Category management and sustainable advantages: An indian perpective

Category management (CM) is a collaborative process between the retailer and manufacturer. This begins with shifting management's brand centric focus to category level growth. Intense competition and product proliferation leading to fighting for retailer's limited shelf space forces manufactures to maximize profit and optimize stock keeping units (SKUs) and shelf space at the store. CM is directly concerned with the increasing knowledge of consumer base and joint planning with supplier to improve profit and customer satisfaction. It is a demand side strategy to determine ef fective allocation of right shelf space to desired SKUs on the retailers’ shelves. Research has shown that manufacturers and retailers continue to rate category management as “critically important” and remains a core business practice in consumer package goods (CPG) industry. The Indian consumer choices and preferences are changing very fast. They are more demanding in term of quality and variety now than before. Hence consumer needs to be served better in terms of quality product offerings at cheaper price within a product category. So it becomes inevitable for both retailers and manufactures to look collectively at the category growth. The paper looks at how CM can be used by Indian manufactures and retailers to gain sustainable advantage.