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Transcript of Category Management Share Group May 2009 © 2009 The Partnering Group, Inc. 1 CPG Cat Net The Next...
Category Management Share Group May 2009© 2009 The Partnering Group, Inc.1CPG Cat Net
The Next Wave of Best Practices Category Management
Focusing on the Shopper, on Execution and on Team Capabilities
The Partnering Group, IncJeff Clow
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.2CPG Cat Net
Category Management
Concept introduced in the late 1980’s
Category Management has had global acceptance since it’s introduction
The 1995 US ECR Report documented the Best Practices definition and business process
© 2009 The Partnering Group, Inc.3Category Management Share Group May 2009
CPG Cat Net
Category Management Process
Category Definition
Category Role
Category Assessment
Category Scorecard
Category Strategies
Category Tactics
Plan Implementation
Ca
teg
ory
Re
vie
w
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.4CPG Cat Net
Adoption of Best Practices Spread Quickly
Ad
optio
n
1993 Today
The Best Practice Model provided a Platform for Global Adoption.
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.5CPG Cat Net
15 years later it still is a Top Priority
98% of retailers and 89% of manufacturers consider Category Management critically important.
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.6CPG Cat Net
Key Reasons why CM Has Worked
Provided foundation for strategic retail marketing Categories as Strategic Business Units Aligning Company to Company strategies Balanced portfolio of Category Roles Linking Category Strategies and Tactics
Brought consumer focus to Retail Marketing and Merchandising New Category Definitions and Structures Consumer-driven Strategies and Tactics
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.7CPG Cat Net
Key Reasons why CM Has Worked
Provided a new and more effective model for collaboration through better information sharing
Expanded organizational capabilities Attracted and developed new skills and talent Roles and accountability Scorecard-based performance
Delivered superior results Retailers and Manufacturers Sales, Profits, and ROI
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.8CPG Cat Net
Why CM Hasn’t Achieved It’s Full Potential
Inconsistent top management support
Too often used as a tactical tool rather than for achieving differentiation and strategic advantage
Scorecards have not changed enough to motivate and reward new behavior
Too project oriented – not a “continuous” process
Work cycles too long and time intensive
Process too data focused and template driven – not enough emphasis on insights
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.9CPG Cat Net
Why CM Hasn’t Achieved It’s Full Potential
Too much reliance on manufacturers – lack of retail ownership
Too headquarters focused – not enough store / shopper focus
Inconsistent implementation at store level
People competencies not systematically developed and maintained to sustain advantage
Lack of software supporting tools, especially in promotion and pricing tactics
New trends and competitive challenges have emerged
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.10CPG Cat Net
Trends Shaping The Next Generation of Category Management
© 2009 The Partnering Group, Inc.11 Category Management Share Group May 2009
CPG Cat Net
Scanning
Space Management
Category Management
ECR Category Management Best Practices
Next GenerationStore Designs
ShopperMarketing
Shopper Marketing - The Next Wave
1975
1989
Today
1985
20001995
Category Management Share Group May 2009© 2009 The Partnering Group, Inc.12CPG Cat Net
Introducing…
Shopper & Category Development
The Next Wave of Best Practices
Category Management
Publication: 2009
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.13CPG Cat Net
Shopper & Category Development
Key Elements
Streamlined, robust for all categories
Consumer & shopper insight driven
Shopper-centric strategies
Loyalty Marketing integration
Breakthrough, differentiated initiatives
Global & local application
More emphasis on implementation
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.14CPG Cat Net
The Philosophy & Objective Remain The Same
“A Retailer - Supplier Process of managing categories as Strategic Business Units,
producing Enhanced Business Results by focusing on delivering Consumer/Shopper
Value.”
Consumer/Shopper
RetailerSupplier
© 2009 The Partnering Group, Inc.15Category Management Share Group May 2009
CPG Cat Net
But the Process Has Evolved
Category Definition
Category Role
Category Assessment
Category Scorecard
Category Strategies
Category Tactics
Plan Implementation
Ca
teg
ory
Re
vie
w
Insight Generation
Strategic & Tactical Planning
Initiative Development
Plan Launch
Category Definition
Category Role
Pla
n R
ev
iew
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.16CPG Cat Net
Best Practices Enhancements
Category Definition
Category Role
CATEGORY SUB-CATEGORIES SEGMENTS SUB-SEGMENTS
Definition & Role remain as important “umbrella”
elements of the process.
Greater focus on strategic alignment and Destination categories.
