cm shavya n aashu
TRANSCRIPT
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APPLICATION OF CATEGORY MANAGEMENT
PRINCIPLES
SUBMITTED TO:
Mrs. Ritu Malhotra
SUBMITTED BY:
Shavya Taneja 05
Ashish Kumar 25
NATIONAL INSTITUTE OF FASHION TECHNOLOGY, KOLKATA
CATEGORY MANAGEMENT
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Category management is a retailing concept in which the range of products sold
by a retailer is broken down into discrete groups of similar or related products;
these groups are known as product categories (examples of grocery categories
might be: tinned fish, washing detergent, toothpastes). It is a systematic,
disciplined approach to managing a product category as a strategic business
unit.
Each category is run as a "mini business" (business unit) in its own right, with its
own set of turnover and/or profitability targets and strategies. Introduction of
Category Management in a business tends to alter the relationship
between retailer and supplier: instead of the traditional adversarial relationship,
the relationship moves to one of collaboration, with exchange of information,
sharing of data and joint business building.
The focus of all supplier negotiations is the effect on turnover of the category as
whole, not just the sales of individual products. Suppliers are expected, indeed in
many cases mandated, to only suggest new product introductions, a
new planogram or promotional activity if it is expected to have a beneficial effect
on the turnover or profit of the total category and be beneficial to the shoppers of
that category.
THE CATEGORY MANEGEMENT 8 STEP PROCESS
Introduction
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Lifestyle International (P) Ltd, part of the prestigious Dubai based Landmark Group,
started its operations in India with the launch of the first Lifestyle store in Chennai in 1999.
In little over a decade’s time, Lifestyle has established itself amongst the leading retail
companies in India. Positioned as a youthful, stylish and a vibrant brand, Lifestyle offers its
customers not just the ease of shopping but also an enjoyable shopping experience. Each
Lifestyle store brings together five concepts under one roof – Apparel, Footwear,
Children’s Wear & Toys, Furniture & Home Furnishings, Personal Grooming - offering a
convenience of a one-stop shop and a wide choice of national & international brands.
Home Centre by Lifestyle is a one stop destination for Furniture, Home Décor and Soft
Furnishings that truly represent style, comfort and individuality. Home Centre uses a
unique ‘Concept Room’ display model to give customers a practical idea of how each piece
of furniture would look in a particular room.
In keeping with the Group’s tradition of making every shopping experience rewarding and
memorable, The Inner Circle – Landmark Group’s Loyalty program allows members, to
enjoy exclusive benefits and privileges such as reward points and exciting offers. The Inner
Circle is today recognized amongst the leading Loyalty Program in the country with an
ever increasing base of customers. The card is accepted across all Landmark Group Stores
in India including Lifestyle, Home Centre by Lifestyle, Max Fashion, Splash, Bossini,
SPAR Hypermarket, Polynation Food Court, Gloria Jean’s Coffees & The Yellow Chilli
chain of restaurants.
Lifestyle and Home Centre offer a truly international shopping experience, a fact borne by
numerous accolades:
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• Most Admired Large Format Fashion Retailer– Images Fashion Awards 2011
• Most Admired Retailer of the Year - Home & Interiors Category for Home Centre
by Lifestyle from Images Retail for two consecutive years, 2009 & 2010
• ‘Most Respected Company in the Retail Sector’ by Business World – IMRB in
2003 and 2004.
• ‘ICICI – KSA Technopak Award for Retail Excellence’ in 2005
• Lycra Images Fashion Awards for the ‘Most Admired Large Format Retailer of the
Year’ in 2006.
• ‘Reid and Taylor’ Retailer of the Year award for the year 2006
• Most Admired Retailer of the Year – Department Store’ from Images Retail in
2008
CATEGORY : MENS ETHNIC WEAR
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Step 1 - Category Definition
The category does not see high volume of sales but the margins in this category are
high.This section occupies approx 200 sqft of space.
Step 2 - Category Role
This category does not see high volume of sales but the margins in this category are high.
This category fulfills occasional, exclusive requirements and the prices for this category
range from Rs 799 – Rs 5000.
Destination category – Ocassional/Seasonal Category.
Step 3 - Category Assessment –
Market share
Sleepers –
• Kurta pyjamas
Winners –
• Short kurtas
• Long kurtas
Questionable
• Sherwanis
• saafa
Opportunities –
• Jodhpuri suits
Market Growth
Manyawar , a premium brand at Lifestyle occupies a set shelf space that the brand has
purchased for itself.
