CIA3 : RETAIL MANAGEMENTMerchandise management and other related processes

Retail Store Chosen: Arrow

By Anish Rao

08d1334Marketi

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Retail Store Chosen

ARROW IN INDIA

A Brief profile

The epitome of the brand is heritage and craftsmanship. The parent company of the brand namely Cluett Peabody & Co., USA, began operations in the US in 1851. Till 1920 Arrow was a brand known for manufacturing collars. It was only in 1920 when a man named C.R. Palmer came up with an idea to make Arrow shirts. Since then Arrow is known for heritage a master craftsmanship. In 1993 Arrow was launched in India and the first exclusive store was opened at Commercial Street, Bangalore. In 2000 Phillips Van Heusen got the license for the brand in the US and in 2004 history was made for Philips Van Heusen when they got the world rights to the Arrow brand.

ARROW in India is a lifestyle brand targeted at men between 25 to 44 years. Arrow is a benchmark for formal dressing but also caters to the leisure wardrobe of the customer with a range in Arrow Urban and Arrow Sports. Arrow’s product range comprises of Shirts, Trousers, Knits, Suits, Blazers, Innerwear, and Accessories.

Arrow is expanding its exclusive retail network. Arrow now has 64 outlets across India. It is also present in 30 retail chains including Life Style, Shoppers’ Stop and Pyramid among others. Arrow, which is in the process of adding more showrooms, is focusing on a new format for stores. With a strong channel wise distribution network ,its really doing a great business and catering to Metropolitan ,Urban as well as Suburban customers.

The customer connect takes place through five channels – Exclusive brand stores ,department stores, multi brand outlets ,exports and institutional sales. Each of these is headed by channel heads. The business and channel heads supported by specialist teams –supply chain, production, sales, finance, information technology and human resources .Each of these teams is headed by senior professionals.

Question. Define Merchandise Management.

Ans. Merchandising management is the science of evaluating human behavior and buying habits in order to determine the best way to stock, display, and sell goods at retail stores. For example: It's no accident that the ice-filled tubs of soda are sitting next to the cash register at the convenience store on a hot summer's day -- a merchandise manager determined that more product would be sold by doing it.

Question: What is the relevance of product management in retail business and key issues involved in the process?

Product management is an organizational lifecycle function within a company dealing with the planning or forecasting or marketing of a product or products at all stages of the product lifecycle.

Product management (inbound focused) and product marketing (outbound focused) are different yet complementary efforts with the objective of maximizing sales revenues, market share, and profit margins. The role of product management spans many activities from strategic to tactical and varies based on the organizational structure of the company. Product management can be a function separate on its own and a member of marketing or engineering.

While involved with the entire product lifecycle, product management's main focus is on driving new product development. According to the Product Development and Management Association (PDMA), superior and differentiated new products — ones that deliver unique benefits and superior value to the customer — is the number one driver of success and product profitability

The retail product range contributes significantly to the strategic success of a retail business. It is through their product ranges that retailers implement their pricing strategies and profitability levels, and it is through managing their product ranges that retailers succeed in maintaining the consumer's interest. Proper product management also allows the retailer to quickly and visibly respond to changes in consumers' shopping patterns. Over the years, the retail industry has evolved to adapt to structural changes in the economies of nations, and the highly specialized model of retail product management one sees today is a product of the last few decades.

At one time, the retail salesperson was considered the most integral member of the retail business. In some retail institutions, such as department stores, retail salespersons frequently worked their way up through the organization, from the sales floor to department management. In many modern retail companies, such as chain stores, the retail salesperson's experience is still valued highly, and although retail salespersons are now more likely to be graduates, they still have to spend time gaining product and supply knowledge and generally becoming familiar with the retailer's strategic and operational aims.\

Question. List the key responsibilities of a buyer? (in retail)

A retail buyer selects merchandise and develops product assortments to grow the business and increase market share.

Key Responsibilities:

Retail buyers are responsible for developing product assortments using market trend analysis information as well as managing sales and margins. It is a multi-faceted position that includes contract negotiations, inventory management, sales planning, forecasting and close coordination with the merchandising and operations teams. Buyers will identify growth opportunities and risks in assortment, and develop contingency plans. This person will be expected to build strong vendor relations and put together solid business plans, including strong and detailed promotional programs. Some travel may be required.

