The term category management, coined by former marketing professor Brian Harris, refers to a systematic, disciplined approach to strategically managing groups of similar or related products: the product category unit. Originally used in retail, category management can also be a very useful tool for restaurant owners. What benefit does category management offer? It enables you to optimise product rotation and create value to obtain maximum conversion and happy customers. Sounds complicated? It doesn’t have to be. In this blog post, we’ll break down the eight steps to set you on a path to success.

The methodology provides you with the steps you need to consider to put together a category plan. You decide how thoroughly you want to approach this, using the models provided and pulling together all the necessary information. It should help you achieve a broader, more strategic view of your categories and make your life (and running your business) easier!

 Step 1 Discovery and alignment

Before you can start planning your category management, it’s essential that you map out a strategy: what specific goals do you have for your product categories? Which consumers and what market developments are you targeting? To ensure everybody involved is on the same page, these key essentials must be clear from the get-go. Communication is key!

This model explains how to turn an opportunity for growth into a profitable strategy:

Step 2 Definition and role

Once you have discovered and aligned your goals and targets, it’s time to focus on the definition and role of your category. What are the key influencing factors? What are your customers’ wants and needs, and what about the chef’s? What menu trends are emerging? Try to answer these questions from all possible perspectives to find the products that best suit your preferred answers.

Now you have the definition, it’s time to take a closer look at the importance of the category from a consumer’s perspective. Ask yourself how this category is interesting to the consumer. Generally, there are five roles a category can fulfil for the customer:

• Destination – these assortments are key to your restaurant’s identity, they add value and contribute to your customers’ sense of consistency and excellence.
• Routine – customers will almost always choose this category because it’s routine, almost mandatory. This category covers mostly competitive and easily exchangeable products.
• Convenience – when available on the total offer, consumers find these products quite convenient to add to their order.
• Traffic builder – these are specifically aimed at persuading the customer to come in-store. Think promotions and specials offers.
• Transaction builder – with this temporary and supplementary category, customers are persuaded to order something extra or upgrade their current choice.

The model below can be used to determine the category value (high or low) in terms of sales and consumer interest, and align it with the designated category role to get a complete overview:

Step 3 Vision

No future-proof category management can take off without an aspirational vision statement describing your ambition in the category for the next three years. To create a clear, specific vision statement that really hits home, it’s important that you get your hands on any relevant trend reports you can find. This includes macro consumer trends, market trends, foresight analysis, global trends and forecasts. And don’t forget to delve into consumer and category trends over the last three years. But don’t go as far as writing an entire dissertation – the most important goal is to know what you want to establish with this category in terms of your complete assortment.

In summary, find the right input resources that help define a category vision statement:

Step 4 Insight identification

Once you have a clear vision of the desired category, it’s time to gather and analyse information to help you identify key trends, opportunities and insights that will help you grow the category. The most important information source for this step is asking the questions that offer the most insight into macro trends, category, capability and consumer needs. The key questions to be answered are:

• How, why and when is the product used?
• Who is the primary user?
• How much is generally used?
• What are possible substitutes?
• How much is held in inventory and why?
• How and where is the product stored/prepped/used?
• What can be improved? And how?
• How loyal are your guests to specific brands and products?
• How passionate are your staff and guests about the category?

So, focus on key domains by asking the questions that offer the most insight into macro trends, category, capability and consumer needs:

Step 5 Consumer and category strategies

Now that you have a straightforward definition, a clear vision and useful insights, it’s time to identify strategic drivers and their key performance indicators (KPIs) to ensure the category will be successful and will have the opportunity to grow.

Do you want to increase the percentage of consumers buying fries? Or do you want to increase your breakfast or snack sales? And what are your restaurant’s most important KPIs? Are you focused on generating new business, increasing customer spending or visits, or distinguishing yourself from your competitors? It’s important that the strategic framework this soul searching leads to drives all future decisions. To stay on the right path, ask yourself time and again: ‘Is this consistent with our category strategies?’

All in all, it’s about identifying key performance indicators and using them to anchor the accompanying strategies. As a summary of this step:

Step 6 Tactics

Are you eager to put the above into action? Hold your horses for just a little longer. First, you have to focus on the tactics needed to turn strategy into successful action. So, let’s develop an action plan with a timeline and clear deliverables. Now that you have all the relevant information, such as trends and consumer attitudes, you can align these with tactical blueprints in various areas. Is your goal attracting more guests? Make (direct) marketing and promotions a key tactic. Do you want to treat your guests to an even more creative menu based on upcoming trends? Turn chef tips and recipe planning into a key tactic.

Use this table to create an overview of the various tactics. Fill in keywords with the right strategy and marketing Ps (product, price, promotions, place, personnel, presentation).

Step 7 Plan activation and target selling

You’re almost ready to get started. But first, you must create a simple yet specific implementation roadmap: a category scorecard with specific targets. Your input for this important data lies in the blueprints you’ve made, your understanding of yours and your employees’ roles and responsibilities, smart prioritisation and timing of your tactics.

Discuss in depth which of your staff will be playing what role. Who is responsible for what tactic and who needs to be involved?

Keep score of your targets using this category scorecard:

Step 8 Review and refine

The last step before you can put your new and improved category management into action. In this final phase, you will review the category’s performance against the targets. Are performance and targets out of sync? Are there new insights that have to be taken into account? On a bi-annual basis, take all this information and use it to refine and/or refresh your strategies and actions. This will help ensure the process becomes a way of life rather than a temporary project.

It’s recommended to refine and/or renew your strategies and actions based upon thorough review and new insights on a bi-annual basis. A summary of the process:

Non-stop managing

And always remember: category management isn’t a tool to use only once and then discard completely. Category management is a continuous loop of four important phases. No matter what step of category management you’re focusing on, always keep these four phases in mind:

1. Analysing your market and category
2. Analysing your formula and/or brand
3. Formulating your category strategy and tactics and implementing a plan
4. Evaluating

There you have it! A thorough, yet condensed roadmap that can lead you to more successful category management. Time to turn theory into good practice! Need some help with that? Lamb Weston has developed a comprehensive document that covers all the necessary steps. We also methodically address all the – simplified – visuals accompanying this blog post. We are more than happy to share our insights and intricate graphs with you during one of our in-depth pressure-cooking sessions. Your first steps towards successful category management start here!

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