Their hot sellers are Kurta pyjamas and the space allocation is comparatively higher than
other categories.
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Sizes, L & XL have the highest stocks. M is comparatively lower and S is the least.
Melange, an exclusive store brand has high assortment has higher space allocation.
Most kurtas are hung on waterfalls with medium sizes displayed in the front and
successively – L, XL, XXL & S. While the pyjamas are placed on the bottom shelves.
Step 4 –Performance Measures
Short & Long Kurtas have the highest growth share matrix and are promoted extensively.
Step 5 –Category Strategies
There is a clear propogation of store brands, viz – Melange which has higher space
allocation.
Long kurtas are stocked to the maximum as their growth and demand is higher and also
compared to Sherwanis and Jodhpuri suits, they have lesser occasional use.
Large (L) size is stocked and displayed most, approx 3 Large pieces in each design are
displayed.
Step 6 – Category review
This category does not contribute to a large proportion of the revenue generated from the
mens wear line.
The space allocated to it is lesser than the space allocated for women’s ethnic wear.
CATEGORY : WOMEN’S ETHNIC WEAR
Step 1 –Category Definition
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CATEG
ORY
SUB
-CATEG
ORY
SEGMENTS
(BRANDS)
SUB -SEGMENTS SIZES
Womens
wear
Ethnic • Biba
• Neerus
• Leffet
• Mélange
(store
exclusive
brand)
• W
• Maahi
• Harra
• Isvarah
• Prafful
• Span
• Short
kurtis(cotton
and cotton
blends)
• Long
kurtis(cotton
& cotton
blends)
• Leggings
(cotton)
• Salwar kameez
suits
(cotton,cotton
belnd &
synthetic)
• Salwars
• XS
• S
• M
• L
• XL
• XXL
This category occupies approx 300 sqft of space and is a high demand category.
Step 2 –Category Role
This category sees high volume of sales and margins in this category are medium - high.
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This category fulfills occasional, exclusive requirements and the prices for this category
range from Rs 299 – Rs 3000.
It is considered as A Destination category
Step 3 – Category Assessment
Sleepers –
(None)
Winners
• Leggings
• Long kurtis
• Suits
Questionable
• Salwars
Opportunities
• Short kurtis
Melange, W, Biba and Neerus have the highest shelf space allocation.
Melange is a store brand & has considerably lower prices, it occupies two different spaces
in the ethnic area. One space is for discounted merchandise and lower quality fabrics that
are placed on shelves in the centre and the other display is with the use of waterfalls and
other hangers for higher priced merchandise.
The other brands are given a fixed space to display their products of which – W, Biba, and
Neerus are given a higher space allocation.
The merchandise is displayed according to the brands & separate space is given for all
brands to place their low priced merchandise which is hot selling and everyday wear.
Step 4 – Performance Measures
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Leggings and Long kurtis have the highest growth share matrix and are promoted
extensively.
Step 5 -Category Strategies
The strategies adopted by the women’s ethnic wear line are –
• Placement of discounted merchandise in the centre on a tier table to attract
customer and sell more.
• Merchandise is stocked brand – wise.
Step 6 –Category review
This is one of the most popular categories of Lifestyle, it is on the ground floor after the
Women’s casual wear section. It contributes to a large share of the profits.
CATEGORY : WOMENS CASUAL WEAR
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CATEG
ORY
SUB
-CATEG
ORY
SEGMENTS
(BRANDS)
SUB -SEGMENTS SIZES
Womens
wear
Casual • Forever
New
• Bossini
• 109 F
• Remanika
• Ginger
(exclusive
store
brand)
• Benetton
• AND
• Fame
Forever(ex
clusive
store
brand)
• Levis
• Tee shirts
• Tops
• Three-fourth
lowers
• Shorts
• Skirts
• Tops
• Spaghetti tops
• Full lowers
• Tracks
• Sweaters ,
scarves, socks
• Short Dresses
• XS
• S
• M
• L
• XL
• XXL
Step 1 - Category Definition
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The category sees the highest volume of sales..
• This section occupies approx 500 sqft of space.
• Ginger & Fame forever are the 2 store brands in this category.
Step 2 - Category Role
This category sees high volume of sales and margins in this category are medium.
This category fulfills occasional, exclusive requirements and the prices for this category
range from Rs 299 – Rs 2000.
