Category management as an effective assortment management technology in retail. Encyclopedia of Marketing

There is no generally accepted definition of category management, so I will give the most common version today.

The objectives of category management are to maximize the satisfaction of buyers' needs and at the same time to increase the efficiency of interaction between the supplier and the seller.

Historical reference.

The Schnucks retail chain from St. Louis (USA), which consisted of 60 stores, in 1985 began to lose ground in the competition. Then university professor Brian Harris offered the chain owners an interesting idea on how to boost sales. Harris promoted the Apollo computer program, which calculated the optimal amount of shelf space for each product in a particular category. This was an innovation - usually supermarket managers prioritized shelf space based on their personal preferences or under the influence of suppliers.

Acting on Apollo's direction, Schnucks has given more space to hotsellers in the baby food section. As a result, sales in these sections jumped by 20%. Schnucks soon began using the Apollo program for all of its categories, and by 1987 its main competitor had left St. Louis. All this led to the development of a truly revolutionary idea: a store can increase sales by approaching the assortment not as a collection of individual products, but as a collection of certain categories, or product groups.

In the traditional approach to trade, the functions of purchases and sales were divided between different divisions of the company, whose strategies differed: if the purchasing departments were oriented towards the acquisition of goods in demand at the best price and obtaining the maximum discounts from suppliers, then the sales departments sought to sell the maximum volumes of goods. And since each department had its own goals and criteria for evaluating performance, which did not always coincide with the interests of the whole company, then with such a structure of a trading company, miscalculations inevitably arose. As a result, batches of goods with low turnover could settle in warehouses and shop windows or products that fell out of the general trading concept could appear.

In case of transition to category management technologyall stages - from procurement, logistics to the sale of goods - are concentrated in a single responsibility center, while the so-called category manager (category manager) is responsible for the entire cycle of movement of goods belonging to a clearly defined product category.

The key idea of category management is the allocation of each product category within the assortment group (or product lines), for example, “vacuum cleaners” in the “household appliances” group. This approach allows a number of enterprises to achieve better results, since it takes into account the maximum number of factors affecting the sale of a particular product.

How to create a store assortment structure? The market has changed significantly over the past few years. And if quite recently the consumer was mainly guided by a well-known brand, now the presence of certain specific functions in the product often comes to the fore when buying. Therefore, when compiling the assortment, it is necessary to strive to ensure that each buyer, having come to the store, can choose for himself what he wants. At the same time, even in stores belonging to the same trading network, the assortment should differ depending on their location (outskirts or city center, capital or region, etc.), enterprise format (hypermarket or small pavilion).

To form a store's assortment card, a category manager needs to know both the results of marketing research (analysis of the consumer basket, monitoring prices and competitors' offers), and information about the sale and turnover of goods at a given outlet. The assortment card of the store consists of specific stock items that should always be displayed on the showcase, and the quantity of goods necessary for uninterrupted operation between deliveries of product batches. In the assortment card, in addition to specific positions, the values of consumer properties should also be indicated; without this, maintaining the structure of the store's assortment is almost impossible. When replenishing the stocks of a trading enterprise, in the absence of the necessary products in the supply warehouses, the goods, based on the values of consumer properties, are selected according to the NBL (Next Best Line) principle, i.e. with the most similar set of consumer properties and the closest in price.

Based on the assortment cards of all stores, the balance of goods, both in the warehouses of the store and in the supply warehouses, the category manager builds relationships with the supplier (what exactly needs to be purchased and in what time frame). By introducing new products and changing the priorities of consumer characteristics, as well as changing the fixed assortment, the category manager optimizes the assortment of outlets, taking into account the specifics of their location and seasonal fluctuations in demand.

Sometimes retailers have to make a distinction between administrative categories and shelf categories. Some products are distributed according to their specific category and are therefore displayed twice on the shelves. This means that two category managers are involved when one participates as an administrative category manager and negotiates with the supplier.

However, not all products are suitable for category management. Thus, an expensive product (premium class) cannot be in the same category as cheaper goods. Therefore, in order to cover the entire range, there must be some kind of hybrid between categories and brands for the most effective management, in which expensive brands in the store are not mixed with cheaper ones.

