bake - March 2017 - 14

practical marketing

Managing Categories
Retail bakeries can proﬁt from managing their business like

despite its importance, price remains one of most mismanaged

supermarkets do by employing a principle known as category

areas in consumer goods retailing.

management. In a nutshell, category management means treating
each product category like its own individual business unit. Bread,

Price communication is one of the most important elements in

for example, would be handled as a single category and managed

an effective pricing strategy. Retailers may have solid pricing

accordingly. If you raised the price of one variety of bread, but not

practices in place, yet shoppers fail to acknowledge, or don't

other breads, you would analyze the proﬁtability of doing so on

realize, the values being offered, according to Willard Bishop.

the entire bread category, not just the single product.
The battle for capturing more share of wallet continues to inSupermarkets have learned over the years that consumers re-

tensify as the percent of promoted items reaches new heights.

spond to price increases and promotions across entire product

For many retailers, more than half of their total sales are pro-

categories. One individual change affects the whole.

motion related.

Why this is important to retail bakeries, particularly those that

The percent of sales from promoted goods is at an all-time

sell a lot of self-serve products, is that category management

high; however, the true impact of these promotions is often

can help you improve bottom-line proﬁtability. Supermarkets

unknown due to multi-department tie-ins and inability to

work on slimmer net margins (2-3 percent) than retail baker-

determine the tradeoffs between increased traffic and lower

ies and, therefore, depend on volume sales to raise proﬁts. Still,

margins. To optimize promotions, Willard Bishop uses sophis-

this principle is a useful tool to understand the effect of pricing

ticated, pooled demand forecasting to determine the optimal

changes and seasonal promotions on the proﬁtability of any

mix of products and price points.

retail bakery business.
The goal is to obtain long term improvements in the efficienRetailers typically compete on price in one form or another.

cies of the retailer, which leads to increased sales, an improved

While the strategy for an everyday low price (EDLP) retailer

shopping environment and customer loyalty. The idea behind

is certainly different than a hybrid-EDLP or a high-low retailer,

category management is straightforward: manage each prod-

price remains paramount as margins decline to an all-time low,

uct category in a way that enables maximum consumer appeal

according to Willard Bishop, a Chicago consulting ﬁrm. Yet,

while maximizing proﬁts.

