Analysis Of The Problems And Countermeasures On Etchs Chain Supermarket Category Management

After utilizing Category Management for over ten years, those international retailer giants, through the supply chain system, have had fully competitive advantages in effective product development, distribution, promotion, and replenishment etc. While those domestic retailers, whose annual turnover is over hundred million Yuan, are also practicing category management, only with low ply rating comparatively. The main reason is the lack of retailers and suppliers cooperation. Those retailers each does thing in its own way, do not share data with others, or never undergoing data analysis. Therefore, it is necessary to do the analysis of the status quo of category management within domestic retailers.The article is based on chain supermarket, ETCHS Co. LTD in particular, having one of the regular chain stores as an example, utilizing case study method analyze some typical cases, and eventually complete the category management process design for chain supermarket.The key point of the analysis is the customer flow. Supermarkets normally target on mass consumer goods, especially foods, which account for over 50% of the whole consumption level, although mostly with low profit, consumer goods contribute to the profit growth by the volume of sales. Therefore, even Wal-Mart, as the retailer giant, maintains its customer flow by providing its customer with 80 % of zero profit goods. Through the assessment on the sales layout, product display and background data within ETCHS supermarket, it has been revealed that the main problems in its stores are:category has not been coded to SKU; decisions are based on single factor; only sales volume data has been kept; not an evaluation mechanism has been set up; the data can not been used to evaluate the supplier; with no way of obtaining category market data has been developed, which resulted in unfitting sales layout and product display, insufficient customer flow and inferior sales achievement, which far away from the company's expectation.There are two major challenges for ETCHS to make the category management process design:Firstly, the category management has not been recognized by the management, meanwhile no necessary input has been made; Secondly, under the influence of first profit source, all parties interests within the company needs to be balanced tactically. Due to its current situation, it is recommended that ETCHS start with the primary stage of category management. After category role has been recognized and the evaluation system has been set up, focus on category tactic. By exploring and testing the category individually and eventually, transform the existing management information system. Internal management improvement should be carried out simultaneously with the supplier selection and market analysis, establishing supply chain relationship, then bringing the category management to its middle stage, eventually building strategic partnership with its suppliers, and finally accomplishing its advance stage of category management.