National Grocers Association Case Competition

University of MinnesotaTory Ahmann | Denise Fung

Ashley Gilles | Kim Tam

great food. good neighbor.

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

great food. good neighbor.

great food. good neighbor.

great food. good neighbor.

Business Problem

Existing customers are not experiencing the mission to its full potential.

great food. good neighbor.

Strategic Solution

great food. good neighbor.

Part Two: Update Labels

Signage Flyer

Part Three: Produce

Department

Part One: Chief’s &

Ray’s Signature

Items

Strategic Solution Part One

great food. good neighbor.

great food. good neighbor.

Classifying Customer Service

great food. good neighbor.

Strategic Solution Part Two

great food. good neighbor.

great food. good neighbor.

great food. good neighbor.

great food. good neighbor.

great food. good neighbor.

great food. good neighbor.

Strategic Solution Part Three

great food. good neighbor.

great food. good neighbor.

Employee Training

great food. good neighbor.

Incremental Marketing Costs

Signs; $3,120

Stickers, $30,000

Recipes; $3,744

Tablecloths; $11,232

Orchard Produce

Display Bin; $12,000

Remodeling producesection(great experience)

Promoting low cost easy made healthy food (great experience + great food)

Total New Plan Cost is $60,096 or 6% of Chief’s 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 ChiefSignature items(great food)

Highlighting new labels strategy (great food)

great food. good neighbor.

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 PenetrationMosaic USA Data

% Chief SegmentTotal Chief Customers

Low Income Demographic (S, N) 27,603 50% 13,802

Medium Income Demographic (M, I) 42,422 55% 23,332

Total 70,025 37,134

great food. good neighbor.

Assumptions

Middle Income Segment (M, I) Existing Chief Plan New Plan

Average Trips 1.25 1.30

Number of Weeks per year 52 52

Total trips 65 68

Dollars spent per trip 65 70

Total Dollars Annually $4,225 $4,732

Number of Chief Customers 23,322 23,322

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.

The Bottom LineExisting Plan New Plan

Total Sales for Both Segments $133,026,667 $145,573,719

Sales Difference $12,547,053

great food. good neighbor.

Assumed Margin Contribution %

IncrementalMargin

Contribution $Net Profit

0.50% $62,735 $2,639

0.75% $94,103 $34,007

1.00% $125,471 $65,375

Timeline

great food. good neighbor.

1st Quarter

2nd Quarter

3rd Quarter

• Replace display bins in 6 stores

• Track sales and spending/trip

4th Quarter

• Evaluation• Improvement

• Train Staff• Renew

signage

• Implement newly trained staff

• Replace display bins in 6 stores

• Track sales and spending/trip

great food. good neighbor.

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.

Thank you!

great food. good neighbor.

ReferencesBerman, 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 MarketingInstitute, 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.

great food. good neighbor.

Lower Income Segment (S, N) Existing Chief Plan New Plan

Average Trips 1.00 1.00

Number of Weeks per year 52 52

Total trips 52 52

Dollars spent per trip 48 49

Total Dollars Annually $2,496 $2,548

Number of Chief Customers 13,802 13,802

Total Sales $34,448,544 $35,166,222

Assumptions

great food. good neighbor.

Marketing Cost

Quantity # Stores # Weeks/Year $ / unit Cost

Signs 200 12 52 $0.03 $3,120

Sticker 1,000 12 250 $0.01 $30,000

Recipes 12 12 52 $0.50 $3,744

Tablecloths 2 12 104 $4.50 $11,232

Orchard Produce Display Bin 5 12 1 $200.00 $12,000

Total Cost of New Plan $60,096

% of 1 Million budget

6.01%