Merchandise Management

The Power of Optimization

Your Experience- Buyers rejects you. They do not understand or appreciate your products.

Your Solution- Learn to understand and use Category Management to your advantage and earn money.

Category Management is the process of managing a retail business with the objective of maximising the sales and profits of a category. -To help retailers and suppliers implement Category Management quickly and effectively, or improve their existing processes RETAIL VISION is required.

Basically, Molton Brown has broken down their products into the categories as follow:

1. Gifts
2. Men
3. Bath & Body
4. Hair
5. Make-up
6. Skin care
7. Hand Wash & Lotion
8. Candles & Scent
9. Travel
10. Old Friends

Where does my product fit in?

we suggest-

zero in on the category your product belongs to by undertaking field research at the stores that belong to the chains you want to contact

then

register ALL the products and their street prices that the selected retailer has in the assortment that could be in the category

after

start focusing on the chains with the largest number of products in your category as they(the stores) obviously understand your product best and are more likely to test your product

Developing your Category strategy

Once you know which category (and cell within the category) your product belongs, you can start developing your strategy.
Focus on one of the following 3 strategies:

1. Pushing out competing product-

Evaluate the strengths and weaknesses of your product compared to a specific competing product, in Molten Brown's case, compare the sales of the different scent and flavours in the category that the customer prefers.-All retailers are looking for category killers. A category killer is a product that generates almost all the sales in a category.

2. Expanding a cell (on behalf of another cell)

not all perfumes and scents and body care products will go in the store, hence we can increase the hype on a certain non-moving item and make it seem as a whole collection in itself.

3. Establishing a new type of product (and category).

some products after certain time do not really fit into the existing category they were originally placed in. Selling-up strategy is an old trick where retail attracts customers with low prices that often mean lower profits.

Category ambassadors

So even though it is still the retail chain that will decide if your product will be part of the assortment a category ambassador can actually help by becomming YOUR ambassador.

all about saving cost!!!

By analyzing detailed spending, transactional and pricing data, and continuously monitoring the supply markets, we can

1. routinely identify and implement solutions to further reduce maverick purchasing
2. drive incremental unit-cost reductions through additional sourcing, appropriate specification changes, substitution, better demand management
3. actively target cost-avoidance opportunities in appropriate commodities.

Rationale behind the category management

• Due to customer fragmentation, category management can tuned to various customer needs
• Ease of searching a product
• Creating a pleasant atmosphere so that customers will stay longer
• Assist promotions planning
• Assistance with consumer behavioral/shopping research

at the end it is all about the categories being defined by the customers and making it easier for the customers to get an overview of the products available.