Mkt355

In: Business and Management

Submitted By zhaoyue
Words 630
Pages 3
Comprehensive Case----What’s Ahead for Costco? 1. 1) Costco is the largest U.S. membership warehouse club player with nearly one-half of total U.S. warehouse club sales. The firm’s no-frills, self- service, members-only clubs are positioned well to attract both business seeking to buy in bulk and individual consumers hoping to discover a great deal while stocking up for home.
2) Because the firm has a treasure-hunt environment A multi-channel retailer, Costco operates warehouse clubs; Costco Business Centers, which carry only merchandise catering to small businesses; and Costco Home, which is a furnishings-and-furniture outlet. Costco gains additional sales through its E-commerce Web sites and catalogs. 2. TNS Retail Forward’s market positioning model provides a good framework for understanding Costco’s strategy. Identifying the company’s market strategy objectives: target customers, core goods and services, core competition, and key appeals. Successful market positioning depends on the execution of the six keys: merchandising; pricing; promotion; customer service; location and physical facilities; and organization, systems, and processes. 3. 1) Because Costco offers a limited number of sku’s, inventory is brought through payment terms rather than through working capital.
2) Costco offers a selection of quality name brands at lower prices than traditional competitors. An important element of the company’s merchandising strategy is to carry only those products on which it can provide its members with significant cost savings. 4. Manufacturers that refuse to accommodate Costco’s demands for lower prices may find themselves displaced by a similar Costco private-brand product, which may sell just as well or better than the manufacturer’s brand. 5. It relies on creating “buzz” or word-of-month recommendations. 6. With regard to its…...

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