Category Management Implementation in The Retail Market of Fast-moving Consumer Goods
Category Management Implementation in The Retail Market of Fast-moving Consumer Goods

Author(s): Larisa Mikhailovna Kapustina, Andrei Drevalev, Karolina Ilyenkova
Subject(s): Politics / Political Sciences, Social Sciences, Economy
Published by: Vysoká škola ekonomická v Praze
Keywords: category management; category manager; categories; retail trade; retail chain; assortment management.
Summary/Abstract: Purpose: The paper aims to evaluate the impact of the transition from the traditional model of assortment management to category management on the growth of turnover and profit of the retail chain. It proposes empirical assessment of the effects of the category management in a regional retail chain and testing the implementation of eight stages recommended by the European Customer Response System. The study aims to identify the stages of category management implementation in terms of the best satisfaction of customer needs. Design/methodology/approach: The paper reflects the results of consulting project about category management implementation performed by the authors for a regional retail chain, comprised of 30 stores, 15 categories and 24,000 items of fast-moving consumer goods. The authors have tested the role analysis method for determining the composition, roles and strategies of product categories based on internal statistics of the retail chain “Plus” on sales volumes per month and retail markup for each product category for the years of 2015-2017. The analysis of category management implementation is based on the findings and the data collected from the interviews with the category managers.Findings: The case study showed that the category management implementation resulted in the increase of profit. The implementation process was accompanied by restructuring of the company's organizational structure. It turned out that the most difficult part was the process of determining the composition of goods within a category based on the customers’ preferences. The method of role analysis of categories proved its effectiveness in optimizing the roles of categories during the analyzed period. Future research studies are aimed at finding a methodology for selecting Category Captains in cooperation with manufacturers.Research/practical implications: The implementation of category management relied on the stages suggested by the European Customer Response System. Six stages out of eight were carried out. It is required further elaboration of each stage. The results of the study and the suggested methodology can be applied to retail chains of various sizes and in different commodity markets.Originality/value: The authors suggest strengthening the client-oriented approach to the developing the product categories. Thus, an additional stage is added to the classical scheme – developing a marketing plan in cooperation with the supplier on the basis of the 4P concept.

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