Kudler Fine Foods
Kudler Fine Foods (KFF) is an upscale specialty gourmet store in the San Diego metropolitan area. They currently sustain three locations in La Jolla, Del Mar, and Encinitas. Each location is an estimated 8,000 square feet of retail space. In efforts to maximize profits the founder Kathy Kudler is in need of a market analysis, a review of competitive strategies, and recommendations. This consultation will evaluate the marketplace competition while defining the strengths and weaknesses of KFF. Positive and negative points of KFF’s market structure will show competitive strategies that can contribute to long-term profitability.
In 2011 and 2012 Kudler fine foods reach out to its current customer base asking for marketing surveys. The intent of the survey was to point out the strengths and weaknesses of Kudler fine foods. The 2011 market survey reflects the strengths to be convenient store hours, appealing atmosphere/décor, attractive displays, merchandise satisfaction, and the overall satisfaction of the store. Each category listed as strengths from the 2011 survey shows that less than 25% of the customers experience dissatisfaction. The weaknesses shown by the survey are product selections, value of goods sold, and customer service. These three categories alone define Kathy Kudler’s mission statement, which, states “Our selections, coupled with our experience, helpful and knowledgeable staff, merge to offer each customer a delightful and pleasing shopping outing”. The trends KFF must reverse are the categories that provide the most dissatisfaction to customers.
Looking into the 2012 market survey, it shows that dissatisfaction is rising across the categories. Kudler fine foods strengths in 2012 remain the same as in 2011 but the satisfactory trend is decreasing according the customers. In 2011 the satisfaction rate was less than 25% in 2012 that rate has increase to 30%. Of the nine categories, customers show the most dissatisfaction with customer service, value of goods, and product selection. Although, KFF has much dissatisfied customers they still obtain the majority of the market because this is one of a kind store that caters to unique demands. Therefore, the only way grow within this specific market is to focus on new customer focus programs, better information management, target awareness building, and store efficiency.
New customer focus programs can consist of cooking class socials, these specialty cooking classes will serve 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. Better information management is utilize by a frequent shopper program, this program can provide analytical data about purchasing behavior of current customers. Thus, giving an insight on the way customers think and certain times of the year and what food or wines are in demand. Target awareness building is direct marketing and word of mouth. Direct mail promotional literature will be sent to high-income zip codes to solicit customers. These pieces of literature will contain information about the array of products and services that KFF has. Store efficiency will consist of positioning the focus on internal processes and how those can improve to deliver an increase value to the customer. After the review of this information the perception of KFF is that it is operating in a monopoly market structure. To elaborate further the different types of market structures will be discuss. Those structures are perfect competition, monopolistic competition, oligopoly, and monopoly.
Perfect competition is a market structure in which many firms sell identical products, and no barriers exist to enter this market. Supply and demand in the overall market set the equilibrium price and quantity, one firm