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National Grocers Association Case Competition University of Minnesota Tory Ahmann | Denise Fung Ashley Gilles | Kim Tam great food. good neighbor.

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Presentation on theme: "National Grocers Association Case Competition University of Minnesota Tory Ahmann | Denise Fung Ashley Gilles | Kim Tam great food. good neighbor."— Presentation transcript:

1 National Grocers Association Case Competition University of Minnesota Tory Ahmann | Denise Fung Ashley Gilles | Kim Tam great food. good neighbor.

2 "Chief exists to delight our customers with great food and experiences." great food. good neighbor.

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5 Business Problem Existing customers are not experiencing the mission to its full potential. great food. good neighbor.

6 Strategic Solution great food. good neighbor. Part Two: Update Labels Signage Flyer Part Three: Produce Department Part One: Chiefs & Rays Signature Items

7 Strategic Solution Part One great food. good neighbor.

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9 Classifying Customer Service great food. good neighbor.

10 Strategic Solution Part Two great food. good neighbor.

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16 Strategic Solution Part Three great food. good neighbor.

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18 Employee Training great food. good neighbor.

19 Incremental Marketing Costs Total New Plan Cost is $60,096 or 6% of Chiefs existing $1 million marketing budget *per unit costs and quantities are available upon request We recognized there are small incremental costs from Chief University for training, but these are difficult to break down Highlighting Chief Signature items (great food) Highlighting Chief Signature items (great food) Highlighting new labels strategy (great food) great food. good neighbor.

20 Financial Plan Assumptions In our plan, we will only focus on the findings from the incremental margin from these 4 segments % of Chief segments are assumptions after reviewing the Mosaic USA Data Household Penetration Mosaic USA Data % Chief Segment Total Chief Customers Low Income Demographic (S, N)27,603 50% 13,802 Medium Income Demographic (M, I)42,422 55% 23,332 Total70,025 37,134 great food. good neighbor.

21 Assumptions Middle Income Segment (M, I)Existing Chief PlanNew Plan Average Trips1.251.30 Number of Weeks per year52 Total trips6568 Dollars spent per trip6570 Total Dollars Annually$4,225$4,732 Number of Chief Customers23,322 Total Sales$98,578,123$110,407,497 Key assumptions are average trips, dollars spent per trip, and the number of Chief Customers. This assumption is made base on the 2012 Food Marketing Institute and experts opinion. Middle income segment is assumed to be 55% * Analysis for the low income demographic are made, but it is not presented here. Available upon request great food. good neighbor.

22 The Bottom Line Existing PlanNew Plan Total Sales for Both Segments$133,026,667$145,573,719 Sales Difference$12,547,053 great food. good neighbor. Assumed Margin Contribution % Incremental Margin Contribution $ Net Profit 0.50%$62,735$2,639 0.75%$94,103$34,007 1.00%$125,471$65,375

23 Timeline great food. good neighbor. 1 st Quarter 2 nd Quarter 3 rd Quarter Replace display bins in 6 stores Track sales and spending/trip 4 th Quarter Evaluation Improvement Train Staff Renew signage Implement newly trained staff Replace display bins in 6 stores Track sales and spending/trip

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25 1.Highlight Chief Signature Products 2. Create more visibility through a consistent look 3.Remodel produce aisle to upsell Chief Signature Products Strategic Solution great food. good neighbor.

26 Thank you! great food. good neighbor.

27 References Berman, Barry and Evans, Joel R. Retail Management: A Strategic Approach, 111h Edition "It's Dinnertime | Share Our Strength's Cooking Matters. No Kid Hungry. N.p., n.d. Web. 29 Jan. 2013. "Greater Minneapolis Area Grocery Stores." Personal interview. 20 Dec. 2012. "US Grocery Shopping Trends 2012." FMI The Voice of Food Retail. Food Marketing Institute, 2012. Web. 18 Jan. 2013. Underhill, Paco. "A Science Is Born." Why We Buy: The Science of Shopping. New York: Simon & Schuster, 1999. 25-26. Print. "University of Minnesota Students Signage Survey." Personal interview. 15 Dec. 2012. great food. good neighbor.

28 Lower Income Segment (S, N)Existing Chief PlanNew Plan Average Trips1.00 Number of Weeks per year52 Total trips52 Dollars spent per trip4849 Total Dollars Annually$2,496$2,548 Number of Chief Customers13,802 Total Sales$34,448,544$35,166,222 Assumptions

29 great food. good neighbor. Marketing Cost Quantity# Stores# Weeks/Year$ / unitCost Signs2001252$0.03$3,120 Sticker1,00012250$0.01$30,000 Recipes12 52$0.50$3,744 Tablecloths212104$4.50$11,232 Orchard Produce Display Bin 5121$200.00$12,000 Total Cost of New Plan $60,096 % of 1 Million budget 6.01%


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