Step 3 - Category Assessment
Sleepers –
• scarves
Winners
• Tee shirts
• Tops
• Shorts
• Skirts
• Spaghetti tops
• Tracks
• Dresses
• Three-fourth lowers
• Full lowers
Questionable
• socks
Opportunities
• Short dresses(seasonal)
• Sweaters(seasonal)
Ginger(store brand) has the highest space allocation.
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Fame forever, Remanika, 109 F and AND all have 3-4 shevles and display units allocated
to them.
Benetton, Bossini and Levis have a separate shop-in-shop space allocation.
Within each brand, every category is divided on the basis of its sub segments, viz, tops, tee
shirts ,socks etc
Sizes are placed from XS to XL in ascending order.
Every item is displayed on a waterfall in a medium size and its other size variants are
placed on a shelf.
Medium is the size placed most on shelves.
Step 4 – Performance Measures
Tee shirts and tops have the highest shelf space.
Sweaters ,during season, are fast selling and their growth is rapidly moving.
Step 5 -Category Strategies
The strategies adopted by the women’s casual wear line are –
Every item is displayed on a waterfall in a medium size and its other size variants are
placed on a shelf.
Medium is the size placed most on shelves.
Step 6 –Category review
This is the most popular category at Lifestyle, it is on the ground floor. Its volumes are
very high and it generates highest turnover.
PARTY WEAR
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STEP I - DEFINING THE CATEGORY ROLE
Category : Apparel
Sub- Category : Men’s wear
Segments : Party Wear
Sub-Segments : Jackets, Shirts, semi formal t-Shirts
Category : Apparel
Sub – Category : Women’s Wear
Segments : Party Wear
Sub- Segments : Blouses, Tops, Tunics, Shrugs, Jackets, Leggings , Dresses, Stole’s
STEP II – DEFINING THE CATEGORY ROLE
OCCASIONAL/ SEASONAL CATEGORY – are those that are purchased infrequently
or follow cynical patterns. It helps to re-inforce the target customers image of the retailer
with the aim of frequent, competitive value to the target customer. Around 15- 20 % of
Lifestyle’s categories are managed with this role.
This category is of medium importance to the target customer as it is occasionally
purchased. Lifestyle also gives this category medium importance as they stock a limited
amount of Party wear. When it comes to Lifestyles competitors (shoppers Stop,
Pantaloons) this category is not given much importance as Party wear is an occasional
category.
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STEP III CATEGORY ASSESSMENT- the current performance of the category is
evaluated with respect to turnover, profits and return on assets in this category.
Key factors which influence Consumer Assessment :
• The consumers buy ‘Party wear’ because it fulfils their need to dress well for
occasions . Occasion wear requires a person to dress in a more stylish and special
manner.
• Consumers are influenced by the need to dress in a special and stylish manner.
Parties are a special occasions where people put in more effort to look their best. A
persons social cycle plays a key role in influencing what he or she wears.
• While selecting party wear, a consumer scans through the entire range. He/she is
very fussy about the colour, fit and style. As it a special occasion, the consumer is
fussy about buying party wear and party wear is also priced higher so the consumer
puts in a lot of effort into selecting party wear.
Key factors which influence the assessment of the market are :
• Competitors of party wear (Shopper’s Stop, Pantaloons) offer a similar price
range as Lifestyle
• In terms of consumption and sales, this segment has low sales but at higher
prices per unit. Party wear is infrequently purchased.
• Lifestyle under its private labels (code,Fame Forever, Remanika & AND)
stocks a low range of party wear.
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STEP IV – CATEGORY PERFORMANCE MEASURES
This step involves setting measurable targets in terms of sales, Margins, GM Return On
Investment. These need to be established for measuring category performance.
The sales for Party wear when compared to the other departments is comparatively lesser ,
hence the space allocated to party wear is minimum.
The assortment carried y Lifestyle for Party wear doesn’t contain every size. The
replenishment for party wear is poor and only few sizes are available for merchandise in
this segment. The new products introduced for this segment is also lower compared to the
other segments.
STEP V – CATEGORY STRATEGIES
It is the step in the category business planning process when strategies are developed to
deliver the category role and category performance targets. Strategies may relate to
marketing and product supply strategies. The strategies used here are :
• Transaction strategy : these maybe subject to impulse purchase and increase the
average transaction in the basket or category
• Cash generating Strategy : - uses parts of the category to generate cash flow, has
low inventory turnover.
• Excitement Creating Strategy : frequent change in products and seasonal products
where a sense of urgency is created.