With a categorical approach to managing goods in an extensive distribution network with a large number of stores located in different regions, different districts of the city, having different formats and not completely matching assortment, a comprehensive solution for managing trade should include not only systems for managing the movement of goods (purchases products from external suppliers, the supply of goods from central warehouses to stores), minimizing the inventory of the entire network, but also assortment management support.

Retailers' choice of how to classify products by category is based on a number of reasons: What makes sense to the consumer (number 1); What is easy to manage (process routing, product packaging, suppliers); Other factors.

Category manager - buyer, trader and logistics specialist. All other business functions can be performed by the staff. Such a specialist is responsible for the entire range of works on the acquisition and promotion of goods of a certain, clearly defined assortment group. He establishes business relations with suppliers, looks for ways to optimize supply and logistics costs, organizes and supervises promotional events.

What does category management mean for a manufacturer? Often there is an opinion that category management is the prerogative of the retailer, studies show that the implementation of category management is just as important for the manufacturer.

For the manufacturer, category management is an addition to brand or product management, taking into account the mutual influence of goods and paying close attention to logistics issues.

The purpose of the introduction of category management by the manufacturer is to achieve maximum efficiency in the process of interaction of all business functions, optimizing the flow of goods between the manufacturer and the retailer .

The internal structure of the company should be optimized in order to increase the efficiency of assortment management and reduce negative impact of mutual competition of various goods. For this purpose, a number of companies have introduced the position of an “internal” category manager. In addition to the internal category manager, the position of an “external” category manager is introduced, who is responsible entirely for the product category (in many respects, its functions are similar to those of the account manager ). He should be a more significant and experienced manager than the account manager, whose role is often reduced to the function of simply implementing the sales plans of the brand or product manager.

Due to the fact that the manufacturer has two types of category managers, the category management of the manufacturer cannot be considered in isolation from the overall structure of the enterprise.

How does the manufacturer determine the categories?

Just like for a retailer, defining a category is a very difficult issue for a manufacturer. When forming a category, the manufacturer must take into account such an important factor as the weakening of positions in negotiations with retailers with the complexity of the assortment structure.

Assortment classification is generally based on customer experience as well as the retailer's shelf layout and the retailer's purchasing department structure. In general, the manufacturer is forced to focus on the retailer and adapt to its assortment management scheme.

The product range is characterized by breadth - the number of product categories, as well as depth - the number of positions in each product category.

Sometimes external goals are set for the category, based on relationships with customers (retailers) and internal, aimed at improving the work with the assortment within the company.

Category management is not the deciding factor, although it does add professionalism to retailers. If the supplier is a monopolist, then it is strategically important to take the necessary steps to introduce at least two competing companies. Three or four suppliers in one type of business - this seems like the right decision for most retailers.

Using your own brand name is one way to break the power of a monopolist. There is a disadvantage associated with using a private label, and that is that the retailer's category manager is not only responsible for managing the brands of large suppliers, but also for their own brand. Because of this, large vendors are reluctant to share information at an early stage of development because there is a risk that the information will be shared with the private label vendor.

In some situations, the retailer allows a large supplier to be the preferred supplier, i.e. they are given the opportunity to give advice and support to the retailer in a more thorough manner than competitors do. This means that part of the category management is transferred to the manufacturer. In practice, providers do not abuse this system.

In conclusion, I would like to add that, despite the apparent promise of this management model, and the sharply increased interest in this topic, this is not a panacea. It must be taken into account that the introduction of category management will require a significant qualitative change in the qualifications of personnel, changes in the software product, changes in the mentality and organizational forms of the enterprise. And at the same time, the experience of such companies as Metro Cash & Carry, SportMaster, etc. exemplary and worthy of emulation in his field.

Vladislav Artamonov

September 2004

It is not difficult to increase sales in a retail store: it is enough to optimize the process of purchasing and marketing in order to satisfy the needs of a potential buyer. This is the area of influence of category management - a relatively new way of maintaining and accounting for the assortment. Let's take a closer look at how it works.

