Get an understanding of Category Management and related fields with our terms and phrases. This list of definitions for key category management terms should help you.
Assortment - A selection of products that are chosen based on a number of attributes (including consumer need, retailer strategy) that maximizes efficiency and commercial return within a category or store
Baseline Sales – Those sales of a product that would have occurred had there been no promotional or marketing activity
Brand Cannibalization – Switching of sales within a brand; e.g., consumers buying 16 oz Diet Coke instead of 32 oz
Brand Loyalty – A measure of the expenditure on one brand as a proportion of expenditure bya a household on all brands within a category or subcategory
Brand Management – The process by which marketers attempt to optimize the Marketing Mix for a specific brand
Case Size – The number of products in an outer case
Category – Products grouped together to reflect consumer usage or purchase occasion; e.g. “Ready Meals”
Category Decision Tree – The order of priority in which shoppers make their purchasing decisions; the hierarchy is usually described like a family tree and details the various product attributes (such as price, flavor, size, brand, etc.)
Category Management – The strategic management of product groups through trade partnerships which aims to maximize sales and profits by satisfying consumer and shopper needs
Cluster – A group (e.g. consumers, stores, locations) that identifies similar characteristics or attributes; ranges can be targeted at cluster groups to better meet consumer needs
Competitive Advantage – The product, proposition or benefit that puts a company ahead of its competitors
Consumer – The end user of a product; the consumer is not necessarily the same as the shopper, who is the person who buys the product or service; the term customer is often used (by retailers) when referring to the consumer
Consumer Behavior – The buying habits and patterns of consumers in the acquisition and usage of goods and services
Consumer Demand – the average daily sales of a product
Consumer Products – Products produced for, and purchased by, households or end customers
Cross Merchandising – The display of a product in a different category to its usual location due to an associated relationship (e.g., salsa in the chip aisle); cross merchandising assumes there is an element of lateral thinking and shopper logic to the purchase
Database – A collection of organized information in which a computer can easily display and select different fields of data
Demographic Data – Information describing and segmenting a population in terms of age, sex, income, etc., which can be used to target marketing campaigns
Distribution – This can be measured as the number of stores that a product is stocked in or based on total volume sales; the level of distribution can be classified in a number of ways although is usually reported as a percentage of total market or total sores of a specific retailer
Efficient Store Merchandising – Optimization of space allocation at store level that aims to avoid out of stocks and at the same time maintains minimum stock levels
Frequency of Purchase – How often a product or category is purchased by consumers over a given period of time
Incremental Sales – The additional sales of a product that have happened directly as a result of promotional or marketing activity; sales over and above base sales
Inventory – The level of stock available; usually refers to products on the fixture itself or in the total store when measured as part of demand management (as opposed to the warehouse or total chain as often used in Supply Chain terminology)
Knowledge Management – The collection, organization and distribution of information in a form that lends itself to practical application; knowledge management often relies on information technology to facilitate the storage and retrieval of information
KPI (Key Performance Indicators) – Measures that are deemed essential in monitoring the category for example volume sales, gross margin
Loyalty – Consumer’s allegiance to a product, brand, store or image; loyalty can be measured by the proportion of the total spending made by shoppers (across all outlets) that they spend in the outlet concerned
Market Research – The gathering and analysis of data relating to market places or customers; any research which leads to more market knowledge and better-informed decision making; the study of the demands or needs of consumers in relation to particular goods or services
Market Share – A company’s sales of a given product or set of products to a given set of customers, expressed as a percentage of total sales of all such products to such customers
Merchandising – The planning of space at a micro level (category and product); merchandising involves the allocation of shelf space and physical layout of product within a specific category
Out of Stock – In demand management, the term usually refers to when a product is unavailable at the shelf (as opposed to Supply Chain terminology where it can refer to any given point in the Supply Chain, e.g., supplier distribution center, retailer distribution center, store)
Pallet – A flat, open surface constructed of wood or plastic that is designed to hold and transport product; sometimes used in-store to display high volume products
Planogram – A visual representation of the fixture layout that aids communication, planning and replenishment of products in-store; it shows the position of every product within a fixture, shelf heights, length of fixture adjacencies
Point of Payment – Location where payment for goods or services takes place where the purchaser and seller are both present
POS (Point of Sale) – This can have two meanings: the most literal is its use as reference to the physical location where a product is displayed for sale (e.g., shelf, end-cap, checkout); secondly, POS is used in reference to communication material (e.g., of promotional offers) that is displayed at the point of sale
Product Launch – The promotional plan for the introduction of a new product
Promotional Mix – The components of an individual promotional campaign, which are likely to include advertising, personal selling, public relations, direct marketing, packaging and sales promotion
Qualitative Research – Market research that does not use numerical data but relies on interviews, focus groups and the like, usually resulting in findings with are more detailed but also more subjective than those of quantitative research
Quantitative Research – Market research that concentrates on statistics and other numerical data, gathered through opinion polls, customer satisfaction survey, etc.
Relational Database – A database in which related information is stored in multiple tables
ROI (Return on Investment) – The value that an organization derives from investing in a project
Sales Promotion – A range of techniques used to engage the purchaser; these may include discounting, coupons, guarantees, free gifts, competitions, vouchers, demonstrations, bonus commission and sponsorship
Segmentation – The clustering of products within a category into discrete groups on the basis of consumer need, product form, shopper behavior, etc.
Shopper – The person who visits a store to purchase a product; the shopper is not necessarily the consumer (i.e., the end user)
SKU (Stock Keeping Unit) – A uniquely identifiable line within a product category; a particular product may have many variations, each of which would be a unique SKU
Space Management – The allocation and control of in-store space; this can be at a macro level, such as department (e.g., Non-food) or category (e.g., Health and Beauty); it can also be at a micro level relating to products within a category
Sub Category – A smaller subset within a category; for example, Coffee within the Hot Drinks category
Supply Chain – The network of suppliers, manufacturers and distributors involved in the production and delivery of a product
