Category Management in Pharmacy: The Process, the Roles, and a Category Review Agenda for Pharmacy Chains

FreeScore your brand plan before management does. Send me the scorecard

Walk into most large pharmacies and you will see the result of category management, even if nobody in the store uses the phrase. Cough and cold sits apart from pain relief. Vitamins are grouped by need: immunity, energy, bones and joints, pregnancy. Sun care moves forward before summer. Somebody decided those things, ideally on the basis of data about how people shop, and somebody reviews them each season.

In twenty years of working on consumer health brands in Egypt, Saudi Arabia and the wider Gulf, I have sat on the supplier side of many category reviews. The suppliers who gained influence with pharmacy chains were rarely the ones with the biggest budgets. They were the ones who arrived with an honest view of the whole category, including competitors, and a clear proposal the buyer could take to their own management. This guide explains the method behind that, step by step.

One boundary first. This article is about how a category is planned: its definition, role, range, strategy and review. The in-store execution, meaning shelf position, planograms, facings, end-caps and point-of-sale material, is covered in depth in the guide to pharmacy merchandising strategies. Category management decides what the shelf should achieve; merchandising makes the shelf do it.

What Is Category Management in Pharmacy?

Before category management, retail buying was mostly brand by brand. Each supplier negotiated listings, space and promotions for its own products, and the shelf became the sum of many separate deals. The result was often a range with overlaps in one corner and gaps in another, promotions that cannibalised each other, and space that reflected negotiating power more than shopper demand.

Category management changes the unit of decision. The retailer asks: what does this category need to do for our business, who shops it, how do they choose, and which range, space, price and promotion plan serves that best? Suppliers then contribute to the answer, and the brands that fit the plan win.

In pharmacy, the categories that benefit most are the ones with wide shopper choice and many suppliers:

• OTC medicines: pain and fever, cough and cold, allergy, digestive health, sleep, first aid.
• Vitamins, minerals and supplements: general wellbeing, immunity, bone and joint, women’s health, pregnancy, children.
• Dermo-cosmetics and skin care: sensitive skin, acne-prone skin, anti-ageing, sun care, scalp and hair.
• Baby and mother care: feeding, nappy care, baby skin, nursing.
• Oral care: toothpaste, sensitivity, gum care, mouthwash, brushes and interdental care.

Prescription medicines are a different case. The choice belongs to the prescriber, so the levers of category management, such as range, space and promotion to shoppers, mostly do not apply.

Where Does the Category Management Process Come From?

ECR began in the United States grocery industry and was later taken up in Europe and other regions. Category management was one of its demand-side pillars, alongside supply-side work on replenishment and logistics. The eight-step model gave retailers and suppliers a shared language: everyone at the table knew what a category role or a category scorecard meant.

The model was built for supermarkets, and many practitioners have since simplified or adapted it. Some merge steps, some add a shopper research phase at the start, and many chains run a lighter version for smaller categories. The underlying logic has held up: define the category from the shopper’s point of view, give it a role, measure it, plan it, act, and review.

What Are the 8 Steps of the Category Management Process?

The table summarises each step with a pharmacy example. The sections below explain the steps that need the most care in a pharmacy.

Step 1: Define the Category the Way the Shopper Does

The most common mistake in pharmacy category definition is to copy the supplier’s or the regulator’s structure. A product classification list may group items by active ingredient or by pharmaceutical form. A shopper with heartburn does not think that way. They think “something for my stomach, fast”, and then perhaps “liquid or tablet”, and only then “which brand”.

A good definition lists the sub-categories and segments below the category, and it is tested against shopper research where the chain has it. The work on consumer insights in consumer healthcare explains how to gather that research and how to turn it into need-states, which become the backbone of the definition.

Step 2: Give the Category a Role

The role is the chain’s decision, because it reflects the chain’s strategy across all its categories. A supplier can propose a role, with evidence, but should not assume one. The four classic roles are explained in the next section.

Steps 3 and 4: Assess the Category and Agree the Scorecard

Assessment is where most of the analysis sits. It looks at the category from four angles: the shopper (who buys, how often, with what else), the market (how the category is moving outside the chain), the retailer (sales, margin, space, availability by store and sub-category) and the supplier (what each brand contributes). The scorecard turns the findings into a small set of measures the chain will use to judge the plan. Agreeing the scorecard before agreeing any tactic is what keeps the process honest.

Steps 5 to 8: Strategy, Tactics, Implementation, Review

Strategies are broad directions such as building traffic, increasing basket size, improving margin or defending against a competitor channel. Tactics are the concrete levers: range, space, price, promotion and, in pharmacy, staff recommendation and education. Implementation is where many plans fail, because a new planogram has to reach every store and be kept there; that is the point where category management hands over to field execution and merchandising. The review closes the loop and should happen on a fixed calendar, not only when something goes wrong.