What is category management

Once upon a time, at the stage of the formation of modern civilization, people purchased various things and objects they needed on the market - a specially designated place for this in the open. In the market you could buy anything: from apples to boots or even a new cart. And no one thought about how to arrange the goods, who to offer in the first place - everything happened spontaneously.

In the modern world, there are too many goods to be combined in one place in the city. The market itself continues to exist, but in a completely different capacity. Now this is the name of the entire sphere of trade. And at present, a huge number of commodity items are presented in the field of retail trade.

Retailers tend to work with a large number of brands and suppliers at the same time and are faced with the challenge of properly placing goods on the shelves of their stores. Therefore, effective management of assortment and turnover has become of great importance for the activity of any retail store.

So there was a need to classify all available products. There was a division of goods into categories into groups. Now they are united among themselves according to their characteristic properties and functions. And, as a result, a new branch of trade has appeared, which is called category management - the management of each category as a separate business unit with its own turnover, strategies and goals. The range of each retail store can be divided into types. And any product that lies on the store shelf can be attributed to one or another category of goods.

Main goals and principles

The following principles logically follow from this:

The buyer or consumer is the main unit regulating the turnover, so it is worth focusing on effective formation, as well as maximum satisfaction of his needs.
is a specific Purchase and sale of products must be managed by the development plan proposed by the category manager at all stages: from the selection of the assortment to the preparation of the sales script.
The assortment is divided into categories, focusing on the perception of the buyer and ignoring other possible classifications.

Benefits of implementing category management

In Russia, the merchandising system is often controlled by different departments, such as purchasing and sales. In classical merchandising, these two departments are managed by different people and work for themselves. The purchasing department is responsible for the quality of the product, its price, and the breadth of the assortment. And the sales department - for selling all purchased goods as quickly and efficiently as possible. This often results in conflicts of interest. But the logic of category management in retail is fundamentally different. The purchasing and sales department report directly to the manager. It is thanks to his plan to promote and acquire specific product categories that the interaction of these structures is simplified. They are no longer competitors, but partners.

Which store will have more sales? Where did you buy some goods offered by the supplier, focusing on the benefits of the purchase, and placed them on the shelves, guided by your own convenience? For example, clothing grouped by brand.

Or, nevertheless, goods that are purchased based on the requests of potential buyers and placed on the shelves so that they are easy to find will sell better. It makes no sense to prove - sales will be higher in the second store. This is the basis of category management.

Stages of assortment formation in the store

The choice of the specifics of the point of sale. For example, a sportswear or nutritional supplement store, or a grocery store. At this point, a general idea of the possible assortment is formed.
Development of a store strategy in such a way that it is possible to answer the questions: what do we sell, to whom, why, for whom is our assortment designed. When developing a strategy, it is important to take into account all the nuances.
Assortment structuring is the selection of the required assortment, contacting suppliers, drawing up a procurement plan, entering commodity items depending on their category and brand. At this stage, decisions are made about which brand to promote. It should be understood that this is no longer a strategy, but a tactic that may vary depending on the constantly changing conditions of the real market.
Merchandising and pricing. At this stage, questions about pricing, ways to promote a particular brand are being resolved.
Category analysis and evaluation. The effectiveness of pricing and assortment policy is analyzed. The analysis is carried out according to the following indicators:

Turnover.
Profit.
Percentage of illiquid goods.

Moreover, these indicators are considered for each category separately. Based on the received readings, tactical moments are adjusted.

Formation of categories in the assortment

A very important point that must be understood when managing the assortment is that the category is formed based on the needs of the buyer and nothing else. Consumers already think in categories. When a person thinks he needs a refrigerator, he usually looks at refrigerators of all brands and manufacturers. And the category of goods here can be called a refrigerator, and not its brand. So throughout the range of the store.

In order to form separate categories of goods, you need to adhere to the following algorithm:

Select a product class.
Combine all products according to some broad features: what it is made of, for whom it is intended
Identify target groups of buyers and study their basic needs.

