Sainsbury's Retail Merchandising and Category Management Analysis

This report delves into the principles of retail merchandising and category management, exploring their strategic importance in the context of Sainsbury's, a major UK supermarket chain. It examines the role of buyers in influencing product placement and marketing strategies, emphasizing the significance of shopper marketing in meeting consumer needs. The analysis further investigates the implications of category management for supplier relations, highlighting the importance of collaboration, timely payments, and shared goals. The report emphasizes the need for retailers like Sainsbury's to align with suppliers, engage in effective communication, and adopt innovative merchandising solutions to enhance the shopping experience and achieve business objectives.

RETAIL AND MERCHANDISING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
STRATEGIC PERSPECTIVE........................................................................................................1
ROLE OF BUYER..........................................................................................................................3
IMPLICATIONS FOR SUPPLIER RELATIONS .........................................................................4
CATEGORY MA NAGEMENT PRINCIPLES AND PROCESSES.............................................6
CONCLUSION................................................................................................................................8

INTRODUCTION
Retail merchandising can be stated as the method through which flexibility can be
delivered to the clients. Furthermore, it also assists in providing the best growth opportunities
and efficiently implement a plan that carries out continues measurement of performance for all
retail programs tailored as per customers requirements. It can be assessed that in a retail store,
merchandising refers to the variety of products available for sale and the display of those
products in such a way that helps in stimulating interest and attracts customers to make a
purchase decision (Dutta, 2015).
In the present study, category management principles are undertaken which is a retailing
and purchasing concept in which the range of products purchased by business enterprise or sold
by retailer is broken down into discrete groups of similar of related products. However, such
groups are known as product categories such as grocery, washing powder, toothpastes etc.
Moreover, it is a systematic disciplined approach in order to manage a product category as a
strategic business unit (Dewhirst, 2012). Here, Sainsbury has been adopted in order to undertake
category management principles and processes in order to maintain cross functional team
approach, strong supply market knowledge and stakeholder engagement etc. Sainsbury is the
second largest chain of supermarket in the UK and thus; provides the best products or services to
attract consumers towards firm.
STRATEGIC PERSPECTIVE
As per the view of Varley (2014), category management can be stated as a collaborative
continuous process between manufacturers and retailers in order to manage shopper
requirements in particular category form so that they can easily obtain desired products. Main
purpose of this process is to optimise shopper satisfaction and thus; fulfils the role of retailer for
that particular category within the overall portfolio of categories in the retail format. Moreover,
the end state of such category management process is the combination of assortment, price, shelf
presentation and promotion of goods that optimises the category role over time. It is the process
through which data intensive and analytical orders can be placed appropriately and thus; shopper
can buy the products accordingly. However, Ridgway and Clayton (2016) argued that it is
significant for retail organisation to identify the needs and requirements of shopper so that they
can place the products in an appropriate order and influence buyers towards products. Retail
1

