Market Research at Kudler Foods

Market Research at Kudler Foods

The market segments that Kudler Fine Foods sells into are significantly different from those of a typical grocer as their customers include commercial chefs and "foodies" or those who passion and interest is in cooking upscale meals and desserts at home. While the company has carved out a very profitable market niche, there is significant room for growth if market research programs and strategies are put into place. The intent of this analysis is to recommend a series of areas where Kudler Foods can increase their use of market research and gain additional sales as a result. Areas where additional research is needed are discussed in the following section. One aspect of their customer listening system is the need to get focused on what their reputation is on social networks. The company has not taken any steps to use Facebook, Twitter or any of the other social networks to listen to what their customers are saying, which for many companies has turned into a wealth of competitive and market data (Bernoff, Li, 2008).

Structuring the Kudler Foods Research Strategy

At its most fundamental level, the market research programs at Kudler are not keeping pace with how rapidly their customers are changing over time. This is a major strategic threat to their well-being as they need to know existing customer needs and anticipate future ones. As is evident from an analysis of their website, the company is doing little outside the traditional direct mail and e-mail campaigns to get in touch with customers first, and capture their information to research what preferences later. No ongoing customer advisory councils, no customer panels, no approach to a systematic and complete capturing of customer data is underway. This leaves Kudler at a significant weakness strategically compared to other stores in the area. They are also not focusing on how their psychographics of the commercial chef and "foodie" their two core markets, are changing over time as well. From this lack of understanding of who their customers are many other market research needs emerge. The following is a list of those areas that Kudler needs to concentrate on in order to gain greater insight into their customers, their buying dynamics, competitive landscape and broader market trends as well. Here are the suggested areas of initial study focus, as these studies concentrate on the areas of the most vulnerability to the profits of Kudler over the long-term.

Price and Product Mix-based Elasticity Studies

Kudler is in a unique and high-end area of the retailing market and as a result has the potential to actually charge more for those products that have the lowest levels of elasticity. When a product is highly inelastic it is possible to charge even more for it as the substitutes to them are not as easy to get. Kudler has the potential to be much more profitable than it is by using pricing research and studying how the elasticity of their products vary when sold within a mix. These are two areas that large-scale grocery chains routinely study to determine which two products to bundle in order to increase sales and profits at the same time. Kudler also has not completed an analysis of how its pricing decisions impact how commercial chefs perceive their brand, and if there is room for further pricing promotions to drive up the value of their brand. As the elasticity of demand for their products is flat Kudler could easily increase prices on new products and consumers would still buy them. They are missing out on a major opportunity to drive up profitability as a result.

Customer's Preferences for Selection and Unmet Wants

Large-scale retailers often rely on a framework of research to define the preferences and unmet wants or needs of customers by segment and audience (Thompson, Stanton, 2010). This framework impacts everything from the planograms used for laying out retail stores to the definition of pricing and discounting, including seasonal specials on given products (Thompson, Stanton, 2010). Kudler most likely does not have one of these for even the commercial chef market yet, and as a result is missing out on a very significant revenue opportunity. The use of these frameworks can greatly simplify supply chain coordination, store planning, and the development of store promotions. Kudler needs to address the lack of insight into the customer preferences and wants, and needs to build a framework to better capture and use them over time.

Customer Behavior and Purchase Patterns

Most likely Kudler does not capture the sales of bakery items, unique and hard-to-fine ingredients, chef supplies or any of the fresh fruits and meats they sell by customer name or any type of demographic indicator. They have no loyalty program to capture sales by customer to further analyze and determine how best to structure specials and promotions. All of these aspects of research could provide the company with a wealth of insight into customer behavior and purchase patterns. This is significant because the selection of new products to fit into these predetermined mixes of shoppers stand a better chance of selling well. Having more accurate customer behavior data also means that events the store plans have a greater potential for success if the manager can define the event in terms relevant to key customer groups. All these insights can be gains from customer behavior data and purchase trending data analysis.