The Category Management Process Driving collaboration in General

The Category Management Process Driving collaboration in General Merchandise categories Presented by: Eric Togneri Date: 12/24/2021

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A quick introduction to CPG Cat. Net… Presenter: Eric Togneri Principal, CPG Cat. Net

HBW and Food and Beverage companies score the highest ratings in Category Management… Which Manufacturers Best Practice Category Management? GM is noticeably absent from this list Source: Cannondale Associates, Powe. Ranking Survey 2005

Category management is important to retailers… % retailers rating category management “very or extremely important” Channel Ratings Overall Rating Grocery 86% C-Store 83% Mass 82% Drug 65% Club 67% Source: Cannondale CMAR Study 2004 82%

Category Management process has evolved to an improved collaborative process… Past Category Management Future Marketing at Retail Category Definition Category Role Investigation Fact Finding Measurement Case Building Category Assessment Category Scorecard Category Strategy Category Tactics Plan Implementation Category Review Execution Path to Success

This transition is leading to marked changes in supplier / retailer collaboration… Category Management Marketing at Retail Category Definition Category Role Canned Custom Investigation Fact Finding Measurement Case Building Category Assessment Category Scorecard Category Solution Category Strategy Execution Category Tactics Plan Implementation Category Review Generic Differentiate Path to Success

Category Management process combines collaboration, behind the scenes work, and retail execution to achieve results… Marketing at Retail Approach Finding out what is important Investigation Fact Finding Plan to Win Look to the data for answers Measurement Continuous Improvement Case Building Execution Making it Happen

Investigation leads to common understanding of the retailer objectives… q It is very important for retailers to know that suppliers fully understand their goals and objectives q Conducting a dialogue where investigating and aligning with retailer objectives is evidence of a suppliers commitment q This is the type of approach that builds credibility and collaboration for the supplier and the retailer q A more solid direction and better plans are then built on a solid foundation

Investigation can be both formal and informal… Formal q Conducting a meeting where the sole purpose is understanding the retailer q Integrating into the agenda on formal meetings and conversations Informal q Investigation is a mindset, take the opportunity whenever it presents itself

How the formal investigation meeting works… Who attends… q The appropriate decision makers from merchandising, marketing and logistics. All of the key players should be involved What it is… q A minimum of one hour meeting, ideally longer with clearly defined purpose Where does it take place… q In a place free of interruption How often… q At least one time per year or more often when necessary How to conduct… q Probe and align…. do not raise!

Conduct a post-meeting analysis of retailer objectives and create an action plan… Retailer Objectives Supplier Capabilities Prioritization To build category loyalty Brand loyalty initiative and High consumer understanding To maintain category market share Channel growth initiative Low To improve internal IT systems Out of scope N/A

Fact finding uncovers what information is available to address retailer objectives… q Tap into multiple data sources to uncover insights q q Point of Sale / Syndicated Research Topic relevant research Consumer research Demographic and psychographic research q Bucket all of the relevant insights against the appropriate retailer objectives q Take a step back and look at what the totality of evidence is indicating Investigation Fact Finding Measurement Case Building Execution

Building a good case creates a compelling call to action… q The facts drive the direction of the story q A compelling story is a compilation of facts that lead to a conclusion Investigation Fact Finding q A credible conclusion is a summary of facts Measurement Case Building q A call to action creates a course of direction that should be taken as a result of the insights Execution

The facts of the case are compiled from multiple sources… Retailer Input Uncovered Through Investigation 3 rd Party Data Either Purchased or Public Compelling Case Internal Data Available for Use Sales and Marketing Initiatives

The case for action follows these steps… 5 4 3 2 1 Issue/ Opportunity Retailer Solution Specifics Benefits Action Plan

The presentation of a solid case is simple to follow, well supported and leads to a conclusion… Headline Description Interminable vs. Concise Conclusion

The best laid plans must be executed… q The retailer has to fully support the case and conclusion q A retail plan needs to be put in place that outlines the steps that need to be taken Investigation Fact Finding Measurement Case Building q Responsibilities assigned with strict accountability Execution q Accomplish the plan…so we can measure the results

Measure is the most important step toward continuous improvement… q There is no way to know if you are achieving if you are not keeping score Investigation Fact Finding Measurement Case Building q Make sure that the right thing is being measured q “Measure twice cut once” q Don’t kill the messenger…focus on what the message is conveying and why Execution

There are numerous positive outcomes that will result from measurement… q Category Management objectives are both clearly understood and how they will be measured q Consistent measurement will enhance credibility over time as a track record is established and built upon q Measurement brings the process full circle and provides a bridge to starting the process over again

A true partnership is the confluence of objectives leading ultimately to true collaboration… Retailer Objectives Supplier Objectives Cooperative Retailer Opportunities Measurement Supplier Opportunities Collaboration

The Category Management Process Questions & Answers Presented by: Eric Togneri Date: 12/24/2021