The intent behind the development of Kudler Fine Foods Frequent Buyer Program is to increase the level of customer loyalty. The system will be broken down into two different levels; the frequency of a buyers shopping with Kudler Fine Foods and the amount of money that the buyer spends with each purchase. A program like this is typically used as a marketing strategy that is “enabled by point-of-sale technology to record and store customer purchases in exchange for rewards’ (Appel, p. 156, 2006). A web-based shopping program will be used to enhance the Frequent Buyer Program for Kudler Fine Foods.
This will be achieved by applying web-based advertising. A projection of frequent buyers growth is expected on the initial employment of the frequent buyer program. It is the estimate of the Sales and Marketing Department that there will be a 5% growth within the first 12 months of this program. The department has also conducted an analysis considering what legal courses of actions, if any, Kudler Fine Foods will need to take to ensure the success of this program. Legal Considerations A study of the consumer trends in this area will have to be conducted.
The will enable the Sales and Marketing Department to allow for a smooth and functional program and give them an idea on how to better market the product. “Market research and demographics data can be used to better target products and produce better or customized products; such data are becoming increasingly valuable: (national Research Council, p. 156, 1994). Some of the legal issues that will be taken in to consideration are costumer privacy as this will have an increased attention in response to the initial data that we will be requesting.
It is important that Kudler Fine Foods incorporate some sort of privacy statement into the initial request form stating that the information will not be shared with anyone outside of Kudler Fine Foods, and state the basic reason of why Kudler Fine Foods is requesting such data. Employees of Kudler Fine Foods will need to be trained on the proper handling of such data and what ramifications can happen in the event that costumer information is released without the expressed consent of the costumer.
Ethical Considerations The intent of the Frequent Buyers Programs with Kudler Fine Foods is to be one of electronic commerce application. An e-commerce program can provide Kudler Fine Foods another level of costumer shopping and potentially receiving new customers for Kudler’s. As the program grows so will be profit margins of the company. However, internet security will have to be in the foremost thought of the IT Department in the development stages through the employment of the Frequent Buyers Program launch.
The IT systems employed will “gather personal data about customer bases, and use it to support vital functions, such as the authentication of individuals requesting service, verification of credit and accounting information, delivery of services and goods, marketing, decision-making and law enforcement” (Appel, p. 156, 2006). Security Considerations The design and development of the database should not solely be focused on the access to and the protection of the personnel identifiable information that is being stored of the database.
This information should be considered sensitive as it could be access in the attempt of identification theft or other forms of fraud. Programs of the nature have shown that they release they sensitive information to third party buyers. (Appel, 2006). Purchases that an individual makes should be held in a private and secure location and should not be shared with anyone outside of Kudler Fine Foods. An implementation of this should help ease a buyers concern that we are sharing their information with anyone who does not need to have it.
The development of Kudler’s e-commerce site should be designed to fully secure. This is to help any unethical occurrences form happening; however, it will not prevent them from being attempted. Financial Analysis This initial cost of the startup of this program will be a minimal impact on Kudler Fine Foods. The initial advertisement effort will be done via social media; the companies Facebook page and Twitter account, email and word of mouth. Allowing for a reward system for costumer referrals can be used for current and new customers as the programs is employed and continues to grow.
Rajiv and bell argue “customer retention costs are generally lower than customer acquisition costs, companies are better of 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” (p. 180, 2003). Kudler Foods could reduce their marketing expenses by using a customer loyalty system through the use of rewards. The sales increase from this program should be reflected by the increase of new customers and the increased returning customers increased spending.
The use of seasonal promotions only available to costumers enrolled into the frequent buyers program could also help in increased sales profits. Conclusion A frequent shopper program can be a successful tool is used correctly by a company. The difficult task will always be bringing in new costumers. This program should allow for the retention of existing customers with Kudler Fine Foods. A rewards points system should be used for the exchange of costume items only available to customers enrolled in the frequent shopper program. This will entice customers to remain loyal to the company and refer the friends and family to the program.
The increased awareness of the customers privacy should always stressed from the designing of the program, through the implementation and further in the continuing changes of the program. Ensuring that the customers understand that their information is not shared with any third party organizations and that their information will help in the advancement of this program should minimize conflicts. The paramount concern should always be information security and privacy of customers identifying information will help keep this program a success.