Summary of Experience:Retail buyers need a sense of retail and product trends and strong analytical experience. Previous retail experience required. Buyers will have computer skills and working knowledge of resource planning and forecasting. Excellent leadership, negotiating, and planning skills also a must.

Question:Explain the assortment planning process with relevant examples to the company you chose

Assortment planning with respect to the arrow company:-

PRODUCT RANGE

1) Shirts2) T-shirts1) Trousers2) Suits3) Blazers4) Accessories:

a) Beltsb) Socksc) Tiesd) Handkerchiefe) Suspendersf) Cravatg) Walletsh) Cufflink

ASSORTMENT PLANNING

Factors affecting assortment planning:

1. Target Market.

2. Past sales record.

3. Budget Available.

TARGET MARKET

It generaly refers to the market segment which Arrow is targeting it. Arrow targets a particular set of customers that are working class youth and adults.Arrow is a brand of premium shirts which target the age group ranging from 28 yrs to 40 yrs. It has only formal shirts along with a assortment of urban and sports t-shirts.

So the merchandise of Arrow is basically consist of formal wear with light pastel colours to suit working people needs. It is also having a nice range of party wear with vibrant colour.

PAST SALES RECORD

Assortment planning is always done keeping in mind past sales record that what was the sale in the same period last year.

A year is divided into two basic sales period i.e.1. Autumn Winter – This period starts from August to January.2. Spring Summer- This period starts from February to July.

Past sales record also helps in determining budget for a particular period or month for the coming year.

BUDGET

Budget here is referred to amount of money available for merchandise purchase in a particular season or month. Budget is determined keeping in mind past year sales at the same period. Budget of arrow mainly is kept high during 2 months of autumn winter and one month of spring summer. Also the size ratio kept in a store suggests the budget for that particular product.

PRICE RANGE

SHIRTS: Rs. 1,199 – 5,099 TROUSERS: Rs. 1,199 – 3,999 T-SHIRTS: Rs. 6,99 – 1,699 SUITS: Rs. 5,999 – 29,999 BLAZERS: Rs. 3,999 – 6,999 ACCESSORIES: TIES: Rs. 999 – 1499 SOCKS: Rs. 149 – 189 HANKY: Rs. 179 – 279 CUFFLINKS: Rs. 999 – 1499 CRAVAT: Rs. 699 SUSPENDERS: Rs. 999 BELT: Rs. 799 – 1299 WALLET: Rs. 599 - 999

STYLES

o SHIRTS: 100 options ( all cotton shirts)

35 % half sleeve in summer. 20 % half sleeve in winter. Formal: 60% (30% staple shirts + 70% fashion

shirts). Sports: 25% Urban : 15%

o TROUSERS: 60 options ( polyester/viscose, polyester/wool, cotton)

40% cotton + 60% non cotton trousers 20% pleated + 80% flat front trousers

o Size Quantity Ratio

Shirt Trouser 38 28 139 30 240 32 342 34 344 36 2

ASSORTMENT TABLECategory Style Unit Retail

priceAutumn/ winter collection

ShirtsFormal-Uni-Color/ Stripes/Check

Urban

1200

800

1,199 – 5,099

1,199 – 5,099

Aug

1100

700

Sep

1400

1000

Oct

1400

1000

Nov

1200

800

Dec

1200

800

Jan

1000

650

Trousers

BLAZERS

Pleated

Flat front

400

300

300

1,199 – 3,999

1,199 – 3,999

3999-6999

300

250

200

450

400

400

450

400

400

400

300

350

400

300

350

300

250

300

NOTE-

1. Unit in assortment table refers to no average of unit which has to be maintained in the store at any point of time during the season.

2. Units in the assortment always has to be maintained in a ratio of sizes in both shirts as well as trousers which is as follows-

Size Quantity Ratio Shirt Trouser

38 28 139 30 240 32 342 34 344 36 2

Nature of suppliers

There are a number of key characteristics that one should look for when identifying and short listing possible suppliers. Good suppliers should be able to demonstrate that they can offer the business the following benefits.

Quality and reliability

The quality of the supplies needs to be consistent - the customers associate poor quality with the business, not the suppliers. Equally, if the supplier lets the business down with a late delivery or faulty supplies, the firm may let the customer down.

Speed and flexibility

Being able to place frequent, small orders lets you avoid tying up too much working capital in stock. Flexible suppliers helps one respond quickly to changing customer demands and sudden emergencies.