merchandising is a crucial concept for retail organisations such as Sainsbury to form category
and place it in particular order and thus; attain common goals. It serves as a platform through
which shopper marketing initiatives can be collaboratively launched because the retailer and
manufacturers are aligned around common solution to fulfil the need of buyers.
According to the opinion of Varley (2014), consumers requires variety of products at one
place therefore; large scale retailers undertake such situation and aligned such goals in order to
provide common solution to a need state of the shopper. Company is required to adopt effective
marketing activities which are effort to change attitudes and thereby; provide the best products or
services in order to attain desired goals. Retail organisation undertakes marketing activities that
helps in creating awareness stimulate desire and ultimately differentiate product through giving
consumers a reason to purchase in preference to competition. Also, Piercy and Alexander (2013)
argued that Sainsbury needs to obtain single initiative and campaign to promote the products
among buyers and thus; they can deliver best offers and discounts to consumers so that goals and
objectives can be attained. Sainsbury is required to recruit skilled marketing professionals so that
they can attain desired objectives and thus; merchandise the products carefully in the store so
that it attracts consumers towards firm. It also involves organisation to adopt different research
protocols and different promotional campaigns such as social and digital media to attract
shoppers. With the help of effective marketing, Sainsbury can identify consumer attitude towards
particular product and thus; provide them defined goods so that sales can be enhanced.
Wolfe (2014) examined that shopper marketing is an occasion based component of the
larger marketing function that helps in identifying the buyer perception as per their previous
experience regarding the products in the particular category. Thus, this assists in providing them
efficient product in order to satisfy their needs. Main aim of shopper marketing is that it helps in
enhancing the brand's equity usage and experience at the time of sale. It assesses that shopper
marketing begins as the consumer perceives a need and starts down the path to purchase through
identifying the needs of consumers and providing them particular goods so that sales can be
enhanced. For instance, retail organisation such as Sainsbury shopper marketing is more crucial
component of the overall marketing activity because the product which is sold by retailer is as
per the needs and experience of buyer. Thus, providing desired products as per the needs of
shopper helps retailers to attain desired objectives.
2

Mehta and Chugan (2014) stated that category management is retail context tends to alter
the relationship between retailer and supplier. However, instead of traditional advertising
relationship, the connection between them moves to effectively collaboration with the exchange
of information, data, knowledge etc. so that focus upon supplier negotiations with the effect on
turnover of the category as a whole. Here, the focus of all the supplier negotiations is the effect
on turnover of the category as a whole, not just the sales of individual products. Also, suppliers
are expected in order to suggest retailers regarding the new innovations and thus; provide
benefits to buyers of that particular category. In this particular case, shopper marketing is carried
out in order to maintain the category and thus compete with other brands so that it helps in
satisfying the buyer’s needs.
ROLE OF BUYER
As per the view of Rosenau and Wilson (2014), role of buyer within category
management can be termed as crucial as it helps firm to obtain organisational goals by providing
desired products to consumers and thus; enhance the sales and profitability of firm in market.
Here, buyers play an effective role in order to provide retail firms regarding their views and
opinions about the product category as per their previous experience that assists Sainsbury to
provide particular goods to consumers so that sales can be enhanced. Company also promotes its
products by adopting different marketing and communication campaign so that sales
performance of firm can be enhanced. It also assists in marketing the products as per the
category management and thus showcases the popular products with the use of the best shelf
presentation so that consumers can be attracted towards the goods and improve the sales and
profitability of firm in marketplace. However, Van der Veen and van Ossenbruggen (2015)
argued that buyer’s role in category management is critical as it involves effective strategic
framework which involves collaboration that takes place such as efficient promotion, product
introduction, efficient store assortments etc. All such factors assists in promoting products or
services introduced by Sainsbury and thus; attract potential consumers towards firm in order to
enhance the sales and profitability of firm in marketplace.
According to the Katerina and et.al (2009), Sainsbury is required to maintain effective
relationship with their customers because they play a crucial role in order to engage each other
and develop effective relationship with them. Moreover, firm is required to develop effective
3

