Category Management in Retail

This assignment delves into the strategic implementation of category management within the UK retail industry. It examines the practices of prominent retailers like ASDA, Sainsbury's, and Tesco, analyzing their approaches to category planning, assortment optimization, and supplier collaboration. The analysis draws upon academic literature, industry reports, and publicly available information from these retailers' websites to provide a comprehensive understanding of category management's role in driving retail success.

CATEGORY
MANAGEMENT

Category management is a concept of retailing and purchasing of wide range of products.
Product are either purchased by business organizations or by retailers. Retailers breaks the wide
range of goods into a discrete groups (Varley, 2014). These groups are made either of similar or
related characteristics of products. In other words the product are classified on the basis of
similarity and relatedness by the retailers. Category management is systematic and disciplined
approach by which retailers display their good to provide convenience to customers (Category
Management, 2011). This essay will include various principles and process that are adopted by
retailers in category management. Also will include various strategic perspectives that are
followed by retailers in managing their goods category wise. Further the essay will also include
role of buyers and various implications of supplier relations. Essay will also include examples of
various large scale retailers those apply category management strategies and theories in their
respective stores in UK.
Concept of category management
Category management is collaborative process in which the retailers and manufactures
manages product in their shops as per the shopper needs state or category wise. This is done to
optimize the sanctification of shoppers as well as it also helps in fulfilling the role chosen by
retailer for that particular category within the overall portfolio of categories in the retail format.
In simple words, category management is combinations of prices, assortment, shelf presentation
as well as promotion which helps in optimizing the category role in the coming time (Category
Management, 2011).
Category management is analytical and intensive in nature and is all about understanding
the data. Various large scale retailers such as ASDA, TESCO, Sainsbury organisations follows
such management. This management is based on shopper marketing that is emotional in nature.
These various retail organisations differentiate their products range and displays their product
differently. For example- TESCO displays its house products in a different sections then of food
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products in its stores This helps customers convenient to purchase either food products of
furnitures. It make easy for customers to find required product (Agrawal and Smith, 2015).
Category management have various benefits such as it helps in building more closer and
constructive relationship with stakeholders and service liners. It also focuses on planning phase
that further offer greater scope of improving performance as well as ground breaking solutions. It
also provide a process and a tool set to supports strategic approach for procurement and also
helps in creating supportive environment (Wrigley and Lowe, 2014). It also enables the various
retailers such as TESCO etc in targeting savings as well as other benefits related to service lines.
It also assist in minimising the contract spend through service line engagement, sign off as well
as ownerships. category management also helps in enhancing procurement capabilities across
various retail organisations.
Strategic Perspective
Strategic perspectives refer to the mission, vision and corporate goals etc of the
company. To fulfil those goals different organisations go for different ways of categorising their
products. For example- the Vision followed by TESCO retail organisation is to meet the needs
and demand of its customers and to increase the overall customer satisfaction level. Similarly the
mission of TESCO is to expand its services throughout the world to provide convenience to its
customers. Also the corporate goals followed by the TESCO is to inspire as well as earn the trust
and loyalty of its customers, colleagues and communities (About TESCO, 2016).
For fulfilling and attaining all such objectives and goals of TESCO retail company. It
goes for categorizing its products in order to provide convenience to its customers. It categorise
its different products in the form of different outlets. It provides wide range of products from
household, furniture, fashion clothes etc. IT has categorised its products on the basis of different
outlets. That are Skip sores, TESCO homes, TESCO extra, TESCO groceries etc. That is for
food and other grocery items TESCO had open separate supermarkets and marts such as TESCO
Homes. Similarly it had open its products in different super markets and marts for clothes as well
as for Finance and Insurance. This helps the customers to more in the supermarkets as per its
requirement (About TESCO, 2016).
It has been a good strategy adopted by TESCO to categorize in the form of its outlets. It
provides convenience to customers as they have to go to that supermarket in which it will find
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product of his/her choices. This will also helps the customer in choosing specific product for
which he has come. Otherwise, in variety of products customers get confused in what to buy and
what not to buy. However, it can be critically evaluated that for some customers, who like to
purchase products of different category at a time, it creates problem. This is because they do not
have much time to move to every specific markets. It provide lot of inconvenience to such types
of consumers (Beck and Willis, 2016).
Similarly taking example of Sainsburry, It also has wide range of products whether it is
clothing, furnitures, groceries and many more. Sainsburry also has some strategic perspectives
for which they set certain standards to achieve those perspectives. Strategic perspectives includes
corporate goals, mission, vision etc of the firm (About Sainsburry, 2016). The vision followed by
Sainsburry retail organisation is to become the most trustable retail brand for employees as well
as customers. Goals of Sainsburry is to make customers life easier by providing good quality
products at fair prices. Mission followed by Sainsburry is become the best retail outlet in world
and provide its services.
