#Post 1 - Introduction to category management
"whys" of category before we get into any "what" and "how"
Dear Aspiring category manager,
In the previous post, we have discuss why category management could be an exciting career path for you. We have also outlined the skill-set that one should have to do good in the role.
To get the newsletter directly to your inbox,
Now off to the task in hand,
Dear Category Manager,
Hope you are enjoying your new role in category management. If this is your first time in this role, you would like to understand the significance of your role in the organization better.
So, Let’s get straight to it.
Businesses all around the world sell bunch of things. Diverse product lines. Sometimes multiple unrelated businesses or products within overall umbrella.
Things could get messier. Managing products category wise simplify this messiness. Although bundling products into categories seems very rudimentary and an obvious way of running a business, the concept could be new and not-so-much self-explanatory as presumed for newcomers. (Veterans in the Industry, you can skip this part)
So first thing first, it’s important to know “why” behind this strategy i.e. category management.
The benefits of organizing products into categories are :
Category definitions can be mapped to how consumers think and that helps businesses reaching to moving closer to thumb-#rule no 1: THINK LIKE YOUR CUSTOMERS WOULD THINK. KNOW YOUR CUSTOMERS.
During Pandemic times, many consumer-facing businesses have reoriented their product portfolio as per the voice of consumer.
Quoting from Sunil Kataria, CEO of Godrej in one of the interview with Business line : “We have a strong innovation pipeline and a flurry of items in categories such as air care and fresheners, home care, insecticides ready. However, the lockdown happened and now we are seeing a huge change in which consumers and users are approaching hygiene as a category. Their health habits are changing too,”
This sentence clearly laid down the benefits of thinking products as a category and being strategic in defining product portfolio for the businesses. It has to be aligned with consumer behavior and mindset.
When you group bunch of products, it becomes easier to think strategically for one category rather than thinking about dissimilar products randomly.
Streamlining the businesses into units that share similar traits in terms of supply-chain, marketing
The way you manage daily products from supply-chain perspective or marketing perspective would be different from snacks even though both are subcategories of grocery as a broader category. The purchase of snacks are driven sometimes by combination of hunger pangs + binge watching or party mood etc. , while daily products such as milk are daily items, purchased quite frequently and mainly traditionally bought in the morning. Shelf life of snacks is different than dairy products. etc. etc.
Now this changes the whole game. Your communication strategy would differ. The distribution channels would differ. And also the nitty-gritty of your supply-chain.
Thinking “category” will force you to think along the lines of this requirement of streamlining your business processes. This is the key for complexity to Simplicity.
Cannibalizations of your own product line if not grouped well.
As a retailer, it doesn’t make a sense to promote brand A over brand B. You are gaining if your entire product category is growing and not sales of products under one brand umbrella. Hence, you divide your business into categories and category manager will be responsible for category growth. You are avoiding cannibalization that could emerge if you are not thinking category wise and resource allocation accordingly.
Talking about resourcing allocation : Challenges of each category is different and focusing on challenges pertaining to one category is easier to develop as it requires focus, expertise, and perspective that comes with the experience of running one particular category.
In case you think there are other benefits as well, please do share. would love your inputs.
So well, Happy thinking category :)
Till then, Take care and have a safe and healthy life.