stakeholder engagement so that company can identify the needs of consumers and thus provide
them desired products so that sales can be enhanced up to a great extent. It can be assessed that
retail firms are required to determine the potential needs of customers as per their previous
experience and thus; fulfil the needs of consumers by placing the goods in shelf as per the
particular category in order to achieve organizational goals.
Kumar (2010) stated that category management involves the needs and expectations of
consumers so that products should be able to meet the needs of individual and thus; provide them
proper goods and services in order to attain success. Marketing team of Sainsbury needs to
identify the needs and preference of consumers and thus; offer them required products so that
sales can be enhanced. It assists in satisfying their needs and thus obtains set targets. For
instance, category management reflects that the particular goods are placed effectively at one
place with the help of proper shelf presentation so that consumers can be attracted towards goods
and thus improve the performance of firm. However, Lagrosen (2005) argued that buyers are
crucial for any business enterprise and thus retail firms are required to undertake crucial steps in
order to satisfy individual needs and attain targets. Sainsbury management employs skilled
professionals so that effective promotional campaign can be launched in order to develop
effective communication with consumers and thus satisfy their needs by delivering effective
products. Hence, organisations are required to develop effective tactics so that company can
develop effective relationship with their customers and thus attain organisational goals. Thus, it
can be articulated that Sainsbury is required to identify the needs of consumers and thus; provide
the best products or services to them in order to attain satisfaction. It is significant for
organisation to develop the best relationship with consumers so that quality products can be
delivered to them.
IMPLICATIONS FOR SUPPLIER RELATIONS
As per the view of Youssef and Soliman (2003), companies are required to develop
discipline collaboration with suppliers in order to build continues growth and success within the
changing industry dynamics and thus; repeatedly produce desired results for both retailers and
consumers. Sainsbury is also required to develop countless collaboration strategies and
marketing plans so that best initiative can be taken to attain desired results. Also, developing
strategic collaboration by retailers with suppliers and build effective relationship it helps in
4

emphasizing sustainable mutual benefit and efficient movement of product across the supply
chain and attain high profit and shopping experience. However, Zhang and et. al., (2011) argued
that maintaining effective supplier relationship assists in providing them timely payment and
thus; build effective relationship with each other. Moreover, the ability to achieve strategic
collaborative relationship fails upon the shoulders of retailer and supplier. Therefore, it is
essential for both of them to develop objectives willingly and thus rethink the priorities and
move beyond traditional collaborative practices to where the shopper is the primary emphasis of
all initiatives. It involves:
 Willingness and ability to align goals, strategies, systems, people and processes.
 Commitment to the collaborative process and desired outcomes from tip down and across
operations (Zhao and Zhong, 2015).
 Moreover, developing ability to establish trust and productive communications.
 Willingness to share knowledge and information.
 Further, ability to think, plan and commit strategies beyond one or two years.
 Also, providing resources that are required to support development of innovative and
differentiated merchandising and product solutions.
 Provide timely payments to suppliers in relation to delivering better quality products.
 Willingness to share risks and rewards (Zott, Amit and Massa, 2011).
Link (2012) stated that organisations are required to engage in effective collaborative
relationships with suppliers and thus; provide the best products to consumers. Here, company is
required to undertake effectual relationship with their suppliers because they possess power and
thus it is essential for company to provide them timely payment so that they can gain
satisfaction. Thus, the collaborative strategy helps in driving effective relationship with
individuals through offering them the best products and develops relationship so that set targets
can be attained.
As pet the opinion of Maier (2012), Sainsbury is required to adopt effective supplier
relationship guidelines for every segment so that the best quality products can be offered to
consumers and thus set targets can be attained. All such guidelines need to be developed in
regard to encourage focused collaboration with buyers and thus pursue aggressive cost
negotiations and possible substitution in order to prioritize effective categories and thus enhance
the sales and profitability of retailers to obtain desired objectives. Main objective of strategic
5