What Are the Category Roles, and How Do They Apply in a Pharmacy?

Two points are specific to pharmacy. First, a category can be routine for one chain and destination for another. A chain that has built its brand on skin advice treats dermo-cosmetics very differently from a chain that leads on convenience and opening hours. Second, roles can differ by store format: a large store in a mall may treat baby care as a destination, while a small neighbourhood pharmacy treats it as routine.

For a supplier, the role is the first thing to understand before any proposal. Asking a chain to give premium space to a category it has classed as convenience is a request it cannot accept, however good the brand data looks.

How Does Category Management Change in a Pharmacy?

The Pharmacist’s Recommendation

In a supermarket, the shelf does nearly all the selling. In a pharmacy, many shoppers ask for advice, and the answer from the pharmacist or assistant can decide the purchase. That makes staff a lever in the category plan alongside range, space, price and promotion. A category plan in pharmacy should state which products the chain wants its staff to recommend for which needs, on what evidence, and how staff will be trained. It should also respect the professional judgement of the pharmacist: recommendation is a clinical decision first and a commercial one second.

Regulated OTC Versus General Sale

Most markets distinguish between medicines that may only be sold in a pharmacy, sometimes only from behind the counter or with a pharmacist’s involvement, and products that can be sold more freely, such as many cosmetics, supplements and personal care items. The exact rules differ by country and change over time, so the category plan should be checked against the current regulation of the market. In practice this affects which products can sit in open self-service, which must stay behind the counter, what point-of-sale claims are allowed, and which promotions are permitted. A category plan that ignores these rules will fail at implementation.

A Decision Tree Driven by Need State

A consumer decision tree (CDT) describes the order in which shoppers make choices within a category. In many grocery categories, the first split is brand or format. In pharmacy OTC, the first split is usually the symptom or need: dry cough or chesty cough, headache or muscle pain, adult or child. Format, speed of action, natural or conventional, and brand come later. Price may come early in some categories and late in others.

An illustrative decision tree for a cough and cold category might read:

1. Who is it for? Adult, child, or a specific group such as pregnancy, where the pharmacist’s advice matters most.
2. Which symptom? Dry cough, chesty cough, sore throat, blocked nose, or several symptoms together.
3. Which format? Syrup, lozenge, tablet, spray, or sachet.
4. Which preference? Day or night, sugar-free, natural ingredients.
5. Which brand and pack? Usually the last choice, often guided by a recommendation or past experience.

This is a teaching example, not research. A real CDT should come from the chain’s own data, shopper research and observation at the counter. Once agreed, it shapes the range (is every need covered?), the planogram (are products grouped the way shoppers decide?) and staff training (do assistants ask the questions in the same order?).

What Is a Category Captain, and What Are the Compliance Limits?

Retailers appoint captains because category analysis takes time, data and skill that their buying teams may not have for every category. Leading suppliers often have shopper research, market data and category analysts, so they can produce a full category view faster. Some chains also appoint a second supplier as a validator or “co-captain” to check the captain’s work.

Competition authorities in several jurisdictions have looked at category captain arrangements, because the role can be misused. The main risks are easy to state:

• Exclusion. Recommending delistings or poor positions for competitors without a category reason.
• Information exchange. Receiving competitors’ confidential plans, costs or promotion calendars through the retailer.
• Price coordination. Using the role to influence the prices of competing products, or to align prices across retailers.
• Conflict of interest. Presenting brand advocacy as neutral category advice.

Good practice follows from those risks. Keep the captain’s category team separate from its sales team where possible; base every recommendation on data the retailer can verify; let the retailer own the final decision and record it; have competition law advice set the rules for what data may be shared; and accept that the honest category answer will sometimes favour a competitor. For a captain, that last point is the price of credibility. In regulated health categories, add a second layer: every claim in a category presentation or staff training must also respect the market’s health product promotion rules.

This is general guidance, not legal advice. Before taking on a captain role, a supplier should brief its own legal and compliance team on the specific arrangement.

What Should a Supplier Bring to a Category Review With a Pharmacy Chain?

The table below is a working agenda I would use as a supplier preparing for a periodic category review with a large pharmacy chain. Adjust the order to the buyer’s priorities, and agree it with the buyer before the meeting.

Three habits make this agenda work. Send the data pack in advance, so the meeting is spent on decisions rather than reading. Use the chain’s own definitions and measures, even where they differ from your internal ones. And leave the meeting with fewer, clearer actions rather than many vague ones; a buyer can carry three changes through the chain’s process far more easily than ten.

The category review is also where trade marketing in the pharmaceutical industry meets the retailer. The trade marketing team usually owns the analysis, the promotion calendar and the in-store programmes that the review agrees, so it should be in the room or at least in the preparation.

