Promotional Marketing- Costco Analysis
| Promotion Strategy: Costco Wholesale |
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Introduction and Competitive Landscape
Our general findings about Costco are that it is an all-around great, moneymaking, expanding company. To start off, Costco is a membership warehouse that offers its customers low prices on exclusive, private-label products in a wide assortment of merchandise categories that generate high sales volumes and quick inventory turnover. A combination of this turnover, resourceful distribution, merchandise with “no-frill” and a self-service warehouse gives this company extensively lower gross margins than your typical, everyday warehouse or supermarket.
To prove that Costco is a moneymaking company all one has to do is glance at the sales figures. Even though 2010 was a rough year for everyone economically, Costco managed to acquire $76.3 billion in sales, which is a nine percent increase from last year’s sales. Not only did the company’s sales increase but also their net earnings exceeded $1.3 billion along with their earnings per share increased by 18%. Since Costco is acquiring more than enough revenue they decided to expand their company even more, and open 14 new units in 2010, which are all located in the U.S. and in Canada. Apparently consumers were looking forward to the opening of new Costco’s, because eight of the new buildings had opening day sales that surpassed $500,000 and three of the stores made close to a million dollars in sales within that first day. Since Costco has had great success with the opening of its stores in 2010, they plan to open 28 new stores by the end of 2011 (Greenhouse).
Even though customers must pay a membership fee of $50 to shop at Costco, it is worth the time and amount of money they will save. Customers can save time by shopping at Costco because they have everything you need in one stop. Their assortment of products includes; sundries (snack foods, alcoholic and nonalcoholic beverages, cleaning supplies), hard lines (major
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Introduction and Competitive Landscape
Our general findings about Costco are that it is an all-around great, moneymaking, expanding company. To start off, Costco is a membership warehouse that offers its customers low prices on exclusive, private-label products in a wide assortment of merchandise categories that generate high sales volumes and quick inventory turnover. A combination of this turnover, resourceful distribution, merchandise with “no-frill” and a self-service warehouse gives this company extensively lower gross margins than your typical, everyday warehouse or supermarket.
To prove that Costco is a moneymaking company all one has to do is glance at the sales figures. Even though 2010 was a rough year for everyone economically, Costco managed to acquire $76.3 billion in sales, which is a nine percent increase from last year’s sales. Not only did the company’s sales increase but also their net earnings exceeded $1.3 billion along with their earnings per share increased by 18%. Since Costco is acquiring more than enough revenue they decided to expand their company even more, and open 14 new units in 2010, which are all located in the U.S. and in Canada. Apparently consumers were looking forward to the opening of new Costco’s, because eight of the new buildings had opening day sales that surpassed $500,000 and three of the stores made close to a million dollars in sales within that first day. Since Costco has had great success with the opening of its stores in 2010, they plan to open 28 new stores by the end of 2011 (Greenhouse).
Even though customers must pay a membership fee of $50 to shop at Costco, it is worth the time and amount of money they will save. Customers can save time by shopping at Costco because they have everything you need in one stop. Their assortment of products includes; sundries (snack foods, alcoholic and nonalcoholic beverages, cleaning supplies), hard lines (major
References: Mahdavi, S. (2007, April). Costco and the customer. Retrieved from http://bmctoday.net/crstoday/2007/04/article.asp?f=CRST0407_19.php Regnier, P. (2006, June 1). Hunting Big Savings at Costco . Money Magazine, 35, 7. Retrieved March 22, 2011, from http://money.cnn.com/magazines/moneymag/moneymag_archive/2006/07/01/8380748/index.htm Greenhouse, S. (2005, July 17). How Costco Became the Anti-Wal-Mart - New York Times. The New York Times - Breaking News, World News & Multimedia. Retrieved March 20, 2011, from http://www.nytimes.com