Business sum-up In 2012 ,the sales of infant milk reached 90.82million and growth by 3.16%and comparable sales of 85.45 million with 2.47% growth. 20129082.873.16% 8545.8 2.47% During Jan-Mar 2013, sales reached 28.91 million 20131-32891.4525.6% 20131-32655.77 16.14% DM 10%--20%6.06%6.38%

Category Management in ActionA Case Study: Infant Milk Formula

IGA 2014911-12IGA Shenyang Conference 11-12th, Sep, 2014Speaker Profile, 10

General Manager of Changsha District, Bubugao Food Business UnitCao Zhihui, General Manager of Changsha District, Bubugao Food Business Unit, takes charge of hypermarket operation of Changsha downtown area .He has 10 years retailing experiences and more than 7 years of conducting category management . Cao zhihui was senior merchandise manager and worked with Mars, Wrigley, Kraft and Yili together in this area.

Category Management In Action A Case Study2009-2013 Situation in 2009 - 2013 Experienced total negative sales grow Food safety issue Experience intense competition, one of them was from baby and mother shops around BBG stores. Category Strategy and Tactic was not in place Category: Infant Milk FormulaThe Category Management Business ProcessCategory Definition: To determine the products that makes up the category and its segmentation from the consumers perspective

Category Role: To develop and assign a role for the category based on a cross category comparison, considering consumer, market and retailer informationCategory Assessment: To Conduct an analysis of the category sub category segments, etc by reviewing consumer, market, retailer and supplier informationCategory Performance Measures: To establish the categorys performance measures and targets

Category Strategies: To develop the marketing and product supply strategies that realize the category role and performance objectives

Category Tactics: To determine the optimal assortment, pricing, shelf presentation and promotion tactics that ensure the category strategies are implemented

Plan Implementation: To Implement the category business plan through a specific schedule and list of responsibilitiesCategory RoleCategory DefinitionCategory AssessmentCategory Performance MeasuresCategory Strategies

Category TacticsPlan ImplementationCategory ReviewCategory Review: To measure, monitor and modify the Category Business Plan on a periodic basis Category : Infant Milk Formula Category Role : Destination Category Management In Action A Case Study

Category: Infant Milk Formula Category Role : Destination Category Management In Action A Case Study

Baby Center

Infant Milk Formula Category PlanCategory Management In Action A Case Study

Infant Milk 201220131~39082.873.16% The sales of infant milk reached 90.82million and grow by 3.16%.

8545.8 2.47% The comparable sales of 85.45 million with 2.47% growth.

2891.4525.6%Sales reached 28.91 million and grow by 25.6%. 2655.77 16.44% Comparable sales reached 26.55million and grow by 16.14%.DM 10%--20%6.06%6.38%In order to exert more influence to the market and strengthen our DM, though the sales showed positive growth, the category GP% dropped. Through the category review, the strategy and action plan will focus on maintaining positive growth and improving GP% from 6.06% to 6.38%.Executive Summary Strategy and Plan Expansion of brandOptimization of facingOptimization of layoutAssortment and Space Distribution AB8101416To expand the distribution of competitive brand such as imported infant milk and cover the items to all stores.To adjust triple-pack from the bottom of facing to the middle in order to get more sales of triple pack.Currently, the shelf and Skus is reasonable, the brands with 8 bays -10 bays involve high sales and low inventory days. Therefore, new opening store should follow the pattern while products with 14 bays-16bays should be reduced.Strategy and Plan 4 &2.99%6.06%6.38% Pricing To adjust pricing of sensitive items based on competitors prices check.

To set up 4 price zone which can be applied to local competition. Due to the price zone need to be competitive, which will lead to GP% drop about 2.99%,afterwards,we plan to improve the margin from 6.06% to 6.38% by reducing in store promotion.CompetitionHigher margin201333.82%201215%20131-34.73%9.59%3.47%15.45%12.17%2.9%

In 2013,we will increase the CTS of DM to 33.82%(while in 2012 the figure is 15%).During Jan-Mar we did several discount events for infant milk which greatly stimulate the sales.We increase the rate of hero items on DM from 4.73% to 9.59% by sacrificing 3.47% margin to gain sales. Among the marketing event for infant milk, promotion by brands achieve better effect than by low price or by item. To reduce the in store promotion rate from 15.45% to 12.17% ,meanwhile, to increase 2.9% of margin. We should better control the in store promotion except every Wednesday discount.Strategy and Plan Promotion1232010-2013Source: Nielsen Scan Track Report 2010 - 20132010-2013Infant Milk Formula Market Share Trend 2010 - 2013

20121-201312Source: Nielsen Scan Track Report Jan 2012 - Dec 201320121-201312 Infant Milk Formula Market Share Trend Jan 2012 Dec 2013

Project Mindset it is not a project but a business process at the category level within the frame of the companys strategy in order to achieve financial and other goals and objectives

Silo Mindset No integrated strategy and processes among divisions (MD, Operation, and Store Planning)

Lack of Champion to lead the category management processes

Key Challenges of Category Management Implementation Lack of skill to apply the processes (i.e. a combination Financial skills and Marketing skills)

- Lack of commitment from the staffs the process is time consuming (i.e. to collect and to analyze data)

Lack of market data that is important to identify opportunities

If not cautious the process can lead to Analysis paralysis over analyzing data so that a decision or action is never taken

Key Challenges of Category Management Implementation

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