Value for money

The lowest price is not always the best value for money. If one wants reliability and quality from your suppliers, then he will have to decide how much you're willing to pay for thier supplies and the balance one wants to strike between cost, reliability, quality and service.

Strong service and clear communication

The suppliers need to deliver on time, or to be honest and give one plenty of warning if they can't. The best suppliers will want to talk with the business regularly to find out what needs the business has now and how they can serve it better in the future.

Financial security

It's always worth making sure the supplier has sufficiently strong cashflow to deliver what one wants, when one needs it. A credit check will help reassure that they won't go out of business when one need them most.

Q: What are the key factors affecting vendor negotiation?

Seven Key Factors That Influence Price Negotiations

Using the Fair Market Valuation and the seller's asking price as a starting point, there are seven critical factors that will influence the premium or discount to be applied in reaching a negotiated purchase price package. These seven factors include:

I. The type of buyer.II. Financial parameters.

III. The general attractiveness of the company.IV. The relative negotiation skill and leverage of the parties.V. The buyer's experience with prior acquisitions.

VI. The inherent risk factors and the buyer's tolerance for them.VII. General market and economic conditions and outlook.

I. Type of Buyer: Not all buyers are created equal. Buyers have different acquisition objectives, growth and competitive pressures, availability of capital and the attendant costs, risk tolerance and adeptness at negotiating deals that impact the amount they might pay for a given company at a given time. The type of buyer you are will impact the price you are willing to pay:

Bargain hunters are looking to acquire at the lowest possible price; below market rates.  Financial buyers seek a return on their capital and that return more or less puts a cap on

what they can afford.  Corporate and industry buyers are buying for strategic objectives such as obtaining

additional capacity, products, expand sales or diversification.  Such buyers are generally willing to consider a premium over market value. 

Strategic or synergistic buyers believe that the “synergies” inherent in the deal will allow it to pay an even higher premium that will be justified on the basis of the benefit of the synergies.  If reason is at the helm, synergies will pay for themselves and come from

things like revenue enhancement, cost savings, process improvements, and balance sheet composition.  However, paying a significant premium based upon anticipated synergies is a risky proposition.  Higher prices mean lower margins for error and in many cases synergies fail to be realized.

Bargain hunters are likely to favor valuation approaches that look at tangible asset values or historic earnings using a high capitalization rate.  Financial buyers may favor valuation approaches that utilize historic and future earnings.  If the financial buyer is entertaining an LBO, the underlying asset values and debt capacity are also a consideration.  Corporate and industry buyers tend to consider valuation approaches based upon future earnings and market comparables.  Finally, the strategic/synergistic buyer may favor the same valuation methods as the corporate/industry buyer but will factor in a premium for the value of the synergies.

II.   General Attractiveness of the Company: Naturally, an asking price that is below market valuations is going to make a company more attractive.  For that matter, an asking price that is in close proximity to the company’s fair market valuation is also attractive. Factors that make a company attractive include: 

Quality of earnings. Growth rate higher than industry norms. A strong balance sheet. Capacity to support additional debt. Leadership or dominance in the market. Strong management.

An attractive acquisition candidate encourages a higher premium for two reasons.  First, if the overall economics of the business make it attractive, it’s future earnings can support a higher premium.  Secondly, as a general rule, an attractive acquisition target is going to attract a larger universe of interested buyers.  Given the law of supply and demand, as the universe of interested buyers expands, the pressure increases for a higher premium. 

III.   Financial Parameters: The seller’s financial parameters are pretty straightforward: to walk away with the most after-tax dollars.  The seller may have set the negotiation stage with an asking price and may have formed a floor or walk-away price as well.  From the buyer’s side, the financial parameters that determine what can be paid for the company include the following: 

Internal cash available for investment in acquisitions. The amount they are willing to invest in a single deal.

The cost of capital (actual and calculated). The buyer’s hurdle rate: the percentage required over and above the cost of capital. The availability of capital and the terms under which it is available. The reaction of the capital markets to the proposed acquisition.

IV.   Relative negotiation skill and bargaining leverage of the parties: As a buyer, the premium you will need to pay will be influenced by your negotiating skills, bargaining leverage and time constraints.  In negotiation, power is derived from your perceived ability to fulfill needs.  The buyer offers the seller liquidity, personal freedom or the opportunity to further develop the company.  The seller offers the perceived economic advantages of owning the company.  The greatest power possessed by both seller and buyer is to walk away, to end the negotiation process—the power of ”NO!” 

