What is the role of Category management in contemporary market? What is the relation of range and space management and product availability? Learn about space allocation and layout setting tactics.
Posted: Sep 2011
Category management is a retail and supply management concept where the range of products is grouped into specific groups of products of similar characteristics. These groups are called the product categories. For example, the product category can be carbonated soft drinks, milk, bread, etc. The category management is supply chain concept of managing a product category as a strategic business unit. Precondition for successful category management is the alignment and cooperation of both supplier and retailer.
Category management concept was developed at the end of 80s of 20th century in the developed retail markets. The dialog took a place between the most developed retailers and their key suppliers with the purpose of joint cooperation on management of product categories, as strategic business unit.
Category management is among the most advanced business tools for business results improvement. Category management has the aim to create the value to the consumer and improve business result, through the cooperation of retailer and supplier.
It is usual practice that main supplier into a specific category is nominated by the retailer to be a category captain. The category captain is having the closest and most regular contact with the retailer and is investing time, effort, marketing resources and financial investment into the strategic development of the category within the retailer’s premises.
In return, the supplier is giving a authoritative position within retailer’s outlet. The category captain is often the supplier with the largest turnover within the category.
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