Debayan Ganguly (Dev Ayan) is an MBA with 2 years of experience in B2B sales. He likes to share his learnings through blogs and videos.
This is a continuation of my previous article on Category Management and the Steps in managing your category well.
In this blog, I will be talking about 5 Best Practices in Category Management. They are:
1. Know you Who, What, and Why?
2. Data Collection and Clustering
2. Floor Plan
3. Assortment Planning
Know your who, what, why.
Category Management has to be carried out by every department to ensure smooth Supply Chain Management. You must know who are the people behind driving that category. You need to train every employee across the department and keep taking advice regarding the working and betterment of the Category you are working for.
You need to be trained in different areas. You need to have full knowledge of the resources used, the vendors providing each resource, their rates, and the final product's market demand.
As a Category Manager, one needs to undergo training and keep themselves updated continuously.
You need to have a good framework and have knowledge of the entire process.
You need to know the time and duration of each process and continuously monitor and upgrade the process. You need to define the key performance metrics clearly and continuously check against those metrics.
Having a good knowledge of the WHO, WHAT, and WHEN of your category will put you at the forefront of the operation, and you will be able to deal with the arising problems in the shortest time.
Data Collection and Clustering
The first and foremost thing required for any strategic decisions is a good amount of quality data.
Now let me break down each complicated word for you.
Strategic Decision: - The decisions are the decisions taken on the Corporate level and affect the entire functioning of the company or group of companies. The kind of decisions here includes expanding into another market, starting another business, extending a brand, etc. The outcome of their decision is passed on top down to the management and other employees.
Quantity of Data - that data you get has to be collected over a large sample of people, over a significantly considerable time, and collected from over a large type of respondents.
Quality of Data - the data collected must be free from any bias; the respondents should respond genuinely to the questions without any manipulation. Only then you can use the data.
So every decision you make has to be backed by data. The same has to hold for Category Management as well. You need to have a ton of quality data about your vendors, raw materials, supply chain, market demands, everything.
You need to have a standardised mechanism for the collection and analysis of data.
What is clustering? And why is it important here?
Clustering is the grouping of the dependent variable based on similar features and characteristics.
In your case, too, you need clustering at many stages. You need to cluster your retail stores, your products. Clustering helps in removing the burden of treating every retailer, every product as a separate entity. Your efforts are significantly reduced when you cluster your products.
And the data you collect will give a lot of ideas to the cluster. You can also form clusters using SPSS or R software.
You Need to Have a Floor Plan
Floor Planning is setting up the floor of your outlet so that each category gets their deserved exposure for their success.
Having a floor plan is the first step of your execution stage. It is designing your retail layout.
The floor plan allows navigating your buyers through the products. It helps you layout the products so that the right product gets the right kind of attention. Because floor planning cannot be changed easily and needs a lot of time, effort, and costs in revamping, it is wise to have an optimum plan backed by consumer psychology and data. Design the floor plan in such a way that you don't have to change it for years. Floorplanning has to be done when the retail store is new or when it is undergoing a revamp.
So you have understood how floor planning is helpful and promotes the products that need promotion, and helps sell every category.
So you have your clusters; you have the floors planned. The next thing you need is Assortment Planning.
Assortment Planning is arranging your range of products based on some similar characteristics from the point of view of the target market. The buyer who comes seeking a particular product must be able to see all related products.
Assortment planning is knowing what products to place in your stores and at what period of the year. For example, if you have a garment store, you will be bringing sweaters and other woollens in the front display during winters and have cotton clothing during summers.
You allocate a location in your store to each category based on their sales volume and demand. Some products need more visual cues and need to be placed at eye level to look at them and buy them. You must have seen Biscuits, Soaps and other FMCG products placed on the racks in the supermarkets and hypermarkets. They are there because the purchase decision to buy a particular brand happens on the spot (read my article on Consumer Buying Process). Whereas other products like flour, rice etc., are kept somewhere far removed in non-glamorous containers because people who will buy them will come seeking them; they are already aware of their needs. They needn't be triggered using any visual cues.
Assortment planning helps you manage your inventory by telling you what to buy, when to buy and how to display your products. It also helps give the buyers with alternative options so that if you do not have what they are seeking, they can look at the related product that may solve their pain points.
So Assortment Planning is another Best Practice that you need to follow in Managing your Category.
Read my Blog on Fnding your target market
- How to Determine the Target Audience for Your Business?
As a business, it is paramount for you to know who your target audience is. Proper identification of the target audience can be made by understanding what problems your business is solving and market research. Analyzing the data collected from Market
If your retail store is spread over a large area and customers have to do a lot of navigation, you can ease their purchase by having a Planogram.
A planogram is a visual map or a schematic drawing of the entire store. It helps guide you and your customers to reach the right place without wasting time looking for the right product. Having a planogram proves beneficial in having a satisfying retail experience for your customers and becomes another best practice in Category Management.
To watch my video on the same topic
- 5 BEST CATEGORY MANAGEMENT PRACTICES | RETAIL CATEGORY MANAGEMENT | MBA TALKS - YouTube
Subscribe to my channel: https://bit.ly/3wMGgmMTimestamps00:00 Start00:32 Intro01:06 Practice 102:22 Practice 204:33 Practice 305:43 Practice 408:57 Practice...
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2021 Debayan Ganguly
Debayan Ganguly (author) from Kolkata, India on August 13, 2021:
Welcome, I am Happy You liked my article.
Moon from New York on August 02, 2021:
Thanks for sharing with us... I learned a lot of new things in the article.