For manufacturers, the process of implementing category management requires a new management focus. Instead of emphasizing individual brands and product lines, manufacturers must demonstrate how products can lead to category growth.
There are three areas in which you must be proficient to succeed at category management:
1. Advanced information technology.
2. Sophisticated business analysis.
3. Strategic business manager skills.
The process of category management will result in a higher level of retail contact. Sales calls will be more strategic and conceptual. Your sales team must be capable of developing strategies for growing entire categories, making objective and workable recommendations and focusing on profits and volume.
The skills necessary for implementing category management are specific to both the process itself and the results of category research.
Terminology: How many members of your selling team truly understand DPP? What is the accepted standard today (the Food Marketing Institute model) and why? How does it work? What is the "category management process?" How does it differ from "preferred supplier" or "prime vendor?" What is a "fact-based selling program" and why is it important to the category management process? What is a "Retailer Profitability Analysis?"
Category Knowledge: There are five areas of specific category knowledge your selling team will need: (1) Trade Perceptions; (2) Retail Conditions; (3) Consumer Dynamics; (4) Market Structure, and (5) Category Profitability.
Selling Tool Proficiency: All tools must have a common purpose: To effectively transmit the knowledge you have developed in your category management program to customers. How elaborate these tools are will depend on the nature of your research results, the sophistication of your sales force, and your budgets.
The two main reasons why category management efforts fail are, one, lack of planning and, two, neglecting education. Both of these efforts can be avoided by the development of a comprehensive training plan.
Here's a checklist for success:
Effective category management programs require more than just putting the "category trends" chart of the latest retail movement reports at the front of the business review deck.
Defining the category properly is critical. The consumer perspective must be thoughtfully factored into the equation.
Category management information should help retailers manage categories more effectively.
Category management requires a full commitment from manufacturers to make credible recommendations on such matters as profitability and category growth.