Topic for Discussion: How does a retailer decide what products to stock and how to let the customer know these products are available?

Answer: Navarro Pharmacy allocates this responsibility along product lines and we heard from Patricia how she makes these decisions in the fragrance area. First, she recognizes that fragrances are almost an essential to the Hispanic woman. This means that Patricia has to offer a wide selection of popular products to meet the needs of her customer base.

Second, Patricia has to do her homework and determine which products are the most popular. Finally, as part of the stores' direct mail campaign and ongoing promotions, she has to decide which products to feature in the limited advertising space available to her.

Topic for discussion: How should a store manager decide what products to advertise?

Answer: For a retailer, the primary purpose of advertising is not to sell the product advertised but to get the customer into the store. Successful retailers keep very detailed inventory records which clearly indicate, by product, purchases, sales, mark ups and mark downs. Each product is identified by its own unique number or SKU (stock keeping unit). In deciding what product to advertise, these records are reviewed very carefully.

First, the manager looks for a product that sells well, in large quantities. This indicates that the product is popular with the store's customer base. Once identifying these products, the manager reviews the margin of each, the difference between his or her cost and the selling price. The higher the margin, the deeper the discount the manager can provide in advertising the item as "on sale". Sometimes, managers will advertise products at or below their cost. These are called "loss leaders". The products generate no profit for the store, but they lead the customers into the store, when they might buy additional products and/or establish a pattern of returning to the store on future occasions.

You think about it: Is every day an adventure for you or is everything the same old same old? What are you doing to monitor your product/service offerings?Have you found ways to ask customers what they need and want from you? Do you listen to the customers?