CMA SIMA Exam

Put the following steps in the correct order when assigning category roles:

1. Complete cross category analysis 2. Identify seasonal categories 3. Ensure a fit with corporate strategy and fit with target customer 4. Assign roles to each category

You have 5 PL listings. Competitor X has 5 PL listings. The total category has 20 listings. What is competitor X's PL share of listings?

5 listings / 20 listings * 100 = 25.0

What is the definition of a category?

A measurable group of products that consumers perceive to be inter-related and/or substitutable in addressing consumer needs

If retailers assign "Cash Flow" and "Profit Generating" strategies to categories, what else should they include in their strategy?

A secondary strategy that relates to the consumer

Match each of the following terms with the appropriate calculations.

Absolute $ chg: $ vol - $ vol YAGO Category $ share: (brand or segment $ vol/ category $ vol) * 100 Retailers share of mkt: (retailer $ vol/ mkt $ vol) * 100 Category $ share pt chg: $ share - $ share YAGO Growth rate ($%chg): ($ vol/ $vol YAGO) - 1

Consideration for which perspective will give you the winning formula in category management?

All 3 of the perspectives (the shopper, the vendor, the retailer) are important for the winning formula

An effective way for retailers to benchmark themselves against the market is through an "Index vs ACV" calculation. What is ACV and how is it calculated?

All Commodity Volume, and it is calculated by summing up the total of all category sales within a geography (market, channel, or retailer), to get a Total ACV number

In which channel is category management practiced?

All answers are correct: Drug, Online, Grocery, Mass+Club

Each tactic below has been "paired" with an objective. Select which tactic has an objective that is not appropriate for that tactic:

All are correct: Promotion: # of flyers Product assortment: # of items Pricing: competitive price matching Product placement: consumer-focused layout

A retailer's strategy will affect:

All of the answers are correct: Category tactics Category roles Category strategies

Which tactic is most influenced by a retailer's Private Label/Store Brand strategy?

All of the answers are correct: Pricing Product Placement Product Assortment Promotion

Assignment of ___________ requires that retailers take a broad look across their category mix to determine the category's relative _________

Assignment of category roles requires that retailers take a broad look across their category mix to determine the category's relative importance

Match the following retailer assortment strategies with the best description.

Broad assortment: stock as many items as possible, offer unique and different products High quality strategy: premium products targeted to higher income customers First to market: focus on "speed to market" for all new product launches Market coverage: have a target coverage objective, focusing on the top items sold in the market Value strategy: lower quality, less expensive items targeted to lower spenders Private label strategy: less focus on national brands, more emphasis on store brands Large size strategy: majority of brands and segments represented through larger pack sizes only

Categories assigned a _______ role define the image of the retailer and usually lead all categories in ______. Retailers dedicate the highest percentage of ______ to categories that are assigned this role to ensure they understand and meet their ______ needs.

Categories assigned a destination role define the image of the retailer and usually lead all categories in sales growth. Retailers dedicate the highest percentage of resources to categories that are assigned this role to ensure they understand and meet their target shopper needs.

Drag and drop the words in their places as it relates to vendor participation in retailer programs:

Category Captains or vendor advisors may be responsible for providing labor assistance and helping them grow the category for the retailer. Category Advisors or validators refers to vendors that a retailer selects to provide supplemental data, resources, analytics, ideas (and often a second opinion).

Match the key components of: Category Strategies, Category Tactics, Category Assessment, Category Scorecard

Category Strategies: confirms how execution of the plan will happen in the category Category Tactics: creates action in the category and can have a significant impact on sales and profit Category Assessment: uncovers the biggest area of opportunity for the retailer Category Scorecard: tracks how the retailer is doing vs category goals and targets

Category definition does NOT affect which of the following areas of business?

Category definition affects all of these areas of business: How data is purchased How product is purchased How data is segmented How a company reports their business

Which of the following answers presents the original category management 8-step process define by the joint industry in the correct sequence?

Category definition, category role, category assessment, category scorecard, category strategies, category tactics, plan implementation, category review

"To attract customer traffic down the aisle", "to increase impulse purchases" and "to turf protect" are examples of:

Category strategies

Category ________ need to be aligned to the category role, and set the foundations for the corresponding category tactics.