14 < MAR 2017 | bakemag.com

http://www.bakemag.com

bake - March 2017

Table of Contents for the Digital Edition of bake - March 2017

bake - March 2017
Editor's note - The Consumer Issue: The promise of clean label
Contents
News bites - James Beard Names Semifinalists
Lesaffre Opens Baking Center in Africa
School Expands Pastry Curriculum
Management - Satisfying Customers
New product success stories - A Sweet Collaboration
Technical corner - Cutting Tools
Practical marketing - Managing Categories
Food safety - Safety in Packaging
Equipment innovations - Sheeters for Delicate Doughs
Healthy & indulgent
Target light users
Chocolate & decorating - Mother’s Day Chocolates
CAKENOMICS - PLANNING AHEAD
SELLING THE EXPERIENCE
PRICING FOR PROFIT
LICENSING ISSUES
TIME SAVING TIPS
Cakes - Back to Nature
Breads - Flavors Push New Boundaries
Pastries - Fueled by Latin Flavors
Product showcase
Classifieds
Ad Index
Formulation of the month - Apple Brioche Donuts
BakeMark's Panaderia - March 2017
INTRODUCCIÓN - El Negocio Familiar
INTRODUCTORY LETTER - The Family Business
PAN Y HORNEO - Galletas subir las tablas
PASTELES Y DECORACIONES - Pasteles para Bodas y Celebraciones
El Negocio Familiar
PERFILES - Panadería Azteca #1
Panadería Azteca #2
El Pueblo Bakery
La Esperanza Bakery
RECETAS DESTACADAS
PRODUCTOS DESTACADOS
BREAD AND BAKING - Cookies Climb the Charts
CAKES AND DECORATING - Wedding & Celebration Cakes
The Family Business
PROFILES - Panadería Azteca #1
Panadería Azteca #2
El Pueblo Bakery
La Esperanza Bakery
FEATURED RECIPES
FEATURED PRODUCTS
bake - March 2017 - bake - March 2017
bake - March 2017 - 2
bake - March 2017 - Editor's note - The Consumer Issue: The promise of clean label
bake - March 2017 - 4
bake - March 2017 - Contents
bake - March 2017 - School Expands Pastry Curriculum
bake - March 2017 - 7
bake - March 2017 - Management - Satisfying Customers
bake - March 2017 - 9
bake - March 2017 - New product success stories - A Sweet Collaboration
bake - March 2017 - 11
bake - March 2017 - Technical corner - Cutting Tools
bake - March 2017 - 13
bake - March 2017 - Practical marketing - Managing Categories
bake - March 2017 - 15
bake - March 2017 - Food safety - Safety in Packaging
bake - March 2017 - 17
bake - March 2017 - Equipment innovations - Sheeters for Delicate Doughs
bake - March 2017 - 19
bake - March 2017 - Healthy & indulgent
bake - March 2017 - 21
bake - March 2017 - 22
bake - March 2017 - 23
bake - March 2017 - 24
bake - March 2017 - 25
bake - March 2017 - 26
bake - March 2017 - 27
bake - March 2017 - Target light users
bake - March 2017 - 29
bake - March 2017 - 30
bake - March 2017 - 31
bake - March 2017 - 32
bake - March 2017 - Chocolate & decorating - Mother’s Day Chocolates
bake - March 2017 - 34
bake - March 2017 - CAKENOMICS - PLANNING AHEAD
bake - March 2017 - Cake2
bake - March 2017 - Cake3
bake - March 2017 - SELLING THE EXPERIENCE
bake - March 2017 - Cake5
bake - March 2017 - Cake6
bake - March 2017 - Cake7
bake - March 2017 - PRICING FOR PROFIT
bake - March 2017 - Cake9
bake - March 2017 - Cake10
bake - March 2017 - Cake11
bake - March 2017 - LICENSING ISSUES
bake - March 2017 - Cake13
bake - March 2017 - TIME SAVING TIPS
bake - March 2017 - Cake15
bake - March 2017 - Cake16
bake - March 2017 - Cakes - Back to Nature
bake - March 2017 - 36
bake - March 2017 - 37
bake - March 2017 - 38
bake - March 2017 - 39
bake - March 2017 - Breads - Flavors Push New Boundaries
bake - March 2017 - 41
bake - March 2017 - 42
bake - March 2017 - 43
bake - March 2017 - Pastries - Fueled by Latin Flavors
bake - March 2017 - 45
bake - March 2017 - Product showcase
bake - March 2017 - 47
bake - March 2017 - Classifieds
bake - March 2017 - Ad Index
bake - March 2017 - Formulation of the month - Apple Brioche Donuts
bake - March 2017 - 51
bake - March 2017 - 52
bake - March 2017 - 69
bake - March 2017 - 70
bake - March 2017 - BakeMark's Panaderia - March 2017
bake - March 2017 - PAN2
bake - March 2017 - INTRODUCCIÓN - El Negocio Familiar
bake - March 2017 - INTRODUCTORY LETTER - The Family Business
bake - March 2017 - PAN5
bake - March 2017 - PAN Y HORNEO - Galletas subir las tablas
bake - March 2017 - PAN7
bake - March 2017 - PAN8
bake - March 2017 - PAN9
bake - March 2017 - PASTELES Y DECORACIONES - Pasteles para Bodas y Celebraciones
bake - March 2017 - PAN11
bake - March 2017 - PAN12
bake - March 2017 - PAN13
bake - March 2017 - El Negocio Familiar
bake - March 2017 - PAN15
bake - March 2017 - PAN16
bake - March 2017 - PAN17
bake - March 2017 - PERFILES - Panadería Azteca #1
bake - March 2017 - PAN19
bake - March 2017 - PAN20
bake - March 2017 - Panadería Azteca #2
bake - March 2017 - PAN22
bake - March 2017 - PAN23
bake - March 2017 - El Pueblo Bakery
bake - March 2017 - PAN25
bake - March 2017 - PAN26
bake - March 2017 - La Esperanza Bakery
bake - March 2017 - PAN28
bake - March 2017 - PAN29
bake - March 2017 - RECETAS DESTACADAS
bake - March 2017 - PAN31
bake - March 2017 - PAN32
bake - March 2017 - PRODUCTOS DESTACADOS
bake - March 2017 - BREAD AND BAKING - Cookies Climb the Charts
bake - March 2017 - PAN35
bake - March 2017 - PAN36
bake - March 2017 - CAKES AND DECORATING - Wedding & Celebration Cakes
bake - March 2017 - PAN38
bake - March 2017 - The Family Business
bake - March 2017 - PAN40
bake - March 2017 - PROFILES - Panadería Azteca #1
bake - March 2017 - PAN42
bake - March 2017 - Panadería Azteca #2
bake - March 2017 - PAN44
bake - March 2017 - El Pueblo Bakery
bake - March 2017 - PAN46
bake - March 2017 - La Esperanza Bakery
bake - March 2017 - PAN48
bake - March 2017 - FEATURED RECIPES
bake - March 2017 - PAN50
bake - March 2017 - FEATURED PRODUCTS
bake - March 2017 - PAN52
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