Archive for: February 2012

Category Management Series Tip #8: What is a “Good” or “Bad” Index?

Calculating an “index” is a common practice in category management – index vs ACV (or all sales share), fair share index, index vs year ago – to name a few.   An index provides a comparison between two sets of numbers, and can be very useful data.  But there tends to be some generalizations when using an index.  For example, if I create an index that compares a retailer’s category market share and a retailer’s ACV market share, if their index is > (greater than) 100, it is “overdeveloped” or …

Category Management Series Tip #7: Baseline and Incremental Sales (Are You Using Them?)

There are so many data sources and measures available for suppliers and retailing companies – I’ve been asked many times what I think are the “most important” or “best” ones to use.  As I commonly respond to a general type of question, “it depends” – it depends on what you are trying to understand, and what data you have access to.

That being said, I think that baseline and incremental sales information is incredibly valuable for both suppliers and retailers, for scorecarding their business, and measuring ROI on …

Category Management Series Tip #6 Manufacturer Promotional Return on Investment

Last week’s category management tip was primarily focused on how retailers can calculate a breakeven point based on gross margin objectives.  I had a lot of questions from suppliers on expanding more on understanding gross margin and breakeven from their perspective.  Based on this feedback, this week’s tip relates to breakeven, but focused more specifically on the supplier.  I walk you through 3 different costing scenarios for a supplier when booking a promotion with a retailer, and determining the scenario with the biggest payout for the retailer.

Suppliers need to complete profitability / return on …

Category Management Series Tip #5: Tactics: Pricing (Break Even Analysis)

I certainly am not going to complain about anything in Calgary these days – beautiful snow in the mountains to give us some of the most fantastic ski conditions around, and we are enjoying a balmy 10°C in the city (with no snow at all).  Very unlike Calgary in February, but I’ll take it!

February’s category management tips are all going to relate to the tactics (pricing, promotion, placement, product assortment).  I thought I’d start with one on …