collaboration is to grow sales and profits through improving the shopping experience and
creating truly differentiated offerings as compared to rivals.
Nickson (2013) examined that organisation is also required to review and supplier
negotiations in order to take place every year before the crucial season of the specific category.
Thus, it helps company to develop effective relationship with suppliers so that different strategy
can be developed in order to inform company about the availability of particular category and
thus deliver the best quality goods so that success can be attained. However, it also assists in
developing effective relationship with suppliers by providing them timely payments and thus
attains desired results so that success can be attained.
CATEGORY MANAGEMENT PRINCIPLES AND PROCESSES
According to the view point of Weinberg (2012), category management is an eight step
process that helps in providing the best solution for the business and thus encompasses all the
strategies in order to make the brand successful. Sainsbury is required to adopt effective process
that needs to adopt significant objectives so that goals can be attained as per the brand. However,
it will help in achieving success. The process will establish the brand as a true leader in the
market and thus helps them to differentiate them from competition. It is essential for retailer to
place effective shelf presentation and assort the product category effectively so that profit margin
can be enhanced. It also assists in establishing effective relationship with consumers and thus
attains desired success. Following is the category management process-
 Define category- As per the Wong (2004), it is the most crucial step that helps in
defining the understanding of the retailer, consumers and suppliers so that the best
relation can be developed with individuals. Main focus is that category management is
required to identify the consumer’s needs and thus; showcase the products in particular
form so that individual can influence and purchase the same.
 Category role- Here, it assesses the role which identifies the significance of the category
to the retailer. Thus, it is the main role of retailer as they want the category to play within
their store. It helps in attracting consumers towards the store and thus increase profits by
fulfilling the needs of individual. Sainsbury assists in assigning different roles to
categories within their stores depending upon the customers they want to attract as stated
(Wood and Brotherton, 2008).
6

 Category appraisal- Furthermore, it assesses in knowing the category performs at the
retailer within the market and across different outlets which involves pricing, promotion,
placement and product assortment. Thus, it helps in improving the performance of firm
as compared to competitors.
 Category scorecard- According to Lohman (2015), it is considered as the strategic
allocation of work that needs to be performed in order to reach the category goals and
objectives. However, it is the summary of observations and analysis in order to help in
developing goals and targets of the category. Thus, it involves assessment of consumer
buying habits.
 Category strategies- Henshall (2013) stated that retailer is required to develop strategies
that are used to develop fine tune with the category and thus meet the scorecard
objectives. However, category objectives are designed in order to grow the market share,
enhance sales, and improve customer attractive and profits so that satisfaction can be
attained.
 Category tactics- It involves appropriate action plan so that effective category strategies
can be selected in order to promote the brand in market. Sainsbury promotes top brand in
front end premises of the store and thus attracts consumers towards firm.
 Implement plan- As per Dutta (2015), it is the action step that brings the strategies and
tactics into action and thus; develop accurate objectives in order to implement the plan
and attain desired success.
 Review and assess performance- It can be assessed that analyse, measure and review
the results helps the company to focus upon individual needs and thus; make changes if
essential to obtain results.
As per the view of Dewhirst (2012), category management principles help in
implementing effective category so that company’s can achieve overall business strategy.
However, category management is founded upon five key principles which are as follows-
 Cross functional team approach
 Strong supply market knowledge
 Make change happen
 Stakeholder engagement
 Facts and data based
7

However, all such principles assist in developing foundation of governance so that
implementing of category management can be successful in order to attain desired success. There
are two levels of governance which is required as follows-
 It involves program level where steering group manages the particular category programs
(Varley, 2014).
 Also, corporate governance helps in developing the system through which companies can
direct and control the operations so that success can be attained.
Hence, it can be stated that Sainsbury assists in developing effective performance
management so that effective category products can be placed so that success can be attained. It
is also significant for firm to identify the objectives so that they can compete with different
competitors (Ridgway and Clayton, 2016). Thus, developing capability management assists in
building high performance so that team can be given best training in order to attain desired
success. Also, it helps in supporting the program and thus facilitating management to achieve
breakthrough results and attain success.
CONCLUSION
It can be examined from the study that category management is a crucial step within
retail organisation and thus; involves in building a business plan around 4 P's such as pricing,
promotion, placement and products. Moreover, Sainsbury adopts effective category management
with the help of marketing professionals and thus; place the product attractively in the shelf and
assort the products as per their price so that sales performance can be improved. Thus, company
promotes its products through effective campaign and promotion in order to influence buyers and
thus enhance the sales and profitability of firm. Also, involving different category management
principles assists in managing change, stakeholder engagement and develops strong relationship
with suppliers so that set targets can be attained.
8

