Business Intelligence and FMCG Glossary: #categorymanagement
Category Management
What is category management?
Category Management applied to the FMCG industry is a mode of collaboration developed in the 80s at the initiative of the American distributor Walmart and the multinational corporation Procter &Gamble. Its objective is the joint development of categories between distributors and manufacturers in a cost-effective way by responding in the best possible way to the shoppers’ expectations.
The Category Management process is traditionally broken down into 8 steps:
- Definition of the category
- Role of the category
- Category evaluation
- Category objectives
- Strategies
- Tactics
- Implementation
- Process review
If it is not possible, for reasons of time, priorities, or others, to develop an entire 8-steps project for all categories, the philosophy of Category Management can be applied in a more concentrated way on the key themes of:
- Supply chain efficiency
- Minimization of out-of-stocks / on shelf availability
- Efficient promotions
- Efficient assortment
- Efficient new products introduction
Always with the aim of shopper satisfaction at category level.
For many distributors and manufacturers, moving towards a new type of relationship based on Category Management represents a cultural change. It is a question of leaving the traditional confrontation for values of openness, trust and sharing of information. Beyond the technical difficulties of the analyses and processes, this point is certainly the most important and success-defining challenge.
