Category Management in Chinese Supermarket Retailing : _{A Case Study in Chinese Lianhua Supermarket}

Abstract:

Purpose - The purpose of the research is to study how category management is implemented by Chinese Lianhua supermarket. Design/methodology/approach - This paper is adopted a single case study of qualitative ap-proach with explanatory and exploratory design as our research strategy. The method of the re-search is developed by the following three steps: (1) based on the previous literature, we elaborate category management background, its definition, explain category management process, analyze its demand side and the benefits it brings to retailers; (2) according to the above literature and theories, we create a working model which combines category management and its demand-driven side feature (i.e. customer focus, category management collaboration and strategic retailing positioning) in order to analyze the implementation of category management in Chinese super-market retailing; (3) we find a Chinese supermarket that is carrying out category management and conduct a case study based on it. With consideration of the working model, we explain how cate-gory management is implemented in the supermarket, find barrier and challenges during the im-plementation and make the corresponding suggestions to the current situation. The case study is based on interviews with major representatives from Lianhua supermarket and one of its suppli-ers in order to achieve insight into the essence of the problem. Findings and analysis - The implementation of category management in Lianhua supermarket includes “strong outlet” strategy aiming to deal with the supermarket development in a fierce competitive environment. Besides, Lianhua supermarket closely carries out the category management process and adapts the process according to its own positioning. Insufficient systems to support the implementation of category management, collaboration with suppliers is still on the fence, lack of internal managerial techniques and conflicts between category concentration and customers’ personalized shopping are the major barriers and challenges facing to Lianhua supermarket during its implementation of category management. Authors suggest Lianhua supermarket to invest IT resources, establish win-win strategic relationship, enhance top management commitment, improve internal collaboration and improve category performance measures. Research limitations – This research only restricts insights of category management on single case and specific geographical location. As for whether the research is also applied to other industry, the researched hasn’t been concerned and needs further research. The case study in the research is conducted only from retailer’s point of view. Findings obtained from the interviews are mostly from Lianhua supermarket side. The inadequate interview from supplier side is a clear limitation of the study, but it leaves an interest for future research.