Different roles in the sales area – Nielsen workshop about category management

How can the performance of a category can be improved in store sales? Paris Galanis, Nielsen’s regional category manager consultant gave answers to this question at a 2-day workshop in Budapest, in November (the event was so popular that Nielsen will organise another such workshop in the spring). Different categories play different roles in store sales. For a retail company it is a strategic question how the different product groups are categorised and managed. From the assortment of a store 5-7 percent of categories are called ‘target’ categories: these are the products that make consumers visit a store, e.g. bread, meat and dairy products. ‘Basic’ or ‘routine’ categories constitute 55-60 percent of the shop floor, e.g. soft drinks, beer, pasta. ‘Occasional/seasonal’ categories (e.g. ice cream on a stick) make up 15-20 percent and the ‘convenience’ category (e.g. chocolate) represents 15-20 percent. Paris Galanis used five case studies to show the 36 participants from twenty domestic FMCG companies what modern category management is about. The case studies were developed in cooperation between retailers and manufacturers. Nielsen’s expert pointed out that the aspects of pricing may differ greatly across the different categories. He divided category strategies into seven groups, to which individual category management decisions belong. He suggested the following category strategies for creating the assortment of a store: 1. Sales building 2. Transaction building 3. Cashflow increase 4. Profit increase 5. Defensive strategy 6. Excitement increase 7. Image improvement. Paris Galanis told that all this was not simply theory because by defining the goals to be achieved implementation can be controlled, making the efficiency of category management measurable.