No matter who is playing, a chess match is played one move at a time. However, the greats, the grandmasters, and prodigy’s, all play these matches far, far more quickly than that. See, in the mental landscape of a chess grandmaster, they are likely playing the game 10 or 15, or even 20 moves ahead of their opponent.
Their ability to accurately predict the outcomes and results of different actions, while also reading their opponent to know how they’ll respond is a truly magnificent skill set. In this fast-moving economy, businesses are constantly looking for ways to connect with, influence, and predict consumer behavior. Category management is just one of the many fields that aim to assist businesses in growing market shares, sales, and profits by predicting consumer behavior.
Big data and individualized information are two of the most valued commodities that currently exist. Companies spend astronomical amounts of money on data mining to better understand their consumer demographics and even influence their decision-making, purchase patterns, and consumer behaviors.
Category Management
Category management has been around for a few years now and has a few different definitions depending on your source. Commonly though, category management is the practice of grouping like products into a single unit, and then addressing all the purchasing, sales, inventorying, and other business needs of the unit.
For instance, a basic example might be an office supply store grouping together all their writing utensils as a single category, then addressing their sales, stocking, and purchasing of that category, rather than the many individual products included in that category.
Category management allows procurement professionals to save loads of time by bundling entire product assortments together, defining the category, and acting on those categories.
However, there are many reasons that category management has become so robust. The category management strategy allows companies to approach the consumer market in a variety of new ways, equipped with impactful tools.
Category Management Tactics
When it comes to the category management process, there are many ways to implement different category management tactics that will drive sales, business growth, and boost your company’s overall performance.
As stated above, one of the main benefits of implementing a category management strategy is the cost savings and time savings seen in the procurement department. By addressing products by their effective category rather than as individual products, procurement professionals become more efficient and are empowered to find better deals with larger orders.
In addition, category management allows your company to speak to consumers in a whole new non-verbal language. In doing so, the company has a stronger influence over consumer focus and purchase decisions. This is accomplished, in part, by providing a way through which companies can differentiate themselves from one another by grouping their categories in a unique way from their competition.
Finally, however, there is a whole slew of benefits relating to decision-making, logic, and resource allocation. By grouping products into categories and acting on those inclusive categories, procurement professionals, managers, and business executives are all enabled to make more informed decisions powered by logic and patterns that emerge in spending and purchasing.
Upon assessing these patterns your business can have a stronger resource-allocation strategy, in turn leading to a more optimized organization through and through.
Hiring a Category Manager
As with every strategy or tactic your business employs, someone needs to be the champion of that strategy. In the case of category management, that role falls on the category manager. The category manager has a wide range of responsibilities that are both internal to the organization, and external with the actual consumers and customers.
As their main position is to influence the development of your category management tactics and comprehensive strategy, they also need to have strong working relationships with consumers and customers alike to provide accurate and insightful information into the demographics your company is targeting.
Why is Category Management Important?
Category management is an essential business concept. It’s a technique used by companies to make an effective purchase decision and save a significant amount of money on procurement. Category management provides the following crucial benefits.
1. Healthier Supplier Performances. Effective and efficient category management can help your company work with suppliers healthily and can fasten the time between project initiation and completion.
2. Client Satisfaction. Category management is the sole responsibility of a contract manager who examines all the things related to a given contract including collecting bids, sourcing requirements, and negotiating bids.
3. Better Supplier Relationships. Management of categories extends an opportunity to establish contacts within the structure of the organization. This is facilitated by the coordination at the highest level and the delegation of special tasks and functions.
4. Better Spending Insight. Essentially, when a contract is not owned by anyone, no one can provide accurate insight into expenditures because no one is acquainted with the contracts. When the full list of contracts is known, the entire extent of spending is also known. This facilitates a better understanding of spending on existing and upcoming contracts.
5. Valuable Insight for Decision-Making. With a category management system in place, you can manage specific vendors and entire categories to align with the organizational goals in terms of risk management, performance, and profitability.
A Final Thought on Category Management
Category management is a robust and comprehensive strategy. For more information on the benefits of category management, or how your procurement team can benefit from implementing a category management strategy, contact ProcurePort today. Our main site is a great resource for everything procurement, from technology and software to strategy and best practices.