The essence of category management

CATEGORY VISION

The Essence of Category

Management

Ben Thompson, Category Leadership Director, UK

Petcare

Definition

“Category Management is the strategic management of product groups through

trade partnerships, which aims to maximise sales and profit by satisfying shopper and

consumer needs.”

[Source : IGD]

To lead the category growth agenda in Petcare based on deep shopper and consumer insights, and to effectively align our customers strategies and our own…

Our Mission…

The difference between Category Management and Category Leadership

Category Management is doing the very best with

what we’ve got….

Category Leadership is thinking through what we

should have in the first place.

In UK Petcare we aim to do both…

Category Management is about…

• Help Customers manage ranges more effectively

• Growing or protecting our share of the shelf in line with sales

• Taking an objective look at the category and making clear

recommendations based on sold fact and insight

• A 6-12 month time horizon

• Key Skills: Customer Relationship Management, Shopper Data

Analysis, up-to-date Tools and Systems – delivered through Great

People.

X-axis Median (ROS): 6034

Y-axis Median (WD): 28 Mars Market Mars Market

nb. of SKUs 0 30 16 41

% of SKUs* 0% 21% 53% 29%

K€ Sales 0 29,329 50,202 122,566

% of Sales* 0% 16% 82% 66%

nb. of SKUs 4 40 10 30

% of SKUs* 13% 28% 33% 21%

K€ Sales 815 10,641 9,912 23,863

% of Sales* 1% 6% 16% 13%

MOS measure 5.1:

* = % of all SKUs/Sales of selected Manufacturer or Market

PQA Index SKU: 106% PQA Index Sales: 101%

Sle

ep

ing

Be

au

tie

s

Blo

ck

bu

ste

r

La

me

Du

ck

s

We

ak

en

ing

Co

re

PQA Proteus range planner

Category Leadership is about…

• Defining the Category and its Drivers

• Understanding the Category Segmentation

• Developing and selling-in the Point of Purchase Vision which drives growth for Mars and Retailers.

• A 3-4 year time horizon

• Key Skills: Category and Retailer knowledge, Marketing understanding, familiarity with and access to Shopper Data & Insights

The Mars Vision for Petcare

Opportunities for Growth over the next 3 years

The voice of the Retailer in Mars…

Drive the Agenda on Petcare

Eg Category Vision

Brand / Shelf Executions

Shopper Analysis & Execution

Drive the Retailer Agenda in Mars

Eg Packaging Waste

Range optimisation “Less is more”

Shopper tailoring

The voice of Mars in the Retailers…

What do our Customers want from Category?

Right first Right first

time Admintime AdminPerfectPerfect

OrderOrder

Customer &Customer &ConsumerConsumerfriendlyfriendly

packagingpackaging

Help myHelp my

AvailabilityAvailability

Add Category Value

Add Category Value

Add Value totheir peopleAdd Value totheir people

Add Value totheir businessAdd Value totheir business

Help me if itHelp me if it

goes wronggoes wrong

Grow myGrow my

footfallfootfallGrow myGrow my

MarginMarginGrow myGrow my

CategoryCategory

EducateEducate

memeMake meMake me

look goodlook good

Help ourHelp our

whole businesswhole business

All this has to be BUILT ON THE BASICS…

Get it right, and we grow the pie (and our share)…

Category leadership is a critical part of strategic Customer Engagement…

A best in class supplier must have a shopper focusedgrowth agenda, understand the operational and commercial model of the retailer , have the ability to adaptquickly to changing market conditions and help us to differentiate.

Its approach is fact-driven as opposed to brand-driven.

Senior Trading Executive , Tesco

The resources that Mars Petcare have in category development are completely dedicated to our company, and it is very far removed from the commercial aspect. We feel comfortable that we are being provided by Mars Petcare's personnel with information that is solely about category and not twisted a bit towards the brand that they work for.

Senior Trader, ASDA

Which are the five most important capabilities which you expect your branded suppliers to display as a basic requirement?