Category strategies need to be aligned to the category role, and set the foundations for the corresponding category tactics.

In which of the following retailer strategy examples can only one retailer really "own" the strategy with the consumer, within a market?

Cheapest prices

Match the following terms related to category definition and segmentation on the left with their corresponding description on the right:

Consumer decision tree: a model typically done through market research that is a good approach to understanding category segmentation Category definition: a step in the category management process that sets foundations for the category, ensures a clear understanding, and avoids shopper confusion Category: A distinct, measurable group of products that consumers perceive to be inter-related and/or substitutable in addressing consumer needs

Which of the following is not a proprietary data source, and a manufacturer can share observations and insights across retailers?

Consumer panel data

Who ultimately drives all sales results for retailers and suppliers?

Consumers, through their purchases

Categories playing what role are usually allocated the lowest percentage of resources by the retailer?

Convenience

You have determine the right category segments, and how the items need to be segmented. But you can't change the fields within your item level database to align to these new segments. What steps should you take to add segmentation to your data?

Create an external segmentation database that you can link with the item level data, and plan to automate the process in the future

_____ is when a retailer displays high profit items with low profit destination items to drive incremental sales and profit.

Cross merchandising

What are the 4 prerequisites for Category Management?

Data, Organizational Alignment, Collaborative Approach, Technical Tools/Automation

Categories that play different roles in the store need to be treated differently, and have different pricing strategies. What role usually has the lowest gross margin % for the retailer?

Destination

What category role(s) match well with a turf protecting strategy?

Destination

Match the following category roles on the left with the corresponding product assortment strategy on the right.

Destination - largest variety from a subcategory, segment and brand level, down to an item level Routine - broad variety across subcategories, with major brands and items being carried Convenience - limited variety with only major brands and key items being carried Seasonal - broad variety for categories in their peak times

Match each category role on the left with the most like pricing strategy on the right for a typical large category for a grocery retailer.

Destination: price leader Occasional (fill in): frequently competitive Routine/preferred: consistently competitive Convenience: non-competitive

What is the most effective way to determine consumer needs to segment the category?

Develop a research-based consumer decision tree

Match the assortment measure with the correct calculation

Distribution opportunity gap: $ sales / current distro * (target distro - current distro) % of store carrying: # of stores that carry the item / total # of stores Sales per point of distribution: item $ sales / distribution Weighted distribution: sum of store sales that carry the item / sum of store total sales

What is the purpose of the traffic building category strategy?

Draw more people into the store Increase traffic in the store Draw more people down the aisle ALL OF THE ANSWERS ARE CORRECT

Which of the following is not a component of developing the implementation plan?

Ensure category strategy and tactics are aligned to category role (should be done earlier)

Large Christmas displays and Easter displays are good examples of which category strategy?

Excitement creating

True or False: Category management is only possible if you have a full suite of data and automated tools to work with.

False - You can do category management - just less sophisticated - with limited data and technology

True or false: The best data measure for comparing to year ago results for a product group is Growth Rate (% Chg vs YAGO).

False, "% chg vs YAGO" does not reflect the size importance of the product group. It should be supplemented with "absolute volume change" results

True or False: A category should have the same definition across all retailers.

False. Each retailer has unique target consumers based on their overall retail strategies, which should drive category definitions

True or False: Defining and segmenting the category is part of the category plan development in the category management model.

False. It is part of the retailer strategy

True or False: Without a consumer decision tree, the category cannot be segmented at an item level.

False. There are other options available for segmenting data if a consumer decision tree is not available.

True or false: You should show all of the data analysis that you complete in a project in a final presentation.

False: You should only show the data relevant to the business issue(s) you are presenting

True or false: Share of listings by product group = # of listings by product group / total category $ volume

Flase. = # of listings by product group / total category # of listings

Which type of private label branding is "a no name brand often used to indicate the lowest cost alternative options"?

Generic brand

Retailer X focuses their strategies on their very important customer. Their fresh areas like deli, meats, and produce have a wide assortment of products, and they have a carryout service and in-store childcare. They maintain consistent pricing slightly above market price. What would their overall strategy most likely be?

