When I was offered to lead a team of a newly formed department called Category Management in a beauty and health retailer in 2010, I was given a briefing by the Vice President for Human Resources as to the scope of the job, as it is their first time to have these division in their corporate structure, they would want to initially merge it with their marketing department.
It took me more than two weeks to finally came up with the written and approved job scope of their category division, nonetheless, it is still a merchandising related job however there were several additional scope in the job that pertains to marketing and branding.
So here, I am sharing what that responsibility means and how it has developed me further in my retail dynamic skills and experience which I find very valuable.
Category Management
is a collaborative continuous process between manufacturers and retailers to manage a shopper need state which we refer to as a ‘category’. The purpose of this process is to optimize shopper satisfaction and fulfill the role chosen by the retailer for that category within the overall portfolio of categories in the retail format. The end state of the category management process is that combination of assortment, price, shelf presentation and promotion which optimizes the category role over time.
Category management is data intensive and analytical in character. Category management is about understanding data. By contrast, shopper marketing is more about understanding emotions or motivations.
Most importantly the category serves as the platform from which shopper marketing initiatives can be collaboratively launched because the retailer and the manufacturers ideally are aligned around a common solution to a need state of the shopper. Large complex consumer need states such as a ‘family dining‘ solution or a ‘birthday party‘ solution often involve a multi-category solution which necessitates the collaboration of multiple manufacturers and the retailer.
Marketing
is an effort to change attitudes and thereby change behaviors. Marketing has many requirements. It must create awareness, stimulate desire and ultimately differentiate the product by giving consumers a reason to purchase in preference to competition. Marketing is a continuous and all-encompassing activity. It is not a single campaign or initiative such as event marketing, a social media program or an in store shopper marketing event. These are components of the larger multi-faceted activity known as marketing.
Marketers have many tools to attain their objectives. These include research protocols and various promotional and communication options ranging from print to TV to all the newer social and digital media. Marketing begins by understanding consumer attitudes towards a particular need and then proceeds to product design and strategy development. Great marketing is built upon an insight, a profound understanding of some critical aspect of the consumer need. Marketing consummates at two moments of truth, the first at the shelf when the product is purchased and the second when the product is consumed.
The ultimate end of marketing is creating equity in the consumer’s mind such that consumers identify that product as uniquely theirs, a trusted contributor to a more satisfying life, one that meets a perceived need in a superior manner.
Shopper Marketing
For the CPG manufacturer, shopper marketing is an occasion based component of the larger marketing armamentarium. It is preceded by the shopper’s perception of a need state and possibly by previous experience with other products in the category which satisfy the need. Shopper marketing is preceded by and influenced by all the advertising and information collected from months perhaps years of advertising exposure and in many cases actual usage experience. The objective of shopper marketing is the enhancement of the brand’s equity at the point of sale. Such that a purchase occurs.
The initiative called ‘shopper marketing’ begins as the consumer perceives a need and starts down the path to purchase perhaps by taking the mundane first step of preparing the shopping list. Shopper marketing may include a range of information gathering and communication interactions including seeking and receiving promotional incentives or exploring websites for product recommendation or product availability.
The key point is that shopper marketing is an episodic time bound activity, occasion specific and immediately linked to a transaction consummated at retail at the end of the path to purchase.
The larger and more comprehensive ecosystem of marketing surrounds and influences the more immediate transactional activity known as shopper marketing. What differentiates shopper marketing is its inextricable link to the retail point of purchase. Therefore truly effective shopper marketing requires some level of collaboration with the retailer who, after all, controls the point of sale. Let’s put it this way: the single most effective and efficient ‘shopper marketing’ tool is a display at retail. Can any manufacturer get display without the retailer’s collaboration? This basic fact requires the manufacturer to align with retailers who understandably have their own objectives regarding the shoppers and the need states involved in any given shopper marketing initiative.
For the retailer, shopper marketing is a more important component of the overall marketing activity because the ‘product‘ the retailer is selling is the shopper experience. That experience has as its objective satisfying the need states which the drive the shopper to the store or digital shopping location. Many important aspects of that shopping experience are not time bound. For example, store appearance, in store service level, pricing and promotional policies etc. are permanent, continuous components of and contributors to the shopping experience and the overall marketing platform of the retailer.
But many important aspects of the retailer’s overall marketing platform are occasion specific or target shopper specific.
These overlap with and often align with the manufacturer’s ‘shopper marketing’ initiatives. These are initiatives aimed at a specific shopper need state that add excitement and urgency to the shopping experience. In these cases, shopper marketing for the retailer centers on categories which themselves are satisfiers of shopper’s needs. The brands within the category are competing to satisfy the basic shopper need. The retailer is agnostic to the brand except in so far as one brand somehow does a superior job in meeting the shopper need. For the retailer, shopper marketing is about categories and needs not brands and their initiatives.
The retailer has the same weaponry as the manufacturer with which to influence the shopper but has two unique weapons unavailable to the manufacturer. Through its proprietary loyalty card data, the retailer knows every aspect of the shopper’s buying behavior in the store. Even more importantly, the retailer controls one critical moment of truth, the point of purchase itself, the shelf, the alter of the shopper experience. Without the retailer’s collaboration, the manufacturer is virtually powerless at the shelf.
Therefore the manufacturer’s capability to succeed at shopper marketing requires aligning with the need states or categories chosen by the retailer to attract and satisfy the shopper.
