the USA in FMI / The Partnering Group (Brian Harris)(Food Marketing Institute - Standard for CM)

*) Origin: Cooperation of P&G and Wal Mart on the Supply Side

How did ECR start ?

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Demand Management

Demand Strategy & Capabilities

Optimize Assortements Optimize Promotions

Optimize New Product Assortements Consumer Value Creation

EnablersCommon Data &Communication

Standards

Cost/Profit And ValueMeasurement

IntegratorsCollaborative Planning

E-BusinessBusiness to Business

Supply Management

Supply Strategy & Capabilities

ResponsiveReplenishment

Integrated DemandDriven supply

OperationalExcellence

The elements of ECR


Demand Management




Demand Management





Standards



Standards






Supply Management





Supply Management





The elements of ECR

CategoryManagement

Supply Chain Management

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Demand Management




Demand Management





Standards



Standards






Supply Management





Supply Management





The elements of ECR

All communication standards that enable manufacturers and retailers to achieve superior profitability and efficiency through a framework of co-operation.

All methods and media used by manufacturers and retailers to integrate their IT systems and facilitate the communication flow.


PerformanceMonitoring

CollaborativePartnership

OrganizationalCapabilities

Information-Technology (IT)

BUSINESSPROCESS

STRATEGY

Key components

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Organisational alignment of the retailer and the manufacturer through multifunctional teams with a single interface that jointly define strategies which reduce inefficiencies and achieve category growth at the client (= Organizational Capabilities)

Joint analysis of relevant data to detect potentials and evaluate the achieved results (= Performance Monitoring)

Co-operation in the implementation to achieve the definied objectives with a collaborative attitude of both sides(= Collaborative Partnership)

Development and implementation of common methods and procedures to facilitate the exchange of information(= Information Technology)

The principles of collaboration


A cultural change from

CONFRONTATION

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NA

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SYSTEMS

CO-OPERATION

SALESMAN

MARKETING

LOGISTICS

ADMINISTRATION

PURCHASER

MARKETING

LOGISTICS

ADMINISTRATION

TO

The principles of collaboration

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„Category Management is an evolutionary management

concept operating function-wide. It leads to more

effectiveness and efficiency throughout the supply chain

by a better knowledge about consumer needs.”

Definition Category Management


Definition category:A category is a distinct, manageable group of products that consumers perceive to be substitutable in meeting a consumer need. Some categories can be divided by in sub-categories, which identify complementary groups of products that all satisfy the same overall consumer need (i.e. Shampoo, Conditioner and Treatments).

A category consists of sub-ordinate segments:

Definition segment:A (sub-)group of products within the same category, which is clearly recognisable by the consumer, relevant for the consumer and forms one or more level(s) of the purchase decision tree.Segments are dynamic and may vary by country or channel.

2 basic concepts of Category Management

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* Based on: Best Practices Report / ECR Europe

BUT: It is not a project to improve categories!

retailer/supplier (business) process of managing categoriesas strategic business units, producing enhanced business results by focusing on delivering consumer value

concept of closer, long-term co-operation between retailerand manufacturer

The CM process


Philosophy = Integrated co-operation

Model = transparency + efficacy

Tools = data base, Consumer Panel data, spacemanagement

Information = triggered by data = market environment

Organisation = “independent consultants”

Key factors of Category Management

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MANAGEMENT of CATEGORIES

1. Planning

2. Execution

3. Measurement

Products in competitive environment

Marketing-Mix

Distribution and rotation

Shopper and consumer

How to exploit business potentials together toimprove customer satisfaction?

What does Category Management imply ?


Manages the portfolio at his client through a transformation process of the overall marketing-mix into a customised marketing plan for the client

DISTRIBUTION and ROTATION

Internal External

Develop the business via a directrelationship with our clientscollaborating in a categorymanagement process

Develop the business in co-operationwith other departments within the company (Marketing, Trade Marketing, Sales)

La misión de la GpC para un fabricanteWhat does the manufacturer do ?

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BMProcess

BMProcess

SalesProcess

SalesProcess

ClientProcess

ClientProcess

Distrib.Process

Distrib.Process

Inlet Outlet Shopper Consumer

... but the business is generated by the shopper in the store

Brand Management specialises in the role of a client as a consumer

Sales specialises in the distribution towards the client

Internal business process:

How to adapt internal processes ?


SalesProcess

SalesProcessSalesProcess

SalesProcess

ClientProcess

ClientProcessClientProcess

ClientProcess

Distrib.Process

Distrib.ProcessDistrib.

