Bsa 375 Kudler Frequent Shopper

Abstract

Kudler Fine Foods is a local upscale specialty food store owned by Kathy Kudler and located in the San Diego metropolitan area. The company has three locations each with approximately 16,000 square feet of retail space. They are located in fashionable shopping centers in La Jolla, Del Mar and Encinitas. The stores are stocked with the very best domestic and imported foodstuffs and divided into categories named Fresh Bakery and pastries, Fresh Produce, Fresh Meats & Foods, Condiments and Packaged Foods, and Cheeses and Specialty Dairy Products.

Introduction

On May 05, 2008, Kathy Kudler, the owner and manager of Kudler Fine Foods, requested the services of Learning Team B to develop a system to track customer purchases through a Frequent Shopper Program. The purchases will be tracked on an individual customer basis and accumulated as loyalty points. These loyalty points will be redeemable by customers in the purchase of gift items, specialty foods and other products or services as made available through partnerships with other external companies.

Kudler Foods Scope and Goals Statement

Kudler Foods in a fast growing chain of gourmet food stores looking to increase customer loyalty and the stores profitability by implementing a Kudler Fine Foods Frequent Shopper Program. This program will utilize Business and Information Technology elements to provide a workable solution.

Project Goals

There are three goals of the Kudler Fine Foods Frequent Shopper Program.

• Expanding Services (Revenue Increase) – Kudler is offering parties in the store to show customers how to prepare specialty foods. The draw for the consumers is to be trained by world-renowned chefs, local celebrities, other food experts, and even Kathy Kudler herself, and to be invited to exclusive, upscale events. The anticipated outcomes will be to increase the customer purchase rate of high margin food and beverage items and to get consumer to make an evening at Kudler Fine Foods part of their social network. This increased time in the store will increase the overall revenue per visit and increase the frequency of visits to the store. Consumers will receive multiple entries in high-ticket item contests by bringing a friend to the parties. While the firm’s preference is to have the events in-store, guests can have Kudler cooking classes at their home for a price premium. Programs such as this encourage consumer loyalty and word-of mouth marketing.

• Frequent Shopper Program (Revenue Increase) – Kudler’s new initiative is tracking purchase behavior at the individual customer level and providing high value incentives through a partnership with a loyalty points program. The customer purchase behavior patters will help Kudler refine its processes and offerings to best satisfy their valued customers. Price is not the primary differentiating factor for Kudler consumers; these consumers are focused on quality and finding specialized items. Therefore, rather than providing everyday discounts to the customers for their purchase frequency like lower end markets, Kudler has partnered with a loyalty points program to provide customers with points which can be redeemed for high end gift items, airline first-class upgrades, or other specialty foods.

• Increased Efficiency (Cost Reduction) – Kudler's is now in a position to focus on internal (both front line and behind the scenes) processes, and how those can be improved to deliver increased value to the customer. From a service perspective, Kudler is benchmarking Nordstrom department stores. In addition, the firm is developing employee training programs and integrating new software systems to facilitate the effort. Marketing has encouraged the purchasing department to find ways to reduce costs of ordering foods and minimize the amount of food to be stored, while also having a zero stock out policy. In response, purchasing has developed a supplier relations program and has solicited the help of marketing to help roll out the program.

Project Scope

Building the Kudler Fine Foods Frequent Shopper Program will require the following components;

• Model a transactional database to capture transactional data associated with customer purchase.

• Model an OLAP database in which data will be stored in a schema that will facilitate the real time manipulation of data, construction of reports and what if scenarios for trending and