Great shopping experience and/or easiest to shop

Match the following items with their formulas

Growth rate ($ %chg): ($ vol this year / $ vol YAGO) - 1 $ share point chg: ($ share this year - $ share YAGO) Absolute $ chg: ($ volume this year - $ volume YAGO)

What is an effective way to approach a business issue?

Have a business issue to address before going into the data Develop hypotheses to prove or disprove Have a clear idea of what you are looking for in the data

How a retailer defines a category has implications on different areas of the retailer's business. Match each of these area on the left with the best description of what's more specifically affected by the category definition:

How data is purchased: affects how items fit into syndicated, panel, and other sources (may not be aligned) How a company reports their business: affects how the retailer's scorecards, goals, and objectives are established How product is purchased: affects which items a category manager "owns" in their portfolio How data is segmented: affects the consumer decision tree and hierarchical structure for the category

What one word will help you remember the basic tips to keep in mind when using data?

Important

Which data source can be misleading, as it can be reflective of a "one-time" store check of a product's price, promotional activity, placement, and availability?

In-store audit data

Which of these statements regarding in-store observation data is the MOST accurate?

In-store data gives an understanding of what is actually going on in the stores (e.g. compliance, merchandising, pricing, etc.)

Transaction building helps to:

Increase the size of the shopping basket

What is the most important reason for retailers to benchmark themselves against more than the channel which they compete within?

It gives an external perspective of the total market that consumers are shopping in.

At what product level is average unit price (both regular and feature) MOST effective? Why?

Item level. Average unit price should only be used at an item or line-priced level, because at a category, brand or segments level, it is a blended average

What are the most common traits of a destination category in retail grocery?

Large dollar sales, high household penetration, high purchase frequency

Display, pricing and promotion usually create an increase in sales versus if the product was NOT given one of these conditions. What is this increase in sales called?

Lift

Which of the following category tactics is least typical for a destination category?

Little or no promotional activity

Following are components of the category plan. Which element is where a retailer's opportunity gaps are determined?

Market and category assessment

Which of the following category examples does not include products that deliver a solution to a similar consumer need?

Mexican food category - this is a meal solution but not replaceable solutions

The average household that shops at Retailer X spends $25 per year on a specific category. Which of the following statements is most correct based on this information?

None of the answers are correct. More information is required. IMPORTANCE OF BENCHMARKS

Which of these is NOT a category strategy?

Occasional

Which of the tactics (or combination of) typically drive traffic to a particular store?

Pricing and promotion

Consumer purchase decisions are influenced by manufacturer marketing programs, such as:

Print advertising

Store layout, aisle layout, and category adjacency plans should all be included in what piece of the retailer's strategy?

Product placement

Match the different ways to group products together on the left with the most appropriate example on the right.

Products that deliver a meal solution: Mexican food category Products that create a total store effect: Total juices and drinks category Products that deliver solution to a similar consumer need: Salted snacks category Products that are substitutable in consumer usage: Total cough/cold products category

Match each of the tactics with the most related question that should be considered for the respective tactic:

Promotion: which programs deliver the volume and profit objectives required for the category? Product Placement: what are the category adjacencies? Assortment: what non-essential categories should they carry? Pricing: what items should the retailer match competition within 2%?

A supplier wants to highlight a listing opportunity to a retailer, but there is no market data available to benchmark them to. How can the supplier provide market or competitive insights to the retailer?

Provide market and channel benchmarks based on supplier shipment data, and compare them to retailer opportunities

Match the following terms with their formulas

Retailer $ share of mkt: (retailer $ vol/ mkt $ vol) * 100 Category $ share: (product group $ vol/ category $ vol) * 100 Volume opportunity gap: (target share - current share)/ 100 * product group mkt $ vol

Which of the following calculations is the correct formula for "Retailer Share of Market" for the total category?

Retailer Category Volume / Market Category Volume

What is the most important data source to use in category management work?

Retailer scanned sales data

In which step of the Category Management process does category definition and segmentation fit into?

Retailer strategy

Which data source allows for price regression and lift analysis, and in depth profit, promotion and pricing analysis?

