Marketing Analysis At Kudler Foods
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Kudler Fine Foods, a gourmet food store was founded by Kathy Kudler in 1998 with the vision to provide customers with a variety of quality products such as bakery, meat and seafood, cheese and dairy, wine, and produce with over 350 fresh fruits, vegetables, herbs and spices from all over the world. Kudler Fine Foods opened its first store at La Jolla, California and within five years of operations expanded to Del Mar in the year 2000 and Encinitas in the year 2003 all stores located in San Diego County, California. Kathy Kudler is committed to provide to her customers the finest selections of the very best foods and wines. After introducing at her stores a variety of organic products from local growers; according to the 2006 market survey 33% of the surveyed people agree that the stores have a good selection of products but the 2007 market survey showed a 5 points decline or 28% and Mrs. Kudler wants to implement a catering service in addition to the in-store parties to improve her products demand.
“Marketing research is the process of defining a marketing problem and opportunities, systematically collecting and analyzing information, and recommending actions.” (Kerin-Hartley- Berkowitz-Rudelius, 2005). Analyzing the survey data provided by Kudlers’ marketing department regarding the overall opinion of very satisfied customers with the store, the 2006 data shows 8 customers out of 63 interviewed disagree with the store; the 2007 data shows that 11 customers out of 69 disagree with the store which indicates a 37% change increase in dissatisfied customers compare to 8% change increase in satisfied customers. (KFF intranet). Mrs. Kudler wants to pursue the implementation of a catering service and is very important to perform a market research to identify not only why customers dissatisfaction is increasing before it becomes a problem but the feasible opportunities present at the market for expansion. I believe that the survey data is inadequate due to the small sample of interviews. I believe that Mrs. Kudler needs to hire a professional marketing research company and extend the survey area towards possible target markets in addition to the existing ones focusing on how to increase customers’ loyalty. “The loyalty business model relies on training of employees to achieve a specific paradigm: quality of product or service leads to customer satisfaction, which leads to customer loyalty, which leads to profitability. Loyalty marketing is an extension of that effort, relying upon word-of-mouth and advertising to draw upon positive experiences of those exposed to loyalty business model inspired ventures to attract new customers.
” (Carrol – Reichheld, 1992). Customers’ loyalty will be crucial for the implementation of the catering service business since word-of-mouth will be an important player in the success of the new venture. The results and recommendations of the research will play a major role identifying the relative value for the decision making process.
The marketing mix at Kudlers in regard to the four Ps (product, pricing, promotions, and place) describes the strategic position of a product inside the stores. At first, Kudler will have to concentrate in offering event catering inside the 3 stores to advertise the organic products and create a menu with very explicit pictures offering dishes and appetizers. Kudler will have probably to condition a small area inside or outside of each store in partnership with the local organic growers. The area set will be like a farmers’ market and take advantage of the freshness and taste of the produce to prepare the dishes. Since Kudler will partner local organic growers’ prices will probably be near cost of production using a cost-plus minimum pricing strategy to hit the 5% minimum margin threshold to test the feasibility of the venture and later on adjust it according to market value. Cooking class socials and the frequent shopper program will continue at Kudlers for promotions since they are offered as a way to increase the consumption of high-margin items among existing customers and to build awareness, trial, and regular shopping among new customers. (KFF intranet). The food prepared by world-renowned chefs, local celebrities, and Kathy Kudler will promote upscale events and eventually they will become part of their customers’ social network. After reaching the 50% gain on new customers, Mrs. Kudler will take the opportunity to offer a full-service catering to private entities for special events including a make-to-order menu with specific dietary or religious needs specifying the usage of organic products. Improving existing locations inside or outside will be used as place to launch the new venture.
Kudler will have to benchmark competition such as Bristol Farms and Whole Foods Market in order to identify which products prices are they offering in their catering department and which market are they targeting. For Mrs. Kudler catering and organic products are a new venture but for the companies above is an existing profitable business. Kudlers’ target market is a select group of high-end income people where price is not a concern and with the changing eating habits around the world due to health issues more people is turning towards organic products which will benefit Kudler at the end.
Benchmarking will give a good idea to Mrs. Kudler about the products to offers to her existing and new customers and which prices to use relative to the benchmarked catering companies. Since price is not the primary differentiating factor for Kudler consumers and consumers are focused on quality and specialized items (KFF intranet), pricing will be set similar to the competition maintaining the gourmet taste and fresh quality organic products. Ongoing research to the competition will provide measures for pricing increase in relation to customers’ desires. The demand and acceptance for Kudlers’ catering service will also be an indicator to set up future prices for the service.
I believe that place in terms of catering service means the location where the business is providing the food service for example, a mobile catering uses a vehicle or cart for that purpose. A location could be an office, ballroom, outside Kudlres’ stores and many other places since the key for a good service in addition of the quality of the food, will be the attractiveness of it and for this fact, Kudler will probably will have to partner with professional event caterers to take charge of decorations towards satisfying all the clients senses with food as the main point. “Beautifully prepared food alone can appeal to the senses of taste, smell, and sight – perhaps even touch, but the decorations and ambience can play a significant part in a successfully catered event which will make the event special and memorable.” (Wikipedia, 2008).
Kudler Fine Foods will keep disseminating its products through direct mailing to high-income zip codes and advertizing in the local radio, newspapers and television. Kudler will also sponsor community and charity events on high-end income zones and empower its public relation department to contact major corporations around San Diego Metropolitan area offering catering for their special events. Kudler will have to increase its capital budget for design and development of its web site in order to incorporate the online shopping, the catering service, and the organic products. Kudler will also have to increase its human resources capital and hire experience people in information technology to maintain the system and keep track of all the customers’ orders identifying cycles in the demand for an efficient operation management.
Ones Kudler decide to go with the catering service connecting with organic produce and local growers will benefit the enterprise since it will provide additional quality to the service as soon as Kudler start offering fresh, tasty and healthy food deliver at the table on each special private, public, inside or outside the store event.
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