Category Management Zara

1701 Words Aug 2nd, 2013 7 Pages

Application of Category Management Principles in ZARA

Submitted To:-
Mr. Sanjay Kumar
Submitted By:-
Mr. Ritesh Malpani
IInd Semnester MFM

Introduction:- Category management is a retailing and purchasing concept in which the range of products purchased by a business organization or sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as product categories (examples of grocery categories might be: tinned fish, washing detergent, toothpastes). It is a systematic, disciplined approach to managing a product category as a strategic business unit. The phrase "category management" was coined by Brian F. Harris.
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were beneficial to the retailer and the shopper in the store.
A second reason was the realization that only a finite amount of profit could be milked from price negotiations and that there was more profit to be made in increasing the total level of sales.
A third reason was that the collaboration with the supplier meant that supplier 's expertise about the market could be drawn upon, and also that a considerable amount of workload in developing the category could be delegated to the supplier.
The Nielsen definition of a category, used as the basic definition across the industry is that the products should meet a similar consumer need, or that the products should be inter-related or substitutable. The Nielsen definition also includes a provision that products placed together in the same category should be logistically manageable in store (for example there may be issues in having room-temperature and chilled products together in the same category even though the initial two conditions are met).
However, this definition does not explain how the process often works in practical retailing situations, where demographic or marketing considerations take precedence.
The category management 8-step process:-
The industry standard model for category management in retail is the 8-step process, or 8-step cycle developed by the Partnering Group.[9] The eight steps are shown in the diagram on the right; they are :
Define the category (i.e. what products are
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