5/1/2011

CATEGORY MANAGEME NT

[CATEGORY MANAGEMENT AT PANTALOONS (KIDSWEAR)]

SUBMITTED BY: VIVEK ANAND SIDDHARTH ONKAR BHAI PATEL NEERAJ TRIPATHI

Application of Category Pantaloons (Kids wear)

Management

Principles

at

CATEGORY MANAGEMENT Category management is a retailer-supplier process of managing categories as strategic business units (SBUs), producing enhanced results by focusing on delivering consumer value. It is the process by which firms manage their business at the category level to deliver better product, pricing and service to their Customers.

KEY AREAS OF CM Space planning to ensure desired display space. Assortment planning to facilitate the achievement of required financial
objectives.

Visual Merchandising to optimize display efficiency and aid walkins/conversions in a store. Inventory Management to ensure required stock cover and avoid being out of stock.

Category Management Business Process

KIDS WEAR AT PANTALOONS

Started in 1991 with the opening of the store at Pantaloon Spencers Chennai. Kids wear category leads to 10 % of the total sales of the store. Profit is 7-8% of the total store profit.

Step 1: Category Definition

There are 2 categories in the kids wear department Boys wear Girls wear The sub categories are: Girls wear casuals & ethnic wear The product offerings: Tops - t shirts (Message tees, graphic tees, solids), tunics, kurtis. Bottoms- Denim Capri, Roller cargo, Leggings, Skirts, shorts, jeans, salwars. Frocks

Boys wear casuals & sportswear The product offerings: Tops - t shirt (message tees, print tees, cut & sew, stripes, solids) & shirts Bottoms - Cargo, Jamaica(3/4), Shorts, Full length jeans

Step 2: Defining the Category Role

Brands

Age Group

Price Range (Rs.)

Products Offered

Space Provided (Sq. ft.)

Private Brands Bare Kids Chalk RIG Sach Pink and Blue Akkriti National Brands 7-16 Lee Cooper Juniors 0-12 Lilliput 245-945 999-2099 Casuals, boys & girls Casuals, boys & girls 168 102 7-16 2-7 3-14 2-16 0-2 7-16 299-1000 299-1000 199 onwards 399-899 199 onwards 299-1099 Casuals, boys & girls Casuals, boys & girls Casuals, boys & girls Sportswear, boys Infant wear, boys & girls Ethic wear, girls 274 125 160 60 81 105

Step 3: Category Assessment

The company gets weekly reports on Tuesdays, which it calls dump.
This data is analysed to see the movement of various types of goods.

According to company policy, a bad seller is a product that stays on the shelf
for more than 60 ways.

In case of slow moving goods, the company analyses the results in context of
price, style, colour and size.

If the price appears to be a deterrent, the company corrects it right away and
marks down the price immediately. So if the merchandise does not move during its shelf life, it is just removed and kept at the warehouse for end of season sale.

A slow moving good is often moved to the factory outlet or the Big Bazaar,
where it is discounted and sold.

The fast moving category at pantaloons was assessed to be Bare Kids with
average sales of 50-60 thousand and minimum of 20-30 thousand weekly.

Step 4: Category scorecard

HO sets the targets for 4 months, and segregates on weekly basis. Based on the previous sales data, secondary market research and date taken
from other pantaloon stores. 10 % increase in the target is made.

Last quarter 10 12 lakhs target and achieved 6-8 lakhs i.e. 60 to 70 %. Last month target 2, 90,000 and achieved 1, 70,000.

Step 5: Category Strategies

Category managers look at sales and margins of each brand in a category. The whole idea of category management is to create products across length and breadth of a category at different price points, fabrics, design, shape, seasons, color and size.

Pantaloons are characterized by a broad variety, deep assortment.

The Category manager develops a merchandising strategy for the category taking into consideration customer profile, classification, resource structure, vendors, fashion trends, items and price points. The category manager visit stores regularly to check assortments of merchandise displays, stock levels and old season merchandise, consult with team leaders and sales people on problems and suggestions.

MBQs are set at the store level and there is Auto Replenishment System,
where the PO will be generated automatically, once the stocks reach MBQ level.

Floor plan Demarcating the different sections and their placement is made by the
concept, design and visual merchandising team at the head office and is implemented by the zonal teams.

The plan changes after each End of Season Sale (EOSS) i.e. The AutumnSummer (August) and autumn- winter (February) sales. Changes are made according to the revenue per square foot of each section and brand.

Step 6: Category Tactics

PRICING -

Power pricing is a strategy used to enhance sales. Discounts offered are not specifically for kids wear category, they are
combined offers either on high billing amount or to the green card holders.

MERCHANDISE PRESENTATION A4 sized shelf talkers that tell the customer which product is from which brand. The high value brand products are displayed on walls with focus lighting or mannequins.

Rests of the products are displayed in hangers, gondolas, tables, cubes,

waterfalls and other racks. Slow moving items are placed behind the fast moving products. Each rack is placed in such a way so that consumers can easily take their wanted products. Racks are never kept empty. Detachable fixtures with smooth edges are maintained in the store especially in the kids segment.

PROMOTIONS The events are organized on the basis of occasions which come on a yearly basis. In total there are 14 special occasions listed in a year for e.g. Holi, Diwali, etc. The events are decided after the mark down budget has been made in the marketing plan.

They also conduct in house celebrations like childrens week (around 14

Nov), events like End of season sale and games for kids like on 26 th of January.

 Also the company has roped in posters of bollywood stars like Sachin
Tendulkar for the brand Sach to promote its apparel offerings

Step7: Category Plan Implementation

There are department managers are available to manage each department 3
out of 35 staff personnel are assigned to work in the kids wear department. The planogram sent by HO to the stores department manager instructs him to create a cluster display.

Every month the performance of each product variety is measured.

Depending on the product movement, the department manager can alter the display eg. at Pantaloons Chennai Bare kids was identified as the fast moving category, hence maximum floor space is occupied by it in the kids wear section. If a product variety happens to be slow moving, more visual display emphasis is provided.

Category Replenishment is done on daily and weekly basis depending on

sales. Replenishment happens daily at 1 am. Example Bare kids and Chalk products are replenished on daily basis because it has high, regular sales. Akkriti, products are sold one or two pieces every week. Hence they are replenished on a weekly basis.

Most of the brands for kids wear are private or in- house brands and hence
fall under the preferred category. The reason is to overcome the problem of overstocking. Most of the national labels have their own outlets hence Pantaloon was not able to push these products and had only the national label Lee Cooper Junior as it was selling well.

Step 8: Category Review

IT system: IT system at Pantaloon stores is fully centralized; the report of
daily sales is being reported to head office. They use SAP ERP software to maintain the data regarding each product.

 Bar Coding and Scanners: Point of sale systems use scanners and bar
coding to identify an item, use pre-stored data to calculate the cost and generate the total bill for a client.

CATEGORY PERFORMANCE CHECKLIST

Trial rooms - 4 trail rooms (near to the kids wear section for ease of access
especially for kids with chairs provided to sit on and interesting cartoon and animal drawings on walls). repeat purchase - 70% referral purchase - 40% mini service gap - service by staff is good there was no such gap observed

Customer coming back - it is analyzed that due to the brand image, quality of
merchandise and ambience many customer comes back and shop again. (source: information provided by the assistant department manager)

Recommendations We recommend an area that would be made a Kid zone. This area would
have toys, books and games so that the kids can enjoy. There should be separate billing counters for each category.

There should also be separate promotional offers alone for the kids wear
section.