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
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
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.