Goods can be divided in a standard way according to the similarity of manufacture and use. In this case, you can get such categories as: soap, shampoo, shower gel, bread, cottage cheese, coffee. You can also divide the categories according to the principle for which it is used. For example, goods for recreation, fishing, a certain type of creativity.

Almost every category can be divided into subcategories according to the properties that are important to the buyer (for example, all shampoos can be sorted into products for dry, oily or normal hair) and arranged in accordance with this division. In this case, the buyer will be easier to navigate. Shower gels can be divided into fragrances. At the same time, the same washing powder, most likely, is better sorted not by aroma, but by the method of washing.

To separate categories, you can use the results of market research, the results of observations of buyers in the hall, and also use the help of sales assistants who often contact customers and know their basic needs.

Category structure, purchasing decision tree

The buyer goes to the store for a specific category. A classic shopping list, for example, to the grocery store looks like this:

Bread.
Sausage.
Milk.
Beer.
Seeds.

And already in the store, the buyer is faced with a choice. What kind of bread does he need to buy? Rye, wheat, sliced, whole. Which milk: 6% fat or 3.5? What kind of sausage? Boiled, smoked?

Product user. For example, clothes can be women's, men's or children's. The latter, in turn, is divided into things for boys or girls.
Form and style. The dress can be straight or fitted, the soap can be lumpy or liquid, and so on.
Color.
Size. For example, clothes. Or, for example, one and a half or double.
Manufacturing material. Vinyl or paper wallpaper. The jacket is leather, rag, suede.
Taste or smell. Shower gel with strawberry or chocolate scent. Orange juice or multifruit.
Price.
Manufacturer country. In wine boutiques, you can often see that the wines are arranged according to this criterion.
Also, depending on the specifics, categories can be distinguished into some other criteria.

The consumer makes a choice based on several criteria from the above. The final determination algorithm in a customer's purchase is called a purchasing decision tree.

Category properties

To correctly divide a product into categories, it is important to know the purchasing properties:

Rigidity - the willingness of the client to refuse to buy a product of a certain category, if there is no kind that he prefers. Most often, the more expensive the product, the stronger the rigidity: in this case, the buyer can be tied to the type of product, to the brand, to certain properties. For example, if he came for an Iphone X of a certain color and with a certain amount of built-in memory, then he wants to leave with this particular product. Categories of a different price segment will be undesirable for a particular buyer. And not only by brand, but also by other characteristics. For example, if a customer likes green tea, then he will not buy black. Or if he loves red wine, he is unlikely to buy white even of the same brand or brand.
The manageability of a category is the possibility of its expansion and narrowing. The first option is required when there are too many commodity items inside it. In this case, it is divided into several subcategories. And the narrowing is the opposite, the inclusion of one category in another, its addition to related products.
The category life cycle is the period of time during which the category is circulating in the market. The life cycle has several stages: product introduction to the market, growth, maturity and decline.

Any category has such a cycle. A typical example would be audio cassette recorders, whose life cycle began around the 1980s, when compact cassettes of music began to be commercially distributed on a massive scale. The period of growth falls on the nineties, and the period of maturity in the two thousandths. The decline began with the mass appearance of CDs and computer technology.

The balance of the assortment in the outlet

You should determine for yourself, again based on the preferences of the potential buyer, how to balance all the product variety on the shelves of your store.

Assortment width - the total number of product categories in the store. It may differ depending on the purpose of the outlet, its area and location. For example, in a small food stall near the house, there may be about 15-30 categories. And in a large hypermarket, there are hundreds.
Depth of assortment - the total number of commodity items within each category. For example, regular bread, loaf, sliced loaf and rye bread. Or in an accessories store, the depth of the “bags” category will be measured by the number of separately presented models.

The balance of the assortment - the ratio of the depth and width of the assortment that is optimal for the buyer. Depending on the purpose of the store and the role of each category, the balance can be different.

Roles of categories and their classification

Depending on the type of product, each category can be assigned one of four roles.

