Category management

Summary: Retailers (also known as buyers) employ category management teams and/or category managers to oversee categories of their stores.

What is category management?


Depending on who you ask, the specific definition of category management may change slightly. However, everyone agrees that this term refers to managing different product categories rather than focusing on individual items or brands. Category management involves input and strategy from various retailers and manufacturers so that they can deliver better results for their customers.

Category management began in the late 80s/early 90s so that there could be better collaboration between companies to benefit consumers. If each brand kept its data a secret, it would be impossible for everyone to market and sell effectively.

How do you manage the category management process?

While each company can manage product categories with unique processes, there are eight steps that brands can follow to ensure better category management.

  • Step One: Define the Category – During this step, you need to set parameters for the category, including sub-categories and consumer behavior.
  • Step Two: Determine the Role of the Category – What is the driving purpose of the category? Is it to bring new customers in or to expand your product line?
  • Step Three: Assess the Category – Here is where you look at all the data related to the category to anticipate any changes or trends. This step is the most time-consuming.
  • Step Four: Come Up With a Category Strategy – Once you determine the category’s role, you need to know how you’re going to achieve it. This step lets you figure out how to get from where you are now to where you want to be.
  • Step Five: Implement Your Strategies – Now that you have a game plan, you can start putting it into action.
  • Step Six: Review and Assess Your Progress – The only way to ensure that your processes work as efficiently as possible is to review them in action. Look at your data and see how it changes with various techniques.

Why is category management important?

Managing product categories is helpful because you can work with other vendors more efficiently and deliver better results for your customers. By understanding the entire category, not just your products, you can anticipate trends and add value to the customer experience.

On the back end, category management helps keep your operational expenses relatively lean because you can focus your attention on products and marketing strategies that work. Instead of guessing and taking a shot in the dark, you can align your teams more effectively.

FAQs about category management

What is a category management strategy?

A category management strategy is what you come up with after determining the role the category should play. This strategy needs to be data-driven and specific, such as building more traffic or increasing your profit margin.

What are the four p’s of category management?

The P’s stand for:

  • Product – Make sure that you have the correct number of products within the category. This number is based on the role you choose for that category.
  • Price – The price point can also be a marketing tactic as it can compel shoppers to buy.
  • Placement – You need to work with retailers to ensure that your shelf placement works well for the product category.
  • Promotions – You should develop a long-term promotional calendar for your products to capitalize on various trends and seasonal changes.

What is the role of category management?

Category management is there to help your business understand consumer behavior and make better purchasing decisions. Since your profit margins are relatively slim, category management enables you to keep a leaner and more efficient bottom line.

How Byzzer can help

The CPG industry as a whole is awash with data, and category management relies heavily on it. That said, if you don’t know how to read and digest this information, it’s impossible to develop a cohesive category management strategy. Fortunately, Byzzer has the tools and insight to help you get the most from your product categories. Start a free trial today

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