Both buyer and seller will enter the negotiation with a set of expectations and assumptions.  The seller’s expectations will be influenced by the size and attractiveness of the company along with the advice received by I-Bankers and other advisors.  If there are a number of potential suitors for the company, the seller’s will tend to drive a harder bargain.  A good I-Banker working for the seller is going to create a process and negotiating environment that is going to encourage the highest and best offer.  The pressure to “pay top dollar” may be subtle, but it is there. 

As a buyer, you want to manage the seller’s expectations.  On one hand, you want to project yourself as a capable buyer.  On the other hand, you want to make it clear that you are looking for a reasonable and fair purchase price package. 

While “cash is king,” the human touch can and does play a vital role.  A promising acquisition can be derailed by a faux pas or an overly aggressive approach.  You want to sell yourself, your company and your vision of the future.  If you ask questions and listen, the seller may reveal their needs.  With some creative problem solving and salesmanship, you might be able to craft a purchase price package that is acceptable without paying a needlessly high premium. 

Time plays a vital role in acquisition negotiations.  Time can be an ally for one party, an adversary for the other.  If the buyer is under pressure to complete the deal by a given date, there may be a tendency to relax resistance to pricing issues.  On the other hand, if the seller is under a deadline (self-imposed or otherwise), then that creates a willingness to be flexible on price and terms.  In most cases, the buyer and seller will attempt to keep their time constraints confidential as knowledge of them gives a definitive edge to the other side.

A high premium compresses time.  The seller can easily agree and will usually be motivated to get the contracts drawn and transaction closed quickly.

If the business is burning cash, is under increasing competitive or regulatory pressures or if the seller is facing a deadline, the passage of time puts downward pressure on the premium needed to get the deal done.

V.   The buyer’s experience with prior acquisitions: The premium that a buyer is willing to pay is influenced by prior experience.  If the buyer paid a high premium in the past and the acquisition failed to deliver expected benefits, they are going think long and hard before offering an overly generous premium.  The reverse may be just as true.  If the seller has experience in the industry, they may be apt to pay a higher premium because they have a greater degree of comfort with their ability to make the deal pay off. 

Experience within the industry reduces the downward pressure on the premium. The buyer’s prior experience provide him with:

An understanding of the relative value of companies in the industry and the drivers that influence value.

A deeper understanding of the strengths and weaknesses of the company and how it compares to others in the industry.

The existence of procedures and systems to insure a smoother transition and the exploitation of existing opportunities.

Knowledge of the industry makes it easier to identify financial shenanigans and separate substance over form.

A better understanding of the risks facing similar companies and the industry.

On the flip side, a lack of positive experience in the disciplines of corporate acquisition and post-acquisition integration encourages a lower premium, not because of the company, but because of the buyer’s recognition of a higher probability for a bad outcome. 

VI.   The inherent risk factors and the buyer’s tolerance for them: Risk can be defined as the possibility of a bad outcome or, stated another way, the uncertainty of a desired outcome.  Tolerance of risk is your willingness to accept and manage the risks.  Risk management is the action that you take to reduce the possibilities of a bad outcome and increase the odds of a desired outcome.  When it comes to negotiating the purchase price package, the biggest risk is that you will agree to a purchase price package that does not make economic sense—overpaying! 

When it comes to the risk of acquisition pricing, there are two key principles:

The lower the inherent risks of owning the company, the higher the premium a buyer might pay.

The higher the premium paid, the greater the risk.

The evaluation and due-diligence process should address these and all other inherent risks: 

Key customer dependency. Key employee dependency. Market uncertainty or growing competition. Weakness in the supply chain. Existing or pending litigation. Existing or pending governmental regulation.

If a buyer wants to acquire a company, there are two avenues to a higher return:  

Pay less for the company. Implement a plan to increase the company’s earnings once the transaction is closed.

When banking on increased earnings to justify a higher premium, keep in mind that the greater the number of positive outcomes assumed, the greater the odds of an undesirable outcome. 

Once you identify the risks, the next step is to determine if can you tolerate them.  If the rewards are sufficient and confidence (not overconfidence) in a positive outcome is high, it may all be worth the risk.  Ideally, the risk should be quantified.  In a potential worst-case scenario, a buyer might pay an exceedingly generous premium and find that anticipated synergies are just not there.  In that case, they may find themselves divesting the company for a price closer to the fair market value.  In such a case, the risk is the spread between the offered price and fair market value.

