Kudler Fine Foods - Frequent Shoppers Program

Frequent Shopper Program

The team reviewed service request SR-kf-013 and decided to use the systems development method learned in the BSA375 class to develop and support Kudler Fine Foods information system. The Project was divided into separate and sequential sections and each team member was assigned with some responsibilities for completion. The first section explains the business objectives, statement of scope and goals, measures of success, project constraints, and description of the current business process. The next section will be the business functional requirements and the description of the new business process or system. The last section explains the cost-benefit analysis and conclusion.

Business Objectives

The goal of Kudler Fine Foods is to create or acquire a frequent shopper program (FSP). This program will provide recognition, gift certificates, merchandise, travel, or a combination of any of these. To promote the program, on a periodic basis, Kudler Fine Foods will tell the participants how successful the program is. This is a remarkable way to let customers know how they can benefit by using more of the services and products and what rewards they will receive for doing so. Most important to the business is that by joining the program the customer gives permission to receive marketing material. Taking into consideration Kudler Fine Foods organization's objectives, structure, and processes, adding knowledge to exploit information technology Team C's proposal is to create or acquire a business/systems Frequent Shoppers Program that meet Kudler Fine Foods business objectives.

Statement of Scope and Goals

People tend to exert more effort as they achieve their goals. Companies can take advantage of this by designing a customer rewards program that makes the perceived distance to the reward seem small (Urminsky, 2008). To accomplish Kudler Fine Foods expected results and impact, and based on the service request SR-kf0013, these goals must be accomplished:

1. Expanding services and revenue increase.

2. Acquire or develop an information system that helps Kudler Fine Foods to track customer purchases and award loyalty points for redemption.

3. Increase efficiency and lower the cost.

When the goals become clear, the team will have to focus on a critical aspect of the frequent shopper program with some type of customer identification system that allows purchases to be tracked at the household level, such as

1. Track Customer or Shopper Identification. Implement a common shopper identification method, such a plastic card, or key chain that will work similar to a typical credit card.

2. Implement a program that tracks consumer behavior data such as shopping frequency, product category, demographic, and market basket.

3. Track benefits beyond the supermarket. Implement an award loyalty points redemption program that feature additional savings opportunities at other businesses in the market area, such as airline frequent flyer miles program, discount certificates for various spending levels, and in-store culinary classes based on shopping behavior.

Measures of Success

The following guidelines were used to find how successful the frequent shopper program could be

1. Develop or acquire an information systems program that can trace consumer behavior data, such as shopping frequency, product category, demographic, market basket, and award loyalty points for redemption based on frequency of purchases. The information system must have all documentation and training materials to help and train employees.

2. Based on the regularity of a customer the store received, the store will experience revenue increase of a minimum of 10% within the first year of implementation.

3. Design or acquire a system with a database that can track customers' patterns. This database will help understand the customer buying habits; therefore the inventory program can be tailored and refined to meet the customers' needs to avoid an inventory not moving.

Project Constraints

According to a PowerPoint presentation from the University of Toronto (2004), the objective of a feasibility study is to find if an information system project can be done, and if so how. The main objectives of this study are to determine the economic, operational, technical, schedule, legal, and political influence that the new system will have on Kudler Fine Foods. Team C has two major concerns; first, to be within budget constraints, the new FSP system needs to integrate existing data and use as much as possible the majority of the existing software and hardware. Second, the installation of the new system and training sessions cannot interfere with the daily operations. Team C's recommendation is to install the new FSP in phases beginning with La Jolla, followed by Del Mar, and Encinitas store. The installation needs to occur when the stores are not operating. The sales department will be trained prior to installation for proper understanding of the system as well as the system strategies. On-site training for employees will be conducted prior to the integration of the new system, and regional and web-based permanent retraining will be available.

Determination of Requirements

It is imperative for analysts to identify specific analysis methods to define user needs. Team C began to use requirements gathering techniques to collect information. Team C believes that at this point it is better to place more emphasis than previously done on evidence from people other than the learner. This technique was accomplished by doing direct observation of others users in the workplace, e.g. cashiers, managers, and other department staff already employed. Team C will also conduct examination of old work records, questionnaires, interviews and with managers and colleagues. Team C will obtain and review literature based on new or upgraded FSP systems from other sources.

Current Process Data Flow Diagram

Figure 1

Business Functional Requirements

Kudler Fine Foods has 12 Point of Sale (POS) module networks connected to a Novell 4.11 server and the Internet. Each module entry results in data transmitted to the general ledger, electronic payment clearing house, and purchasing function. Data transmitted includes debit and credit sales, calculation