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In this paper, I will discuss Kudler Fine Foods and the importance of marketing research as it relates to it’s strategies and tactics. I will also identify where additional market research is needed. Finally, I will discuss the importance of competitive intelligence and analysis in regards XXXXX XXXXX development of Kudler Fine Foods.
Kudler Fine Foods
Kudler Fine Foods is a local upscale specialty food store located San Diego, California. The company has three locations (La Jolla, Del Mar and Encinitas). Each store has approximately 16,000 square feet of retail space located in fashionable shopping center. The stores are stocked with the very best domestic and imported foods. Every is stocked and carries upscale fresh meats and seafood, baked goods, produce, deli, and dairy departments. The owner, Kathy Kudler, opened the first of three stores in 1998. In 2000, Kathy opened a second store with a third store opening in 2003 (Kudler Virtual Organization, 2006).
Kudler Fine Foods has experienced significant growth and wants to expand it’s services, improve efficiency of operations, and increase the consumer purchase cycle. The ultimate goal is to increase customer loyalty and profitability of each shopping visit.
To accomplish these goals, the Kudler marketing department has developed three marketing initiatives that will improve sales and profits as well as reduce costs. First, Kudler plans to increase revenue in each store by holding parties to show people how to prepare specialty foods. To increase customer participation at these parties, the customers will be entered into a contest that allows them to win high-ticket prizes (Kudler Virtual Organization, 2006).
Introduce Frequent Shopping Program
Second, Kudler will encourage customer shopping trips and improve loyalty by introducing a loyalty points program. This marketing initiative will track the customer’s buying habits and allow Kudler to target to specific customers. Looking at the current information technologies databases, Kudler foods has a system that tracks internal sales data but wants to enhance the system so they can track the demographic information and buying trends of each customer (Kudler Virtual Organization, 2006). However, when I read this I was a bit skeptical as I feel it is an invasion of one’s privacy.
Kudler Fine Foods has decided to use Nordstrom’s Department Stores as a benchmark. To help with this initiative, management is developing training programs and developing software that will facilitate the needed customer service training of employees. Studying the companies current capital budget and information systems technology budget, the company will spend $91,715 on new software licenses to improve training (Kudler Virtual Organization, 2005). In addition the company has budgeted $45,000 for a new customer relationship management system or CRM.
Importance of Marketing Research
In the next 12 months, Kudler Fine Foods plans to increase their customer loyalty by offering added high-margin services, leveraging the better understanding of their customers purchase patterns, and providing more efficient operations. They will accomplish this through their suppliers of their food and beverages. By partnering and by purchasing larger quantities for bigger discounts. The key to Kudler’s success will be about building a long-term, profitable consumer base. Loyal consumers are usually more profitable due to frequent visits. and are often insulated from the marketing efforts of competitors.
Strategies and Tactics
Developing strategies and tactics is important when developing a IMC. To develop a IMC plan, the company must insure that all marketing initiatives align with the company’s mission statement. When selling gourmet foods, it is more important to have the highest quality foods and customer service than it is to have low prices. Kudler must stay focused on this aspect at all times when developing new tactic and strategies as not to succumb to the pressures of the discount shopper. For example, Our family use to own unique high end shoe stores in Southern California. They were run by two different family members with two very distinct management styles. Eventually, by one of the owners not aligning themselves to their Mission and trying to compete with discount stores the shoes store chain folded. In hindsight, management should have stuck to their mission by providing exceptional service and the finest quality shoes without going to a department store.
Demographic and Psychographic Information Both psychographic and demographic information will be used to create the marketing strategies for Kudler Fine foods. Demographics measures of characteristics of individuals or households, such as age, sex, place of residence, or family income. Persons who have certain of these characteristics in common are grouped. (Wikipedia)
Psychographics measure attitudes, beliefs, and lifestyle characteristics. They are usually used in connection with demographics and not alone. Demographics and psychographics are critical to the success of an IMC Campaign.
Competitive Intelligence and Analysis
Information will come from a variety of sources, both within the organization and external to it.
Sales representatives deal on a daily basis with customers - and will hear what the competitors have been doing. They are the business foot soldiers - with the ear to the ground who can forewarn management about impending enemy campaigns.
Research & Development may come across new patents.
Purchasing may find out that a supplier is now also supplying a competitor.
Market research can give feedback on the customer's perspective
Information can also be found on the Internet itself - most companies are now advertising their services and some specialize in offering information that can be used for competitor research. Among the best are Dunn & Bradstreet D&B, with a database of over 30 million companies world wide. There are numerous other web-sources - discussion forums, web-logs (blogs), protest group, customer and governmental sites and so on. You can also find information at trade shows and conferences, and by interviewing industry experts, your competitors' customers and suppliers, ex-competitor employees - or even the competitor although there are ethical issues involved when obtaining information from some of these sources.
From Information to Intelligence
Having searched the Internet, spoken to the sales force, customers, suppliers, there should now be a large pile of data on your competitors. However much of this will be repetitious, out of date, wrong or inaccurate, misleading, or incomplete. However like a jigsaw, each piece can help build up the complete picture. And even if some pieces are missing, you can often get a good idea of what the real picture actually is - even if other pieces are damaged and not all remaining pieces fit perfectly. For example, the company report can give an idea of a company's health - which will be enhanced by information from trade suppliers, trade press articles, and credit information agencies such as D&B Patents give an idea of R&D activity, while the trade press also gives an idea of marketing activity. All this information needs to be collated - with any links and commonalities highlighted. The information will need to be indexed and catalogued - so that when new information comes along, it can be quickly linked to similar information that had previously been found. It may be stored in a custom-built or dedicated competitor database accessible via the company Intranet - although it can also be stored in much less sophisticated forms.
Finally, the relevance and importance of each piece of information needs to be interpreted and analyzed - on its own and in conjunction with other information, the other pieces in the jigsaw. This is where information starts to become intelligence.
Communicating the Intelligence
Many companies are overly secretive, protecting information that all their customers and competitors already know. Secrecy is important. It can be extremely dangerous to let a competitor know about a new strategy or marketing idea being developed.
Competitor intelligence needs to be evaluated and selectively communicated to all who need to make decisions based on what customers, suppliers, or other companies in the market are doing or are likely to do. And in today's world, that usually means everybody. The worker in the factory needs to know why production processes have changed from what was always done if he is to believe in management. The Mushroom theory of management (keep 'em in the dark…) has always had its adherents but has not usually succeeded in the long term.
Countering Competitor actions
Having identified what competitors are doing, battle can be entered. Sometimes the battle will be vicious - especially when two competitors have been slugging it out for years. (Pepsi vs. Coca Cola; Procter & Gamble vs. Clorox). With Kudler, it’s high quality products with a renewed shopping experience vs. bad service and low prices. It’s getting help to your car vs. bagging your own groceries.
I have discussed the importance of market research and analyzed the importance of competitive intelligence and analysis in the development of an IMC Campaign for Kudler Fine Foods.
Kudler Virtual Organization (2006). Marketing Overview. Retrieved on May 21, 2006 from University of Phoenix, Resource, MKT/463 Marketing Web site: https://ecampus.phoenix.edu/secure/aapd/CIST/VOP/Business/Kudler/IT/KudlerITDatabases001.htm
My apologies, but the word count is 1481..