Category Management – A Manufacturer’s Perspective
The other day, I was in a meeting and was asked the question “What is Category Management? Isn’t it just SKU rationalization?” I began my response to the cross functional room of attendees at this meeting with “well, it is the management of a category…” The room burst into laughter! And so did I! How do you really explain what category management is in a foodservice environment in 30 words or less?
According to The Partnering Group, Inc. it is a collaborative consumer and category-based planning and execution process among foodservice industry stakeholders, leveraging mutually agreed to goals, insights and strategic & tactical plan to drive improved business results. In other words, category management considers a multitude of factors to drive business. It encompasses everything from concept to … no, not to sales but actually through sales.
Internally this looks like interdepartmental planning with Marketing, Product Development and Sales. Externally it should look like a strong joint business planning cycle between the manufacturer and distributor. In either case, internally or externally category management charges the parties to:
- Create a vision for the category
- Determine market insights (consumer, distributor, channel)
- Align on the key performance indicators that will signal success
- Map a tactical execution plan
- Let me repeat myself. It involves collaboration, market research, insight, planning, and execution.
Of course, as with any execution strategy, you must also include review and refinement. In other words some amount of flexibility needs to be built into the process.
So the next time you get asked to define category management you can say unequivocally, that it is a planning process that drives improved business results. You see, category management is much bigger than SKU rationalization.
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