Last Updated 16 Apr 2020

Reflection Essay on Differentiating Between Market Structures

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Kudler Fine Foods is an organization that offers gourmet foods and wines to the San Diego Metropolitan area. The organization currently has three locations (La Jolla, Del Mar, and Encinitas). Kudler Fine Foods stocks its fresh bakery, fresh produce, fresh meats and seafood, condiments and packaged foods, and cheeses and specialty dairy departments with local and imported goods. Kudler Fine Foods’ motto is Shopping the World for the Finest Foods and its mission statement is Kudler Fine Foods is committed to providing our customers with the finest selection of the very best foods and wines so that your culinary visions can come true.

Both Kudler’s motto and mission statement speak to the organizations passion of wanting to provide only the very best to their customers. In reviewing Kudler Fine Foods’ information, the organization appears to be competing quite well in the marketplace. The financials portion of Kudler’s strategic plan show the organization staying on the positive side of the profit margin despite only four months out of the year of above average sales. Also noted in the strategic plan are every store that in some way are similar to Kudler Fine Foods. These stores are more focused on supplying their customers with one or two services.

Because Kudler Fine Foods carries a larger variety of items, these stores only pose a small threat, if any, to Kudler Fine Foods. Kudler Fine Foods does plan to close one of their current locations and open a store in another location but this is not because of competition, rather a smaller customer base. Kudler Fine Foods’ marketing overview shows an aggressive plan on how the organization will change certain aspects in different areas of the company. There is plan for a new frequent shopper program, which is nontraditional in a sense and will give customers rewards instead of discounted prices.

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Ideas on how to expand the organizations services to for its customers increase revenue as well as how to increase efficiency and cut costs for the company are also mentioned. The expansion of services will include offering parties in the store to teach the consumer on how to prepare properly gourmet dishes using items sold at the store locations. These sessions will be conducted be celebrity chef, food experts, and others. Merchandise selection and pricing is also addressed in the marketing overview.

Providing total customer satisfaction by way of constantly introducing new food items is the focus on how to accomplish this task. The marketing surveys for Kudler Fine Foods shows an average of about 71% of customers shopping at the Kudler Fine Foods to be satisfied all around. However, the customer satisfaction rate did drop by 1. 02% from 2011 to 2012. Although a one percent drop in customer satisfaction is not largely significant, if the issues in which the drop is associated with are not addressed, Kudler Fine Foods can expect a bigger drop every year as customer find newer stores to shop at.

Looking more closely at the surveys, they focused on the stores hours, atmosphere and decor, selection of products, whether the merchandise was a good value for the money, attractiveness on how the merchandise is displayed, satisfaction with the purchased merchandise, if the customer service representatives were courteous and knowledgeable, and the customers over-all satisfaction with the store. Although most of the areas the surveys touched on showed a customer satisfaction rate of 70% or more, there were a few areas that were at a satisfaction rate in the 60% range.

However, the survey results do show one area in which the customers were more dissatisfied than satisfied in both 2011 and 2012. This area was whether the merchandise sold was a good value for the money. In 2011, 58. 22% of customers were dissatisfied in this area. That number went up to 58. 83% in 2012. Although not a large increase in percentage, this still does reflect the dissatisfaction rate in this area is climbing every year. Kudler Fine Foods organization appears to fall under the monopolistic competition market structure.

First, in the strategic plan it states “Kathy Kudler is the vision behind the organization. She intends to grow and expand the business for 10 – 15 years, at which time she will reach retirement age. Her intent is to sell the entire organization at that time and no longer be involved in the operation”. This signifies that there is an easy entry and exit in this type of market, which is a feature of a monopolistic competition market structure. Second, in the Competitive Analysis section of the strategic plan it lists multiple stores in the same area as the Kudler Fine Foods location are and sell similar products.

However, since the products being sold at these other stores are not exactly equal in brand and quality as what Kudler Fine Foods offers, this also points to the organization as being a monopolistic competition market structure. Although Kudler Fine Foods is defined as a monopolistic competition type market structure, it does not fully fall under the same set of rules that a full monopoly type organization has. For instance, Kudler Fine Foods can set prices for the products it sells because its competition only offers similar products rather than exact product.

However, if Kudler Fine Foods sets its prices too high, its customers have the option to shop for similar products elsewhere where the price is more to their liking. Kudler Fine Foods must find the precise price where it can maximize profits but not run their supply to low where the run the risk of not being able to meet the customers’ demands. Once Kudler Fine Foods finds the correct equilibrium price, it can expect to see long-term profits. Some recommendations of competitive strategies for Kudler Fine Foods would be to continue to offer new products to their customers on a regular basis.

Offering new products that competitors do not offer will ensure that Kudler Fine Foods controls that portion of the market. Another recommendation for Kudler Fine Foods would be to investigate and determine why eight months out of the year their profits are lower than the other four months. After concluding why this is, Kudler Fine Foods should proceed with a more aggressive ad campaign, initiate special product pricing, and any other strategies to increase their profits in these low performing months.

A company comparable to Kudler Fine Foods would be Williams-Sonoma. With 252 locations that p 45 states, four provinces, and two countries, the Williams-Sonoma organization is enormously larger than Kudler Fine Foods, but offers the same type of products. These products range from organic and gourmet foods and wines and high quality and high priced utensils, cookware, bakeware, and many other items needed to produce a gourmet meal.

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