Food Category Management Exam 2

Define and explain the Share/ Growth Quadrant Analysis and Opportunity Gaps.

-Quadrants include: sleepers, winners, opportunity gaps, and questionables. -Which sub-categories are growing faster or slower in the market? -Is the category role being delivered based upon current performance in the market? -Does a gap exist between the category's performance and its role? -Is the retailer receiving its "fair share" of a category's business? -How important is each sub-category to the overall category?

Name two benefits of assigning category roles.

1) It helps the retailer deliver better consumer value. 2) It maximizes the retailer's and supplier's return on resources.

What three steps are involved in the Category Role completion?

1) the determination of company-wide category roles 2) the assignment of category roles 3) the allocation of resources to each categories

Why define a category? Define the category you chose previously.

1. Better retailer/supplier alignment with the consumer a."How would consumers define the category, sub categories and segments based on their needs, and how do they make purchase decisions within this category?" 2. Better retailer-supplier alignment a. helps retailers and suppliers arrive at a common definition 3. New Perspectives a. It can highlight unnoticed competitors or other opportunities that have been overlooked in the past.

Define the word "category".

A distinct, manageable group of products/services that consumers perceive to be interrelated and/or substitutable in meeting a consumer need.

What is a Consumer Decision Tree? Describe the CDT for the category you chose.

Category Structure from a consumer's perspective, which is the identification of the category's key sub-categories, segments and sub-segments. Sub-categories: Caffeine and Decaf Segments: ground and instant Sub-segments: by size packets or by jar

What ten performance measures would you use for your chosen category? Why?

Measures fall under four categories: Consumer, Market, Financial, and Productivity Out of Stock Rates- Consumers don't like out of stock items Sales per Square Foot- Valuable space should be used effectively Loyalty- knowing the popular brands and new products is essential. Private Label Sales- Be aware of private branding and consumers prefer well known brands Customer Satisfaction- knowing the consumer satisfaction and have the right assortment Transaction Size- determine transaction size for inventory purposes Opportunity gap- understand the competitive advantage from others Gross Profit- lead into profits Sales Growth- preserve high profits and increase sales to be successful. A slow growing rate means change. Sales-brands to sell the most and have the highest value to maximize profits.

What is the retailer's role in the Category Performance Measures?

Recommend appropriate target goals and communicate target objectives to suppliers.

What is determined by the Category Performance Measures?

Setting the category's target objectives in consistent manner with role and assessment findings.

Name four retailer resources that would be impacted by the Category Role.

Staff- how much/staff time is allocated Floor space- the more important the category, needs more floor space. Management time research- category should be continuously upgraded and enhanced Supplier relationship- retailer must work carefully and cooperatively with a supplier

Define an Occasional/ Seasonal category- Name one in your chosen retailer. Why?

The Role of an Occasional/Seasonal category is: -major provider -reinforce the target consumer's image -deliver frequent, competitive value -secondary role in delivering profit

Name the four critical elements of a Category Assessment?

The four critical elements are: -Clear assignment of responsibilities between the retailer and supplier -A standard assessment process -technology tools to perform productively and objectively. -A willingness to share the necessary information

What does the Category Role establish?

The priority and importance in retail and the resource allocation.

Define a Convenience category- Name one in your chosen retailer. Why?

The role of a Convenience category: -reinforce the target consumer's image -deliver good, everyday value -play an important role in the area to generate profit

Define a Destination category- name one in your chosen retailer. Why?

The role of a destination category is: -the primary provider -define the profile of the retailer -to deliver consistently superior value -to lead the retailer's people to achieve the goals and strategies.

Define a Preferred category- Name one in your chosen retailer. Why?

The role of a preferred category is: -the preferred provider -build the target consumer's image -deliver consistent, competitive value -a primary role in delivering profit

Define market share.

The sales of that retailer divided by the sales of the entire industry, including the retailer's sales.

What is the supplier's role in the Category Performance Measures?

The supplier should help evaluate the target objectives. The supplier's knowledge of new trends and useful informations is important.

Which two areas of the category business unit are defined in the category definition?

The two areas are: - selection of specific SKU's - defines the structure (or segmentation)

What are the minimum retailer requirements to start a Category Assessment?

Turnover, profit, and current shelf space management data with a need of sales and cost of goods.

What is the purpose of the Category Assessment?

to obtain organize and analyze the information necessary to understand the current performance and to identify the areas of greatest opportunity. "What is the current state?"

Category Performance Measures should have what characteristics?

• Balances Architecture- internal and external measures focusing on short and long-term results • Total System- Measures should allow all results from all phases • Allow for Comparison- Measures should be able to track actual results overtime • Timely, Accurate, Understandable Measures- allow managers to make good decisions is consistent with the company goals.