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Not long ago at our offices in New York, Progressive Grocer received a phone call from a frantic young executive who had just been named a category manager at his growing supermarket company. While he sounded excited about the opportunity, he posed a fundamental question: "What exactly does a category manager do, and what will it take to be successful in that position?"
As a former independent retailer, I wasn't surprised by the aspiring category manager's lack of knowledge. While manufacturers and suppliers have worked in tandem with large chains for nearly three decades to faithfully apply and improve category management disciplines -- gaining distinct competitive advantages in the marketplace as a result -- it seems that independents are often left in the dark about how the practice can help them grow sales and profits.
If memory serves me correctly, the closest I ever got to category management was meeting with the pop vendors every December to see how much money we'd receive during the following year for each end cap display we'd provide.
In an effort to help independent supermarket owners gain more insight into category management and its role in the food industry, I asked Donna Frazier, v.p. and category management specialist at MRI Sales Consultants of San Antonio, to share her expertise. Frazier, whose client list includes numerous consumer packaged goods and beverage companies, including Bacardi, Cadbury Schweppes, Wm. Wrigley Jr. Co., Gillette, and Playtex, has during the past year recruited and placed both national and regional category managers at such retail companies as Wal-Mart, Circle-K, H-E-B, and Safeway. I view Frazier as the perfect resource for teaching independents -- and me -- more about this process.
"First of all, it's important to realize that category management is not just something that 'sales' does," says Frazier. "A major goal in the process is to transform all employees from sales and marketing, product management, finance, and accounting into business managers. Overall it's a collaborative marketing effort by which manufacturers and suppliers work with individual retailers to determine for each category the best product mix, merchandising, pricing, and promotions that will satisfy consumer needs."
Frazier continues: "Tasked with maximizing sales, category managers assess sales patterns based on SKU data and other sources, and they advise buyers and retailers about the total category, not just their brands. Naturally, they are making a case for shelf space for their own products, but the most effective category managers view themselves as unbiased advisers."
She adds, "If the category manager represents the category captain -- in other words, the vendor chosen by the retailer to guide the analysis of the category in the stores, and help make assortment and shelf set decisions based on the retailer's sales data and other factors -- he or she must be totally unbiased."
How does Frazier outline the ideal formula for category management? "If the category adviser is truly looking at what the consumer wants, then each product should be fully maximized to its potential on the store shelves for the consumer niche it satisfies. That should increase sales for all products in a category, because the consumer is driven to the right place and the right display, which should make their buying decision easy."
She notes, "In a perfect world, category management must be designed around cooperation, not competition, to increase sales for both the supplier and the retailer."
Like me, Frazier isn't surprised to hear that an independent retail executive could find himself or herself in a new category management position without a clue about what do to next. She says the same lack of direction can bedevil a manufacturer's category adviser, as well.
"Unfortunately, even after interviews, some highly qualified candidates come away not knowing what the company actually wants them to do," she observes. "Category managers who have been devoted to one account for a few years have, to a degree, defined their own job description, based on their experiences with particular buyers. On the other hand, many category managers view themselves as the 'employee' of the retailer -- or at least the retailer often sees it that way, particularly for those who are in the role of the category captain."
So just what skills are needed? At the manufacturer end, here is Frazier's list of requirements for a national account category manager:
-One to three years' consumer packaged goods or food and beverage key account management
-Extensive category management orientation and application
-Proficiency in operating and interpreting syndicated data such as IRI and ACNielsen
-Strong organizational, written/oral communication, PowerPoint, Excel, Access, Word, Adobe, and Space Planning Plus skills
-Strong customer presentation and key account skills
-Bachelor's degree in business, marketing, or a related field; MBA helpful
Basic job description: Become part of a best-in-class consumer packaged goods company, and consistently set a new category management standard by creating innovative solutions that grow the business for both the company and its retail partners. Synthesize channel intelligence and analytical insights into retail account-specific presentations that drive volume through increased distribution of shelf space and more frequent and effective promotion and merchandising. Become a preferred manufacturer for key retail account decision makers, and develop professional and impactful category management presentations for assigned retail accounts. The position will support the initiatives of sales and marketing personnel by providing expertise in compiling and analyzing syndicated and internal business data.
"On a national level," adds Frazier, "what's needed is a strong skill set that includes strong software and data tools exposure, and experience making presentations to buyers, along with five to six total years of experience." That kind of resume can earn a candidate between $80,000 and $95,000 per year plus a bonus, she says -- although many people begin a regional support role at about $50,000 or less.
Seeking to meet the ongoing educational and networking needs of category managers nationwide and service the many CPG companies wishing to create an internal certification/benchmarking system for category managers, Frazier, working with approximately 45 business leaders, recently established an international association called CPG CatNet.
"What has been developed through CPG CatNet is a network where category management ideas can cross-pollinate," explains Frazier. "Our Web site will be extremely useful for national account salespeople who need access to category management resources and don't have any in their companies. I also view the association as a valuable resource for category managers who have only a small network of peers. This will broaden their reach for advice and tools."
She adds, "My first project is developing accreditation standards for category managers, along with publishing a resource directory that will list college coursework and consultant classes that can be used for continuing education."
As consolidation and downsizing continue to plague the food industry, Frazier predicts that skilled category managers will remain in big demand. "Many companies have aggressively expanded their key account sales and category management teams despite overall sales force cuts," she says. "Even with consolidations, my clients have been aggressively hiring national accounts personnel even after blending the sales forces of several companies."
She continues: "There is still a lack of talent in the key accounts arena. Why? Good key account experience at the headquarters level is hard to come by. Customers want sophisticated services presented by experienced team members, and since key accounts can make a phenomenal difference to a supplier's bottom line, key account talent is at a premium."
Frazier concludes: "The line between sales and category management continues to blur. Category managers must be excellent presenters, and salespeople must have superior category analytic skills. The overall goal of category management is to strengthen relationships with shoppers and increase profitability and growth for the retailer."
Independent Retailing Editor Jane Olszeski Tortola can be reached at [email protected].