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Key Idea: Change To Meet Demand

Consumer spending habits change constantly. One of the biggest challenges a retailer faces is determining what products to offer. This is as much of an art as a science. Through it all, Gloria Navarro keeps the stores staffed and the staff happy.

Key Question:


Keep changing what needs to changed.

Navarro knows that consumer spending habits change constantly. One of the biggest challenges a retailer faces is determining what products to offer. This is as much of an art as a science. Shelf space is limited and advertising is expensive. Successful retailers are able to evaluate products, know their customers, and are able to predict buying trends. No small task!

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

A: 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.

Q: How should a store manager decide what products to advertise?

A:  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 track products,  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. 

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?

Clip from: Navarro Discount Pharmacies

Miami: In this city, a destination for new Spanish-speaking Americans, finding somebody who understands you, knows and feels your pain, is a seismic relief. With a profound empathy, this family's business is committed to service and to solving very big problems for their customers.

With an abiding willingness-to-serve, this family's business is one of the most profitable per square foot of any retail store in the USA. When we taped this story there were 12 locations generating $160 million in annual sales and jobs for nearly 600.

So many new medicines are announced every day, it is almost impossible for anyone to keep up. But, those new Americans with a limited command of English, and our elders who are taking multiple medicines, have special challenges.

This family has always been committed to serving their customers. Eighteen-hour days, seven-days-a-week -- whatever it took to get the job done and keep their customers in good health -- these people have done it.
In the process, they have created a first-class business.

Opened in the United States in 1961, the two sons became pharmacists; and today, with 600+ employees, they have become the most productive pharmacy per square foot in the USA and they are a force for good that is helping to reshape Miami as a world-class community.

A classic family business, three generations of compassionate people are involved at every level of the operations.

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Navarro Discount Pharmacies

Jose Navarro, CEO

5959 NW 37th Ave
Miami, FL 33142

Visit our web site:

Office: 305-633-3000

Business Classification:
Retail, Pharmacy

Year Founded: 1961

Change To Meet Demand

HATTIE: Lots of change.

JOSE: A lot of change. I think that's one of the reasons that we've been able to grow the way we have, you know. We're ready for change anytime it happens. We have been able to be there and react fast.

HATTIE: Talk to me about making your product, your selection, unique for the niche. How do you do that?

LUIS: Well, the selection--we have pretty much grown into the selection, always trying to keep up with new items. Trying to add--it's just like a trial, you know...

HATTIE: Trial and error.

LUIS: Yeah. Hit and miss. You bring new products. Some will work, some don't work. If you bring in a line and it works, then you try to expand on that category. So, you know, through the 30 years that we've been doing it, you grow into it. We have a little world of our own. Merchandising for us is totally different than merchandising for somebody in Georgia.

HATTIE: OK. Give me an example.

LUIS: It's kind of hard. There are so many products that for us, they're number one in the category. Once you step outside Dade County, those products don't sell.

HATTIE: Can you give me an example?

LUIS: A product like this for us in the powder category is, like, the number one. It's what we call a `loss leader,' where we hardly make any profit on it. And once you step outside Dade County, you can't hardly get this anywhere.

HATTIE: Well, what is it? Is it the smell?

LUIS: No, it's just--it's a real good product.

HATTIE: How come I've never heard of it?

LUIS: Really?

HATTIE: I haven't.

LUIS: Yeah, well, you know, because of the heat and the humidity down here...

HATTIE: Ah, lots of powder.

LUIS: Yeah.

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