What is a Category Manager?
Category Managers, also called CATMAN, are divided into two types:
· Retail Category Manager
A Retail Category Manager is a person in charge of assessing and implementing which product categories are the most interesting to the brand’s customers. Therefore, the ones available on the shelves. This person works hand in hand with Trade Marketing Managers at the point of sale. The point is to increase that product’s sales. Additionally, they manage the signage and explanatory information relating to those items.
For example, in the bakery department in a supermarket, there will be a Retail Category Manager in charge of the acquisition of the products. They will also be responsible for their sales and marketing strategies. They analyze current and future trends to offer their clients seasonal or trendy items that will sell best.
· Indirect Category Manager
An Indirect Category Manager is in charge of purchasing the goods or services in the supply chain. These items are necessary to achieve the objectives of the established strategic plan. They usually have previous knowledge of the specific sector in which they work (IT, tourism, etc.)
What is the difference between a Buyer, a Product Manager, and a Category Manager?
We have already seen the main functions of the two types of Category Managers, but, what tasks are the Buyers and the Product Managers entrusted with?
· The Buyer
It is the person in charge of buying goods and services for a company through suppliers already established in their database.
For example, if a company needs to purchase shopping baskets, the buyer will have to talk to an established supplier and manage the purchase from beginning to end. They will also need to provide all the documentation of the process. To acquire new suppliers, they typically get help from the Senior Buyer.
· The Product Manager
It is the person in charge of managing and maximizing the profitability of a product from its creation until the end of its life cycle. He is in charge of the success of this specific product based on the 4 Ps:
Product, Price, Place, and Promotion
The Product Manager works hand in hand with other departments and interdisciplinary teams to collect the needs of each of them. He/she will transform them into feasible solutions to implement on the product.
Therefore, the Buyer receives orders to buy necessary items for the company. The Retail Category Manager looks for the items that will most interest the brand’s clients and, the Indirect Category Manager searches for the goods or services necessary to achieve the strategic objectives of the company. The Product Manager is responsible for the management of the creation of new products or services and maximum profitability.
· In Summary
– Buyers receive orders to buy necessary items for the company.
– Retail Category Managers look for the most interesting items for the brand’s customers.
– Indirect Category Managers search for the goods or services necessary to achieve the strategic goals of the company.
– Product Managers are in charge of the development of new products from their creation until the end of their life cycle, implementing the guidelines given by the different departments involved in the process.
Working Methodology of a Retail Category Manager
The Retail Category Manager is decisive for a successful Point-of-Sale (POS). It’s an 8-step methodology:
· Category definition:
To define the product categories and their target audience
· Role of each category:
Definition of what needs to be covered in each category based on 4 main roles:
- Destination: this is the category of products that bring customers to the store. These categories position the company. For example, a basic quality fashion company will attract their customers by the category of basic shirts that are the brand’s flagship.
- Routine: usual purchase items that could be bought in any other establishment, but for convenience are purchased in the establishment to which the consumer has been attracted.
- Convenience: items normally forgotten by the customer at the time of the purchase. They are usually strategically located at the exit or at the payment area.
- Occasional: the category that takes advantage of seasonality.
- Development: categories that want to be incorporated into the regular shopping list and are given special attention during their development phase.
· Analysis of the following points:
- Consumers: when, how, and why consumers buy in a certain establishment.
- Market: competitive and brand positioning
- Point of sale: prices, benefits, and rotation
· Reports:
Goals and KPIs: ROI, recurrence, sales per square meter, conversion rate, etc.
· Strategies:
Development of strategies to achieve the goals set for each category: upselling, increase the number of items per ticket, etc.
· Tactics:
Specific actions through the price, promotions, and proper management of the supply chain to achieve the aforementioned strategies.
· Execution:
Management of the tactics carried out at the point of sale with the final customer.
· Evaluation:
Report of results of the executed tactics and analysis with the set business plan.
Challenges of a Category Manager
To start with, the biggest challenge for an RCM is to maximize the profitability of the Point of Sale. The high competitiveness and dynamism in the shopping centers make this issue difficult. In addition, consumers and trends change dramatically, forcing Category Managers to be flexible and act in the PDV quickly.
On one hand, the RCM has to take care of the strategy that defines each category. He also has to have his role and planning in mind. Besides, he/she has to take care of the communication between all the partners of the strategy to obtain the necessary results during the implementation. Consequently, he/she will be able to measure the results.
On the other hand, RCT doesn’t have time enough to manage the product categories in the POS, since they have to deal with ordering, meeting suppliers, writing advertisements, etc. RCTs have to focus on managing daily tasks without having time to establish a strategic plan for the future.
Summing up, we can see how the figure of the category manager fulfills a vital function in the process of selling a product. Although, in many cases, it is not clear what functions they perform. Other jobs can overlap tasks, as many times they are not clear.
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