FreeScore your brand plan before management does. Send me the scorecard

Which KPIs Should a Pharmacy Category Scorecard Include?

Choose the KPIs that match the role. A destination category is judged on growth, shopper attraction and the strength of advice; a convenience category is judged mostly on margin and availability. Putting every KPI on every scorecard makes the review long and the decisions unclear.

How Does Category Management Apply to Large Pharmacy Chains in Saudi Arabia and the GCC?

Across Saudi Arabia and the wider Gulf, organised pharmacy chains play a large part in consumer health retail, alongside independent pharmacies. Many large chains have moved beyond pure dispensing into a broader health and beauty offer, which makes category management more relevant each year. A practical guide to working with the channel as a whole, including chains, independents and distributors, is the article on pharmacy channel management in KSA.

Several local features should shape the category plan:

• Regulation. The national regulator decides how each product is classified and what claims are allowed, and those rules affect where products can sit and what promotional material can say. Check the current rules for every category before proposing space or materials.
• Bilingual shoppers. Many shoppers read Arabic, many read English, and many read both. Category signage, need-state labels and staff training materials usually need both languages.
• Seasons. Ramadan, the summer travel period, the back-to-school weeks and the winter cold season move demand in several categories. A category calendar built around them is more useful than one copied from another region.
• The pharmacist’s role. Shoppers in the region often rely on the pharmacist for advice on OTC and supplement choices, so staff education is a serious category lever.
• Private label. Several chains have built their own brands in categories such as vitamins, skin care and baby care. That changes the supplier’s position at the review: the buyer is also a competitor. The guide to healthcare private label marketing explains how branded suppliers can respond.
• Online and delivery. Chain apps and delivery platforms are now a second shelf. The category plan should cover how products are found, described and kept in stock online, not just in store.

One practical note for suppliers. Many chains in the region run formal joint business plans with their main suppliers, and the category review sits inside that plan. Bringing category thinking into those negotiations, rather than only discount and listing fee discussions, is often the quickest way for a supplier to move from vendor to partner.

How Do You Start Category Management as a Supplier?

1. Choose the category where you matter most. A supplier with a strong position in oral care should start there, not in a category where it is a minor player.
2. Learn the chain’s view. Ask the buyer how the chain defines the category, what role it has, and which measures matter. Write it down and use their words.
3. Build the category fact base. Market data, the chain’s data where it is shared, shopper research and store observation. Include competitors fairly.
4. Draft the decision tree. Test it with pharmacists and counter staff, who know how shoppers ask.
5. Propose a small number of changes. Two or three range, space or promotion changes with clear reasons and a way to measure them.
6. Help implement and measure. Use your field team to support the rollout and report compliance, then review results on the date you agreed.

Build the internal capability as you go. Category management needs analysts who can work with retail data, key account managers who can run a review, and trade marketing teams who can turn decisions into store programmes. It also needs the brand team’s agreement that the category answer will sometimes differ from the brand plan.

Common Mistakes in Pharmacy Category Management

• Brand pitch dressed as category work. Buyers spot it quickly, and it costs the supplier credibility for the next review.
• Defining the category by product classification. Shoppers choose by need; the definition and the decision tree should follow them.
• Ignoring the pharmacist. A plan built only on shelf and price leaves out one of the strongest levers in pharmacy.
• Forgetting regulation. Proposals that put supervised products in open self-service, or use claims that are not allowed, fail at implementation.
• Invented benchmarks. Targets borrowed from another market or another category mislead. Use the chain’s own data.
• No implementation plan. A good planogram that never reaches the stores changes nothing. Plan the rollout and the compliance checks.
• Skipping the review. Without a fixed review date, the plan drifts and the next cycle starts from opinion instead of results.

Key Takeaways

• Category management treats each product group as a business unit with a role, strategy, scorecard and review
• The classic process has eight steps, developed by The Partnering Group and published through ECR in the 1990s
• The four category roles are destination, routine, occasional or seasonal, and convenience; the chain decides the role
• In pharmacy, the pharmacist’s recommendation, regulation and need-state decision trees change the model
• A category captain leads the analysis but not the decision, and must respect competition and health promotion rules
• Bring a category-first review agenda, use the chain’s own measures, and leave with a short list of agreed actions

Frequently Asked Questions

What to Do Next

Pick one category you know well, write its decision tree on a single page, and check it with two pharmacists. Then take the review agenda above, fill in what you already know for one chain, and mark the gaps. Those gaps are your preparation list for the next review.

When the plan is agreed and it is time to make the shelf deliver it, continue with the guide to pharmacy merchandising strategies, which covers planograms, facings, end-caps and the field audit.