Professional Documents
Culture Documents
By Polpiya Thitivesa
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Scope of the Category Management Session
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Agenda
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Message from CEO of Retailer
A Joint (Supplier & Distributor) Focus on Supply & Demand Opportunities
Demand-Side Strategies
Supply-Side Strategies
Efficient Assortment
Efficient Replenishment Efficient Product Introduction
Efficient Promotion
Category Management
• The “Planning Platform”
• The “Steering Wheel” of ECR
Ground rules: From Supply Chain to Category
CATEGORY MANAGEMENT IS A
Introduce Promote Merchandise Replenish
products products products
products MANUFACTURER/RETAILOR
Information PROCESS OF MANAGING
CATEGORIES AS STRATEGIC
Suppliers Manufacturer Wholesalers Retailers Consumers BUSINESS UNITS, PRODUCING
Products
Reducing inventory & merchandise matching with ENHANCED BUSINESS RESULTS
operating costs consumer demands
Reduced
BY FOCUSING ON DELIVERING
Cost Enhanced
Revenue CONSUMER VALUE
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
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To understand competitive
Category Management Concepts pressures, new approaches
are necessary to meet the
challenges of today’s intense
and varied forms of
competition.
Optimise Optimise Optimise
Introduction Promotion Assortment
The traditional focus on
similar format competition is
Trade Consumer
Product
Deals inadequate to understand
Promotions Category
New ProductExtensions
Strategies Channel and to respond effectively.
Introductions
Product Strategies
Seasonality
Key Account The success of alternative
Market Category Management
Forecasts Plans retailer formats, such as
Variations in Consumer Demand
discount stores, hypermart,
Response Consumer
Requirements Demand specialty “Category Killer”,
Withdrawals from Trade DCs or POS and Convenience stores has
Manufacturer Retail DCs and been challenging to the most
Plants & DCs Replenishment Shipments Retail Stores traditional retailers.
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
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Brand Performance Falls on Deaf Ears
MANUFACTURER RETAILER
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information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
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Under Category Management Manufacturer / Retailer
Activities
MANUFACTURER RETAILER
Research consumer Research customer
product needs Consumer category shopping needs
needs
• Price • Price
• Advertise brand Product development • Advertise store
branded/private label
Range/Layout
promotion
“CATEGORY CAPTAIN”
Promotions add
value to Category
Easy to shop Stock most New products
demanded products stimulate needs
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
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Category Management Best Practice
Business Process
What
CATEGORY Whatisisit?
it?
CATEGORYDEFINITION
DEFINITION What is its structure?
What is its structure?
How
Howimportant
importantisisthe
thecategory?
category?
CATEGORY
CATEGORYROLE
ROLE How
Howtotoleverage
leveragethe
theimportance?
importance?
Category CATEGORY
CATEGORYSCORECARD
SCORECARD What are our goals, objectives?
What are our goals, objectives?
Reviews
What
Whatisisthethebusiness
businessplan?
plan?
CATEGORY
CATEGORYSTRATEGIES
STRATEGIES How will it achieve the role, scorecard?
How will it achieve the role, scorecard?
What
Whatdo
dowe
wedo
dototoachieve
achievethe
thestrategy?
strategy?
CATEGORY
CATEGORYTACTICS
TACTICS Who
Whodoesdoeswhat?
what?
PLAN
PLANIMPLEMENTATION
IMPLEMENTATION DO IT!
DO IT!
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Category Definition
CATEGORY ASSESSMENT
Cereal
Coffee Machines
Brown Sugar Milk
Napkins
Breakfast Pastries
Spoons Baileys Cookies
Filters
Ground Coffee
Chocolates
Cups Coffee Espresso
Sweetener
Creamer
Whole Bean Coffee
Sugar
Tea Cream Croissants
Hot Chocolate
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
action in reliance upon, this information is prohibited.
Category Role
CATEGORY ASSESSMENT
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
action in reliance upon, this information is prohibited.
Category Roles - Possible Approach
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information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
action in reliance upon, this information is prohibited.
Category Assessment
CATEGORY ASSESSMENT
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
action in reliance upon, this information is prohibited.
