Category Management  

Category management is term used to define a marketing strategy where a full line of products (not the individual products or brands) is managed as a strategic business unit (SBU). It is based on the concept that a marketing manager is better able to judge consumer buying patterns and market trends by focusing on the entire product category. Using category management and business planning enables a firm to plan and manage its retail goods for the next season and beyond. Category management can most simply be explained as follows: Under the leadership of a category manager, using cross-functional teams to identify product categories and drive category performance improvements through the application of categories as strategic business units. The goal of category management is to improve the operating results of a retailer and its associate partners - including manufacturers, distributors and brokers by focusing on the consumer. Products are more than just goods being sold; they play an important strategic role as a category or part of a category. Through the category management approach, a group of specific products are treated as a strategic business unit. A category is a distinct and manageable grouping of products that consumers perceive as interrelated and possibly interchangeable in meeting their needs. Under this premise, category management has some key assumptions:

• The process involves many interrelated activities.
• The process must be flexible in order to fit particular companies and situations
• The process reaches beyond the retailer to include its partner manufacturers, distributors, wholesalers and brokers.
• Reducing costs is not the end goal - goals should focus on the consumer while improving results and simultaneously improving the relationships between trading and servicing partners.
• A solid infrastructure - including people, process, information systems and measurement tools - is necessary to attain goals.

Category management has several key focus areas such as efficient product introduction, efficient product promotion and efficient store assortment.