Marketing
Marketing
Marketing
Product
Costco offers their customers low prices on selected private and a limited selection of
nationally branded products in a wide range of merchandise categories.
Costco currently carries 330 private label items which make up 15% of their sales
Their major products are appliances, books, DVD movies, VHS movies, music
systems, computer and peripherals, electronics and camera, furniture, hardware
and outdoor living, health and wellness, jewelry and apparel, wine and food items.
Their major services are auto and home insurance, auto financing and refinancing,
real estate agent service, mortgage services, life insurance, travel, small-business
loans and lines of credit, and health insurance.
High-end products that are not available at stores can be purchased online at
Costco.com.
Costco currently operates 573 warehouses, including 417 in the United States and
Puerto Rico, 79 in Canada, 22 in the United Kingdom, seven in Korea, six in Taiwan,
nine in Japan, one in Australia and 32 in Mexico.
Costco has had success using an infill strategy when selecting an area to build a
warehouse. An infill strategy is the use of land within a built-up area for further
construction.
Costco is tentative when entering new markets because they rely on word-of-mouth ,
and they are fearful of the lack of familiarity with the warehouse.
Promotion
Advertising: direct mail & word of mouth.
Public Relations: Costco allows their customers to sample many of their products as
they walk through their warehouse. It gives customers the ability to try a product
risk-fee. They will provide a complete refund at the purchase price if the customer is
not completely satisfied, with the exception of electronics after 90 days and
cigarettes.
Personal Selling: When it comes to Costco employees selling goods and services at
their warehouses, they are generally informative, cheerful, and are known for their
experience because of Costco’s low turnover rate.
Sales Promotion: The card offers businesses 5% annual rebate for gasoline
purchases, 3% cash back for eating out, even takeout or delivery, 2% cash back for
traveling on airlines, for hotel stays, car rentals and cruises, including booking
through a travel agency.
Presentation
The first things you see when you walk into a Costco are the most expensive
products.
It is the job of the store manager to understand their customers in a given location,
and then present items in a way to entice these customers to maximize their sales.
Personnel and Customer Service
Costco employees are paid pretty well having their minimum wage at $10.50 per
hour.
There are no commissioned sales people that work at Costco. With no commissions,
customers do not feel pressured by Costco workers to purchase a given product.
people are satisfied with the benefits they receive from being a Costco member; this
is illustrated by a strong renewal rate of 87% .
Costco Return Policy