Understanding the role of category management and how it can be used with new product development to

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Understanding the role of category management
and how it can be used with new product
development to maximise sales

• Richard Simpson
• Customer Marketing Controller
• 30th October 2008

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Ginsters who are we?
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(No Transcript)
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If you cant give me something to excite my
customers then all weve got to talk about is
price!
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Overview

• A little theory
• Ginsters and the Samworth Group application
• Future challenges

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Customers will execute when there is maximum
alignment and when . . .
Category Vision Channel Vision POP Vision
Category Development Plan
Initiatives New Product Development, Range,
Space, Promotion etc.
Internal and External
Internal and External
Internal and External
Macro Focus
Micro Focus
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Category Marketing?
Categories are products and services grouped to
reflect consumers usage or purchase behaviour
Consumer Definition and Segmentation
Strategic Category Marketing is the management of
a category with the aim of increasing category
returns by shaping the category offer to meet
BOTH current and future consumer and shopper needs
Improving Returns
Category Marketing extends the marketing mix to
the point of purchase and therefore requires
business gains to be identifiedfor both supplier
and retailer
Influencing the Point of Purchase
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Key Concepts DrivingStrategic Category Marketing

• Consumer Insights Driving
• Category-based marketing strategy (including
  innovation)
• Customer Propositions
• Channel strategies vs. generic approach
• Category focused vs. Brand Development
• Developing Point of Purchase and innovation
  strategies based on shopper research which
  support channel strategies
• Quantifying Propositions fact based selling
• Impacting internal organisational development
• Altering the traditional Customer Supplier
  Interface

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Balancing The Roles And Responsibilities
Distinguishes Category Leaders From Also-Ran's

• Led by marketing
• Strategic output
• Cross functional teams
• Total company
• Big ideas

Strategic Category Marketing

• Led by sales
• Process driven
• Tactical output
• Project based
• Performance optimising

Category Management with Customers
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and finally what constitutes new product
development?
Base Source Robertson, 1967
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Efficient Product Introductions

• True innovation is critical but rare
• Product must deliver on concept promise
• Repeat rates are a key factor
• Long-term support is essential
• Success rates are higher for major category
  players
• There is a benefit in being first to market

Source Adapted from Ernst Young / ACNielsen
(1999)
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Enough theoryhow are Ginsters leveraging this
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Vision Statement forGinsters Customer Marketing
To be an industry centre of excellence,
acknowledged as an outstanding implementer of
insightful growth driving propositions at the
Point of Purchase

• Our aspiration is
• To work with our customers to develop the
  Category (Food for now, Traditional Savoury
  Pastry) at Point of Purchase by
• Providing clear and impartial consumer insight
• Increasing consumption
• Adding value

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The raw materials of successful innovation are a
detailed understanding of
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Which of those are critically influenced through
Category Management
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How we use Category Management to help our
customers drive growth and identify need states

• Competitor Intelligence
• Keep abreast of any market changes
• Identify product innovation opportunities
• Whats on our customers competitors agendas?
• Customer Intelligence
• Whats selling and whats not!
• Whats driving category growth?
• Whats driving incremental sales?
• Are the right products ranged in the right store?

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How we use Category Management to help our
customers drive growth and identify need states

• Shopper Behaviour Consumer Intelligence
• Who our shoppers are in terms of demographics and
  lifestyle
• Which customers are likely to buy which products
• Which other products are purchased with our
  products
• Shopper behaviour at the fixture and how they
  make their purchasing decision
• Screening and testing concepts
• Market Performance Intelligence
• How are customers competitors are performing in
  the market place
• What is driving success or failure?
• What their strengths and weakness are?
• How our customer is performing against its
  competitors? Is it getting its fair share of
  trade? Where are its strengths and weaknesses?

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Innovation and operation cycles
Innovation
Operation
How we currently see it
Operation
More like reality
Innovation
Innovation
Operation
Raising the profile of innovation
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Innovation SuccessDevelopment is just half the
job

• Impact at the Point of Purchase

• New Product Development

Typically 27 of new products fail to meet their
success criteria, however only 4 are stars
Source Cardiff University dunnhumby
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Developing Joint Customer AgendasSelling the big
ideas up front

• Keep it simple, straightforward and
  understandable for the customer
• Move from background through objectives to
  actions
• Do not make promises you cannot keep

Channel Customer opportunities
Category Action Plan

• Objectives
• check
• next steps
• close

Category Understanding

• What is in it for the customer
• identify where the greatest opportunities lie

Presentation Objectives

• Demonstrate our unique insight
• consequences
• category
• shopper
• customer

Background

• What is the point of today

• Why we are here
• Strategic alignment

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What does success look like for us?

• No. 1 UK Sandwich brand
• A Profitable and sustainable buisness
• A Category leader not a follower
• Recognised as being innovative
• Recognised as having an wholesome and secure food
  chain from farm to plate
• Recognised by customers as driving incremental
  growth
• Respect and integrity

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In practice simple innovations are
keyIncremental Sales at retailnow worth 3 of
our Sandwich business

• Drivers
• Something Special
• Wholesome Food

• Need States
• Impulse
• Indulgence

Taw Valley mature Cheddar cheese, apple raisin
chutney with endive and seasoned mayonnaise on
malted brown bread
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Summary

• We continue to build a credible and profitable
  brand in sandwiches
• We are building a clear category proposition and
  understanding
• We are trying to address the balance between
  innovation and operational needs
• We can effectively leverage the key category
  drivers to build our customers businesses
• We understand the need for effective
  implementation at the point of purchase
• We are developing consistent and joined up
  agendas with our customers
• Hot Food Opportunity