Category management can be turned from a complex activity into an everyday process from which even the smallest firm can benefit, said Procter & Gamble's Luc Demeulenaere.
An ECR Europe project team comprising Coca-Cola, Kraft, P&G, Portuguese retailer Sonae, Tesco and Unilever has been trying to devise a practical and pragmatic category management approach.
The working party has not been able to come up with a "one size fits all" solution.
But their new process which has been "sense checked" for the past five months in European pilots allows companies to choose how much detail they get into with their category management analysis.
Demeulenaere said: "The most straightforward analogy is based on Lego where we have identified three levels, each answering the same business questions, but delivering a different complexity."
The first, or Duplo, level can be used where there is poor market data, where companies have limited resources or where the category is not a priority for the retailer. Level two Lego can be used for core categories that are not the focus of in-depth reviews.
The third level or Technic Lego has the greatest depth of analysis to deliver detailed recommendations that are often highly tactical in nature.
Demeulenaere said: "Anybody who wants to do category management will choose the level most applicable to the task in hand. For example in one of our pilots, Tesco chose to conduct a Duplo analysis with Gillette because the market data was limited. There, Duplo alone provided a new fact base for clear category decision making."
On top of that, the team has devised guidelines covering the most important phases of any "everyday" category management process, namely: retailer strategy, category plan development, implementation and review.
The pilots demonstrate how this new process can help companies focus on the critical issues, so cutting the amount of time spent on analysis. They can also build category plans with fewer people and in less time.
l As part of the move towards more simplified category management planning, ECR Europe is trying to develop common definitions of product classification.
This could ultimately resolve the problems created today by the fact retailers and manufacturers are all too often speaking a different language when it comes to data about markets or categories.
Work also continues to develop open IT standards allowing the automation of key parts of the CM process.
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