Obviously, if you are betting the farm on an acquisition and paying top dollar, you are placing the parent in a very risky position.  A failure can have a potentially crushing impact on the parent and its shareholders.  Conversely, the larger the buyer’s overall capitalization and liquidity in proportion to the transaction, the more tolerable the risk.  In this case, the cost of failure, while distasteful, can be tolerated with little impact on the parent and shareholders.

Finally, the purchase price package and the manner in which the transaction is funded are going to place additional demands upon the company’s cash flow.  Such additional demands on cash flow impact the company’s liquidity, working capital and ability to obtain future financing, result in an additional risk. 

The seller’s tolerance for risk could be reflected in a willingness to accept stock, un-rated paper or earn-out and contingency agreements.  

VII.   General market and economic conditions and outlook: Economic and market conditions strongly influence the buying decisions of both corporate decision makers and consumers.  The impact on the bottom line can be profound. 

In boom times, making money can be like shooting fish in a barrel.  Expansion capital is available, lenders are willing to say yes, consumers are feeling confident and have money to spend on your products or services, CEO’s and CFO’s are approving all kinds of spending requests.  Some things to keep in mind include:

Favorable economic conditions and a growing market can disguise problems with the company that will not surface until such conditions contract.

The favorable economic conditions will likely lead to higher earnings, a higher fair market valuation, and higher seller expectations.

Your view of the future determines how much of a premium you might offer. Your view of the future is probably wrong.

While favorable economic condition encourage higher premiums, it’s important to recognize that such conditions are usually temporary.  The more dependent you are upon such favorable externals, the greater your risk of reaching the point where you feel squeezed by lower margins and the premium you paid (and wished you hadn’t) when times were good.  Remember, almost every I-Banker in the country is telling their clients that the best time to sell is when the company has reached its peak!

Question: Explain the importance of sourcing in merchandise process.

Merchandise Sourcing:

The term sourcing means finding or seeking out products from different places, manufacturers or suppliers. The importance of sourcing in a retail environment can best be understood from the fact that sourcing of merchandise is a key element of cost. In recent years, sourcing and supply management has emerged as one of the greatest focus areas in the retail business, for suppliers as well as for retailers. Sourcing is not without its risks, but at the same time, it holds the key to improving service, product offer, and overall profitability. It enables the retailer to have winning products. Negotiations and cost management play a key role and hence, it becomes necessary to ensure that sourcing is well and truly integrated with the retailer’s overall business strategy, and that sourcing activities closely follow the direction set by the overall business strategy.

Having determined the type of merchandise to be stocked in the retail store, the merchandise then needs to either be manufactured or sourced. The process of merchandise sourcing starts with the identification of the sources of supply. The first decision that has to be faced is whether the merchandise should be sourced from domestic or regional markets or from international markets. This is largely related to the type of the retail organization, the product being offered and the target consumer. For example, products like high fashion garments, exclusive watches, perfumes, cosmetics etc may be obtained from the international marketing.

The process of merchandise buying is a five step process, which involves the following:

1) Identifying the sources of supply2) Contacting and evaluating the sources of supply3) Negotiating with the sources of supply4) Establishing vendor relations5) Analyzing vendor performance

Question:   

Describe category management and its role in enhancing store performance.(with respect to the store you have selected)

Category management is a retailing concept in which the range of products sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as product categories (examples of grocery categories might be: tinned fish, washing detergent, toothpastes).

Each category is run as a "mini business" (business unit) in its own right, with its own set of turnover and/or profitability targets and strategies. Introduction of Category Management in a business tends to alter the relationship between retailer and supplier: instead of the traditional adversarial relationship, the relationship moves to one of collaboration, with exchange of information, sharing of data and joint business building.

The focus of all supplier negotiations is the effect on turnover of the category as whole, not just the sales of individual products. Suppliers are expected, indeed in many cases mandated, to only suggest new product introductions, a new planogram or promotional activity if it is expected to have a beneficial effect on the turnover or profit of the total category and be beneficial to the shoppers of that category.

The concept originated in grocery (mass merchandising) retailing, and has since expanded to other retail sectors such as DIY, cash and carry, pharmacy, and book retailing.

