Category management is one of the four fundamental ECR (Efficient Consumer Response) concepts and is concerned with management of (product) categories. Categories are viewed as strategic business entities.
Category management is the response to the proliferation of branches, centralisation and the increasing use of systems in retail. It is an approach firmly based on numerical analysis which aligns product ranges accurately with customer needs and sales opportunities. Retailers and manufacturers have the objective of satisfying customers' needs better and thereby increasing sales, turnover and earnings.
Ideally, retailers and manufacturers work together collaboratively in category management. This allows them to benefit from category management and increases both their sales and their market shares. Category management is a structured process intended for use in long term collaboration and ideally suited to daily operations.
The guideline for developing, implementing and checking categories is the classic eight-step process. It is not only suitable for food and near-food markets: it can be applied to all other categories in the non-food and healthcare markets. Category management is also put to good use in B2B trade and various service sectors.