CATEGORY MANAGEMENT PROCESS

MEN’S CASUAL SHIRT ( SPRING-SUMMER)

Submitted by:
Ashim
Ambrish
Deepshikha
Deepmala
Category definition

men's casual shirt

combination
woven knitted ( woven and knitted)
 woven

cotton linen
solidswool
Yarn-dyed
 cotton

Regular

Slim Straight hem-line

Apple hem-line Regular

With slits Without slits
 Yarn dyed

checks stripes

gingham madras horizontal vertical diagonal

 knitted

single interloc double pointell

jersey k knit e pique
 single jersey

cotton polyester
ANALYTICAL TOOLS USED TO
ASSIGN ROLES TO A CATEGORY
 Basket analysis
 Frequent shopper data
 House-hold panel data
 Point of sale data
 Occasion analysis
 Fair share and demand gapping
 Financial analysis
CATEGORY ROLES
Destination Preferred Convenience Occasional
categories categories categories category

Large dollar  large dollar Average dollar Seasonal or

sales sales sales occasional
High High Average dollar sales
household household household Average
penetration penetration penetration household
High purchase High purchase Infrequent penetration
frequency frequency purchases Seasonal or
Differentiated within a occasional
from particular purchase
competitors store. frequency.
 CATEGORY ROLES
Destination categories
 Knitted ; single jersey ;printed shirts

Rubber print
Digital print

Heat transfer
Woven ; printed
 Digital
 Screen
 Rubber
Preferred categories
 Woven; regular fit; slim fit ; flat roll collared ;
solids
Woven; regular fit ; yarn dyed; stripes
 Horizontal
 Vertical
 Diagonal
 Knitted ; single jersey ; solids
 Knitted ; single jersey; yarn dyed; stripes
 Horizontal
 Vertical
 diagonal
convenience categories
 woven ;slim fit; apple hemline; yarn dyed; checks
 gingham
 madras
 knitted ; Pointelle ; pique;
 boat neck
 y neck
 Flat roll
 woven ;slim fit; collar
 mandarin
 detachable
Occasional/ Seasonal:
 woven ; slim fit ; embroidered
CATEGORY STRATEGIES
 Involves the development of marketing strategies
for the category.
 Category marketing strategies can be classified into
the demand-chain and supply-chain strategies.
 The demand-chain strategies are targeted at traffic,
profit, transaction, image, turf, cash and Excitement
 The supply-chain ones focus on merchandise flow
and transaction cost
 One of the tools that retailers can use is the growth
share matrix : Each of the category needs to be
plotted on the basis of its sales growth and share in
the total business.
SHARE/ GROWTH DECISION
MATRIX
low
sleepers winners
Woven yarn dyed
checks Woven solids
Knitted checks Woven yarn dyed
Woven slim fit stripes
mandarin, detachable Knitted single jersey
collar solids and yarn dyed

Market
low high
share

Woven embroidered Knitted single

shirt jersey ;printed shirts

Questionables Morning star

high
Market
growth
CATEGORY TACTICS
Once the strategies for the category have been
selected, the next step is to determine the
 assortment
 pricing,
 promotion,
 shelving and
 supply-chain tactics

required to ensure that the strategies Work.

 DESTINATION CATEGORY ROLE
Assortment tactics
Style Round Flat roll collar V- neck Boat neck
neck
construction Woven / Woven /knitted Woven /knitted Woven /knitted
knitted

Prints Digital Digital /rubber/heat Digital Digital

/rubber/ transfer /rubber/heat /rubber/heat
heat transfer transfer
transfer
Fiber Cotton/li Cotton/linen Cotton/linen Cotton/linen
composition nen

colors Green Green/red/white Green/red/whit Green/red/whit

/red/ e e
white
sleeve Half/full Half/full Half/full Half/full

size S,M,L,XL S,M,L,XL S,M,L,XL S,M,L,XL

SKU’s 288 units 288 units 288 units 288 units

 Create as many as sub-categories as possible to
increase opportunity
 Add club packs as necessary
 Create high quality private label
 Maximum Variety vs. Market
Pricing tactics
 Top 10 SKUs below lowest competitor everyday

Shelf presentation
 Prominent aisle location
 Located at the back of the

store
 Vertical color blocking

Destination category
Promotion
 Match competitors if they are aggressively
promoting
 Avoid out of stock
 Feature and display 52 weeks a year
 Direct mail advertising
 SMSes
PREFERRED CATEGORY ROLE
 Assortment tactics

style solids stripes

design plain Horizontal/v
ertical/di
agonal
construction Woven/ Woven/
knitted knitted
colors White / green/
purple/ white/
green / purple/
red red
sleeve Half/full Half/full
size S, M , L, XL S,M,L, XL
SKU’S 64 Units 128 units
 Broad variety
 Decrease the number of national brands and
eliminate sizes that have relatively low volume.
 Create high and low quality private labels
 Equal Variety versus Market
Pricing tactics
 Top 20 SKUs equal to lowest competitors
everyday

Shelf presentation
 Large section
 Side wall of the store
 45○ customer sightline

