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Category manager

What is a category manager

What is a category manager?

A category manager is a specialist who increases sales and business profits by managing the assortment of products, their location in the store, and pricing. Category managers typically analyze data and ideas to identify trends (both in the industry and on the consumer side) about products, develop product categories, and create strategies for promoting products or taking unsuccessful products out of the market. Sometimes definition of a category manager also involves leading a team of analysts and other specialists and building supplier relationships. This means making the company a category leader, regulating supply and demand, expanding the number of buyers and merchandisers, and effectively managing budgets and revenues.

Category manager salary: How much can you earn in this position?

A junior category manager can earn $35,000 to $37,000 a year. The salary of an assistant category manager, that is, a more experienced manager and a specialist with little experience, starts from $40-42,000 a year. An associate category manager earns about the same. Depending on the size of the company and the specialist's responsibilities, this role may be classified as junior or middle-level. Usually, the associate is the next step after the junior. A category middle manager makes $50,000 yearly, and a senior category manager - $65,000 a year or more.

Which businesses need category managers?

Every business that sells goods for various purposes needs category management. For example, you have a small shop offering mugs, plates, several options for cooking utensils, napkins, hot coasters, and tablecloths. You decided to produce napkin holders, kitchen mittens, and cutlery sets for them. Different products can be combined into different categories: buyers interested in dishes will likely be happy to buy kitchen mittens. When people browse tablecloths and napkins, there is a high likelihood that they will be interested in napkin holders as well. Customers who have added mugs and plates to their basket can also look for cutlery sets. Now, your products are divided into categories. As you can see, the format of working with product categories is similar between e-commerce and offline retail. However, the additional features of online and offline sales are different.

What is category management?

What is category management

Category management involves grouping products based on some common feature. This allows you to manage sales performance. Small businesses often entrust ordinary consultants with category management. In large chains, separate category managers oversee the return on investment in specific categories of goods and the performance of different categories.

The advantages of category management

Firstly, category management guarantees maximum performance for each product category. The role of the category manager is to unlock the potential of different categories by managing procurement, supply, visual display of goods, and tracking sales performance. Categories turn into business units, and methods of working with them allow you to make the most of your products.

Secondly, category management lets you predict which products will sell better or worse. Find out what to do with products that don't sell well. Category managers enter analytics information and sales forecasts into purchase calculation tables and then manage the purchases of individual products. You must monitor competitors' sales and market trends, even in procurement. This is much more complicated than a simple purchase based on the company's sales last month.

Thirdly, category management makes it possible to save money. It can (and should) then be spent on buying the products that sell best and reforming the categories. As a result, you will also be able to save money since all purchases will be handled by one category manager, who can order products for 50 or 100 stores within the same network. Usually, such tasks are handled by the global category manager, who has impressive work experience. And, of course, purchases in large quantities allow you to start negotiations with the supplier to provide a discount, which is also helpful for retailers.

Elements of category management

Elements of category management

Category management includes four elements: product, price, placement, and promotion. These elements refer to the traditional four marketing points, representing the same thing.

  • Product. The category manager makes sure that the products the stores need are listed in the purchases based on the analytics of reports, market trends, and customer opinions.

  • Price. The category manager sets product prices and changes them depending on external conditions (for example, according to demand).

  • Placement. The category manager places products in a physical store or on the storefront of an online store (including a marketplace). They can order additional visual elements to draw attention to products and categories. In the case of online placement, these can be photo shoots, cards, or videos from a professional videographer.

  • Promotion. A category manager is also a marketer with experience in product promotion. Thus, they should use ways to promote categories to drive sales and maximize profits. In addition, marketing knowledge will help category managers deal with excess inventory, that is, products bought and not sold that still need to be marketed effectively.

Types of strategy in category management

In category management, there are four types of strategies: exclusive, selective, non-selective, and the "private brand" strategy.

  • Exclusive Strategy

A retail store sells products in one category exclusively from one supplier. The strategy builds customer loyalty and increases market share for both the supplier and the retail store.

  • Selective Strategy

A retail store selects products for the same category from multiple suppliers. The strategy helps the seller to offer its customers a broader and more diverse choice while agreeing with suppliers on favorable prices for products from the category for the retail store.

  • Non-selective Strategy

A retail store sells products from any supplier in one category. The strategy makes it possible to offer customers the most comprehensive and unlimited choice. However, the retail store will not be able to negotiate low prices with suppliers and expand its market share in a specific category.

