Kudler Fine Food’s Frequent frequent shopper Program 2">shopper program
Steve Engelhart
BSA 310
July 29, 2010
Caleb Green
Kudler Fine Food’s Frequent Shopper Program
When customers go into their local grocery store, they will undoubtedly be invited to participate in some sort of shopper-benefit program. Some of these programs will give the consumer discounts on different items or allows them to accrue points that can be redeemed for discounts on other products offered. Kudler Find Foods is considering implementing an online Frequent Shopper Program that will rewards its customers with deals and discounts on many of their products. A Frequent Shopper program can go a long way to building customer loyalty and attract new business. Before investing in such a program, Kudler needs to spend some time and resources investigating what it will take to implement this new feature. This paper will discuss several areas that Kudler Fine Foods needs to investigate, including the legality of such a program, security risks, and financial benefits before any investments are made in creating a Frequent Shopper Program.
Before implementing an online Frequent Shopper Program, some investigation into the legality of this venture needs to be explored. Many online retailers have invested time and resources into similar programs and will defend their intellectual property related to a service such as this. For instance Amazon has patent 5960411 which describes, “A method and system for placing an order to purchase an item via the Internet” (Bezos, 2007).
The Term Paper on Food Customs of India
Food Customs of India By: Richa Laroia Course code: HFN20 Teacher: Mrs. Coletti With nearly 1 billion citizens, India is the second most populated nation in the world. There are twenty-four languages that are spoken by a million people or more, and countless other dialects. India has seven major religions and many minor ones, six main ethnic groups, and countless holidays. India is located in ...
What is interesting is that Open Market, Inc. has a similar patent, 5715314, in this area covering “A network-based sales system includes at least one buyer computer for operation by a user desiring to buy a product, at least one merchant computer, and at least one payment computer” (Payne, 2002).
What these patents are basically saying is that any online store is infringing either on Amazon or Open Market’s patents. So either Amazon or Open Market is not enforcing the patent, or all online retailers are paying these companies for the right to sell their products online. Many patents are so similar and convoluted that it will be necessary to involve a lawyer to decipher what they cover and the implications to the company. What this means is that Kudler Fine Foods needs to hire someone to research potential patents that relate to Frequent Shopper Programs to avoid infringing on another companies intellectual property. In doing some quick research Kudler Fine Foods will find that a patent related to this technology has been filed by International Business Machines Corp (IBM).
IBM holds patent 6415261 which describes “A method for managing a frequent shopper program at a site providing both electronic commerce (e-commerce) shopping and in-store shopping” (Cybul, 2002).
Kudler Fine Foods will need to work with its lawyers to ensure that the Frequent Shopper Program does not violate this or any other patents related to this technology.
With any online business venture security needs to be a top concern. There are many ways for information about Kudler Fine Foods clients to be stolen and later misused. These types of security breaches are not only bad for building customer trust; they can results in fines levied against Kudler Fine Foods. For instance, the company TJK was fined nearly $900,000 by Visa for a security breach in summer of 2006 (Schuman, 2007).
The Essay on Kudler Finer Foods Propsal
Describe how employees will be rewarded for innovative thinking. Describe how the system might affect financial management, investor relations, and market perceptions among shareholders. Proposed Solution: Success will be measured through based on a few key areas. One of these areas will be focused on customer satisfaction. As our company shifts its focus in a more innovative direction, we want to ...
Basically VISA declared that TJK did not take adequate steps to prevent credit information from being stolen. So when setting up a Frequent Shopper Program, Kudler Fine Foods needs to investigate any areas where sensitive information related to its customers is stored and accessed. Many companies hire outside contractors to evaluate the security of their information systems which maybe something that Kudler Fine Foods should investigate before implementing this new program to avoid security breaches resulting in fines.
The final step that Kudler Fine Foods needs to perform before creating a Frequent Shopper Program is to financially justify the cost for creating this system. To deploy a Frequent Shopper Program, Kudler Fine Foods will need to invest in new software development, update to information systems, marketing, sales research, and employee training. All of these steps will incur a sizable cost and should not be started until Kudler Fine Foods has proven that this program will have an economic benefit. A Frequent Shopper Program primary goal is to build customer loyalty; “companies are better off focusing attention on their more loyal customers especially since the top 20% of customers account for 80% of revenues and often more than 100% of profits” (Lal & Bell, 2003).
By rewarding the customers who spend the most money with the company, Kudler Fine Foods will build stronger customer loyalty. Customers are loyal for a variety of reasons; “consumers continue to dedicate an increasing share of their wallet in the category to one brand or to one store, and they incur a cost to switch to a different store or brand because of inertia effects.” (Lal & Bell, 2003).
Basically customers would rather continue to shop where they are comfortable, rather than go multiple stores trying to find the best deal. So if the store they are shopping at adds programs to provide better deals or rewards their loyalty they will continue to spend their money with this company. So by creating a Frequent Shopper Program, Kudler Fine Foods will have created a reason for customers to remain loyal and spend more money on their products.
The decision for Kudler Fine Foods to create a Frequent Shopper Program is one that needs to be researched and considered. Creating this program will incur a cost to Kudler Fine Foods, and the benefits need to be understood. The program will create customer loyalty and drive up profits from the consumers who spend the most money with the company. A Frequent Shopper Program is an excellent investment, and Kudler Fine Foods would be well advised to consider implementing this system.
The Term Paper on Kudler Fine Foods
... As detailed in the Kudler Fine Foods intranet, Kudler currently uses outdated software and ... success, Kudler Fine Foods, must pay for a major technology upgrade in order to successfully service the number of customers that join the Kudler Fine Foods frequent shopper program. ...
References
Bezos, J. (2007). Method and system for placing a purchase order via a communications network. Amazon.com, Inc. Retrieved from http://www.google.com/patents/about?id=pQ2AAAAAEBAJ&dq=5960411
Payne, A. (2002). Network sales system. Open Market, Inc. Retrieved from
http://www.google.com/patents/about?id=o8wLAAAAEBAJ&dq=5715314
Cybul, R. (2002). A method for managing a frequent shopper program at a site providing both electronic commerce (e-commerce). International Business Machines Corp.. Retrieved from
http://www.google.com/patents/about?id=h9ILAAAAEBAJ&dq=US6415261
Schuman, E. (2007, October 28).
VISA Fined TJX Processor for Security Breach. eweek.com. Retrieved from http://www.eweek.com/c/a/Security/VISA-Fined-TJX-Processor-for-Security-Breach/
Lal, R., & Bell, D. (2003). Quantitative Marketing and Economics. The Netherlands: Kluwer Academic Publishers.