Process

Distrib.Process


Marketing-Mix has to address these variables

“Only a shoppercan lead us tothe consumer”

2. Rotation(assortment in store)

1. Distribution(launches)

Focus of the CM process

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Increase Market sharefor his stores

Increase Market sharefor his products

Retailer =chains

Manufacturer = marcas

= or ≠... has to be overcome by more integration!

Conflict between manufacturer and retailer


CMProcess

Integrated process = VALUE CHAIN

The task of CM: to be the integrators!!!

BMProcess

BMProcess

SalesProcess

SalesProcess

ClientsProcess

ClientsProcess

Distrib.Process

Distrib.Process


The optimised process

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Why Category Management and Key AccountManagement

• To better understand the point of view of the retailer / manufacturer

• To be able to “sell” the service of our organisation towards the client to his main contact

• To find common and quantitative criteria between the retailer andthe manufacturer => collaborative model• To have a common language to increase the levers of the business

• To develop the portfolio with a strategic orientation towards the client and his potentials

• To adopt a balanced mix of measures and activities at the clientwithout endangering the total business


POSITIVENEGATIVE

KAM

Retailer

This is the product!This is the price!This is the listing fee!These are the promotions!

KAM

Retailer

We are talking about your cosmetics business...One of the most important categories within cosmetics are deodorants...Consumers in this category search for...Shoppers in this category search for...Your problem in this category compared to your competitors is...Our new product solves this problem, because ...

Análisis categoría

Análisis cliente

Análisis marca

Surtido

Example in Sales

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Cross-categorycompetenceof retailer

= horizontalvision

Specific categorycompetence ofmanufacturer

= vertical vision

Retailer Category 1 Category 2 Category 3

Chain A

Chain B

Chain C

Why is collaboration possible ?


The same client in different roles

Clientof products / brands

from suppliers

Final client

Clientin channels / chains of

retailers

“Shopper”“Consumer”

Focus on the final client

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Market position

Organisation

Why do we need Category Management ?


• If we have a dominant market position, we truly do not have tonegotiate with nobody

• If we have a weak position, it will be difficult that channels withless assortment will take us into account

Why the market position ?

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• Depending on the “natural evolution” of the organisation and the split between functions like Marketing, Trade Marketing and Sales there might be a historical need to overcome the departmentalbarriers

• Marketing: the “tunnel” vision of the Brand Manager• Trade Marketing: lack of orientation towards the client potential per category• Sales: sell the easy things, not what really develops the business in the long

run

Why the organisation ?


Factors that influence the organisation of CM

• The resources necessary for an effective CM work in the organisation of a manufacturer depend on 4 key factors:

• Complexity of the portfolio:

• Nº of categories, nº of SKUs, portfolio strength of competitors etc.

• Market position:

• Leader, important player, secondary brand etc.

• Distribution landscape / clients:

• Strong concentration vs. fragmentation (for example Spain vs. France)

• Organisational structure and competencies of the team:

• ¿ Is there an active management of the total portfolio on marketing level or do we

sell what we have to each client ?

• ¿ Does the sales force analyse the competitive situation at their clients or are they

focused on their sales target ?

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Objectiveness in CM as a manufacturer

• Category Management is, in first place, a joint project between a manufacturer and a retailer with a long-term orientation• The manufacturer selected by a retailer to run a CM project has to ask himself

2 questions:

• How will the retailer react if I take advantage of my position as a category captain

and the results stipulated will not be achieved ?

• What would happen in the category at the retailer if one of my competitors ran the

project instead of me ?

• Both questions have to lead the manufacturer to the conclusion that

objectiveness / neutrality are key to generate a sustainable profit out of

the project on a mid-term basis


4. Benefits of Category Management

• Demonstration of additional competencies towards the importantretailers

• Better “global” vision of the category due to the different focusthan the Marketing one plus access to important client data

• Knowledge of the consumer in the category allows us to improvethe argumentation line of new launches in front of the client

• Rationalisation of the global portfolio of the manufacturer

• Link / interface in the data transmission, information andknowledge between Sales and Marketing

• Better understanding of the POS and its importance as communication media for the shopper

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• CM is a specific tool within the traditional marketing-mix for the FMCG sector due to the specialisation of the two entities manufacturer andretailer

• CM is part of the ECR (Efficient Consumer Response) movement, which is divided in the Demand and Supply side

• CM has the primary objective to reach more efficiency and satisfaction in the supply of the final client with goods and services

• CM is based upon a collaborative concept between manufacturers and retailers in which both parts contribute with their specific knowledge abouth the final client in his 2 roles

• The need of usefulness of CM for an organisation depends on its position in the market and its organisational structure

Summary definition Category Management


3. Explanation of the CM process

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Category Management is a process model for defining

and steering categories on

Channel level

The model is explained in the “Category Management Best Practices Report” published by ECR Europe.

to optimise the retailer’s performance.

