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RMG 200 Lecture Notes - Category Management, Focus Group

Retail Management
Course Code
RMG 200
Brent Barr

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- Merchandise management: the process by which a retailer attempts to offer the right quantity of the right
merchandise in the right place at the right time while meeting the company’s financial goals
- Assortment plan: list of merchandise that indicates in general terms what the retailer wants to carry in a
particular merchandise category
The Buying Organization
Merchandise Category The Planning Unit
- Merchandise category: an assortment of items that customers see as substitutes for one another
- Eg. girl’s apparel, boy’s apparel, infant’s apparel
- Priced and promoted to appeal to similar target market
Category Management
- Category management: the process of managing retail business ith the objective of maximizing the sales and
profits of a category
- Two reasons for adopting category management:
o It is ultimately responsible for the success or failure of a category because it is harder to identify the
source of a problem and solve it without category management
o It is easier to manage to maximize profit using category management. It can help ensure that the store’s
assortment is represented by the “best” combination of sizes and vendors, that is, the one that will get
the most profit from the allocated space
The Category Captain
- Category captain: a supplier that forms an alliance with a retailer to help gain consumer insight, satisfy
consumer needs, and improve the performance and profit potential across the entire category
- Eg. Kraft has a lot of influence on grocery industry
- A potential problem with establishing a category captain, is that vendors could take advantage of tier position
- Appointing category captain makes the category manager’s job easier and brings the promise of higher profit
Category Life Cycle
- Forecast: to estimate or calculate in advance; predict the future (short term sales)
- Category life cycle: a merchandise category’s sales pattern over time
1. Introduction
Merchandise Group: (aka general merchandise managers,
GMM) a group within an organization managed by the
senior vice preseidents of merchandise and resposible for
several departments
Department: A segment of a store with merchandise hat
represents a group of classifications the consumer views as
being complmentary. They are managed by divisional
merchandise managers who report to the vice presidents
Classification: A group of items or SKUs for the same type of
merchandise, such as pants (as opposed to jackets or suits),
supplied by different vendors
Category: An assortment of items (SKUs) the customer sees
as reasonable substitutes for each other
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