  • Private Brand Strategy

Under the private brand strategy, a retail store creates its label or brand, under which products from various categories are produced. The strategy is risky and only suitable for large businesses with an established customer base. It helps to create unique products that differentiate a retail store from its competitors. Along with this strategy, retailers often combine the three ways to promote product categories. This creates an individual approach for customers.

Role and responsibilities of the category manager

Role and responsibilities of the category manager

The category manager job description includes the following items:

  • Forming a team of specialists in category management. If the store is large, more than one category manager will be needed. You will also need to hire a marketer, a sales specialist, a financier, and a specialist in the procurement process. One or two managers can work with all product deliveries if the store is small. There are times when the "category manager and their intern" approach is used.

  • Defining categories. Products are grouped into categories, and the manager explains why they decided to do so, using market data, analytics, survey procedures, in-depth customer interviews, and so on.

  • Developing a strategy for categories. One category of goods equals one strategy. So, the category manager has much to do, since stores never stop at two or three categories. A category manager can employ one of the above strategies or combine them and create new mixes based on rationalizing or optimizing prices within one category.

  • Implementing strategies. At this stage, the category manager cooperates with suppliers, monitors sales of goods in different categories, adjusts categories if necessary, analyzes the market and consumer needs, and buys additional goods. Then, the manager evaluates the strategies' effectiveness and changes them to market conditions.

Key skills and requirements

To qualify for the position of category manager, you must:

  1. Be able to build and manage business relationships.

  2. Be able to interact with people who aren't always pleasant.

  3. Be able to study information, conduct different types of analysis, and find out what can be implemented in business here and now.

  4. Know how to carry out the procurement procedure from different suppliers according to their legal form.

  5. Be able to defend your solutions to management.

  6. Know the basics of business development and be able to use them for improving product categories.

  7. Know how to conduct a strategic search for suppliers and their offers.

  8. Know how the supply chain works in the industry you are interested in for employment.

  9. Be able to work in Excel and have other technical knowledge of programs.

  10. Understand how to analyze financial statements, accounting tables, and retail metrics such as inventory turnover and gross margin.

  11. Understand the market from the perspective of competitors and customer segments.

  12. Know the basics of marketing and sales.

  13. Understand an inventory and how to conduct it, be proactive, and assume responsibility.

  14. Be well versed in mathematics and statistics, but at the same time, know how to test hypotheses in the market.

  15. Use the physical space of a retail store and arrange products in a visually and aesthetically pleasing manner.

  16. Communicate with customers and solve their problems professionally, even if the buyer accuses you of incompetence.

  17. Know how to organize your day and your team's working time to complete your assigned tasks.

  18. Be able to coordinate with other people while keeping several scenarios in mind.

How to become a category manager

How to become a category manager

To become a category manager, you must understand what a category manager does and have some experience in this area. You don't have to take part in the procurement of goods from suppliers or take endless courses. It will be sufficient to start with one educational program and several practical cases. Moreover, you can create them yourself, using information about category management strategies and the process.

Category management steps

  1. Definition of categories. They can be as non-standard as possible - this is only encouraged.

  2. Evaluation of the role of each category. Some categories become the basis for the retail business, some become the main factor in making purchases in a particular store, some support all the others, and so on. Not all product categories will be superstars and will influence sales. In one way or another, they all allow you to attract different segments of potential customers.

  3. Performance evaluation. It is time to analyze the categories and suggest ways to improve them. You must consider the sales volume, the category's contribution to total sales, gross profit, inventory turnover, and other indicators.

  4. Creating goals for each category. Based on ready-made analyzes, you will need to develop goals for categories and metrics by which you will evaluate their effectiveness.

  5. Drawing up a roadmap for strategy implementation. This includes forming strategies for each product category and creating a map to implement these strategies. What steps will you take to implement your plans? What will you do to make the category effective and achieve its goal? Which suppliers will you work with?

  6. Roadmap implementation. Here, you simply implement the plans outlined earlier. And then, you study the implementation experience and determine how to improve it and what to change next time.


A category manager is an essential employee in any retail business. They determine the categories of products, procure them, select new goods, and manage their cost to the consumer. To become a category manager, you need to understand the basics of marketing, get a professional certification, and complete an internship. Moreover, you can solve a couple of cases from the practice of retail stores, which will give you an idea of what an approximate career path looks like in this field.