The privileged role is the main products of the store, the sale of which we focus on. This is the basis of the retailer's assortment, which forms the consumer and price perception of the outlet. These categories are the most competitive, so it is necessary to maintain appropriate prices for them: average for the market or, if possible, lower. Accordingly, these categories demonstrate a large turnover, but a relatively low profit.
A convenient role is assigned to related products that complement the store's assortment. These categories increase turnover, as a rule, they have a high margin. At the same time, the buyer gets the impression of the universality of the outlet for making any purchase.
A seasonal role is assigned to categories that have a pronounced seasonality in sales. Sledges, swimwear, sunscreen, Christmas toys and more. These products also help shape the idea of the outlet as a one-stop shopping destination. At the same time, during the season they bring a large profit, and during the off-season, sales are minimal or zero.

The role of destination can be assigned to some unusual, original goods that are not yet presented at other points. Such products can become the "highlight" of the store, attracting a flow of customers. At the same time, categories in the role of destination do not last long, as competitors' stores quickly notice them and put them on their own shelves. In this case, the role of the product changes.

Sleepers are categories whose sales and distribution are declining, but at the same time there is potential for growth and development. Here it is important to highlight the key products in the category, remove products with low turnover and margin, leaving only marginal and circulating products.
Promising - categories that are not very popular yet, but are growing and developing well. Here it is necessary to balance the composition of the category in accordance with market trends, if possible, reduce the price of key products. You can add related products. Maximize shelf space at the category level.
Doubtful - these are categories in a difficult state that need some kind of renovation to increase interest in sales. Within a single store, this may not be possible. Therefore, it is worth limiting yourself to key products and minimizing the resources allocated to the categories of this role.
Winners are categories that are developing well, their sales and distribution are growing. Here it is important to continue the current policy, promptly resolve all emerging problems with procurement and logistics, and monitor the extensive representation of goods on the shelf.

Depending on the role, respectively, the manager allocates priority categories for a particular store.

Categorizer's checklist

Accordingly, taking into account all of the above, you can create a checklist for a category manager.

Knowledge of all characteristics and trends of the category for which he is responsible.
Understanding of general principles of pricing and marketing.
Education in the field of marketing, university, and additional education in the field of category management will be an advantage: advanced training courses.
Availability of competencies necessary for making decisions on trade turnover.
Analytical thinking.

Of course, this is not a complete list, but you can add something of your own, based on the specifics of each particular store.

In general, applying category management arithmetic, you can significantly increase the turnover and profit of any individual store.

It is also worth understanding that this is a continuous process, taking into account the constantly changing trends of the modern market. Product management and adjustment of the existing situation should be carried out continuously, then it will be possible to talk about business development and expansion.

I highlight the following

- work with the shelf

- sales promotion

– pricing

- market share;

– frequency of purchases;

– average check;

Data Source: Romir Scan Panel Consumer Research

Brand Director at QIWI. Has been working in retail merchandising for over 12 years, collaborating with major manufacturers, retail chains, research and design agencies, including Interbrand, Romir, X5 Retail Group, Magnit, Ruble Boom, Amstor, Procter&Gamble and other. Implemented in Russia and abroad more than 30 projects for the reorganization of stores and categories, which led to an increase in the turnover of chains. Engaged in conducting...

The concept of category management for most chains comes down to ABC analysis, where the assortment of a category is divided into groups depending on sales. In the most advanced cases, the analysis is done on both the sales and profit generated from the position. The next step after assortment optimization is planogram optimization.

Thus, it turns out that the main task of “category management” carried out by Russian chains is to increase the efficiency of using working capital, whether it is to increase turnover through the withdrawal of poorly sold positions or the release of warehouse space from positions that have been dead weight for months. That is, when conducting this analysis, first of all, the interests of the network shareholder, who is interested in improving financial performance and maximizing the return on the invested ruble, are taken into account.

Often, too much focus on increasing the effectiveness of category management leads to a deterioration in store performance when the customer becomes frustrated and leaves the store.

Example. The main priority in the work of network X was to increase business efficiency and improve financial performance. The chain's buyers expanded the range and shelf space of high-margin brands and reduced brands with lower margins, even though those brands were in high demand among customers. Positions with a low turnover, but covering special needs, were withdrawn.

