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What is Category Management

by Master Fool

How often have you stumbled upon this term category management in the FMCG (Fast Moving Consumer Goods) retail environment? Regardless if you have heard or have not heard of it before, it is essential for you to understand what category management is all about as retailers around the world practice this as part of their framework when deciding on displays and other factors. So what is category management? Category management in the FMCG retail environment simply means organizing the categories within each business unit with the aim of giving value to the customer.

Have you ever been to a supermarket with the objective of buying a pack of instant noodles only to find yourself lost in the sea of different brands, flavours and pack sizes that are being offered to you? How fast can you spot your intended purchase? Or if you would like to try something different from what you are normally purchasing, how quickly can you spot a new flavour or brand? Or do you just find the shelf a whole big mess of colours? What you have just thought through are just some of the considerations in the category management

So here are some of the essential things that you need to know in the application of category management in the FMCG retail environment

Products in each category are arranged based on customer decision making process

Depending on each category, some categories are brand loyal hence the products are placed in cluster based on brand preference first vs some categories are not brand loyal but the first thing that comes to mind is the functionality hence the products with similar functionality are placed together instead in a cluster

Products are analysed and given display based on the sales and shelf take-off

In order to reduce the situation of hiring more people to restock the shelf and out of stock situations, one of the deciding factor how much space should a product be given depends on the sales and off-take on shelf ie if this product has been giving 1 facing, how long does it take to sell off everything

Product assortment and variety

While it is great to have various of assortment to offer up to consumers, some assortment sales off-take is much slower than the rest. Retail  buyers often review the assortments and remove slow moving products to either give more space to profitable, higher sales or simply new products

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