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Costco Case
- 1. COSTCO MKGT 680 Case Study II Yu Wen Huang, Yuna Song, Ji peng
- 2. “ 1. Company Summary 2. Marketing Analysis 3. Answer the Questions Provided 4. Recommendations 2
- 4. ▪ Membership-Only Warehouse Clubs ▪ Founded in 1983 ▪ 749 Warehouses in 11 Countries ▪ Product Diversification ▪ Kirkland Signature Company
- 5. ▪ Unique Supply Chain: Trucking their products directly to their stores ▪ Reduce Costs Supply Chain
- 9. 2.1 STP Analysis Segmentation Middle to high income college-educated people Targeting Homeowners Business owners Aged between 35-65 years old Positioning Membership Warehouse with Low Price
- 10. 2.2 SWOT Analysis Strengths Weaknesses Opportunities Threats ● Strong market presence ● Strong brand (Kirkland Signature, Product diversification) ● Brand Loyalty ● Exclusivity to members ● Geographic Dependence ● Young customers ● International Expansion ● Competitors ● Online competition
- 12. 12 What is unique about Costco’s channel management process? Q1: ● Limited brands ● Interesting process ● Level one consumer marketing channel Which of its channel practices can other retailers borrow or implement? ● Costco set an successful example to other retailers the possibility to avoid the conventional marketing channel that consists of independent producer, wholesaler, and retailer.
- 13. 13 Where can Costco improve? Q2: Should it offer more products or advertise more? Why or why not? ● Developing and improving the “brick-and-click” side of its ecommerce ● Offering more online ● Costco should offer more products or service in different product category to maintain and expand its customer base ● Costco should not advertise more since it already has a strong market presence
- 15. Products: To expand its products and service categories 15 Price: To keep its current pricing strategy Promotion: Sales promotion, Direct marketing Personal selling, Public relations Place: To improve their e-commerce and expand globally
- 16. “ 16 ▪ Best, R. (2016, June 15). What's an Average Costco Consumer Like? (COST). Retrieved April 08, 2018, from https://www.investopedia.com/articles/insights/061516/whats-average-costco-consumer-cost.asp ▪ Kline, D. B. (2017, January 10). Costco Knows Its Perfect Customer. Retrieved April 08, 2018, from https://www.fool.com/investing/2017/01/10/costco- knows-its-perfect-customer.aspx ▪ Costco Shopper Insights and Demographics. (n.d.). Retrieved April 08, 2018, from https://www.infoscout.co/retailer/costco ▪ Constantinides, E. (2006). The marketing mix revisited: towards the 21st century marketing. Journal of Marketing Management, 22(3-4), 407-438. ▪ Naik, P. A., Raman, K., & Winer, R. S. (2005). Planning marketing mix strategies in the presence of interaction effects. Marketing Science, 24(1), 25-34. ▪ Rahmani, K., Emamisaleh, K., & Yadegari, R. (2015). Quality Function Deployment and New Product Development with a focus on Marketing Mix 4P model. Asian Journal of Research in Marketing, 4(2), 98-108. ▪ Van Waterschoot, W., & Van den Bulte, C. (1992). The 4P classification of the marketing mix revisited. The Journal of Marketing, 83-93. References
- 17. 17 Thank You!
Editor's Notes
- Here is our contents
- Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only warehouse clubs. Currently it has a total of 741 warehouses; In the United States (514), Canada (98), Mexico (37), United Kingdom (28), Japan (26), South Korea (13), Taiwan (13), Australia (9), Spain (2), Iceland (1) and France (1) Some warehouses even have gas stations, pharmacies, photo processors, and tire garages. "Kirkland Signature" is Costco's private label. It is sold by Costco at their website and warehouses, and is trademarked by the company.
- Costco has mastered the ability to cut costs throughout various stages of their supply chain. Its supply chain differs from the traditional one because it has fewer steps with fewer hands touching the merchandise, which reduce a lot of costs.
- Costco has a strong base of customers. Its membership renewal rate is nearly 97% among active businesses. Costco shoppers are generally middle to high income people, Asian, and senior age. Costco attracts more affluent, college-educated homeowners.
- The biggest competitors of Costco are Wal-Mart’s Sam’s Club and Target. Sam’s Club is also a chain of membership-only retail warehouse clubs. The Target Corporation is a general merchandise discount retailer operating in the U.S.
- Membership can be a weakness because if customers don’t have membership they can’t shop at Costco.