Preferred
Preferredcategory
category
Promotion Tactic
 Match competition if they are aggressively
promoting
 Feature & Display 26 weeks a year
 Newspapers
 Direct mail
CONVENIENCE CATEGORY ROLE

Assortment tactics
STYLE CHECKS MANDARI BOAT Y-NECK FLAT
N ROLL
Construc woven woven knitted knitted knitted
tion
Colors Green/w Green/w Green/w Green/w Green/w
hite/red hite/red hite/red hite/red hite/red
/purple /purple /purple /purple /purple

Design Gingham Plain/stri Plain/stri Plain/stri Plain/stri

/madras pe pes pes pes

Sleeves Half/full Half/full Half/full Half/full Half/full

Size S,M,L, S,M,L, S,M,L, S,M,L, S,M,L,
XL XL XL XL
XL
SKU’S 64 Units 64 units 64 units 64 units 64 units
Assortment tactics
 Decrease assortment by avoiding redundancy
 Prune low profit/ low volume items
 Create lower quality private label for high volume items if
economic return can be shown.

Pricing tactic
 Never use items for EDLP
Convenience
 Raise pricescategory
to increase margins
Shelf presentation
 Decrease space allocated to the category
 Place high margin items in prominent positions
 Do not display category
 Do not feature category in ads

Convenience
category

Promotion tactic
 Promote only budget buys where margin is high on promotion
 Limit promotional pass through
 Signs both internal and external to the store
 Informative in-house displays of merchandise
SEASONAL CATEGORY ROLE
Assortment tactics
 Time variety
style embroidered basic
construction woven Woven/kni
tted
Fibre Cotton/linen/ wool
composition wool
colors Green/red/wh Green/red
ite/purple /white/pur
ple

size S,M,L,XL S,M,L,XL

Sleeves Half/full Half/full
SKU’s 96 units 64 units
 Pricing tactics
 Non-inflammatory
 Raise price points where possible
 Below average operating Expense during non peak
period.
Shelf presentation
 Minimum space required
 Avoid using major displays
 Use shelf talkers to push more profitable items
Promotion Tactic
 Decrease promotional frequency
 Use of flyers
 In store promotion
CATEGORY ASSESSMENT
Category
Subcategory
Segment
Brand
SKU

Supplier
Share and
efficiency

Consumer Distributor
Buyer profile and Contribution
Purchase behavior And productivity

Market
Market share
And
benchmarks

Category assessment from four perspectives

Economic Performance
 It includes the profit generation by the categories
based on sales, inventory, space, and people.
 It also encompasses the assessment of the
performance of suppliers and the processes
employed by the retailers for managing the
categories.
Perceptual performance
 It includes the assessment of the perception of
customers in terms of their roles in creating a store
image and patronage.
ASSESSING ECONOMIC
PERFORMANCE
 Gross Margin Return on Inventory (GMROI)
= Gross margins
Average Inventory @ Cost
 used to evaluate departments, merchandise

classification, vendor lines, and items.

 compares and evaluates departments with
different margin/ turnover profiles.
 Items with higher GMROI are allocated more
space.
Sales-to-stock ratio:
= net sales
average inventory at retail

The Inventory turnover ratio:

= COGS
Average Inventory @ Cost
Gross Margin return on Floor Space:
= gross margin
space provided
Gross margin return on Persons employed:
= gross margin/ persons employed
ECONOMIC PERFORMANCE

Assumptions
 Size of store is 1000 sq ft
 No. of employees working in the store is 20

 No. of SKU’s is 4512

 Total sales= 3000
 Total sales : Rs 30,00000

 Destination category constitutes(7%) : 316

 Preferred category (60%): 2707
 Convenience category(20%) :902
 Seasonal/occasional category(13%): 587
 Size of store is 1000 sq ft

 Non selling area ( 8% ) : 80 sq ft

 Selling area : 920 sq ft
 destination category (7%) :70 sq ft
 Preferred category ( 60% ) : 600 sq ft
 Convenience category ( 20%) : 200 sq ft
 Seasonal / occasional category ( 5%) :50 sq ft
PRICE RANGE OF THE
CATEGORIES
 Destination :knitted =Rs 799 – Rs 1499
woven= Rs 1499- Rs 2499
 Preferred : knitted= Rs 699 – Rs 1199

woven = Rs 1099- Rs 1199

 Convenience : knitted = Rs 599 – Rs 999

woven = Rs 799 – Rs 1099

 Seasonal/occasional: Rs 799 –Rs 1999
Sr. No. Particulars Amount Per Unit
(Rs.)
1 Retail Price s 799
2 Cost of goods 559
Gross margin (30%) 240
Discounts and allowances
3 Cash discount 10
4 Merchandise allowances 10
5 Others 5
Total 25
Adjusted gross margin 215
Direct distribution costs
7 Warehouse space 0.5
8 Warehouse handling 1.0
9 Warehouse inventory costs 2.0
10 Transportation to store 1.0
11 Store space costs 3.2
12 Store inventory costs 4.0
13 Store handling costs 6.0
Total Direct product cost 17.7
14 DPP 197.3