Kudler Fine Foods Case Study
Kudler foods has presented a program to increase their revenue by tracking purchase behavior of individual customers and providing incentives to those customers that continue to come back. They are calling these customers “loyal” or “preferred” customers (Sales, 2014).
I wanted to discuss some of the legal, ethical, and information security aspects of such a program. As well as give some input to the structure of the organization to include a stronger information security team. The legal issues that management should be aware of in something like a loyalty, or preferred customer program are things like customer confidentiality. In order to determine who is a preferred customer and who Kudler Foods isn’t will house personal information on customers in a data base outside of actual building...
Costs for housing such information should include things like servers, encrypting data …show more content…
tools. Using a dedicated server may cost the company more money up front, but in the long run saving the company from cyber-attacks should be considered as a better payoff. Encrypting files assures us that when we transmit our data over the internet we are secure in our transfer. (Magill, 2011)
Management needs to be aware of any personal information breach immediately, so we can shut down servers and protect the rest of the customers.
Management should be aware of financial loss, bad word of mouth, and possible probation periods if any leaks of customer information should take place. I believe management should consider a policy similar to that of the European Commission’s Directive on Data Protection. In this policy customers must give their consent for their personal information to be taken and used. This not only means that the customers we do have are actually “loyal”, but that this provides much more protection in the case of some kind of leak of personal info (Loudon, 2010). Next I would like to address the ethical issues with having a preferred customer program. Management should understand that defining what customers get into such programs and which do not may have unintended consequences. Ethically it would seem to create a system where each customer is still rewarded some kind of incentive, just ones may receive
more.
The cost with including each customer into an incentive program can be balanced out by their spending amount as opposed to individuality or loyalty. Kudler Foods has decided to track customers and what they purchase as a main way to gain revenue in this process. Management should consider tightening the security measures on what can and cannot be tracked to assure the company does not break any laws and cause any financial loss to the company. Tracking companies like Novo Solutions provide secure tracking software and easy to use databases to find information quickly (Novo, 2014). This may raise overall costs in the short term, however in the long run more protection with customer secure information is a payoff management should consider. One of the biggest concerns management has is information security. The above mentioned are two areas of concern. Legal and ethical. The structure of the organization also needs consideration. The lack of attention to information security may destroy the company.
Therefore I suggest management look at making information security a top priority considering the customer data required with the preferred customer program. Instituting a team in each area, legal and ethical designed specifically for information security is my suggestion to management.
References:
Magill, L. (2011). 8 Ways to Protect Your Customer 's Information. Retrieved from http://blog.intuit.com/marketing/8-ways-to-protect-your-customers-information/
Laudon, K. C., & Laudon, J. P. (2012). Management information systems: Managing the digital firm (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall
Novo Solutions. (2014). Retrieved from http://www.novosolutions.com/customer-tracking-software/
Sales Marketing. (2014). Retrieved from https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler2/intranet/marketing-overview.asp
I wanted to discuss some of the legal, ethical, and information security aspects of such a program. As well as give some input to the structure of the organization to include a stronger information security team. The legal issues that management should be aware of in something like a loyalty, or preferred customer program are things like customer confidentiality. In order to determine who is a preferred customer and who Kudler Foods isn’t will house personal information on customers in a data base outside of actual building...
Costs for housing such information should include things like servers, encrypting data …show more content…
tools. Using a dedicated server may cost the company more money up front, but in the long run saving the company from cyber-attacks should be considered as a better payoff. Encrypting files assures us that when we transmit our data over the internet we are secure in our transfer. (Magill, 2011)
Management needs to be aware of any personal information breach immediately, so we can shut down servers and protect the rest of the customers.
Management should be aware of financial loss, bad word of mouth, and possible probation periods if any leaks of customer information should take place. I believe management should consider a policy similar to that of the European Commission’s Directive on Data Protection. In this policy customers must give their consent for their personal information to be taken and used. This not only means that the customers we do have are actually “loyal”, but that this provides much more protection in the case of some kind of leak of personal info (Loudon, 2010). Next I would like to address the ethical issues with having a preferred customer program. Management should understand that defining what customers get into such programs and which do not may have unintended consequences. Ethically it would seem to create a system where each customer is still rewarded some kind of incentive, just ones may receive
more.
The cost with including each customer into an incentive program can be balanced out by their spending amount as opposed to individuality or loyalty. Kudler Foods has decided to track customers and what they purchase as a main way to gain revenue in this process. Management should consider tightening the security measures on what can and cannot be tracked to assure the company does not break any laws and cause any financial loss to the company. Tracking companies like Novo Solutions provide secure tracking software and easy to use databases to find information quickly (Novo, 2014). This may raise overall costs in the short term, however in the long run more protection with customer secure information is a payoff management should consider. One of the biggest concerns management has is information security. The above mentioned are two areas of concern. Legal and ethical. The structure of the organization also needs consideration. The lack of attention to information security may destroy the company.
Therefore I suggest management look at making information security a top priority considering the customer data required with the preferred customer program. Instituting a team in each area, legal and ethical designed specifically for information security is my suggestion to management.
References:
Magill, L. (2011). 8 Ways to Protect Your Customer 's Information. Retrieved from http://blog.intuit.com/marketing/8-ways-to-protect-your-customers-information/
Laudon, K. C., & Laudon, J. P. (2012). Management information systems: Managing the digital firm (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall
Novo Solutions. (2014). Retrieved from http://www.novosolutions.com/customer-tracking-software/
Sales Marketing. (2014). Retrieved from https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler2/intranet/marketing-overview.asp