REFERENCES
Books and Journals
Dewhirst, T., 2012. Commentary on Burton et al.(2012): The influence of tobacco retail
merchandising on tobacco consumption. Addiction. 107(1). pp.176-177.
Dutta, S., 2015. DIGITAL BUSINESS: A NEW CUSTOMER-SAVVY BUSINESS
PLATFORM FOR INDIAN BANKING & RETAIL SECTORS-ISSUES &
CHALLENGES. Indian Journal of Management Science. 5(1). pp.43.
Katerina, D. and et.al., 2009. Measuring e‐commerce‐quality: an exploratory review.
International Journal of Quality and Service Sciences. 1(3). pp.271–279.
Kumar, V., 2010. A customer lifetime value-based approach to marketing in the multichannel,
multimedia retailing environment. Journal of Interactive Marketing. 24(2). pp.71-85.
Lagrosen, S., 2005.Effects of the internet on the marketing communication of service companies.
Journal of Services Marketing .19 (2).pp.63–69.
Link, C. K., 2012. Internal merchandising: creating revenue opportunities. Cornell Hotel and
Restaurant Administration Quarterly. 30(3). pp.48-57.
Maier, T., A., 2012. International hotel revenue management: Web-performance effectiveness
modelling – research comparative. 3(2). pp.121 – 137.
Mehta, N. and Chugan, P. K., 2014. Consumer's Perception for Visual Merchandising of
Lifestyle Apparel Stores. International Research Journal of Marketing. 2(3). pp.53-60.
Nickson, D., 2013. Human Resource Management for Hospitality, Tourism and Events.
Routledge.
Piercy, N. and Alexander, N., 2013. The Status Quo of the Marketing Organisation in UK
Retailing: A Neglected. Retail Marketing. pp.43.
Ridgway, J. L. and Clayton, R. B., 2016. Instagram Unfiltered: Exploring Associations of Body
Image Satisfaction, Instagram# Selfie Posting, and Negative Romantic Relationship
Outcomes. Cyberpsychology, Behavior, and Social Networking. 19(1). pp.2-7.
Rosenau, J. A. and Wilson, D.L., 2014. Apparel merchandising: The line starts here. A&C
Black.
Van der Veen, G. and van Ossenbruggen, R., 2015. Mapping Out the Customer's Journey:
Customer Search Strategy as a Basis for Channel Management. Journal of Marketing
Channels. 22(3). pp.202-213.
Varley, R., 2014. Retail product management: buying and merchandising. Routledge.
9

Weinberg, M., 2012. New Sales: Simplified : the Essential Handbook for Prospecting and New
Business Development. AMACOM Div American Mgmt Assn.
Wolfe, M.G., 2014. Fashion Marketing & Merchandising. Terminology. 27(31). pp.126-139.
Wong, K., 2004. Industry-specific and general environmental factors impacting on hotel
employment. International Journal of Contemporary Hospitality Management. 16 (5).
pp.287 – 293.
Wood, C. R. and Brotherton, B., 2008. The SAGE Handbook of Hospitality Management. SAGE.
Youssef, M. A. and Soliman, F., 2003. Internet-based e-commerce and its impact on
manufacturing and business operations. Industrial Management & Data Systems. 103(8).
pp.546–552.
Zhang, Y. and et.al., 2011. Repurchase intention in B2C e-commerce—A relationship quality
perspective. Information & Management. 48(6). pp.192-200.
Zhao, R. and Zhong, S., 2015. Carbon labelling influences on consumers’ behaviour: A system
dynamics approach. Ecological Indicators. 51. pp.98-106.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
Online
Henshall, D., 2013. The Key Principles of Category Management. [Online]. Available through:
<http://purchasingpractice.com/the-key-principles-of-category-management/>. [Accessed
on 7th June, 2016].
Lohman, D., 2015. 8 steps to mastering category management. [Online]. Available through:
<http://newhope.com/blog/8-steps-mastering-category-management>. [Accessed on 7th
June, 2016].
10