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Category Management

A few years ago, retailers, in an effort to rectify some major retail issues, devised a new way of evaluating merchandise and streamlining the supply chain. The foundation for category management depends on cooperation and sharing between manufacturers and retailers. In the past, buyers were responsible for entire categories but were still managing each SKU individually. Category management treats the entire category as a profit and loss center.

Grocers were the first to adopt the concept and tasked certain manufacturers—category leaders—with actually managing their individual categories. This meant these category leaders had to recommend stocking data based on a set of financials and consumer information. By evaluating the category as a unit rather than as a series of independent products, manufacturers were forced to prove the financial viability of a category. It was even possible that they could list a competitor's product and de-list their own based on objective consumer data.


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