Sainsburry deals in major areas of food, clothing and general merchandising. To make its
products accessible to customers at fair prices it goes for category management. Sainsburry has
opened its various supermarkets in United Kingdom. It which it has displayed its different ranges
of product in floor wise. For example, it had displayed all its groceries items at ground floor of
its supermarkets and similarly other products at different floors. Basically the concept which the
retail company follows for categorizing its products is (O'Brien, 2015). The company places all
those goods a single floor to which a customer can thinks of at a time. That is products which are
either interrelated or are substitutes etc all are place at a single floor by Sainsburry organisation.
This strategy helps the company in bringing a step closer to its goals and missions. By
this type of displaying strategy the customers gets convenience as they get all types of products
at single place. They do not have to go around in various store to purchase different types of
products. Sainsburry provides all products at a single place which are more convenient for
consumers (Becker, Uhr and Vering, 2013). Also such kind of displays increases sales as the
customers while purchasing grocery item may also go for purchasing new clothes for her. This is
a common human nature that the needs and wants of customers never comes to end. Specially
when a person gets all different products under a single roof then he/her might go for all floors to
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find something attractive. However, it can be critically analysed that the process of category
management followed by Sainsburry is time consuming process This is because the customer has
to go for different floors and search for products. It take to long time as well as is tiring process
for some customers.
Talking about the third organisation ASDA, it also follows category management within
its stores and outlets in UK. Various strategic perspectives of ASDA is is to become the best
value retailer company in UK by fulfilling the needs of customer (About ASDA, 2016). Also it
follows a vision to serve its customers with variety of choices at affordable prices. ASDA also
follows certain values which are respecting individuals, strive fro excellence as well as serve
well to its customers. For accomplishing its strategic values in a better ways ASDA has adopted
the strategy of category management.
ASDA had also followed the path of category management in which it had placed its
different products into different sections with floors. To be more specific its had arranged its
products in a demographic ways that is according to age groups (Klaus and Nguyen, 2013). That
it had arranges products in different floors and even each floor is also separately segmented on
the basis of male and female. For example, ASDA had placed products related to old age groups
their apparels everything that are required by old age group people is place at ground floors in its
different stores. To become more specific ASDA had arranged its products in such a way that
there is different sections for veg and non veterinarians as well as different apparels sections for
men and women (Mena. and et.al., 2014).
The following categorising strategy adopted by ASDA is even more convenient to
customers as they find all types of products with lots of variety at one place. It helps the
customers to purchase products for whole family. Also has separate section for pets. This helps
customers to buy all variety and age group products under the single roof with nice quality and
affordable rates (Lukic, 2012). However it can be critically evaluated, that this types of
arrangement leads to lot of confusion among customers that what to buy and what not.
Role of Buyer
Buyer plays an important role in category management. This is because every retail
organisation whether it is TESCO, ASDA or Sainsburry all keeps in mind the perspective of
different types of customers. They go through study of different buying behaviours under
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different situation and base on which they make strategies for category management. Fore
example– TESCO has adopted strategy of placing its products into different outlets. This strategy
has bee adopted by its after going through certain aspects and perspectives. Some customer are
very particular about what they sop (Dawson, 2013). They purchase only those products for
which they have gone to the shop and ignores other products even though they are attracted
towards it. This may happen due to limited income in which customers go for purchasing
products based on priority and necessity. This limited income factors leads to limited
purchasing power of customers. This is why the consumer only goes for the product which
he/her have arrived to purchase in super markets. For such types of customers he strategy
adopted by the TESCO works. This because they do not have to go anywhere else they just have
to go to particular stoles of TESCO to purchase the particular product
Similarly, taking the example of Sainsburry it has changed the system of display of
product. This changes are required to be made with the changes happening in the customers
preferences (Srivastava Dabas, Sternquist and Mahi, 2012). Traditionally the customers use to
have very rational nature because of they use to purchase specific product or the products as per
the priorities But the system ad perception had changed. Also the mind sets of general people
have changed in modern thinks. Thinking of such changes the Sainsburry had came up with such
type of displays. Today's customers have high income and increase in income had lead to
increase in the purchasing power of the customers This has further resulted into new concepts f
arranging product under the stores in single roof.
