Stage 2. Identifying the role of the product category in the store's product range
Posted: Wed Jan 22, 2025 8:42 am
Category management experts claim that all product elements are of great importance. They are the ones that make it possible to conduct communication and pricing policies regarding a certain group of products. In order for product sales to be effective enough, marketing programs and various management methods should be developed that will be initially adapted to each part of the product range.
According to the category theory, goods are divided into 6 groups:
Profit generators. This group includes products that sell out quickly and bring good income to the store. Examples include seasonal products or new products that have recently appeared on the market, but have already earned a good reputation.
Customer flow creators. These botim database are products that are in constant high demand among consumers. It is not affected by seasons, weather, political situation, etc. As a rule, customers buy other related products along with these products. The effectiveness of investments in this group can be assessed by the size of income, as well as by the frequency of purchases and the number of store visitors.
Cash generators. Most often, this group includes those products whose cost is low. Due to the low price, they cannot provide a solid profit. The function of such products is to provide a minimum but regular profit, due to which the store will not have cash gaps. The behavior of buyers of these products is often similar to impulse purchases.
Defenders. This is a group of products that work to retain customers who are hard on price. Their price is lower than that of competitors, so the store can make a statement about the availability of products.
Image makers. These products are expensive, their purpose in the store is not to increase profitability. They create an image and attract new potential customers, those who want to buy an expensive prestigious product.
Auxiliary and test products. If we compare them with the main ones, it is worth noting that the goods do not play such an important role. They are brought into stores in order to meet the requirements of certain categories of buyers, as well as to create a wide range of products.
Case: VT-metall
Find out how we reduced the cost of attracting an application by 13 times for a metalworking company in Moscow
Find out how
Step 3: Identifying criteria for analyzing the effectiveness of a product category
Let us note right away that at this stage not only the group itself is assessed, but also the effectiveness of all its components. Here, the calculation is made of what income the store will receive as a result of selling certain product categories, how each of them affects the total profit. The goal of assortment management in both retail and wholesale trade is to determine the tools for improving results and increasing sales volume.
To analyze assortment management, the following methods are used:
Market analysis. Here, specialists identify what share of the total sales flow the store occupies. To do this, it is necessary to analyze the growth rate and market capacity.
After the market has been researched, experts conduct a survey of consumers: how often they make purchases, which brands they prefer, and which, on the contrary, they prefer not to buy.
Another element of analysis is competitors, their pricing and product policies, and the range of products they offer for sale.
Next come ABC and XYZ analyses, where the rate of profit receipt and its increase are determined, and the turnover of goods is assessed.
The above methods make it possible to analyze the amount of sales, gross and net profit of the enterprise. These indicators are calculated per 1 square meter of the store area. Such figures as sales profitability and more are determined.
According to the category theory, goods are divided into 6 groups:
Profit generators. This group includes products that sell out quickly and bring good income to the store. Examples include seasonal products or new products that have recently appeared on the market, but have already earned a good reputation.
Customer flow creators. These botim database are products that are in constant high demand among consumers. It is not affected by seasons, weather, political situation, etc. As a rule, customers buy other related products along with these products. The effectiveness of investments in this group can be assessed by the size of income, as well as by the frequency of purchases and the number of store visitors.
Cash generators. Most often, this group includes those products whose cost is low. Due to the low price, they cannot provide a solid profit. The function of such products is to provide a minimum but regular profit, due to which the store will not have cash gaps. The behavior of buyers of these products is often similar to impulse purchases.
Defenders. This is a group of products that work to retain customers who are hard on price. Their price is lower than that of competitors, so the store can make a statement about the availability of products.
Image makers. These products are expensive, their purpose in the store is not to increase profitability. They create an image and attract new potential customers, those who want to buy an expensive prestigious product.
Auxiliary and test products. If we compare them with the main ones, it is worth noting that the goods do not play such an important role. They are brought into stores in order to meet the requirements of certain categories of buyers, as well as to create a wide range of products.
Case: VT-metall
Find out how we reduced the cost of attracting an application by 13 times for a metalworking company in Moscow
Find out how
Step 3: Identifying criteria for analyzing the effectiveness of a product category
Let us note right away that at this stage not only the group itself is assessed, but also the effectiveness of all its components. Here, the calculation is made of what income the store will receive as a result of selling certain product categories, how each of them affects the total profit. The goal of assortment management in both retail and wholesale trade is to determine the tools for improving results and increasing sales volume.
To analyze assortment management, the following methods are used:
Market analysis. Here, specialists identify what share of the total sales flow the store occupies. To do this, it is necessary to analyze the growth rate and market capacity.
After the market has been researched, experts conduct a survey of consumers: how often they make purchases, which brands they prefer, and which, on the contrary, they prefer not to buy.
Another element of analysis is competitors, their pricing and product policies, and the range of products they offer for sale.
Next come ABC and XYZ analyses, where the rate of profit receipt and its increase are determined, and the turnover of goods is assessed.
The above methods make it possible to analyze the amount of sales, gross and net profit of the enterprise. These indicators are calculated per 1 square meter of the store area. Such figures as sales profitability and more are determined.