Determinants and outcomes of plan objectivity and implementation in category management relationships

Category management holds great potential, but has several inherent barriers that can impede category performance. This study examines factors thought to impact category performance because of the critical role category management plays at the end of the supply chain in Efficient Consumer Response (ECR) relationships between manufacturers and grocery retailers. Two central factors, category plan objectivity and implementation of the plans, as well as five factors antecedent to objectivity and implementation, were identified through a qualitative study of retailer and supplier category managers. The interrelationships of these factors were tested in an empirical study of 128 supplier category managers. As a direct effect on performance, implementation of category plans had a stronger impact on category performance than did the objectivity of the plans. The retailer’s trust in the category management process was found to be a critical component on the implementation of category plans. Preplanning agreement between the retailer and the supplier was found to impact both objectivity and implementation. The internal conflict between supplier’s brand management and sales/category managers had only a minor impact on objectivity, and that effect was mediated by the supplier’s overall opportunism. Several theoretical and managerial implications are discussed.