🎓 Definition
Category tactics, also known as category management tactics, refer to specific strategies and actions taken by Retailers or Manufacturers to optimize the performance and profitability of product categories within their business.
Category Tactics will depend on the Category Role which has been assigned to the Category: Traffic, Destination, Convenient, Seasonal,
These tactics are designed to drive sales, increase market share, and improve overall category performance. They involve a range of activities and decisions related to the product range, pricing, promotion, and placement called the Retail Mix.
🧪 Example of Category Tactics
For example, a Retailer would like to implement a Category Tactic to drive Destination in Shampoo Category where the objective is to grow sales while maintaining its category margin level. As an example, below, there will be several actions that can be taken on Range, Space, Price, and Promotion.
Range
- Create as many sub-categories as possible to increase purchase opportunities.
- Create high-quality Private Labels.
- Offer a variety of product quality levels.
- Add packs as necessary.
Space
- Place more profitable items in eye-level positions (Give more facing to good performance SKUs)
- Allocate more space to high-volume, high-profit items.
- Tackle out-of-stock as a priority.
Pricing
- To match price points with competitors but not lead.
- Never initiate to decrease the selling price.
- Maintain margin whenever possible.
Promotions
- Try to match with the competitors in terms of promotional price, especially during the period when they are aggressively doing a promotion.
❓What is used for
- Category tactics are designed to drive sales within specific product categories. By implementing effective strategies related to product range, pricing, promotion, and placement, Retailers can boost sales and revenue.
- Increase market share within targeted product categories. By optimizing category performance and offering compelling options to customers, Retailers can attract more shoppers and gain a larger share of the market.
- The tactics aim to optimize the performance of product categories by enhancing their profitability and overall success. Through strategic decisions and actions, retailers can improve category performance metrics, such as sales per square foot, margin levels, and customer satisfaction.
- Retailers can offer a more tailored and satisfying shopping experience to customers. Strategies like product Assortment Optimization, competitive pricing, and targeted promotions ensure that customers find the products they desire, at the right price points, leading to higher levels of customer satisfaction.
- Implementing effective category tactics gives Retailers a competitive edge in the market. By analyzing and understanding customer preferences, aligning offerings with market trends, and leveraging key tactics, Retailers can differentiate themselves from competitors and position themselves as leaders within specific product categories.