Category management, the system under which supermarkets and
selected suppliers work together to boost sales of entire product
categories, has become an important element in packaged-goods marketing.
And as it enters a new and more mature phase, market research is poised
to become the third party around the category management table.
Sophisticated market research techniques are being used to give
marketers greater insight into consumer behaviour. In the early stages
of category management, this was not always the case.
Although they were given much of the suppliers’ own research data,
retailers often chose to rely on a combination of guesswork, habit and
instinct to determine the design and character of a particular category.
What they lacked was that vital piece of the jigsaw: customer
Now the demand for a consumer perspective has presented market
researchers with a golden opportunity. Agencies are reporting an upturn
in business as category managers search for a more accurate picture of
how supermarket shelves are shopped and why particular products are
Research International (RI) reports that demand has risen sharply. A
year ago the agency was conducting just one category management project
every three months. Now it has 18 on its books.
And, in the past 18 months, supermarkets have reached the conclusion
that methods such as space management, in which shelf space is allocated
in direct relation to volume sales, cannot be relied upon on their own
to improve a category’s performance.
Consumers often became confused as products were regularly delisted,
downgraded or moved at the discretion of the supermarket buyer. On top
of this, it was virtually impossible for a brand manager to be inventive
with his or her category.
Maureen Johnson, RI’s global director for retail and category
management, says: ’For the first time, market research is showing how a
consumer reacts to a category. It takes into account the way they behave
down to the very last detail. Space management didn’t illustrate that.
It was more about economics than marketing.’
Market research agencies have responded by employing a growing armoury
of sophisticated research tools and deploying them in the aisles and in
shoppers’ homes. These tools are not totally new. The Research Business
International, for example, has been promoting some of them for several
years, but they are becoming more widespread.
Category managers will no longer accept a ’reconstruction’ of what a
shopper thinks he or she buys. They want to know exactly what was bought
and the reasons why.
Watch and learn
Speaking at the Market Research Society’s recent annual conference, Phil
Ellis, category manager of butter and margarine at Van den Bergh Foods,
set out his agenda when embarking on a major category management
’Many traditional research approaches often stop short of the vital area
where sales and marketing interact: in-store at the sales fixture,’ he
says. ’There is so much to learn from observing and interviewing
shoppers while they are actually in their buying environment, exposed to
all the instore variables and trading off their rational choices against
Accordingly, market research agencies have been observing shoppers on
video, accompanying them on shopping trips, checking the contents of
their cupboards at home, and questioning them as they enter and leave a
Such techniques are giving marketers an accurate insight into consumer
behaviour for the first time since category management found its way
piecemeal into the UK in the early 90s.
The results have been twofold. Armed with such empirical data, the
manufacturer is more confident about getting the right amount of space
for the product.
The retailer, meanwhile, can attend to the detail that is so important
and implement some much needed improvements to the basics of
Why, for example, are shampoos and conditioners often placed at opposite
ends of the display? Why are large soft drink bottles placed on the top
shelf? Why is there no supplementary information about whiskies when
wine point-of-sale labels tell you everything you need to know?
Manufacturers are now using this data at the product development
Instead of coming up with a product and then negotiating with the
retailer to shoehorn it into a category, manufacturers are using
research at an earlier stage. Steven Jagger, managing director of
research agency Gfk, says that because suppliers know more about what
triggers a purchase and how a shopper reacts, they can tailor their
’Manufacturers have been blinkered about where a product can go. Instead
of looking around and watching how the consumer makes a choice, they
have been thinking about how they can get a product they have developed
to fit into a particular category,’ he says.
Jagger claims research has persuaded one of his clients, a biscuit
maker, to start manufacturing for the moist cake category, which has a
higher price point, better margins and associations of higher
If, as anecdotal evidence suggests, market research is becoming more
involved in the business process of category management, then it will
come as a welcome fillip to an industry which has been waiting for an
opportunity to shape, rather than merely corroborate, a marketer’s