Category management does more than contribute to the success of a retail organization. It is an essential component. In fact, it is difficult to imagine a retailer winning in the marketplace without relying on the direction that this valuable process provides. Expertise in Category Management is certainly a competitive advantage.

Some Category Management Benefits: (Source: AMR Research)

Better In-Stock Rates: 2 - 8%

Lower Inventory Levels: 10 - 40%

Higher Sales: 5 - 20%

Lower Logistics Costs: 3 - 4%

Retail Trends Driving Category Management Practice:

Changes in Customer Behavior

Economic Environment

Higher Efficiency Requirements

Strong Competition

Advances in Information Technology, specifically, Business Intelligence

In Arrow, Category management occurs when they separate their retail stores into different zones, for different products. For example shirts go in a certain area, and the cufflinks are placed in a different zone inside glass cases, and the ties go on a special tie rack which is displayed prominently.There are also huge signs making it very easy for a person to notice and find the product section he wants.

Question:    Discuss specific category management strategies and tactics used by retailer

Category strategies provide a framework to help deliver the category ‘role’ (the role or purpose that the category plays in the retailer’s total portfolio) and the ‘scorecard’ (the targets and measures set for the category). They encapsulate what you are going to do to grow the category and just as importantly, what you will not do.

As all activity must achieve strategies, any activity which does not contribute towards them should not be undertaken. Once agreed, category strategies should be adhered to, although the method for how they are delivered - the tactic, can be flexed. A simple way to remember the difference between strategies and tactics is:

Strategy is the ‘what’ you are going to do Tactic is the ‘how’ you are going to do it

Determining appropriate Strategies

Strategies are created by taking opportunities identified in the ‘assessment stage’ of the 8 Step process. In this stage a data trawl is undertaken to analyse data from the varying view points such as the total market, shopper, consumer, retailer and supplier. This aims to identify opportunities that are highly relevant to the category.

The following check list is useful to ensure that your chosen strategies will be effective:

1. Has the strategy been identified from insight and is there documented proof of the opportunity?

2. Is the strategy selective? Does it focus on the big opportunity?3. Is the strategy highly relevant to and appropriate for the category? 4. Is the strategy fully aligned with the retailer’s strategy? 5. Is the strategy aligned with the supplier’s strategy? 6. Does the strategy have the potential to result in significant financial benefit for both

category partners?7. Can the strategy offer the retailer competitive advantage?

Demand and Supply Strategies

Clearly defined strategies do more than state what the strategy is focussing on (such as ‘healthy eating’.) They identify what is going to change in order to achieve them. The above example uses a ‘demand’ strategy – focussing on healthy eating will result in shoppers eating more healthily and will therefore impact the demand of such products.

Whatever a demand strategy is called, its aim will ultimately be to change consumer behaviour by either trying to get more shoppers to buy (increasing penetration) or by getting shoppers to buy more (increasing Average Weight of Purchase – or one of its constituent parts) as illustrated in the diagram below.

Category Value Levers

 

Category Value Levers

It is therefore critical that any demand strategy clearly identifies what shopper behaviour it is aiming to change in order to achieve it. This will help to focus the activity (or tactics) undertaken.

Category Strategies are usually demand strategies as they predominantly focus on optimising in-store activity impacting shopper demand. However category strategies sometimes cross over with ‘supply’ strategies (strategies that impact supply) such in the case of Retail Ready Packaging which can impact both supply and demand. Category strategies may also be ‘cost efficiency ‘strategies which are strategies to drive cost savings along the chain.

Approaches to deciding Strategies

Different companies may have very different approaches to devising their category strategies. Many companies devise category strategies on an annual basis. This could involve deciding the top 5 strategies for the category that year or it could be as simple as checking that the previous year’s strategies are still the most relevant opportunities.

In some companies the entire category, marketing and sales teams are involved in creating the strategies. They analyse the data together or in groups and agree which opportunities are the biggest. This approach is a good way to ensure that the total company buys into the category strategies and will help to ensure that all activity will help to deliver them.

In some companies a specific member or members of the category team are responsible for the category strategies. It is then their task to ensure that the rest of the company buy into these plans.

Once strategies have been agreed internally, it is important that they are communicated with category partners and all parties agree on the chosen strategies. If both retailer and supplier agree on the strategies benefits it should have a much easier task to gain sign-off for proposed in-store activity – as long as it will clearly deliver against the strategy.