Client level

Definition of the CM model


The model describes the 8 sequential steps in a CM project. It consists of the following parts:

The 8 steps of the model

Category Assessment

Category Tactics

Category Strategies

Category Scorecard

Category Role

Category Definition

PriceAssortment Placement Promotion

Plan Implementation + Review

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1. An analytical part(category definition, category role, category assessment) in which the major areas of improvement for the category performance are established.


Category Assessment

Category Tactics

Category Strategies

Category Scorecard

Category Role

Category Definition




2. A strategic and tactical decision (category scorecard, category strategies and category tactics)


Category Assessment

Category Tactics

Category Strategies

Category Scorecard

Category Role

Category Definition



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3. The analysis and implementation of the tactical plan, using methods and tools to for the placement in the store


Category Assessment

Category Tactics

Category Strategies

Category Scorecard

Category Role

Category Definition




• Score Card• Review

Project Agreement

Finally, the project is converted in a process through the continuous revision of the achieved results in a scorecard


Category Assessment

Category Tactics

Category Strategies

Category Scorecard

Category Role

Category Definition



36


• General knowledge:• General market information• Corporate information• Brand roles

• Specific competencies:• Expertise in the general CM

process• Client-specific studies or

research• Specific marketing knowledge in

the distribution process

Requisites to manage the process


A clear definition of the category should be based on the perception of the consumer and replicate the different products of each segment. However, criteria like

- feasability- manageability and- clarity

have to be accounted for in each moment.

The category setting is the base for the precision of all decisions taken with the objective to be relevant for the consumer afterwards.

1. Category Definition

37



Definition category:A category is a distinct, manageable group of products that consumers perceive to be substitutable in meeting a consumer need. Some categories can be divided by in sub-categories, which identify complementary groups of products that all satisfy the same overall consumer need (i.e. Shampoo, Conditioner and Treatments).

A category consists of sub-ordinate segments:

Definition segment:A (sub-)group of products within the same category, which is clearly recognisable by the consumer, relevant for the consumer and forms one or more level(s) of the purchase decision tree.Segments are dynamic and may vary by country or channel.



Questions to answer:

What are the relevant categories ?What are the relevant segments ?What are the relevant products / brands in each segment ?

38


2 concepts help to define the category and its segments:

Hierarchy of needs: What does he need?Ranks the primary (= essential) and secondary (= optional) needsexpressed by the consumer of the category

=> Research: item batteries etc.

Decision tree: How does he buy it?Indicates the sequence of decisions made by the consumer consciously or inconsciously to finally purchase a specific product

=> induces the segmentation criteria=> Research: focus groups, shopper study



Example: Hierarchy of needs – Hair colorants


0 20 40 60 80 100

Attractive

Easy to apply

Duration of desired colour

Compatibility with natural shade

Care for hair

Grey coverage

(Known) brand

(Economical) price

Natural ingredients

Attractive packaging

Others

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Example: Decision Tree – Hair styling


1. Precondition

2. Preference

3. Attitude

4. Preference

5. Performance Flexibility

• mousse• liquid

Hair type

Desired style

Consistency

Brand

Relevant levels of decision tree


Group discussions

40


Women, 16 – 25 years,Colorant users

Women, 28 – 39 years,Colorant users

Women, 40 – 65 yearsColorant users

Women, very interestedin colorant usage

16 – 65 años

Colorants (8 participants per group)

User structure: 12 Permanent6 semi-permanent6 demi-permanent

Non-users: very interested (high buying intention if person was better informed)

Users Potential users

Group setting


In-store studies

41


In-store investigation process

ObservationWith photo of the shelf, indicating the movements of the shopperTime, global behaviour

InterviewPurchase planning (planned vs. unplanned)Purchasing habits (frequency, search process etc.)Purchasing act analysis (vs. observation)Influencing factors in the purchasing actSpecific

E.g. comparison between stores / placementsBrand satisfactionPurchasing barriers etc.


Dokumentation des Suchverhaltens:als erstes wurde beobachtetdanach ....

etc.

Geschäft: Verweildauer in Min/sec:Proband ID:Datum/Zeit:

+

Allgemeines Verhalten des Probanden vor dem Regal Besonderheiten (zusätzliche interessante Auffälligkeiten):Geht gezielt auf einen speziellen Regalbereich zu Schaut/geht vor dem Regal hin und her

.................................................................................................� ja � nein � ja, einmal � ja, mehrfach � nein

.................................................................................................