This policy led to an increase in working capital turnover from 8 to 14 times a year!

But at the same time, there was a sharp drop in operating performance as customers began to leave the store, and those who remained began to spend less.

	Sales dynamics	Average check
Hypermarket X

Data source: public reporting

Classic category management puts the customer first. After all, it is he who “votes with his feet”, leaving the trading floor with a super-efficient assortment, consisting entirely of high-margin positions and high-turnover positions. It is believed that a better satisfaction of the interests of the buyer allows the retailer to win in the long run.

Category management (according to Wikipedia) is the concept of retail space and assortment management, according to which the assortment is divided into groups of similar products. This is a systematic approach to managing product categories as separate business units. It is based on the idea of the best satisfaction of consumer demand.

I highlight the following main stages of category management:

1. definition of the target buyer

2. analysis of the main indicators of the category, in general and separately for groups of target buyers. Formulation of goals.

3. work to increase sales:

– work with assortment: filling segments

- work with the shelf

- sales promotion

4. work on increasing profits:

– pricing

– terms of the contract with the supplier (margin, credit terms, delivery terms, etc.)

5. analysis of the dynamics of the main indicators of the category.

Today we will dwell on the first two stages in more detail.

Definition of the target buyer

In an effort to "satisfy everyone", the network inevitably blurs its positioning in the market and, as a result, does not satisfy anyone.

In addition, not all buyers make the same contribution to turnover, so it makes sense to focus on analyzing different groups of buyers and identifying target ones.

In our example, only 30% of customers make 80% of the retail network's turnover, so it makes sense to analyze the socio-demographic profile of this particular group.

Example. The contribution of loyal customers to the turnover of the chain

Data Source: Romir Scan Panel Consumer Research

Analysis shows that these are middle-aged women with above-average incomes. If necessary, you can collect more data: family composition, frequency of visits to the store, average bill, basket composition, etc. The more we know about the target customer, the easier it is to answer the question of whether we are meeting their needs.

Analysis of the main indicators of the category

After we understand who our main audience is, it makes sense to move on to category analysis.

To do this, consider the main indicators of the category as a whole, in comparison with other networks, and separately for target customers:

- market share;

– penetration, or the percentage of people who buy a category in a given network;

– frequency of purchases;

- conversion, or the percentage of buyers from the number of store visitors who bought the category;

– average check;

- loyalty, or the percentage of money spent on a category in a given network from the total amount of money spent by a buyer on a category.

Data Source: Romir Scan Panel Consumer Research

– Migration of buyers between channels and sales networks.

In our example, we see that the Feminine Hygiene category is not doing well, with the retailer's market share dropping from 3.3% to 2%. If earlier the category was bought by almost 5% of the population, now only 3.4%. In 2010, 30 out of 100 people who came to the store bought a category, and in 2012, only 20 out of 100 found the right product and made a purchase. Excellent growth in the average check could not compensate for the decline in other indicators.

The next step is to set goals. For example, we want to increase the market share to 3% by increasing the conversion (percentage of all shoppers who bought a category) up to 25%. At the same time, we want the margin as a % of turnover to remain at the same level.

How to achieve this? How work is done at other stages of category management, we will tell in the following publications.

Building effective distribution for the manufacturer is increasingly dependent on “rapprochement” with the retailer and combining efforts to promote the product. Knowledge and understanding of modern technologies used in retail is one of the conditions for effective cooperation and an effective way to improve your economic performance. Not on opposite sides, but together and facing the buyer - this motto has already been implemented by successful manufacturers and retailers.

The need to combine the efforts of the manufacturer and retailers in order to promote and increase sales of their own products has long been beyond doubt: in the end, they "sail in the same boat" - both the store and the manufacturer are interested in the product being sold in as large quantities as possible and as quickly as possible. On the other hand, there is one insurmountable contradiction that constantly separates the retailer and the supplier on opposite sides of the “barricades”: the store is interested in selling all types of goods, and the supplier is only interested in selling his own brand.

