Post on 04-Apr-2018
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Sourcing Simulator Licenses
Liz Claiborne
Woolrich
Glen Oaks
Lebanon Apparel
Val DOr
Whisper KnitsBrooks Brothers
Tropical Sportswear
Fruit of the Loom
S&S Distribution
Virginia ApparelRed Well
Dayton Hudson QA
Vertical Threads
Kellwood Company
Ackermans Ltd.
Se
Nike
Nantucket Industries
Private Label Concepts
Federated Merchandise
Levi Strauss
Garan
Edison Brothers
Context Group
Tanner
Cuddle Time
Chic by HISEagles Eye
Claudel Lingerie
Starter Corp
Kikomo
Goldman Sachs
Kmart
Aztec Trading
Charles Gilbert Assoc
GIDC
UNITE
WL Gore & Assoc
Van Huesen
Patagonia
Danube Knitwear
Capital- Mercury Shirt
Lord Olords IncNat Inst Fashion Tech
Limited Dist Services
Wolverine Worldwide
Cajah Mountain Hosiery
Bain & Co.
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Sourcing Simulator Licenses
Texas A&M University
University of Missouri.
Colorado State University
Western Kentucky University
Texas Christian University
Murray State UniversityMichigan State University
University of Kentucky
Oregon State University
University of Nebraska
Southern Illinois UniversityIndiana State University
Iowa State University
UNC Chapel Hill
UNC Greensboro
Kansas State University
Se
West Virginia University
Cornell University
Baylor University
University of Hawaii
Texas Tech University
Kent State University
Middle TN State University
Stephens College
California State University
University of Rhode Island
Sam Houston UniversityOhio State University
Southwest Texas State University
U of Massachusetts
N Illinois University
U of California - Irvine
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Sourcing Simulator Licenses
Auburn University
Ball State University
Clemson App. Res.
Delta State University
Oklahoma State U.
East Carolina U
Tampere UniversityNorth Carolina State U
Integrated Consulting
Stonefield Josephson
Prime Tanning Co
Bayer Clothing GroupMay Merchandising
Logistics Training Intl
Exterior Wood, Inc.
Firmin House
Glen Oaks Industries
Se
American Identity
Andersen Consulting
Adexa
Burlington Industries
Cone Mills
Dillards
DuPont Nylon
EDS
Galey & Lord
Glen Raven Mills
Hologix Inc
IBM
Milliken & Co.
Russell-Cross Creek
Sara Lee Casualwear
VF Corp
Wellman Inc.
Bios Group
Burlington Chemical Co
CFT Consulting
PricewaterhouseCoopers
T-MNA Inc.
Timberland
NHK International
Twin Star Intl
Nordstrom
Bergdorf Goodman
LL Bean
Wal-Mart
Lands End
The Gap
Wigwam Mills
JBA International
Bradley Perspectives
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Efficient Consumer Response Efficient replenishment
Systems, EDI
Fewer stockouts
Efficient promotion
Promotions based on consumer demand Lean inventory to support promotions
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Efficient Consumer Response Efficient assortment
Turnover
Profit
Enhances brand and retailer perceptions
Efficient product introduction Pull strategy for new products
Based on unmet needs
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Category Management Technique used by retailers
Product is sub-divided into categories that
Reflect purchasing behavior of targetcustomers
Are managed as separate business units
Supermarkets and massmerchandisers
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Categories as SBUs Department is too broad and less
strategic
150-300 categories vs. 15-20 departments
Product/brand is too narrow to approach
strategically 15-20,000 skus in a store and 16,000 new
products/year
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Category Management Integration of Buying and Merchandising
responsibilities
Management of price, shelf space,merchandising assortment strategy,promo efforts, replenishment
Affects manuf. sales and marketing Team approach between channel
members
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Category Plans
Jointly developed by retailers and
suppliers Define strategies and financial
objectives GM
Sales/cu ft.
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Buying/Merchandising Decisions
Responsibilities must be
integrated Inventory allocation
Space allocation/analysis
Customer demand
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Category Management Goal - Retailer
Optimize each part of the storeAllocate space that maximizes Gross
Margin/unit of space
Goal Supplier To become the lead supplier or channel
captain for that category
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Benefits Increased category sales (5-15%)
Increased category marginsAssists in creating optimal assortments
Reduction of SKUs in most cases
For Mfct., move from trade allowances(push) to trade promotions (pull)
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Manco example Merchandising of tape products was
difficult
Different buyers bought tape
Solution = tape center
Later mailing center Prevented other vendors access
19 SKUs to up to 32 feet in officesuperstores
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Direct Profit Profitability (DPP) Profit associated with each category
Per unit Gross Margin minus all variablecosts
Procurement
Distribution
Sales
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Defining Categories Consider end uses (frozen, chilled, deli
fresh)
Consider substitutablity (fresh/frozen)
Consider complimentary purchase
decisions (pasta + sauce) Base decision on how customer buys
Same real estate
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Dairy category Displayed by brand name
Customers shop by type (low fat, fullfat, no fat, fruit)
Then individual flavors
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Ready to eat meals category Type Chinese, Italian, meat/two
vegetables Cooking method oven, micro, stove
Low calorie or regular
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Defining Categories What products should be included?
Beer Category- decisions Shelf beer and cold beer part of total
Shelf beer = 1 category and cooler = 2nd
Sub category of beer/wine/alcohol
Beer as a solution (picnic, party, meal)
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Roles/Implied Strategies Destination Traffic building
Turf protecting Transaction building
Excitement creation
Cash generating Image creator
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Pasta CategoryStrategy Examples
Traffic builderStd. Packs of dried spaghetti
Transaction builder Parmesan, fresh herbs, pasta sauces
Cash generator Lge. economy packs of dried pasta
Image creator Filled pastas: ravioli, tortellini.
Excitement creator Fresh, less well-known: stelline.
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Roles/Implied Strategies
Routine/
preferred
Transaction building
Profit generating Turf protection
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Roles/Implied Strategies
Convenience Transaction building
Profit generating Image enhancing
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Roles/Implied Strategies
Occasional/
seasonal
Traffic building
Excitement creation Profit generating
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Tactics Traffic buildingAggressive pricing on loyalty
products/low margins Media on frequently purchased items
Prominent space
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Case Study - ToothpasteResults Previous Current % Diff.
Sales 12.3m 12.64m 2.8%
Gross Profit 1.66m 1.52m (8.4%)
GP Margin 13.5% 12% (11%)
Turns 12.2 14.5 19%Days supply 30 25.2 (16%)
GMROI 1.9 1.98 4.2%
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Leading Manufacturers CM P & G
Kraft General Mills
UnileverRalston PurinaPillsbury
QuakerKelloggsCoke
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Leading Retailers CM HEB
Safeway Wal-mart
Ahold
Kroger
Wegmans