Person kommt an das Regal von ... � �

Verhalten der TP (bitte ankreuzen)• nimmt Produkt aus dem Regal � � � � � � �• Produkt wird nicht weiter beachtet � � � � � � �• liest auf der Packung � � � � � � �• öffnet die Packung � � � � � � �• testet das Produkt � � � � � � �• kauft das Produkt � � � � � � �Produkt? Haarspray � � � � � � �

Mousse � � � � � � �Gel � � � � � � �Wachs � � � � � � �Person verläßt Regal in Richtung... � �

Sex: � Mann � Frau Alter (ca.):

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2. Category role at the client

• Depending on the overall assessment vs. Other categories and the channel benchmark, the importance of the category for the specific retailer is defined

• The selection of the category role determines in a definite way allactivities and their intensity from thereon


Penetration

Loya

lty

• In this graph the potential roles for the category are displayed, while the definite roles for the retailer might be different

• Category roles are set per channel

• The decision should be revised once a year

2. Category role at the clientDefinite roles

Low Medium High

High Competence Destination Destination

Medium Convenience Routine Destination

LowOccasional /

SeasonalConvenience Routine

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DestinationTo be the most important supplier of the category, which offers consistent and above average value to many consumers = preferred supplier

CompetenceTo be the most important supplier of the category, which offers consistent and above average value to an important target group. This target group perceives the retailer with high competence in the category.

RoutineOne of the preferred suppliers of the category, which supplies consistent and competitive value to the consumer.

Occasional / SeasonalOne of the important suppliers of the category, which positions the retailer among a relevant selection, as it frequently offers competitive value to the consumer.

ConvenienceOne of the suppliers of the category, which positions the retailer as a complete offer at good value towards the consumer.

2. Category role at the client


Why do we have to analyse the category ?

The performance of a category in a country or distribution channel is shown by qualitative and quantitative indicators to determine the potential role of the category without taking the specific situation of the retailer into account.

Once the category is analysed on a global level, the client analysis is necessary to evaluate the current performance in the category, comparing it with the performance of relevant competitors and the channel (= benchmarking). This is how the potential of the client can be valued in the category to be exploited as well as establishing the differences regarding the global client strategy.

3. Category Assessment

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The 4 perspectives of the Category Assessment


Consumer Information

• Segmentation• Shopper profile• Shopper behaviour• Attitudes towards the category• Relevance of the category of total expenditure

Retailer Information

• Weight category, segment, brand, products• Evolution category, segments, brands• Penetration, loyalty, closure• Shelf space available• Margin• Procedures with PL• Logistical variables replenishment store

Market Information (= Benchmark)

• Weight category, segment, brand, product• Evolution category, segments, brands• Penetration, loyalty, closure• Benchmark competitors of retailer

Supplier Information

• Introduction new products / trends• Logistical data products• Logistical efficiency• Promotional plan



Questions to answer:

What is the performance of the category and its segments• In the country• In the channel

What is the potential role of the category in the channel?What is the performance of the client regarding his global strategy?What are the relevant competitors for the client?What is the behaviour of competitors in the tactical aspects?What is the performance of competitors in the category?

45


Importance of the category in

the channel

Position of the category in the

channel(potential role)

Data to be analysed in general:

• Total category turnover and by segment- In total market- In the channel

• Data ad-hoc research (p.e. group discussions, shopper studies etc.)

• Penetration, loyalty, intensity- per category- per channel




Data of the retailer to be analysed:• Switch of shoppers between different stores

• Nº of SKUs and shelf prices per client

• Shelf space and shelf organisation per category and client

• Shopper profile

• Price positioning

• Nº and type of promotions per category and client

• Purchasing frequency per client

• Client evaluation by shoppers (specific studies)

• Penetration and loyalty per shopper in the category

Competitivesituation

Tacticalbehaviour: Potential ofthe client

Clientassessment

46


rinses

shampooH-tonicstreatments

gel/cream/wax

spray/lacq

settings

colorants

perms

0

5

10

15

20

25

30

0 20 40 60 80

ø shopper expenditure: Buyers of the sub-category in the channel

PenetrationBuyers of the sub-category in the channel

øsh

oppe

r ex

pend

itur

e in

€

Penetration in %

3. Account Assessment


Example: Nº of SKUs per competitor

0

50

100

150

200

250

300

Client X Hyper B Hyper C Hyper D Drug. A Drug. B


47


Alternative methods to do the account assessment:

1) Enquiry:• Similar steps than in the best-practice model

2) Use of alternative data:• Trade journals, publications, empirical data etc.

=> Like in best practice, but different methods

Benchmark =Relevant competitors in the channel


martin vom stein kam2 gc ingles 1parte - … trends and evolution of category management rcm...

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