METRO Group is part of a small circle of international trading companies, which have established efficient category management. The first projects were initiated in 1998. Category managers are now an integral part of the distribution lines Metro Cash & Carry and Real, where they are responsible for dairy products. Until now the trading group is mainly working with large food manufacturers or cosmetics producers. The target of Metro Group is to involve further suppliers into category management, including the nonfood-sector, which is mainly driven by small and medium sized enterprises. 30 new projects were initiated in 2003.

METRO Group’s category managers cooperate closely with sales and purchasing and effectively bridge the gap between these two company units. While buyers are driven by low prices, sales specialists focus on sales. Category managers take on a cross-functional responsibility, which puts the customer and the relevant categories at the center of all considerations.

Strategic buyers, sales staff and category managers coordinate their work in panels such as the category team, which meets regularly. Category managers come to agreements with their colleagues, e.g. if they have spotted a new product at a trade show, which would fit into the category perfectly. They would then ask buyers to negotiate a price. Internal coordination is beneficial if several category managers from different distribution lines would like to list the same item. Strategic buyers can then pool the orders and negotiate with the respective manufacturer.

METRO Group uses the CMplus software to ensure the efficiency of the category management process. Procter & Gamble (www.procterundgamble.de) developed the tool originally for the consumer goods industry. In 2002 Wincor Nixdorf (www.wincor-nixdorf.com) tailored the software to the needs of trading companies in cooperation with METRO Group. CMplus helps category managers and their partners to analyse information from internal data bases, manufacturers as well as consumers and retail panels. The involved parties can access CMplus via the Internet. The only technical precondition for the application of the tool is a standard computer and Internet access.

CMplus initially pools information from all sources. The program creates a standard structure for the data and therefore considerably simplifies the data collection and analysis. Users have a straight-forward interface and can quickly access all relevant figures. Sales figures are made up of a huge amount of data, which has to be analyzed on a regular basis and includes stock levels, sales and prices for every item in every store. This is complemented by additional key figures - from purchasing frequencies to results of promotions.

CMplus links various key figures and derives recommendations. The software checks if the category's role, its defined targets and strategy are compatible. Users receive answers to different queries, such as: How important is the strategy "increase awareness" for the season category "Everything for a Barbecue?" CMplus can quickly deliver a comprehensive strategy or product range suggestion - and therefore accelerates a process which would otherwise take considerably longer. The results are not compulsory instructions, but rather suggestions which help the category manager to take a decision.

The category management scorecard is a central feature of CMplus. It provides a comparison between the actual and budget figures for specific categories. The result of an analysis could be as follows: the trading company sold 10 percent more soft drinks than its competitor. Alternatively, the system identifies that the customer reach in a particular category is less than that of a competitor and a posts a warning: from all pet food purchasers in Germany, who are Real customers, only 20 percent buy pet food from Real, and they only cover a small proportion of their overall demand.
As a result category managers can introduce additional measures or correct targets.

CMplus is to help business partners planning long term promotions in the future. The software can answer the following question: For which brands does advertising pay off most? Based on the selected product strategy CMplus determines key figures such as purchasing frequency and customer reach and then makes recommendations. Other processes and systems are used for detailed planning activities. In addition the METRO Group realized a link between CMplus and Spaceman, a software for shelf management. This would mean that CMplus could initially make a suggestion and then check how items could reasonably be stocked in shelves. METRO Group's Data Warehouse provides an insight into details such as items, stores and weeks. Category partners can access these from Metro Data Warehouse.

The objective of METRO Group is to considerably expand the use of CMplus and involve as many manufacturers and categories as possible. Since 2004 the distribution line Real as well as the distribution line Metro Cash & Carry are using the software within the scope of individual projects. Having the opportunity to develope regional recommendations for product lines in CMplus, the roll-out of CMplus on other goods classes in the food section is intended. Intensive training is a necessary pre-condition for deploying the tool. METRO Group is currently working on the training for assistant category managers. In this special training candidates create case studies and are introduced to the entire CM process - from the definition of goods classes to result monitoring.