- Retailer: It is a new vertical arrangement between retailers and manufacturers/suppliers. With the help of sharing information (which was previously confidential), collaboration is achieved between retailer and supplier where the managerial decisions such as promotional plans, program plans etc. are taken for the whole category and not just a single brand. This will help in minimizing costs and maximizing sales.
Category is defined as a set of products that satisfy similar consumer needs.
- Supply: The categories are treated as SBUs (strategic business units) and decisions regarding procurement, sourcing, supply chain management etc., for the category are taken as a whole. It helps in centralized procurement and aggregates demand.