Category management must focus on consumer needs to maximize sales

April 27, 2016
Category management is a complex marketing mechanism that should be focused on customer needs. Run as a collaborative system between automotive retailers and suppliers, category management will benefit both parties greatly, although it should be driven by the retailers.

Aftermarket Business World columnist Larry Silvey takes a close look at product category management in the automotive aftermarket in his column, “Category management can maximize sales.”

Category managers need to make sure that they have the right products in the correct quantities on store shelves to satisfy what consumers want. This can best be achieved by establishing a close partnership between automotive retailers and product suppliers.

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The two groups need to share detailed product and sales information and work to benefit each other. For example, retailers need to share with suppliers information about sales, pricing, shelf positions and the time and duration of promotions. Suppliers need to accurately forecast demand for their products and provide proper levels of inventory on a timely basis.

Retailers must rely on suppliers to provide the data they need to manage their categories. Suppliers need to resist the temptation of exerting too much influence over decisions that should be made by category managers. Keeping this fine alignment is challenging. Silvey notes that if one party is trying to take advantage of the other, the partnership can be irreparably damaged. 

A category should be managed as a strategic business unit offering customer solutions. For example, while car polish is a product that will protect a vehicle’s paint, retailers and suppliers must consider vehicle appearance and protective products – including waxes, polishes, cleaners and cloths – that make up the unit. The category should help customers choose all the products they need to clean and protect their cars.

Silvey also explains how to avoid product SKU proliferation, and how to think strategically about category management rather than simply crunch numbers. Click here to read the entire column.

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