Running head: FREQUENT SHOPPER PROGRAM

Frequent Shopper Program Veronica Wagner BSA 310 June 27, 2011 Ray Fernandez

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Frequent Shopper Program Kudler Fine Foods is a local upscale specialty food store located in the San Diego metropolitan area. Kudler has three locations (La Jolla, Del Mar and Encinitas). Each store has approximately 8,000 square feet of retail space in a fashionableshopping center. Every location has the very best domestic and imported fare (Kudler Fine Foods, 2010). To help with tracking of merchandise and the frequency and quantity of each item Kudler is implementing a Frequent Shopper program. This program will allow Frequent Shopper program customers to receive incentives for loyalty and frequent use. The use of this type of program has become common among some stores such as Safeway and Fred Meyers. To start this program Kudler has to research the type of program to use and once decided the employees must be trainedto make sure the program runs without a glitch. Here are some issues Kudler implement while setting up this program. y Ensure customer loyalty program is easily accessible to customers. Set up displays showcasing loyalty rewards program near checkout counter as well asthroughout the store. Also have staff available to help customers with the sign up process and to explain the benefits (Business.com, 2011). Electronically track data from customer base in customer loyalty program. Point-of-sale (POS) equipment can quickly and efficiently help gather data. Making the most of a customer loyalty program means tracking customer information so it can improve the business relationship and continue to build customer loyalty, it does not mean sharing this

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information with other businesses or using the information in an unethical manner (Business.com, 2011). Hire consultants to help make customer loyalty rewards program more efficient. These loyalty program experts can help with all phases of the rewards program, from start up to evaluation of materials. If Kudler can not afford to hire full-time consultants to help Kudlerwith customer loyalty rewards programs, Kudler should hire a consultant to help where it is needed most (Business.com, 2011). Assessing the feasibility of the Frequent Shopper program enhancement is an important step for Kudler to determine the chance of success for the project. A feasibility study focuses on helping answer the essential question of should the company proceed with the proposed project idea? (Hofstrand&Holz-Clause, 2009).There are three types of analysis used to determine the feasibility: operational, technical, and economic. Operational feasibility: the program should be able to integrate into the existing system without too many problems and not disrupt the current system of operations. The new system should only require a small amount of training for the employees to use it. Technical feasibility: As long as the risks involved in developing the system are identifiedthe development team should have no problem in designing a successful program. The program would be developed as an extension to the current POS system so that it will easily integrate. Kudler also employed a POS server (Kudler POS Procedures, 2010), which is good staging ground for the Frequent Shopper database.

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Economic feasibility: is determinedby performing a cost/benefit analysis. This analysis will help the project team determine whether or not the proposed program will be beneficial or not. The project team identifies the expenses of the project by looking at the available recourses and estimate how much it will cost to develop. After it has been decided that the program is feasible and will benefit the company the company must decided to use their own people or to contract out or to use a consultant to help with the set up of the program. The existing POS system would have to be integrated to be compatible with the new Frequent Shopper program. The current registers at each store will be used to enter the customers information, phone number, e-mail addresses, and addresses. The database will allow the IT and purchasing department to process the information and allow them to track trends and to update the system. A secure websitewill need to be created to allow the customer to view points and to use those points for rewards. Cashiers will need to be trained to ask each customer if the customer has a reward card and if not would the customer like to sign up for one. The cashier should be able to give a simple and accurate explanation of the rewards point process or have written material available to handout. The current registers should be able to allow for input of customer information such asthe individual addresses, e-mail address, and phone numbers. Once information is enteredcustomersare issueda reward number and a reward card with the number that would be unique to each customer. This number would be available for use at each store no matter the location. The information must be accessible quickly and easily by both the customer and the

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cashiers so the system must be easy to use. Also the customer must be able to sign up for the program on the web page. During sign up the customer should not be asked for any credit card information or any other type of information that may make the customer less secure about joining the rewards program. When a customer signs up there must be an assurance that the individual information is not used or shared with any other parties and that the websiteis secure. By implementing this type of system Kudler Fine Foods will allow for better understanding of what the customers are spending money on and how better to buy for the store. This will better allow the purchasing department when bringing in products and allow them to customizetheir orders based on individual consumer purchases. This system is used to analyze the rewards points to see if purchasing is on the right track with the type of merchandise they are bringing in. It will check the sales volumes, quarterly sales figures, and the types, andamount of the specialized merchandise ordered. The quarterly sales figures can be analyzed to see if there is an increase in sales and show that the rewards program is working, it would also show any decrease in profits - this will allow for a better understanding of what the customers want and allow for a fine tuning of the program to make it more efficient for the company. The long term cost over the initial setup would be when the system catches on and there is a large increase in the customer database. The IT department may have to increase in operators to support the new system or there will be extra hours of operations to manage the system. The cost of implementing a new rewards program should pay for itself in a short amount

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of time. It will also help all departments track purchases and understand buying and selling trends for the merchandise sold. The Frequent Shopper program will help increase the overall sales and give the loyal customers rewards for shopping that will keep them coming back.

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References Business.com. (2011).Making the Most of Customer Loyalty Programs. Retrieved from http://www.business.com/directory/advertising_and_marketing/promotions/loyalty_progr ams/ Hofstrand, D. &Holz-Clause, M. (2009, October). What is a Feasibility Study? Retrieved from http://www.extension.iastate.edu/agdm/wholefarm/html/c5-65.html Kudler Fine Foods.(2010). About. Retrieved from https://ecampus.phoenix.edu/secure/aapd/cist/VOP/Business/Kudler2/internet/about.htm Kudler POS Procedures. (2010). Point of Service (POS) Procedures. Retrieved from https://ecampus.phoenix.edu/secure/aapd/cist/VOP/Business/Kudler2/intranet/fa/pos.htm