This problem can be overcome if both parties turn their eyes to another participant in the sale process - the buyer. This need is not at all a whim of marketers - it is caused by the requirements of the market, because it is the buyer, in the conditions of increased competition, who exercises the right to put the final assessment on the work of both the manufacturer and the store, choosing specific brands and preferring a certain price level.

In recent years, the growth of the retail market, which contributes to increased competition, is forcing stores to master new technologies of work, assortment management and standardization of the merchandising system (for example, category management). These technologies contribute to the achievement of one goal: increasing the economic "return" from each commodity unit and, accordingly, increasing the profit of the store.

The purpose of distribution is to ensure not only the availability of the maximum amount of a product of a certain brand on the shelves of those retail outlets whose customers are the target consumers of the product, but also economic efficiency, i.e. sales. And for this, it is necessary to understand and take into account the following factors:

what is the consumer demand for these goods in a particular store;
what kind of goods and in what quantity should be presented on the shelves to achieve maximum effect, etc.

These are the questions category management answers.

Thus, understanding and using retail technologies allows manufacturers and suppliers to build effective distribution and achieve really high results.

The number of retail outlets in our country is growing - according to the company A.T.Kearney, Russia in 2003-2004. occupied the first places in the Global Retail Development Index ranking of country attractiveness for global retailers. Despite some slowdown in retail market growth in Moscow and St. Petersburg in 2005, the regions began to develop more intensively. All this cannot but please manufacturers and suppliers - the opportunities for "civilized" distribution are increasing, and the growth of competition in the retail market contributes to a gradual transition from the practice of selling shelf space to the use of modern and efficient retail organization technologies.

One of these technologies is category management - a new approach to managing the assortment of a retail company. It has become very widespread among retailers around the world, as it can significantly increase the profitability of the store. Moreover, this approach is actively used by manufacturing companies that sell their products through retail stores. The supplier is considered as a partner, together with which the goods and brands of the category are managed - sales promotion activities are planned and carried out, assortment planning and rotation is carried out, purchases and logistics are optimized.

First difference- conceptual. Category management is based on a simple principle: from a strategic point of view, increasing the profitability of a retail company is possible only by maximizing customer satisfaction. A detailed study of the demand and preferences of buyers and the further formation of the assortment in accordance with the identified demand are the basis for success. In the traditional approach to assortment management, the starting point is not the buyer, but the product: we sell what we have. If the buyer needs this product - you will be lucky, if not - defeat. This is also the difference between modern marketing and traditional marketing: at present, it is first found out at what price and with what characteristics the consumer is ready to buy a car, and only then, based on the information received, the car is produced, and not vice versa, as it was before: first the car is produced, and then the question is to whom and for how much to sell it.

Second difference- technological. Assortment management means managing not the entire assortment as a whole, but individual product categories. The category of goods is considered as an independent business unit and is formed as a set of goods that have similar, from the point of view of the buyer, features.

There is a detailed scheme for the analysis of categories and their components, sales and the effectiveness of assortment management. The distribution of retail space for the display of goods (by quality and quantity) is carried out on the basis of the economic efficiency indicators of the categories.

Third difference- organizational. When using a modern approach to assortment management, a new position appears - a category manager who is responsible for the entire process - from interaction with the supplier for the purpose of ordering to the sale of goods; accordingly, the organizational structure and distribution of responsibilities in terms of managing the company's commercial activities are changing.

Fourth difference regarding accounting. Within category management, each product category has its own plan for turnover and profitability, and costs are allocated by category in order to be able to identify what the "return" from each product category is and, accordingly, manage profitability.

Product category- this is a set of goods united by a common feature that the target groups of buyers consider similar in purpose or used for the same reason. Simply put, a product category is what a customer goes to the store for. For example, "groceries" in a grocery supermarket is not a category, but a product group, since the consumer comes specifically for granulated sugar, and not for "groceries" in general. Accordingly, in a building materials store there cannot be a “flooring” category, but there will be “parquet”, “linoleum”, “laminate”, “PVC tiles”, etc. categories.