Category Scorecard
CATEGORY ASSESSMENT
business plan
CATEGORY SCORECARD
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Category Scorecard - Example
Current
Original Plan Current Adjusted
Figures Objectives Figures Objectives
Time Period
Source: Syndicated Data
Dollar(Baht) Market Share
Total Dollar (Baht) Sales
Dollar (Baht) Growth
Unit Market Share
Total Unit Sales
Category % of Department Sales
Private Label Unit Market Share
Private Label Dollar (Baht) Market Share
Private Label Percentage of Category Dollar Sales
Private Label Percentage of Category Unit Sales
Source: Plan-o-gram
Dollar (Baht) Sales/Avg. St./ Cube Ft Per Week
Gross Profit Dollars (Bt.)/Avg. St. Cube Ft Per Week
GMROI (Shelf Level)
Days of Supply (Shelf Level)
Dollar Inventory (Shelf Level)
Source: Other
Gross Margin %
Net Margin %
Turns (Shelf & Warehouse Combined)
Service Level (Warehouse)
CRP Savings (Warehouse)
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
action in reliance upon, this information is prohibited.
Category Strategies
CATEGORY ASSESSMENT
• Traffic Building
CATEGORY SCORECARD
• Transaction Building
CATEGORY STRATEGIES • Profit Contribution
CATEGORY TACTICS • Cash generating
PLAN IMPLEMENTATION • Excitement creating
• Image creating
• Turf defending
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
action in reliance upon, this information is prohibited.
Category Strategies - Definitions
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information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
action in reliance upon, this information is prohibited.
Category Strategies - Summary
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information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
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Category Tactics
CATEGORY ASSESSMENT
• Assortment tactics
CATEGORY SCORECARD
• Promotions tactics
CATEGORY STRATEGIES
• New product tactics
CATEGORY TACTICS
• Pricing tactics
PLAN IMPLEMENTATION
• Shelf presence tactics
• Product supply tactics
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
action in reliance upon, this information is prohibited.
Category Tactics - Definitions
Category Tactics and Linkage to Category Roles
Destination • ‘Complete’ Variety • Leadership • Prime Store Location • High Level of Activity
- Best variety in market - Entire Category - High Traffic High Frequency Multiple
- Sub-Categories (per unit of use) - High Exposure Time Vehicles
5-7% - Customised
- Segments • High Cube Allocation
- Brands
- SKUs
CATEGORY DEFINITION
Plan Implementation - Development of
an implementation schedule with
CATEGORY ROLE
responsibilities for completing all
CYCLE - Revise & Review
CATEGORY ASSESSMENT
category tactics
CATEGORY SCORECARD
• Plan Proposal
CATEGORY STRATEGIES
• People
CATEGORY TACTICS
• Communication
PLAN IMPLEMENTATION
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
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Category Management Deployment Plan
Year I - Timeline
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Customer Prioritization
Year II - Timeline
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Advanced Training
Cycle - Review and Revise
CATEGORY ASSESSMENT
plan and once again revisiting the
CATEGORY SCORECARD
category plan - a continuous process
CATEGORY STRATEGIES
• Review
CATEGORY TACTICS
• Revise
PLAN IMPLEMENTATION
• Revisit
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
information presented is intended only for the discussion or entity to which it is addressed and may contain confidential and/or privileged material. Any review, reproduction, dissemination or other use of, or taking of any
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! Rigorous Role Analysis
Category Management ! Extensive Consumer
Understanding
Development ! Top-Down Scorecard Setting
Getting started to !Best practices ! Co-Marketing (if available)
Traditional Category Definitions ! Clustered Shelving
! Consumer-Oriented
! Identified Target Consumer
! Initial Pilots ! Clustered Shelving
! Redesigned Organization
! Following Eight-Step Process ! Implementing ABC
! Identified Target Consumer
! Determining Opportunity ! Collaborating with Supplier
! Working with Suppliers Best Practices
Co-Planning ! New, Broader Category
Basic/Getting Started Definitions
! Evolving Category Definitions
! In-Depth Structure Study
! Fielding New
! Initial Pilots ! Customer Scorecard (P&L)
Category/Consumer Research
! Following Eight-Step Process ! Demand Strategies ! Problem Solving (w/ Templates)
! Completing Templates ! Template Oriented ! Supply & Demand Strategies
! Determining Opportunity ! Redesigning Field ! Best Practices Efficient
! Working with Retailers Scorecard/Rewards Assortment
! Some Training ! CM Deployment Plan in Place ! Co-Marketing / Micro-Marketing
! CM Strategies Developed ! Multi-functional Customer Teams
! CM Selling Presentation ! Menu/Service Pricing
Complete ! Decision Support System
! More Training ! Integrated Supply/Demand
Retailers ! Redesigning Organization ! Category Focused Research
! Building Decision Support ! Program Supported Strategies
Manufacturer System ! Extensive Training
! Collaborating with Retailers ! New Reward Program for Field
Question & Answer
The following material has been developed by Polpiya Thitivesa, Nestle for an oral presentation and discussion. Without the accompanying oral comments, the text is incomplete as a record of the presentation. The
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Thank
Thank you
you
Nescafe
Nescafe Break
Break