44%

72%

76%

80%

44%

Source: IGD Customer Engagement Retailer Survey 2009

Teams who understand our company’s strategic direction

In-depth understanding of the total category and its future trends

Consistently high service levels that meet our expectations

Understand our economic model and KPIs

Dedicated resource for managing our business

Category leadership is a critical part of strategic Customer Engagement…

Store of the Future – Sainsbury’s 2007 (London Colney)

Some great examples of this…`

Store Trials (POS for Permanent Multibuys) – Asda 2008


Leading Edge Reporting of Range Review ImplementationTesco 2008Internet Access for all Tesco and Mars Pet AssociatesIn real time!


Whiskas vs Felix 60:40 Space1 Bay of Whiskas Core Pouch 2for £6 (with POS)

Driving Tesco’s Market ShareTesco JBP 2009

Store Footprint

Store of the Future – Tesco 2009 (Chesterfield)

The learnings / store concept is being rolled out to Tesco Stores In Central Europe within 2010 (Hypermarkets Division)

Our Journey…

(Rank of 3)

All Functions(1)

All Functions All Functions EX/SM/CM EX/SM/CM EX/SM/CM IL IL

1 Mars Petcare UK 1 1 2 1 2 1 1

2 Nestlé Purina (Pet Care) 2 2 1 2 1 2 2

3 Procter & Gamble (Pet Care) 3 3 3 3 3 3 3

Performance based on Net Favourable rank

* Indicates insufficient response

(1) As rated by EX/SM = Executive/Senior Trading Management, CM = Trading/Category Management, IL = Inventory/Supply Chain Management

Overall

Performance

Logistics &

Supply Chain

Mgmt.

Customer

Service/

Support

Brand/

Consumer

Marketing

Trade

Marketing/

Promotion

Practices

Category

Development

/ SupportManufacturer

Business

Relationship

& Support

Manufacturer

Personnel

Top Third Rank Middle Third Rank Lower Third Rank

(Rank of 3)

All Functions(1)


1 Mars Petcare 1 1 1 1 1 3 3

1 Nestlé Purina 2 2 2 2 2 1 1

3Procter & Gamble (Pet

Care)3 3 3 3 3 2 2




Overall

Performance

Logistics &

Supply Chain

Mgmt.

Customer

Service/

Support

Brand/

Consumer

Marketing

Trade

Marketing/

Promotion

Practices

Category

Development


Business

Relationship

& Support

Manufacturer

Personnel


2007

2008

2009

Benchmarking vs. the Best in Class

(Rank of 7)

All Functions(1)


1 Kellogg's 1 1 1 1 1 2 2

2 Coca-Cola 2 2 2 2 2 1 1

3 Nestle Beverages 3 3 5 5 4 3 3

4 PepsiCo/Walkers 4 5 4 3 3 5 6

5 Mars Petcare 5 4 3 4 5 7 7

5 Nestlé Purina 6 6 6 6 6 4 4

7 Procter & Gamble (Pet Care) 7 7 7 7 7 5 5




Overall

Performance

Logistics &

Supply Chain

Mgmt.

Customer

Service/

Support

Brand/

Consumer

Marketing

Trade

Marketing/

Promotion

Practices

Category

Development


Business

Relationship

& Support

Manufacturer

Personnel


2008

2009

Industry Recognition

Asda Supplier of the Year 2006Category Management

Tesco Value AwardPet Range Review 2008

Supplier of the Year 2006 & 2007Today’s Wholesale

Industry Recognition

Shelley AlfordTesco Value Award

2009

Asda Branded Supplier of the Year 2009

James StewartBestway Certificate in Merit 2009

Tesco Supplier of the Year 2009(Grocery 1)

Summary

“Category Management and Category Leadership are fundamental business KPIs.

They guide our business decisions, shape and inform our relationships with Customers, and enhance the experience of our Shoppers and

ultimately Consumers”

[Source : BT]

CATEGORY VISION

The Essence of Category

Management

Ben Thompson, Category Leadership Director, UK

Petcare

Documents

The essence of category management