The main thing when highlighting product categories is to take into account the perception of buyers, how they understand and classify the product. There are no single, common for all rules for the allocation of product categories. The main thing is that the following principle is observed: the category of goods should be perceived by target buyers as a set of identical or related goods in a store of this particular format. The same product in different stores can fall into different categories.

The selection of categories should also be logically consistent, that is, the categories should have the same level of generalization. For example, it is wrong to single out the categories “confectionery”, “chocolates”, “wafers”, “cakes”, because confectionery products include sweets, wafers, and cakes.

The result of the work on the selection of product categories is the compilation of a classifier of goods for the program for accounting for the distribution of goods of a retail company.

traditional approach- categories intersect with groups or subgroups of goods (for example, the category "yogurts" or the category "sausages");
creativity- a commodity category may include goods belonging to different classes, groups or types of goods. So, the category "goods for the school" may include briefcases, notebooks, paints and pencils, pens, rulers, textbooks, pencil cases, school uniforms, etc.

By the way, the emergence of category management is associated with Procter & Gamble - a manufacturer, not a retailer. It was Procter & Gamble in the early 1990s. developed the Efficient Consumer Response program, which became the starting point for the development of a new approach. Efficient Consumer Response is a management approach based on the study of consumer demand and the organization of the supply and sale of goods in stores in accordance with this demand.

The ECR approach from the very beginning of its application has allowed to achieve large volumes of sales and profits, since the retailer and the manufacturer jointly analyzed sales and assortment content of the product category. The adjustments made have produced fantastic results for Procter & Gamble: category turnover growth of 13-15%; increased profits, decreased turnover of category goods and inventory rates.

This success was quickly adopted by other organizations, and today, according to ACNielsen, 98% of retailers and 89% of manufacturers in the US consider category management to be a critical business challenge.

The category manager is responsible for managing the assortment of the store in order to increase the sales volume of the store. The specialist participates in the processes of procurement, storage, merchandising, sales promotion and product sales. For this reason, a professional needs to know marketing, purchasing, logistics, sales and other processes of trade and economics.

What is a category manager? The manager is so named because the assortment is managed according to the division of products into categories (groups of similar products). This division allows you to more competently manage stocks and significantly increase the sales volume of a trading enterprise.

Places of work

History of the profession

Category management originated in the United States in the early 90s of the last century thanks to Brian F. Harris. He proposed to manage product categories as separate business units. This theory began to gain popularity because of its high performance.

Responsibilities of a category manager

The main job responsibilities of a category manager include the management of one or more categories of goods, and more precisely:

assortment formation (studying the demand and assortment of competitors, calculating the profitability of goods);
purchases and accounting of commodity stocks (placement of orders and work with suppliers, control of expiration dates of goods);
participation in pricing (calculation of margins, forecasting the speed of sales);
sales promotion (launch of advertising and promotions, organization of sales).

Category manager requirements

higher (or incomplete higher) education;
knowledge of the market of the product being promoted (for example, in the field of toys, it is required to know the main categories of toys, trademarks, manufacturers and suppliers);
good knowledge of PC (office programs, 1C);
often requires experience in procurement or as a category manager.

The desired requirements for an employee are as follows:

knowledge of spoken and written English;
knowledge of marketing, financial accounting, merchandising;
sales or product promotion experience.

Resume sample

How to become a category manager

To master the profession of a category manager, you need to get a higher education in management, economics or marketing. It is also necessary to understand how modern trading enterprises work. How are the processes of procurement, inventory control, placement on the windows and shelves of the store, how are the sales, what do the stores earn and what do they lose.

To become a serious specialist requires professional knowledge of any area of \u200b\u200bproducts (perhaps your favorite area). These can be sporting goods, auto cosmetics, toys, shoes, household appliances, dishes, upholstered furniture, etc.

category manager salary

The salary of a category manager ranges from 30 to 120 thousand rubles per month. Usually, the higher the turnover of the company, the more serious the position and the higher the salary of a specialist. The average salary of a category manager is about 60 thousand rubles per month.