Which of the following best describes the term 'gross margin' in category management?

The term 'gross margin' in category management is best described as selling price minus cost of goods sold. This measure is crucial for understanding the profitability associated with products within a specific category. Gross margin reflects the amount remaining from sales after the costs of producing the goods sold have been deducted. It is an important metric as it indicates how well a company controls its production costs relative to its sales.

In category management, focusing on gross margin is essential, as it allows managers to assess product performance and make informed decisions about pricing strategies and product assortment. By optimizing the gross margin, companies can enhance their profitability while ensuring that they remain competitive in the market.

In contrast, other options do not capture the specific financial relationship that defines gross margin. Total sales minus total expenses encompasses a broader range of financial metrics, while revenue generated from promoting products looks at marketing effectiveness rather than direct profitability. Sales generated by the top 10 products merely highlights revenue concentration without addressing profitability per unit sold. Therefore, the option that correctly specifies the calculation of gross margin is the one that defines it as the difference between selling price and cost of goods sold.