Few Measure Category Management ROI

SN STAFF

WIMBERLY, Texas — Less than a third of CPG companies in a recent survey said they measure the return on investment in their category management functions, according to a study released this week by the Category Management Association here.

Of the 66 CPG companies surveyed, 27% said they measure ROI.

"The survey was a good initial assessment, and we know that CPG companies are measuring ROI," said Donna Frazier, CMA founding director, in a prepared statement. "This type of benchmarking is what people really want. But more importantly, they told us there is a huge need for standard metrics."

Among other findings:

• Of the 27% that do measure ROI, nearly 70% said they do not use a particular formula.

• Most companies report that resources are deployed to four or fewer "significant" categories.

• While half of the companies set a dollar goal for sales, 18% do not set any quantitative goal for their category management initiative.

• In 85% of the cases where manufacturers understand the retail customer's profitability, category management ROI aligns with the profitability of the retail customer. Future surveys will include retailers, CMA said.