Week 2 Assignment- Kudler Fine Foods SR.docx
Week 2 Assignment- Kudler Fine Foods SR.docx PRG211
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Date Created: 11/11/15
Running head KUDLER FINE FOODS SERVICE REQUEST Kudler Fine Foods Service Request Stephen D James BSA 310 Mark Bentcover May 21 2012 University of Phoenix KUDLER FINE FOODS SERVICE REQUEST 2 Kudler Fine Foods Service Request Kudler Fine Foods is a wellknown California grocer specializing in high quality and specialty foods Because Kudler does not consider the price of its products to be a primary differentiator from other competitor their intent is to produce more profit through increasing their customer purchase cycle To achieve their goal Kudler Fine Foods has partnered with a Frequent Shopper points program to provide customers with points that are redeemable for high end gifts firstclass airline upgrades and specialty foods This program will also enable the ability to track customer transactions and identify trends that will allow Kudler Fine Foods to customize its product line to serve better quality to their customers Before implementing this program Kudler will need to identify legal ethical and security considerations as well as complete a financial analysis to justify the expenditures of the program Frequent Shopper Program According to Kudler Fine Food s Sales and Marketing intranet website customers prefer high quality and specialty foods are more important than high value prices Kudler s Sales and Marketing Department is developing a Frequent Shopper Program that will offer incentives to its members through point accumulation and offer Kudler valuable insight into the shopping tendencies of customers Initially this program should promote customer loyalty and give Kudler additional opportunities to react to customer spending habits Customers will present a rewards membership card that will identify them when making purchases After just a few purchases customers will have enough reward points accumulated on the rewards card to exchange for airline upgrades assorted gifts and free specialty foods Currently Kudler maintains a database that records only demographic information This KUDLER FINE FOODS SERVICE REQUEST 3 database can be altered with a table to record transactions This table should contain a customer identification number which would relate to a table with customer information This implementation should be a relatively simple addition to the current point of sale system that will keep costs low Financial Analysis Several expenditures must be taken into consideration when implementing this program The monetary return on the Frequent Shopper program must exceed the cost of its implementation for the program to be considered a viable solution for increased profitability BenefitCost Analysis Center 2012 Expenses that will occur are explained in detail below gt Each of Kudler s Fine Food locations must be upgraded with point of sale software that recognizes and knows how to record the Frequent Shopper program information Training and support of upgrades will be an ongoing expense gt The purchasing department will need access to the data to forecast food inventories and increase purchasing as needed gt Information technology will need to be engaged to make the appropriate upgrades in hardware and software at all points of sale as well as at the enterprise level The data from each point of sale will need to be sent to a centralized data warehouse for analysis Cost of any software and hardware purchases must also be taken into consideration gt Training how to create actionable results from the new data will need to be implemented at the enterprise level resources to maintain this reporting indefinitely is also required gt The cost of participating in the Frequent Shopper program will also need to be considered KUDLER FINE FOODS SERVICE REQUEST 4 Leveraging these costs against the forecasted monetary gain from an increased customer purchase cycle and potential new customer gains will give a good cost analysis of if this loyalty program is a good financial decision for Kudler s Fine Foods Legal Ethical and Security Considerations Assessing the Frequent Shopper program from a legal standpoint will be primarily taken care of by the vendor running the program However it is very important for Kudler s Fine Foods to be up front with the information collected from its customers and how that information will be used It is recommended that Kudler s contact a representative from the Frequent Shopper program who can outline exactly what can legally be done with the data collected from its customers Presenting this same information to the customers in written form as a condition for joining the Frequent Shopper program will appropriately communicate the program s intent to collect detailed customer data and purchase history This agreement will also obtain the customers acknowledgment of Kudler s intentions regarding the data obtained from its customers Some customers could find this detailed data collection invasive and attempt legal action if appropriate notice was not given Ethical concerns will arise from the same set of circumstances Generally customers will not be comfortable with a company recording transaction data if they do not trust the company unless they will only use it for internal purposes Ethical lines can be crossed if a company uses or sells any of its customers information without permission directly from the customers The loyalty program s acceptance agreement should detail how data will be used by Kudler s Fine Foods and if relevant its program affiliates This will ensure both the business and customer have clear understanding of what to expect when it concerns the use of sensitive personal data KUDLER FINE FOODS SERVICE REQUEST 5 Data security should have much more emphasis since sensitive information is being recorded A secured network infrastructure should be implemented to ensure hackers and other outside in uences could not obtain the program s customer information This could be hazardous to Kudler s reputation and possibly cause Kudler to be responsible for legal reparations for any harm to customers as a result of the illegally obtained information Conclusion To increase customer loyalty and promote additional purchasing Kudler Fine Foods is considering implementing a customer Frequent Shopper program Kudler will be able to develop longterm relationships with its customers that will benefit both the company through detailed customer transaction reporting and the customers who will receive free upgrades and exclusive offers purchased with loyalty points The organization must be willing to make upgrades in staffing software and hardware to support the additional requirements of the program Legal ethical and security concerns will also need to be taken into consideration to protect both the company and its customers from ramifications caused by data being unlawfully compromised or distributed Additionally it is recommended that a cost analysis be completed to determine that the return on investment is worth the immediate and ongoing expenditures it will take to launch and maintain the program KUDLER FINE FOODS SERVICE REQUEST 6 References BenefitCost Analysis Center 2012 Retrieved May 20 2012 from httpevansWashingtoneduresearchcentersbenefitcostanalysis Kudler Fine Foods Intranet Sales amp Marketing 2011 Retrieved May 19 2012 from httpsecampusphoenixedusecureaapdcistVOpBusinessKudler2intranetsmmarketingOverV iewhtm
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