Thursday, February 10, 2005

Value creating processes for retail stores

Learning & Innovation – February 10, 2005
By Moje Ramos-Aquino, FPM

Value creating processes for retail stores

Nimfa and Teddy Abustan assert that, in the retail business, the customer is king and every business, product and service process is there to serve the king (queen, prince or princess). This assertive statement comes from the couple’s 10-year experience as sari-sari store owners at Ang Buhay Street, Barangay 596, Manila.

Both say the first and foremost key value creation process is assessing customer needs, preferences, wants and even dreams. Having been born and lived in the same place, the entrepreneurial couple knows everybody in the neighborhood of mostly working folks and students. They know what kind of detergent, food, liquor, personal care and hygiene and other products each of their neighbors would buy, in what quantity and, if they will pay in cash or “lista.”

Nimfa says, “you need to talk to your customers regularly. Kwento-kwento tungkol sa buhay-buhay. They will not exactly tell you what products they want. You need to know what television shows they watch, where they work and what kind of work they do. You need to keep count how many kids are in the block, how many teenagers, adults, senior citizens, males, females, gays. You need to observe their lifestyle, clothes they wear, car they drive, their profession, their make-up even, their sports, their food preferences, etc. Then you would know what products to sell, in what quantity. You have to be both ‘usyosero’ and “tsismoso,’ short of examining what’s in their wastebasket, to get all these data.”

Second is marketing and trying to match customer needs to the available products in the market. “They key here,” Teddy says, “is price. Since our customers mostly belong to the working class and student group, one of their major concerns is price. That is why we sell by ‘tingi’ or small quantities. Everything is practically sold in small packets—oil, cooking gas, shampoo, candy, everything. So if the manufacturer only sells them big, we repack these goods and sell by piece or small measuring cups. Nobody buys by bulk from a variety store. Those who can afford to buy large quantities go to the supermarket.”

Personally, this is a good trait of the Filipinos—buying only what they could consume. Unlike other cultures like the Americans who buy by bulk, stock them in large pantries and, I suspect, never get to use all of them or use them wastefully since they have plenty.

Some argue that price-wise, buying ‘tingi’ cost more because you don’t get the wholesale discount. But, if you will not really use the product in the immediate future, then imagine what you are paying for the cost of money. Your money is stacked in your pantry, unmoving, not earning value, useless.

Nimfa and Teddy say that one key business decision they make virtually everyday is whether to give credit or insist on cash payment. Teddy says that they have condoned so many debts all these years because they can’t really wring money out of an empty pocket and sometimes, it is the honorable thing to do knowing the dire circumstances some of their neighbors are in like the fire last Saturday where some 21 houses burned to the ground and rendered families vulnerable or when it is Christmas and New Year.

American Society for Training & Development: The 2005 ASTD International Conference and Exposition will be held on June 5-9 at the Orange County Convention Center, Orlando, Florida, USA. Please visit To join our delegation and avail of discounts, please call Ms. Grace Victoriano for details.

(Send Moje, president of Paradigms & Paradoxes Corp, your feedback via

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