NEW YORK -- Brand marketers have to understand retailer strategies at the category level to target their trade programs properly. Then, said consultant Jeffrey Hill, "if we understand the way retailers define segments in a category, we can develop account-specific programs." Hill, managing director at Meridian Consulting Group, Westport, Conn., spoke here at a conference on account-specific promotion sponsored by The Marketing Institute, a division of the Institute for International Research."To understand retailer strategies, you have to understand how the top retailers think," Hill told the brand marketers in attendance. According to Hill, understanding a retailer's category plan involves clear appreciation of how the retailer defines the category, its strategic role and the pricing-promotional focus applied. "If you have the retailer believing in category management, that's a good target to start from," he said.
"The basic principles of category management support account-specific programs. The retailers who have committed to a category management focus can often provide the best targets for account-specific marketing. These retailers should be identified, and prioritized for such efforts," he said. Following his talk, Hill told Brand Marketing that only five to 10 supermarket chains are "effectively executing category management" today.
"Most retailers across the country today are just getting into category management, whereby for the first time they are beginning to define specific strategies for the overall category, and the segments and SKUs that comprise that category. "By that, I mean parceling the segments of the category to determine those that should be traffic generators, relative to profit generators, relative to incremental transaction generators," he said. Most retailers, he told Brand Marketing, want to move into category management. "Therefore, they are very open to the vendor community to provide specific perspectives that help them understand suggested strategies for the overall category and its segments," he said.