STEP VI - CATEGORY TACTICS
Work towards determining optimal category pricing, promotion, assortment and shelf
management which are necessary to achieve the agreed-on role, scorecard and strategies.
Since the consumers needs are lesser in this segment, the variety in has low penetration ,
the prices are high , assortments are not complete and all sizes are unavailable.
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SPORTS WEAR
Category : Apparel
Sub- Category : Men’s wear
Segments : Sports Wear
Sub-Segments : tee-shirts, track pants, sweatshirts, jackets, shorts, boxers.
STEP II – DEFINING THE CATEGORY ROLE
OCCASIONAL CATEGORY – are those that are purchased infrequently or follow
cynical patterns. It helps to re-inforce the target customers image of the retailer with theaim of frequent, competitive value to the target customer. Around 15- 20 % of this category
is stocked by Lifestyle.
This category is of medium importance to the target customer as it is occasionally
purchased. Lifestyle also gives this category medium importance as they stock a limited
amount of Sports wear. This category is not given much importance compared to other
men’s wear categories. The area allotted to sports wear is only 800 – 1000 sqft in the entire
men’s department.
STEP III CATEGORY ASSESSMENT- the current performance of the category is
evaluated with respect to turnover, profits and return on assets in this category.
Key factors which influence Consumer Assessment :
• the consumers buy Sports wear because it is a necessity for people who indulge in a
lot of sports and activities. It provides the perfect and comfortable fit and ease for
those playing a certain type of sport. Also some people buy sports wear if they’re
fans of a particular sport. E.g football jerseys.
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• Consumers are influenced by their need for this type of garment as it provides ease,
comfort and fit. Also they are influenced by the various seasons for various sports
e.g IPL for cricket.
• While selecting sports wear a consumer looks for the apparel in relation to the kind
of sport he plays and need. Then he tried on the garment for size, fit, comfort and
other factors.
Key factors which influence the assessment of the market are :
• Competitors offer lesser range of sports wear than lifestyle
• In terms of consumption and sales, this segment has low sales but at high prices
per unit. Sports wear is purchased based on need, hence infrequently.
• Under private labels lifestyle has a small portion of sports wear but they also
have many shop in shops for various big sports wear brands such as Adidas,
Nike,Kappa, U.S Polo, Puma.
STEP IV – CATEGORY PERFORMANCE MEASURES
This step involves setting measurable targets in terms of sales , Margins, GM Return On
Investment. These need to be established for measuring category performance.
The sales for Sports wear when compared to the other departments such as formal &
Informal is comparatively lesser , hence the space allocated to Sports wear is minimum.
The assortment carried by Lifestyle for Sports wear contains almost every size. The
replenishment for party wear is good and Size set S,M,L and XL are available in almost
every style. Each brand stocks a good amount of merchandise and a wide range.
Competition is high and variety is large.
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STEP V – CATEGORY STRATEGIES
It is the step in the category business planning process when strategies are developed to
deliver the category role and category performance targets. Strategies may relate to
marketing and product supply strategies. The strategies used here are :
• Transaction strategy : these maybe subject to impulse purchase and increase the
average transaction in the basket or category
• Cash generating Strategy : - uses parts of the category to generate cash flow, has
low inventory turnover.
• Excitement Creating Strategy : frequent change in products and seasonal products
where a sense of urgency is created.
STEP VI - CATEGORY TACTICS
Work towards determining optimal category pricing, promotion, assortment and shelf
management which are necessary to achieve the agreed-on role, scorecard and strategies.
The consumer expects a wide range with all size sets in the sports category. Also duringvarious sports season, the consumer expects adequate stock in all size sets and appropriate
merchandise. The pricing for this range is moderate to high, the merchandise assortment is
high and shelves are well stock with a wide assortment and almost all size sets.
BRANDS AND CATEGORIES
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Brand Sub-Category Available Sizes Avaiable
Fame Forever Tees, Tracks, boxers,FIFA
collection
M,L,XL
U.S Polo Tees, Tracks, Caps S,M,L,XL
Kappa Tees, Tracks S,M,L,XL
Nike Shorts, Tracks, chest print
tees, socks, sweatshirts
S,M,L,XL
Proline Tees, tracks M,L,XL
Adidas Tees, Sweatshits,Tracks S,M,L,Xl
Puma Chest print tees, tracks,
socks,shorts,caps
M,L,XL
Space Allocated to Sports wear – 20 % of Space in Men’s Wear Department