This types of strategy made by Sainsburry often attracts its customers to purchase
products from different sections at a single place. Also Sainsburry have developed this strategy
in keeping different perspectives of buyers. In situation where buyer get every thing in a single
roof he/ she will definitely take a look to each product displayed in the stores (Ehrenthal and
Stölzle, 2013). While at that time the buyer will definitely purchase two or more products from
the store of Sainsburry while looking to each products displayed. This arrangement make
convenient for buyer to purchase different variety at a single super market.
Taking the case of ASDA, it might also have followed certain perspectives of buyer
before implanting category management in its stores. It had followed a advance version of
Sainsburry with more number of classifications, floors and sections. It might have came to the
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fact that the buyer leaves a product because he/she is not bale to find suitable match to that
product. To avoid such things in its stores ASDA had arranged all its product in such as way that
all related product that a buyer could think of before buying a product on a single floor. So that
the buyer could not find any single reason to leave product. ASDA had placed product of
different are groups at different sections (Swoboda, Elsner and Morschett, 2014). Along with
these it also had made different trial rooms and for men and women. All these changes are
required to be implanted in the stores with the changes taking place in the market and
perspectives of buyers, This very important for retail organisation whether it is ASDA,
Sainsburry, TESCO etc. They are required to make changes in the supermarkets as per the
changes taking place in the retail sectors and perceptions of buyers to retain its position in the
market. It is important factors that is required to be considered by each retail firm. This helps it
to go with flow and maintain its position in the markets. IT also helps in increasing brand loyalty
and customer satisfactions (Işık, Jones and Sidorova, 2013). That further leads to increase in the
image of company in eyes of customers are well as also helps in increasing sales and revenues.
The company which flows buyer perspectives also leads towards attaining competitive advantage
in the retail sectors markets. The more better firm learns about buyer perspectives the more it
will help in increasing sales and revenue of the company.
Implications of supplier relations
It is important for every company to build a good relation with their suppliers as they
help the company in various aspects. To maintain a good relation with suppliers the companies
are required to involve them into the process of strategic planning. AS they are the stakeholders
of company and are responsible for supplying of raw material or products. To involve supplier is
essential for every types of company whether it is customers oriented, product oriented or service
oriented organization (Effective day-to-day category management, 2011). It is important to
maintain good relation with the suppliers as they responsible for the quality and quantity of the
product. No company is required to exploit or dominate it supplier after attaining a successful
position in the competitive market.
For example various retail organization of UK such as Sainsbury, ASDA, TESCO etc are
required to take care of their suppliers as well are also required to involve them in the strategic
planing process. This will help these organization to build good relations with their suppliers and
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will further result in providing good quality to customers. That will further result into increasing
the customers satisfactions and loyal and base. Also supplier base will get stronger an it will
provide good quality at time (Ivanauskiene and Auruskeviciene, 2015).
By doing this the company will get various benefits. First benefit which thew retail
companies such as Sainsburry etc will achieve while maintaining good relation with its supplier
is quality. It is comparable in hand of supplier either to provide good or worst quality to
companies. To avoid the possibility of providing worst quality by the supplier the company is
required to keep the supplier happy. This can be done by making payments at time and also by
involving them in the strategic decision of the company (González-Benito and Martos-Partal,
2012).
Also it is in hands of the retail companies such as TESCO to avoid delays in meeting the
deadlines given by the customers. Again this is totally in the hand of a supplier. If it is not
satisfied with the terms and conditions of the company regarding payments or anything else.
Then it might lead towards affecting the products of company. By making delay in providing raw
material to the manufacturers of TESCO. In order to avoid such delays in production the the
company should make payments on time as well as required to keep happy their suppliers and
follow there term ad conditions (Hofer and et.al., 2012).
Also the suppliers can give one up point in the competitive markets to the retail
organizations such as ASDA. The ASDA is required to make good relations with its supplier in
order to attain a competitive advantage over various competitors such as Sainsbury, Tesco etc.
Product pricing, quality, technology, reliability as well as knowledge all factors depends on the
quality of product provided by the suppliers (Johnson and et.al., 2013). So the supplier is
responsibility for maintaining position of company within competitive markets.
Conclusion
From the above essay it ha bee concluded that various retail organization that are
Sainsbury, TESCO, ASDA are using the concept of category management. They all have chosen
different displaying formats for their products. Such as TESCO had opted strategy of displaying
different characteristics product in different outlets. On the other hand the strategy opted
Sainsburry is that they display their products into different streams or floors of the stores.
Strategy followed by ASDA is similar to that of Sainsbury but it had additionally implemented
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more streams in separate floors based on the age groups. Good quality, competitive advantage
over competitors etc are some implications of good supplier relations (Beaverstock, Hall and
Wainwright, 2013).
REFERENCES
Books and Journals
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