Performed as needed
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.17CPG Cat Net
Best Practices Enhancements
✔ Focus is on finding key opportunities versus “boiling the ocean”
✔ Heavy emphasis on shopper understanding & behavior
✔ Business question driven versus filling in templates
Insight Generation
Strategic & Tactical Planning
Initiative Development
Plan Launch
Pla
n R
ev
iew
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.18CPG Cat Net
Best Practices Enhancements
✔ Strategies/Tactics are more
integrated for optimal linkages
✔ Greater focus on the consumer
and shopper
✔ Strategies are differentiation
focused
✔ Tactical Blueprints are key
output
✔ Provide tactical guidance of
initiatives
✔ Provide direction for Core and
Local category planning
Insight Generation
Strategic & Tactical Planning
Initiative Development
Plan Launch
Pla
n R
ev
iew
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.19CPG Cat Net
Blueprints identify “The How” Link each category strategy to the key tactics Establish the core tactical elements (that can then be
customized locally)
Tactical Blueprints
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.20CPG Cat Net
Best Practices Enhancements
✔ Focus on differentiating,
more sustainable category
initiatives
✔ Rigorous cost/benefit
analysis & prioritization
✔ Formal Identification of Plan
Requirements
✔ Secures internal / supplier
commitment and resources
Insight Generation
Strategic & Tactical Planning
Initiative Development
Plan Launch
Pla
n R
ev
iew
Importance of Initiatives Deliver differentiation and innovation to Category
Plan Create focus on implementation and success
measurement
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.21CPG Cat Net
Full-faceOn Top Captions
to Simplify Shoppingand Improve Conversion
Consumer Driven Arrangement Organized by Occasion and
Recipient
Lower Density and Vertical Blocking to Improve Shopping
Driving Quick Conversion and
Encouraging Multiple Purchases
Ready To Go Gift Bags to
Drive Transaction
Size
Simplified Shopping Initiative Insight Generation
Strategic & Tactical Planning
Initiative Development
Plan Launch
Pla
n R
evie
w
Improved leverage & recognition of brand existence in the store
© 2009 The Partnering Group, Inc.22Category Management Share Group May 2009
CPG Cat Net
Greeting Cards Category
Shopping Initiative - Example
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.23CPG Cat Net
Best Practices Enhancements
✔ Detailed implementation
planning tied to each
initiative
✔ Formal approval & executive
commitment process
✔ Improved scorecard target
setting & measurement
Insight Generation
Strategic & Tactical Planning
Initiative Development
Plan Launch
Pla
n R
ev
iew
© 2009 The Partnering Group, Inc.24Category Management Share Group May 2009
CPG Cat Net
Moving Beyond Traditional Category Plans
Insight Generation
Strategic & Tactical Planning
Initiative Development
Plan Launch
Category Definition
Category Role
Pla
n
Rev
iew
TraditionalCategory
Plans
PortfolioPlans
ShopperSegment
Plans
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.25CPG Cat Net
Competency Based Curriculum
Course Delivery Course Delivery
Category Management : Shopper & Category Development - The Planning Process
:Problem Solving : Tactical Blueprint & Initiative Development :
Consumer & Shopper Insights : Consumer / Shopper Analytics & Actionable Insights :General Data Definitions :
Fundamentals Of Assortment Planning :Retail New Item Decision Making : Managing Complex Product Assortment (including
Store Clusters):
Fundamentals Of Shelf Management : Promotional Merchandising :Front-End Merchandising :
Foundation Advanced
Competency
Retail Merchandising & Service
Product Development & Assortment
Strategy & Business Planning
Analysis & Insights
Blended Delivery
Enabling S&CD: Competency-based Curriculum w/ Blended Delivery Across Levels
Exa
mp
leDo employees have the necessary
information & systems to support the tasks?
Do employees have the knowledge, skills, etc.
to do the tasks?
Does the decision making process reflect knowledge, experience and
have a bias for action?
Do the reward & recognition programs create the desired
behaviors?
Does the structure permit the right people to work
together on the tasks?
Are specific tasks clearly identified which will lead to achieving the
strategies and goals?
Do employees have the necessary information & systems to
support the tasks?
Do employees have the knowledge, skills, etc.
to do the tasks?
Does the decision making process reflect knowledge, experience and
have a bias for action?
Do the reward & recognition programs create the desired
behaviors?
Does the structure permit the right people to work
together on the tasks?
Are specific tasks clearly identified which will lead to achieving the
strategies and goals?
Category Management Share Group May 2009 © 2009 The Partnering Group, Inc.26CPG Cat Net
Advanced
Mastery
Foundation
Demonstrates base level of capability.
Has the potential to perform adequately.
Applies basic knowledge to daily work.
Demonstrates an advanced level of capability.
Has the potential to perform at an above average level.
Can execute all primary tasks and functions.
Decision-making reflects application of knowledge.
Application of learning produces desired results.
Demonstrates extraordinary level of capability.
Has the potential to be the top performer and resident expert.
Demonstrates mastery of best practices.
Applies deep knowledge to the most challenging situations with breakthrough results.
Has the potential to be seen as a thought leader in the industry.
Is able to bring strategic insights to opportunities.
• New personnel (all key functions)• Category Managers• Buyers• Account Executives• Analysts• Select Support Staff
• Category Managers• Sr. Buyers• Sr. Analysts• Account Executives• Customer Marketing Personnel
• Category Managers / Director-VP’s• Sr. Buyers / VP Merch• Sr. Analysts, Director Insights• Sr. Account Execs/ Regional VPs• Sr. Marketing personnel
Test
Test
Practicum
TPG’s Consumer Products Leadership Program
Category Management Share Group May 2009© 2009 The Partnering Group, Inc.27CPG Cat Net
Is your team ready for the next wave?
Thank you!Jeff Clow
(940) [email protected]