LAKE BUENA VISTA, Fla. -- Seeking to simplify and accelerate the category management process, ACNielsen has developed an Internet-based information-exchange tool.
Called ACNielsen Answers for Category Business Planning, the program will be unveiled here this week at the company's Category Masters conference. The information product is now being tested by several retailers and manufacturers, said Jim Dippold, vice president of global marketing for ACNielsen, Stamford, Conn.
The Answers program is based on what ACNielsen calls the "one-number system," which enables manufacturers and retailers to manage categories and products based on the retailers' definition of the category.
"Retailers want manufacturers to look at their categories the way that they do," Dippold said. Currently, for example, one soft drink manufacturer might include carbonated water in its carbonated soft drink category, while another may not, while retailers have an entirely different set of category definitions based on geography and competition, he said.
In using the program, retailers and their suppliers operate in a collaborative environment driven by the retailers' defined competitive trading areas, category definitions and business processes, he said. "Now, retailers and manufacturers begin on the same page to turn knowledge into actions that drive sales and profit for both the retailer account and the category," he said.
With retailers and their suppliers accessing information on the Internet, the flow of data is so much faster that category management can become a daily process rather than an annual event, Dippold said. For example, in a typical hour-long retailer-manufacturer meeting today, 45 minutes can be taken up defining terms, leaving 15 minutes to discuss plans and policies. Now the entire hour can be devoted to the more vital content, he said. "We had to come up with a common language for the retailers and manufacturers so they can concentrate on making fact-based marketing and merchandising decisions rather than debating whose definition of the category is correct," Dippold said.
Additionally, the intuitive structure of the Web program allows retailers to get up and running with it quickly. Many clients can create a category business plan within 10 minutes of going on the program, which operates from a secured Web portal page. At the top of the page are customized headlines of many answers retailers commonly seek through category management.
For example, a demonstration page put together by ACNielsen for an unnamed retailer opens with the news that 71 items are performing below fair share, representing a dollar opportunity of $613,234. It goes on to report that for 45 items sales growth is lagging behind the market, for 80 items the non-promoted price is higher than the remaining market, and for 70 items the percent of dollar sales is less than the remaining market. Users obtain further information by "drilling down" -- clicking through on the Web page's hyperlinks, Dippold said.
"Retailers are able to focus on opportunities or threats very quickly in this system," Dippold said. "It was designed with the end-user in mind, someone who doesn't have much time to make decisions.
"We had to make sure that the system gives them more gain than pain when they use it. My hope is that all marketing and merchandising decisions in this industry will be based on the facts obtained through this exchange tool."
The program makes obtaining the information easier and more affordable, Dippold said, thus leveling the playing field for different sized manufacturers.
"We have flattened the competition. No longer can manufacturers be competitive in category management based on their technology of building applications and databases. Now they will compete by actually analyzing the information and producing programs to maximize their goals and the retailer's goals," he said.
The program also makes the information available to more people within the manufacturer and retailer organizations, he noted.