A categorical imperative

Plan, act, evaluate

A categorical imperative

Phase four sees the creation of an evaluation grid. This scorecard includes elements such as specific targets and benchmarks, which allow companies to monitor how categories develop. For example, destination categories need to achieve at least 85 percent of their sales benchmark to be considered successful.

A process in several steps

The fifth step in the category management process is geared towards strategic planning. This planning sets the basis for the defined sales and category-role targets. The strategy sets forth how companies purchase, distribute and market merchandise in every individual category.

Companies draft specific measures in phase six, which include choosing the right product mix, setting prices, planning advertising campaigns, and defining product placement and presentation. These measures differ greatly depending on the sales format. “Our professional customers expect to find their usual purchases in their usual places,” says Dirk Reichelt. “Impulse purchases are the exception rather than the rule for this target group. That makes it all the more important to place impulse merchandise, such as savoury snacks and the like, at the right places in the store, namely near the entrance and exit of the store and in high-traffic areas.” Further analysis underpins this planning. Retailers then act on the measures in phase seven and use phase eight to re-evaluate categories.