Driving Sustainable Growth Through Category Management 
How Carlsberg-Tetley has developed the art of category management to deliver accuracy and insight in record time.

Despite the flagging enthusiasm there is light at the end of the tunnel. Indeed, in line with the development of Carlsberg-Tetley’s streamlined category management approach, it implemented new software to make the whole process of range planning more efficient and effective. Now, using CS Range Manager from Cosmic Solutions, it has reduced the time it spends by more than 60%. “Our category management method is based upon a two step approach. Firstly, we identify the drivers that will grow our customer’s business. Then, we align ourselves so that we can take advantage of the expected category growth; with the global objective of moving away from a ‘sharing the cake’ scenario to one of  ‘growing the cake’ so that we can potentially take a larger slice,” said Daniel Sjogren, Category Insight Manager at Carlsberg-Tetley. 

“Part and parcel of the art of category management is to get a deep understanding of the shoppers and their behaviour, which is the core objective. There is currently a shift in the shopper behaviour, where the number of shopping occasions to the supermarket is increasing with an emphasis on smaller baskets,” added Daniel Sjogren. “This is vital information for us; we know that people go into the store more often, however, it is crucial that we understand how we can convert these shoppers into the beer category to facilitate a sustainable growth in the future. Armed with this knowledge we are now looking for alternative strategies that will increase the number visits to the category, in line with the number and type of shopping occasions,” continued Daniel Sjogren.  

Consequently, for Carlsberg-Tetley the question about the effectiveness of category management and range planning is not in doubt, it will always need to spot trends for it to identify opportunities for sustainable growth. However, while its faith in category management and range planning was unshakeable, it still needed to be able to speed up the whole process and play around with vital statistics in a much more flexible way. In doing so, it could find new strategies to exploit trends and offer its customers new ways to grow the category as a whole. 

“Before we introduced CS Range Manager, our process revolved around the preparation of a large number of very complex spreadsheets and calculations. A job much better suited to the IT department. However, our analysts struggled through trying to get the relevant SKU  [stock keeping unit] data into a format that would allow us to sort the wheat from the chaff. So instead of spending time looking for trends, new consumer habits and competitive forces, the bulk of our time was spent number crunching in an attempt to get the right information into a useful and useable format. Once we’d completed the spreadsheets, we still had difficulty cutting the data to test new strategies and so, the insight element of ranging was always distorted,” continued Daniel Sjogren. Of course, all of this is in the past. Today, Carlsberg-Tetley uses a software application, which has played an important role in delivering insight back into the entire process of category management and range planning.

“We were always on the lookout for new ways to improve our processes. CS Range Manager is now playing a critical role and has helped us to create a win-win situation with our customers due to five key reasons:

“Speed – range reviews are no longer extremely time consuming. We have cut the time by more than 60% and our analysts are now doing the job they’re paid to do, using their skills and core competencies.

“Accuracy – the ‘old way’ of carrying out range reviews was filled with the potential of human errors. Using CS Range Manager is straightforward, we simply dump the data into a spreadsheet, and the rest of the process is carried out through an easy to understand workbook-style interface that takes you through each step of the process. This significantly reduces the risk of error.

“Simplicity – the software is really easy to use and takes no more than one hour to learn.

“Measurability – the changes you make in CS Range Manager are updated instantly in all views and with an estimate of the impact of the changes proposed. 

“Category focus – the time the tool frees up in processing allows the team to focus on insight delivery and to understand the dynamics of the category to, in the end, provide a better service to our customers.

“Since the introduction of this new software, we’ve seen a dramatic move away from data preparation to delivering real insight. Using CS Range Manager we can very easily assess the dynamics of the category as a whole and play around with different scenarios to see their likely impact. For example, given the current changes in shopping habits and the fact that a high proportion of take home beer is purchased by women, we need to explore a variety of avenues - does beer need to be sold in more than one area? What would happen if we started to segment the category based upon type of shopping occasion? Furthermore, the flexibility of always working in real-time means that we can keep the data’s integrity intact whilst we explore all these different strategies and tactics for increasing sales,” added Daniel Sjogren. 

The purpose of CS Range Manager is to automate and streamline category management and range planning, it is designed to collapse analysis cycles from days to hours. It allows a combination of measures such as volume sales, retail sales, value and margin, to determine both the optimal range to stock and how much space each product should be allocated. Using retailer scan data, users are able to compare product performance, value and distribution on a retailer by retailer basis, versus the sector as a whole. 

In addition, Carlsberg-Tetley can identify any emerging threats, placing them into context, across its distribution channel. CS Range Manager will also allow Carlsberg-Tetley to build a comprehensive case supporting increased distribution, when it is clearly under-represented, as well as helping it to identify poor performers and gaps in the category as a whole. 

“So despite the scepticism about the concept of category management across many industries, it is proving its worth to us. When you are not the largest supplier in the category, you need something different to take to our customers just to get air time and range planning using CS Range Manager is it, it has given us the edge that we need,” concluded Daniel Sjogren.  

Prepared by: 
Michele Durban, 
micheled@genuinearticle.co.uk
01628 784600
The Genuine Article, 78 Queen Street , Maidenhead, SL6 1HY 
on behalf of Cosmic Solutions, June 2003

Date article published: 17/07/2002