Competition and Kudler Fine Foods

¶ … Strategic Management Kudler Fine Foods as a whole has grown more and more sophisticated about food: demand for international foods (including organic and specialty items) has grown exponentially in recent decades. Much like Whole Foods and HEB, Kudler markets to a large target audience but offers a very specific range of products. Kudler is not like, for example, a vegetarian restaurant that solely caters to vegetarians. It offers many foods spanning from wine to cheese to fresh fruits and vegetables that foodies with many different palates can enjoy.

It has a niche marketing strategy in the sense that it does not offer a wide variety of products. There are few standard processed foods like Oreos and sweet cereals at the store: the packaged foods that are offered tend to be imported goods. Competing solely on price alone (which Kudler does not) is seldom thought to be an effective strategy, given that this leads to price wars which substantially drive down the prices of all players in the industry.

Only stores which can sell at a very high volume and have close relationships with suppliers such as Wal-Mart have been able to parlay price into their primary means of generating sales. However, "with the advent of product differentiation and niche and direct marketing, that reality has changed, and now there are niche markets in which both individual and wholesale buyers are looking for products with very specific characteristics or special services.

These characteristics often use strategies that don't focus on costs and volumes exclusively; rather the product or service may be of premium quality, be differentiated from other products and services available in the market (such as organic, natural, or humane production), or have a value-added component (i.e. flavored meats, pre-washed salad mixes, etc.)" (Ehmke 5-1). Kudler specifically offers some unique international breads, cheeses, pastas, wines, and other products that cannot be found at its competitor stores.

Because Kudler offers a wide selection of goods and services, it is not targeted at an extremely narrow demographic, although customers are likely to possess a certain level of affluence. However, clientele may range from persons desiring to purchase 'ethnic' goods from their home to people who want fine wine and dining on the level of what they are able to purchase abroad. Justifying customer loyalty beyond the purchase price can generate less fickle and more sustained customer loyalty.

If loyalty is solely based upon price, as soon as the price of a competitor lures the customer away, he or she is lost. However, loyalty based upon something deeper and more sustained such as perceived quality or personalized service cannot be easily replicated.

Ways to differentiate a product include specific product features; the location of the organization (even a relatively ordinary product may find an audience simply because it is in the correct location, such as a hotel near an airport); or the method of delivery (such as online or if accompanied by other services) (Ehmke 5-3). Price alone does not have to be the differentiating factor.

In the case of Kudler, differentiation and added is value conveyed because of the convenience of obtaining access to such a wide variety of international products in a single fixed location. The ability to shop online for some of its product offerings as well as in a brick and mortar store is an additional, differentiating service: customers do not need to leave their homes. Also, because of its close relationships with suppliers, Kudler is able to offer diverse products not easily found at other grocery stores.

While some stores today are branding themselves mainly upon their organic and healthy nature, although Kudler offers foods which could satisfy this.