Problem: Kudler Fine Foods is a gourmet grocery store that has experienced significant growth over the past few years. In order to increase its customer base, Kudler Fine Foods is creating an Integrated Marketing Communications (IMC) plan.
Q1. Explain how demographic data and psychographic information can be used to create marketing strategies for Kudler Fine Foods.
Q2. Decide which types of demographic data and psychographic information would be the most helpful to Kudler Fine Foods as they create their IMC plan. Be sure to provide a rationale for each one of your decisions.
Below is the Kudler Fines Foods Marketing Overview.
Kudler Fine Foods has experienced significant growth and is now focused on expanding the services, improving the efficiency of its operations and increasing the consumer purchase cycle as a means to increasing the loyalty and profitability of its consumers.
Strategic Objective: Increase Loyalty and Profitability of Consumers
• 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.
Historical Sales Data and Financials
Historically, Kudler Fine Foods has tracked information such as dollar value and profit margin per transaction, dollar sales and profit levels by day, and dollar sales and profit margins by item. However, in an effort to leverage the information to create a more intimate relationship with their customers, the firm is integrating a system to track customer purchase behavior over time. The firm is in the process of developing this system now.
Marketing Budget
The marketing budget is primarily comprised of new initiatives, marketing communications, and marketing research.
New Initiatives
• Research, development, and rollout of new programs
• Cooking Classes
• Frequent buyer points program
• Supplier relations program
Marketing Communications activities include:
• Radio, Newspaper and Television advertising
• Public relations, events, and sponsorships
Marketing Research expenditures include:
• Market size / opportunity studies
• Food marketing trends studies
• Services benchmarking study
Growth Strategy
Within the next 12 months, Kudler plans to increase customer loyalty by offering added high-margin services, leveraging the firm’s better understanding of customer purchase patterns, and providing more efficient operations. Profitability will also be increased by cost reductions accomplished through supplier partnering programs. New customers will be acquired through social network marketing and word of mouth.