Logistics and Transportation as a Category within a Category - Essay Example

This essay discusses that Category Management is a retailing and supply management process of managing categories as SBU (strategic business unit) produces better business results, with emphasis on delivering consumer value. In Category management, has to be given priority the retailer and the supplier work together to achieve certain targets that are mutually beneficial. Working together offers comparatively better opportunities, as it endless sharing of resources and insight. Category management usually focuses on using key methods such as range assortment, allocation and flow, inventory levels, shelf space, promotion, merchandising and pricing.

Category management can be defined as a marketing strategy where a full set of products, excluding individual products or brands, is managed as an SBU. It focuses on the entire product category, by which a marketing manager can easily understand market trends and preferential tastes of the customers. Another definition of category management is it is that, a strategic management of product groups through business partnership. It aims to maximize profit and sales, by satisfying consumers and shoppers.

“This mutual understanding lays a solid foundation for category management”. The two key elements of Category management are • To provide the consumer and the shopper with what they need, in relation to place and time. • To categorise products in order to reflect consumers’ needs based on how the product is used, purchased or consumed. It is a long term continual business philosophy, normally approached through a series of short term projects, involving sharing of information and close working relationships by suppliers and retailers.

A supplier uses the expertise available, the knowledge about the shopper, the consumer, and their needs and behavior. The retailer uses the expertise of the customers, their purchasing behavior and the way they purchase. The concept category management originated in North America in 1980. It introduced changes in the traditional relationship of the supplier and the retailer to a more collaborative extent. In 1992, category management began to gain a momentum through AC Neilson, who started publishing information to several supply chain associations and suppliers.

This won a lot of recognition across Europe, UK and Canada. The standard model for a category management is an 8- step process. Developed by the parent group, they Define the category Assess the role of the category within the e retailer Assess the performance of the category Set objectives and targets Engage in Category strategies Perform Category tactics Involve in Plan implementation. Review and evaluate. In category definition steps, the job is to determine the product which constitutes a category and its segmentation.

In category role, the definition of the purpose of the category is in relation with retailers’ portfolio. The analysis of various category performances is carried out in the third step and set targets and objectives in the next step. The fifth step defines marketing and in store service strategy for the category. In category, there are tactics sessions determining optimal products, promotions, placement, pricing and supply methods. In plan implementation stage, making a written plan ensures this tactics to achieve strategies, to fit the role and meet the scorecard.

In category review, the purpose is to monitor measure and modify the progress of the categories. The 8-step process is criticized for being bulky and time consuming. Nielson process is a 5-step process. It pinpoints Reviewing the category Targeting consumers Merchandise planning Implementing the