Categories are groups of products that meet similar needs. Departments are groups of categories that meet related needs. The store is a collection of departments. Exhibit 31.6 provides examples of some FMCG departments and categories.
Consumer needs can be defined broadly such as “hair care”, or more precisely such as “cleaning hair”. A broader need is met by a super category (e.g. hair care category), which essentially is a group of related categories (e.g. shampoo, conditioner, hair colour). Categories comprise of sub-categories or segments (e.g. anti-dandruff shampoos).
Marketers need to be careful that they do not define categories too narrowly. For example, a definition such as “yeast based spreads”, where a single brand commands 90% share of category, is unlikely to capture the market dynamics. The category should be defined such that it reflects the needs of the consumers, not merely the form of the product.
For retailers, their categories are central to their identity, and should be framed based on the needs and behaviours of their target shoppers. By and large, for established retailers, this task has already been performed. However, as markets evolve and new products get launched, the category definitions may need to be tweaked and updated.
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Marketing has changed. More so in practical terms, and marketing education is lagging.
The fundamental change lies in the application of analytics and research. Every aspect of the marketing mix can be sensed, tracked and measured.
That does not mean that marketers need to become expert statisticians. We don't need to learn to develop marketing mix models or create perceptual maps. But we should be able to understand and interpret them.
MarketingMind helps. But the real challenge lies in developing expertise in the interpretation and the application of market intelligence.
The Destiny market simulator was developed in response to this challenge. Traversing business years within days, it imparts a concentrated dose of analytics-based strategic marketing experiences.
Like fighter pilots, marketers too can be trained with combat simulators that authentically reflect market realities.
But be careful. There are plenty of toys that masquerade as simulators.
Destiny is unique. It is an authentic FMCG (CPG) market simulator that accurately imitates the way consumers shop, and replicates the reports and information that marketers use at leading consumer marketing firms.
While in a classroom setting you are pitted against others, as an independent learner, you get to play against the computer. Either way you learn to implement effective marketing strategies, develop an understanding of what drives store choice and brand choice, and become proficient in the use of market knowledge and financial data for day-to-day business decisions.