Retailer weekly sales data (POS)

What do you need to know before you can effectively assign a category strategy?

Retailer's overall strategies and the role assigned to the category

Which of the following statements regarding allocation of resources to categories is most accurate?

Retailers should allocate resources to the category based on the category's overall importance to the store and to their shoppers

Categories playing what role(s) should be shelved beside destination categories to prompt impulse purchases?

Routine and convenience

Categories playing a ________ role tend to shrink or expand in shelf space based on the time of year.

Seasonal

Refer to the table. What is the best explanation for why the segment is growing (based on growth rate) by 0.6%, but is losing in $ share (-0.5)?

Segment 2's growth rate is below the category growth rate, so their share of a growing pie declined.

Match the following uses for Index vs ACV with the best description for each.

Strategically benchmark my business: understand business by total store, etc. and compare results vs different geographies to identify weakness and strength Track leading retailers and channels: Stay "in the know" by understanding trends of top retailers/channels Measure success of strategies: Create targets and corresponding strategies to achieve/measure results Identify development opportunities: Compare "most" and "least" developed

Which trading partner has the most influence on the category management process (and ultimately owns the process)?

The retailer

A retailer's index vs ACV for category X is 103. What is the BEST interpretation of this number?

The retailer's Category X market share is higher than their ACV share

Refer to the table. In which segment is the retailer MOST developed vs total market?

The small segment has the highest market share for the retailer and is therefore the most developed segment

The retailer's operations team can have significant influence over implementation of category plans at a store level. Which of the following is the responsibility that retail operations would have the LEAST influence over?

They develop overall strategies for the retailer

Which of the following statements best represents an attribute of a Club (large format) store?

They tend to have lower operating expenses and less overhead so prices are generally lower

Small size gets strong support across the tactics at this retailer, as indicated by the high FSIs. Based on this, what would you EXPECT the development to be on a small size at this retailer?

This retailers should be highly developed on small size compared to the market, driven by strong support that is given across the tactics

There are three key data cube dimensions - product, geography and _______.

Time period

What is the LEAST important reason for retailers to assign category roles as part of the category management process?

To determine their best choice for supplier/ category captains/ vendor advisors

Which of the following is not a category role?

Traffic builder

Match the category strategies on the left with the most relevant description on the right.

Traffic building: retailers use these categories to bring shoppers into specific departments or aisles Image enhancing: retailers use these categories to have a positive impact on shoppers through price, service, quality, and/or assortment Transaction building: retailers use these categories to trigger the purchase of other products/ related items Turf protection: retailers communicate their aggressive pricing strategies to consumers

True or False: Retailers may have more than one type of store format so that they can attract different types of shoppers to each of the different formats.

True

True or False: Maintaining item level segmentation is an ongoing process for retailers and suppliers.

True. As new items are brought in, they need to be properly segmented. This is usually tied into the product launch process.

True or false: Category strategies can be customized to increase creativity and uniqueness to categories for retailers.

True. Customizing categories can add in uniqueness, but can also result in more complexity for retailers.

True or False: Categories that are assigned different roles should be allocated a different percentage of resources by the retailer.

True. The most important categories should have more resources allocated to them

What category strategy is typically assigned to a few, highly visible, frequently purchased, high ring items with competitive pricing well known to shoppers?

Turf protection strategy

What is typically the LEAST accurate/valid measure(s) in consumer panel data?

Volumetric measures ($ volume, % chg)

Which of the following is a question that would LEAST likely be addressed in the retailer strategy phase in category management?

What are the category tactics?

When is Retail Measurement Data referred to as syndicated data?

When it is rolled up to include and reflect channel and market data

Category definitions determine which groups of products belong together based on consumer needs. Which of the following questions is LEAST likely to determine which products should be grouped together?

Which products, when co-merchandised together, build incremental sales?

Retailers POS data does not provide a(n) _____ benchmark to gauge how retailers are doing vs. their key competitors, channel or total market.

external

Tonnage volume/equivalized volume is a measure expressed in a common unit relevant to a category that goes beyond unit sales. Some examples include:

pounds, grams, gallons, cases