Kudler_Sr-Kf--013

  KUDLER FINE FOODS SERVICE REQUEST SR-KF-013 2AbstractKudler Fine Foods, an upscale specialty gourmet foods shop with three locations (LaJolla, Del Mar and Encinitas), has an expressed interest in the development of a FrequentShopper Program to enable enhanced information management by tracking customer-purchasingpractices. The information collected regarding customer purchase behaviors through theFrequent Shopper Program will improve the quality of Kudler Fine Foods’ product lines andreduce the quantities of perishables discarded. To increase revenue and customer loyalty, and asan alternative to providing discounts, Kudler Fine Foods has partnered with a loyalty pointsprogram to offer incentives for customer loyalty in the form of high-end rewards for shopping atKudler Fine Foods. Customers will earn points with every purchase, redeemable for high-valuegift items such as first-class airline upgrades, and other specialty items (Apollo Group, Inc.,2007). Facilitating this effort will require systems planning and selection as well as current andproposed systems analysis and design, in conjunction with systems implementation andintegration, training, operations, and maintenance Initiatives Outline Kathy Kudler, the founder of Kudler Fine Foods, opened her first gourmet food shop in2003. Since that time, two additional stores have opened, and other locations in Carlsbad and SanFrancisco are under consideration. In the interest of expanding the customer base and increasingconsumer loyalty, Kudler Fine Foods ’ marketing and sales department has developed a strategicsales and marketing plan for the fiscal year. The plan includes a Frequent Shopper pointsprogram to leverage the firm with a better understanding of customer buying patterns. Theprogram will facilitate increased efficiency and methods of operation in an effort to providehigh-margin products and services (Apollo Group, Inc., 2007). Through strategic sales andmarketing objectives, social network marketing, and word of mouth endorsements, the marketingefforts of Kudler Fine Foods can help to increase the customer base by luring new customers intothe stores.Marketing efforts will support the expansion of services and programs to increasecustomer loyalty as well as profitability of the existing customer base while adding newcustomers (Apollo Group, Inc., 2007). Scheduling customer-focused epicurean programs such ascooking classes and in-store parties will draw consumers, along with the likelihood of training byworld-renowned chefs, local celebrities, food experts, and Kathy Kudler herself. Anotherenticement is the invitation to exclusive, upscale events (Apollo Group, Inc., 2007). In additionto these efforts, Kudler Fine Foods will implement a Frequent Shopper Program that rewardsconsumer loyalty. This essay illustrates the considerations and details pertaining to the initiativesand goals of the customer loyalty program. Statement of Scope and Goals Pursuant to development of the Frequent Shopper Program, Kudler Fine Foods hasformed partnerships with other companies in an endeavor that will enable customers to exchangeloyalty points for merchandise and services. These partnerships include high-end restaurants,airlines, hotels, spas, gift, and specialty shops. Trade and industry indicators show that clientelewill appreciate the high-end incentives because Kudler Fine Foods’ customers remain primarilyconcerned with quality, not price (Apollo Group, Inc., 2007). Upgrades to the Kudler FineFoods ’ information systems are necessary to facilitate the goals and objectives of in the FrequentShopper Program. Development of the Frequent Shopper Program will follow the SystemsDevelopment Life Cycle processes to ensure thorough planning, selection, analysis, design,implementation, and operations. Planning and Analysis Prior to beginning the Frequent Shopper Program project, a thorough analysis of tangiblemeasures will ensure stakeholders of a successful venture. Kudler Fine Foods will invest inupdating the information system database for tracking customer-buying habits.Recommendations for this program include providing customers with a membership card, whichhas a magnetic strip for account identification purposes. In keeping with the high quality of products and services Kudler Fine Foods offers, the card design will appear similar to a creditcard, unlike the thin plastic cards with bar codes, characteristic of discount grocers. Afterswiping the customer’s membership card, database tracking will begin for that particularpurchase. At chosen intervals, the owner, sales team, store managers, and department managerswill be able to view metrics reports relative to this data to analyze specific items bought by participating customers as well as the frequencies and quantities that customers usually purchase.The raw data and practical information will support the measurable objectives of the program. Supporting Measures for Success The goals and benefits of Kudler Fine Foods’ Frequent Shopper endeavor must bemeasurable, quantifiable, and achievable. Integrating the Frequent Shopper Program within allKudler Fine Foods ’ locations will assist company management in information-based decision-making and ordering processes as well as minimize expenditures by reducing the continualdiscard of perishables. This goal is