Costco Marketing Presentation

NFN Jotei, Brian Edwards, Helen Da Fonseca, Hendrick
Rodriguez, Ruma Bhowmik

Executive Summary
● Costco Wholesale Corporation is a highly viable business.
● Its strategy is membership based with a pay to shop value proposition.
● Since 1983, Costco has risen to the top by offering members low prices.
● They have essential strengths to take advantage of opportunities in the retail
industry.
● Their low prices make it attractive even during times of economic difficulties.
● The company has opportunities to address threats to its long-term viability.
● They could use their website and its network of suppliers to compete against
new membership warehouse club retail companies.
● Expansion in overseas markets could also further boost the company’s success.
Service Description
● Jim Sinegal and Jeff Brotman first opened
Costco in 1983
● They became a public corporation by 1985 and
by 1993, with their merge with Price Club, they
became the largest wholesale corporation
● Costco, currently, is a membership warehouse
club and a multi-billion dollar global retailer
● Dedicated to bringing members the best price
on quality merchandise
● Costco provides a wide selection of
merchandise with special departments and
exclusive member services
Marketing Objective
● Costco’s marketing objective focuses on gaining new members more than
selling their products.
● In their policy, Costco states that only members can purchase goods. This
decision moves consumers to join
● Costco also sells their goods consistently low compared to its competitors
like Walmart to justify the membership deals.
● Costco believes that if it focus on gaining more members then it could
keep a loyal customer base and cover its expenses.
Situation Analysis
● Strengths
○ They offer low prices on goods and/or services in its stores and on its website.
○ Their inventory turnover combined with high sales volume, contributing to higher revenues.
○ The high revenue contributes to high operating efficiency.
● Weaknesses
○ Their main weakness is the membership-only warehouse club retail business model. This
model encourages customers to buy at Costco stores, but also limits the total number of
customers.
○ They have limited array of goods and services. Their competitors like Walmart, may have a
wider array of goods and services.
Situation Analysis
● Opportunities
○ Enter new markets, such as markets in developing Asian countries.
○ Expand the coverage of its e-commerce websites. Currently, they are offering online services
to the United States, Canada, United Kingdom, Australia, Mexico, Taiwan, South Korea, Japan,
and Spain.
○ Increase the variety of its goods and services to improve Costco stores to a more diverse
population of consumers.
● Threats
○ The entry of new membership warehouse club retail companies threatens Costco’s potential
to succeed in overseas markets.
○ The aggressive marketing of other retail firms also threatens Costco.
Consumer Behavior Analysis
● Most of costco shoppers generally have a high income estimating 100k
annually.
● The demographics states the ethnics groups that mostly shop at costco
are asians and hispanics.
● Initially they wanted to attract college educated people and business
owners. People who were stable and allowed for consistency in their sales
revenue.
● They extended their memberships to the general public and gained a
certain type of consumers.
● They managed to gain loyalty and do not chase customers who are not a
good fit. They cater to the needs of their consumers.
Marketing Strategies
● Membership - Working middle class
● Costco offers more promotions in store with less variety than Walmart.
● Marketing Mix 4Ps (Product, Place, Promotion, Pricing) 2017
● Product Mix - Basics, photo printing, life insurance, payroll services.
(diversified)
● Place/Distribution Mix - Warehouses, online, and mobile app (technology)
● Promotional Mix - sales promotion, direct marketing, personal selling,
public relations.
● Pricing - Market-oriented pricing strategy.
Marketing Mix
● Costco’s product mix has grown considerably since its creation. As it has
grown, Costco has added appliances, electronics, and payroll services to
expand its product mix.
● Costco’s price mix is a revised version of the high-low pricing strategy. It is
known as market-oriented pricing strategy. It consists of selling large
amounts of goods at the lowest prices possible.
● Costco has four promotion tactics. They are sales promotion, direct
marketing, personal selling, and public relations
● Costco place mix includes three locations. This includes Costco
Warehouse stores, Costco online store, and the Costco app.
Citations
● https://www.investopedia.com/articles/investing/070715/costcos-busines
s-model-smarter-you-think.asp
● https://www.costco.com/about.html
● http://panmore.com/costco-mission-business-model-strategy-swot
● https://www.investopedia.com/articles/insights/061516/whats-average-co
stco-consumer-cost.asp
● http://panmore.com/costco-wholesale-marketing-mix-4ps-analysis

Costco Marketing Presentation

Uploaded by

Copyright:

Available Formats

Costco Marketing Presentation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Costco Marketing Presentation

Uploaded by

Copyright:

Available Formats

NFN Jotei, Brian Edwards, Helen Da Fonseca, Hendrick

Rodriguez, Ruma Bhowmik

You might also like