CATEGORY MANAGEMENT BOOM FORESEEN

WASHINGTON (FNS) -- "Manufacturers and their customers are on the verge of a category management explosion that will take the industry to the next stage of category and volume growth, and improved consumer satisfaction," said C. Manly Molpus, president and chief executive officer of the Grocery Manufacturers of America here."Category management takes the consumer as its starting point, and brings

WASHINGTON (FNS) -- "Manufacturers and their customers are on the verge of a category management explosion that will take the industry to the next stage of category and volume growth, and improved consumer satisfaction," said C. Manly Molpus, president and chief executive officer of the Grocery Manufacturers of America here.

"Category management takes the consumer as its starting point, and brings retailers and manufacturers together to build categories, combine knowledge and expand business opportunities," he said in a presentation here at Stamford, Conn.-based ACNielsen's Category Masters Conference.

Molpus' message to the audience of manufacturers and retailers was that creative trade partnerships in category management, enhanced by data sharing, will be essential for productivity and growth.

"Category management is a critical business survival skill that must be integrated into our new business agenda," he said. "When supermarkets compete with discounters, drug stores, gas-n-go's, restaurants and a host of other channels for the consumer's dollars, it means trade-partner thinking must adjust to these new competitive realities as well. Category management ultimately forces trading partners into this consumer mind-set."

Citing successful brand manufacturer category-management plans from food, beverage, health and beauty care and general merchandise, Molpus said each success story shares key traits:

Solid information creatively used. "Information sharing and data management form a foundation for meaningful partnering. The companies that share this information to spot trends, anticipate needs and create or redefine categories are the winners!"

Partnerships that become relationships. "Category management is a process, not an event. This means manufacturers must choose retailers who understand their communities and consumers, and have the technology, information systems and desire to lead. Retailers must choose manufacturers who bring knowledge, expertise and the right systems approach."

Constant consumer focus. "If we take our eye off the consumer, we lose. We must constantly ask what value we add to the consumer's experience. From product design to checkout, we must all force ourselves to face this challenge."

Leveraging brand value. "Brands are delivering dollars and dividends for savvy retailers, and this is true even in categories in which there is a strong private-label presence."

Molpus predicted category management will likely to be "a blend of new information, new data sharing, new relationships and new consumer values. And the smartest partners will get there first, and claim the new markets for their own.

"It is clear our industry's ability to create, share and utilize information will be the key to our success. To date, we've struggled to utilize basic purchase and panel data. And typically, this information focuses on the who and what of sales.

"The new focus on data will be the 'why.' Why are consumers choosing a product or a category of products? Why are they shopping in this or that channel, or in one part or another of the store? Why do they hate or love the purchase experience itself?" he said.