Retailers following Category Management Best Practices as defined by the US Food Marketing Institute (FMI) conduct an annual assessment and category plan which includes fairly standard measurements such as revenue and profit trends, market share and SWOT (Strengths, Weaknesses, Opportunities, Threats) analyses. The category manager presents the category strategy to the retail executives along with the expected investment and ROI for the year’s plans. Good examples of category strategies would include:

    Appealing to more bargain shoppers through new assortments, prices or promotions, building a compelling full service solution by bundling or merchandising partner products together, building a larger overall dollar transaction by carrying larger sizes and dropping smaller sizes, competing more effectively with convenience stores and the dollar store channel by carrying more grab-and-go sizes, Become a desitination for institutional purchasers by carrying jumbo packs and offering special pricing, etc.

    These strategies are then translated into specific actions that need to be executed to support the strategy.  Examples include:

    ◆ Assortment Actions – to distribute more low price goods than are available at competitors, more private label goods, more imported items, more high-end items, more flavors, sizes, bulk packages, etc.

    ◆ Pricing Actions – to uniformly raise or lower price points, to create multi-pack pricing offers, to trigger prices off key competitors, to adjust prices to conform to a new channel threat.

    ◆ Promotional Actions – to increase or decrease the number of promotions each year, to vary promotional plans by season, to change promotional vehicles, to integrate promotional messages across categories or with key vendors, to create separate promotional vehicles, to increase or reduce the number of loyalty-based promotions, to create a category club or community that focuses on the category.

    ◆ Merchandising Actions – to increase or decrease the amount of space within the store/website/catalog devoted to the category, to change the merchandising to highlight particular items or segments, to change the location of the category within the store/website/catalog to emphasize or deemphasize the category, to create new adjacencies and tie-ins with ancillary partner products.