achievable through the collection of information obtained byexamining customer-purchasing behaviors. The automated processing of inventory data andautomated ordering procedures will also support the company’s goals while providing rewardspoint benefits to returning customers. A small team of information systems developers willdetermine the information system methods necessary, and develop requirements for collectingdata. The tangible measures for success of the project depend on the quality of data collected.The benefits sought by Kudler Fine Foods in developing the Frequent Shopper Program includeenhanced store management, increased sales, automated purchasing methods; the capacity toevaluate consumer-purchasing patterns, decreased quantities of discarded perishables, reducingoverhead expenditures and labor, and the development of automated purchasing from suppliersand vendors. Other benefits include improved customer relations and established long-termcustomer loyalties, the development of methods to best satisfy consumer-shopping experiences,and providing the finest in upscale and superior products and merchandise within themarketplace KUDLER FINE FOODS SERVICE REQUEST SR-KF-013 6The information collected will provide an abundance of metrics data for Kudler Fine Foods’ exclusive use. Analysis of the required technical and operations changes, costs, andvalue-added benefits of the program will determine project feasibility. Summary of Project Feasibility Determining the success of a Frequent Shopper Program for Kudler Fine Foods requiresperforming feasibility studies (Conducting a Feasibility Study, 1997). The project’s feasibility studies will have a profound effect on the decision of owner, Kathy Kudler. However, KathyKudler will also consider feedback from internal and external stakeholders, includingmanagement, staff, customers, financiers, suppliers, and vendors. Kathy Kudler will examinesimilar promotions of competitors; other specialty food stores within the geographic areas thatKudler Fine Foods serves. A review of the technical, operational, and economic feasibilityreports will provide additional insight, sustaining Kathy Kudler’s decision. Technical feasibility With the addition of a Frequent Shopper Program, communications between stores, andthe Internet, require immediate upgrades. The current method of connectivity at each of thestores will delay communications, data processing, and financial transaction verification. Inaddition, the signature pad/card reader units at each checkout counter will requirereprogramming, which will allow customers to review their loyalty point balance during thecheckout process. The remaining current hardware should be sufficient to handle the day-to-daytasks of the Frequent Shopper Program. As for the current software, at this point there is nourgency to upgrade the technology or operating environments of the information systems. Toaccumulate and store pertinent data, the Frequent Shopper Program will require some additionsand modifications to existing databases Identifying the risks associated with this program will ensure that the development teamdoes not encounter difficulties in designing the program. Using the current Point of Sale systemand database server to integrate the Frequent Shopper Program should pose no technical issues oraffect store services in any manner. Current business processes and operations for sales willremain streamlined, as depicted below in Diagram 1: Current Business Process Summary.Operations feasibility is another essential issue for review KUDLER FINE FOODS SERVICE REQUEST SR-KF-013 7Identifying the risks associated with this program will ensure that the development teamdoes not encounter difficulties in designing the program. Using the current Point of Sale systemand database server to integrate the Frequent Shopper Program should pose no technical issues oraffect store services in any manner. Current business processes and operations for sales willremain streamlined, as depicted below in Diagram 1: Current Business Process Summary.Operations feasibility is another essential issue for review. Diagram 1: Current Business Process Summary Operations feasibility Integration of the Frequent Shopper Program improvements to the current system shouldaffect only negligible changes to business operations. The modified database and programmingdo not require increased levels of computer knowledge for employees or managers. Theintegration of the new program will not affect workflow or other operations of the business andeconomic feasibility through profit is encouraging, as detailed below. Economic feasibility A cost/benefit analysis will establish the economic feasibility of the project. The analysiswill assist the project team in ascertaining whether the program will be advantageous for KudlerFine Foods to implement. The team has determined total costs for salaries, programming, updateinstallations, training, support, and maintenance required for the project. To demonstrate the totalbenefits, the company must show an increase in sales and a reduction in inventory expenditures.According to the figures illustrated in Table 1: Cost Benefit Analysis, implementing the FrequentShopper Program will produce a 16% return on the company investment. Proposed systemrequirements also require analysis and review