Executive Summary The objective of this report is to develop an integrated communications plan (IMC) for Costco Wholesale Corporation. Introduction Research has indicated that Costco has room for improvements in digital and online shopping. This integrated marketing communications plan will focus on Costco in marketing efforts while increase the growth in internet sales competing with Amazon (Team, 2014). Integrated Communications Plan Objectives Attract New Customers Costco has a good marketing strategy with low cost investment on advertisement.
Alternative 3 (Amazon servers) Costco needs to have their information kept safe and secure. Arranging a partnership, with a third-party take care of their data will reduce the cost of employees, maintenance, warehouses, data corruption, and liability. Using a company server will allow Costco management to focus on other departments and areas that are a focus on achieving their mission statement and goals. Pros
Brand: Costco Landing Page: https://www.costco.com/join-costco.html?qid=73479678a8c411ed800b74dd0a1cb826&cjevent=73479678a8c411ed800b74dd0a1cb826 Theme: Membership sales Title: Don’t Miss Your Chance to Save as a Costco Gold Star Member Costco has been helping its members keep their pantries stocked and their wallets full since 1976. This world-famous warehouse club has come a long way since opening its first location. It now has nearly 600 locations in the United States and Puerto Rico and more than 120 million loyal cardholders.
After the success of the warehouse, Price Club and Costos merged together and were first introduced as PriceCostco, but eventually Changed to Costco Companies, Inc. Costco has grown into a successful industry with 848 warehouses located worldwide. Due to the success and growth of Costco, it is one of the top five largest and most popular retailers
Costco Wholesale Corporation strives to grow and expand through their competitive retail and pricing strategies in their market. As a retail firm, Costco depends on cusumer purchasing capacities (Gregory 2015). Costco offers a limited number of items that are afforadable quality services and goods to their consumers and believes it aids to their continued growing and expanding success. Costco is driven by cost leadership for their retailer store because they would rather maintain the lowest prices possible which enable customers to return. Costco largely relies on their pricing and retail strategy to continue sales and organization success.
The mission of Costco is “to continually provide all of its members with quality goods and services at the lowest possible prices.” This mission statement is directly correlated to Costco’s business model and its strategy. Costco’s mission statement shows that business really pays attention to quality as a huge selling point. The foundation of Costco’s business model is centered around a membership-only warehouse business model, in which there are high sales volume, rapid inventory turnover due to their fee-paying members. Due to this type of business model, Costco wholesale remains profitable even by having significantly lower gross margins than other wholesalers.
While Costco maintaining their low-cost strategy, Costco has more opportunities to growth. Even though its low cost makes success during economic difficulties. Costco’s low price and bulk quantity purchase makes consumers to buy large in quantities that makes more attractive to business. For everyday consumer Costco, would start a small and convenience store for the people who want to buy quickly in small or large quantity. These small Costco store can be started in urban areas and memberships for this convenience stores can be offered with allow price by reducing ten or twenty dollars than the original cost.
Costco's History and Success Costco's history dates back to 1976, when Sol Price established the first Price Club in San Diego, California. Price Clubs were wholesalers that charged members a yearly fee. Jim Sinegal and Jeff Brotman founded Costco in 1983, and the foremost storehouse opened in Seattle that year. Costco and Price Club combined in 1993, resulting in the contemporary Costco company. Costco is an American international organization that operates as a "membership warehouse club".
The balance sheet provides financial data at a specific date regarding a company’s assets, liabilities, and stockholder’s equity which is used to help predict future cash flows and assess a company’s flexibility. (Kieso et al., 2022) Costco’s consolidated balance sheet reported total assets of $64,166(million) for FYE 2022 which are categorized as current assets and other assets. Costco’s short-term investments are debt security notes. Receivables consist of vendors discounts and rebates which are settled against any payable due the vendor, credit card incentives, reinsurance, third-party pharmacy due from members, and other governmental tax-related entities. Merchandise consists of inventory from United States, Canada, and internationally.
Costco is a leader in the warehouse member club market. They specialize in selling bulk groceries and using their immense buying power to help get savings on items and then pass those savings on to their members. They opened their first warehouse in Seattle in 1983. Costco is unique amongst retailers because they only mark their products up 15 percent (Inside Costco CNBC). In terms of the wholesale club market segment, Costco is one of only three main players.
The outlook can be characterized by such factors: Retailers are generally affected by the state of the economy and by consumer's spending and income: WalMart is more exposed to foreign markets, whereas Costco is mainly a U.S. company. The U.S. stock market is overvalued, we may expect lateral movements until the economy will go back to its non-QE state; thus, even if not directly affecting sales, market's swing may affect management decisions and reporting. Additionally, labor regulations and trade agreements may affect revenues by increasing costs and reducing gross margins: WalMart issues with workers seems to be addressed; nonetheless, wages in the whole economy do not seems to increase leaving the problem as generic. Nonetheless, Costco is less affected.
Costco operates on a membership only basis, therefore customers and businesses must purchase a membership to shop at the retailer. Costco currently has two memberships available, which are their individual membership, also known as Gold Star, and their Business membership, both of which cost $55 annually (10-K, 2015). For $110, a customer can upgrade to an executive membership, where they can enjoy a 2% discount (SWOT, 2015). They currently have around 75 million members, and due to their no-frills approach, low prices, and high quality products they have a high member retention rate of 91% in the U.S. and Canada, and an international rate of 87% (Forbes, 2016). Costco has been steadily growing and their net sales increased from $75,255 million in 2010 to $110,212 million in 2014 (SWOT, 2015).
Key Trends – Globalisation One of the main opportunities Costco has is more global expansion to specific targeted countries. Although operating in many countries, Costco is heavily dependent on the U.S. and Canadian markets. It still has the opportunity to expand into the Asian and Australian markets where it has a limited presence. Costco has the capability to operate about 100 stores in Taiwan, Korea and Japan combined and about 20 stores in Australia. It currently has 41 stores in Taiwan, Korea and Japan combined and 6 stores in Australia.
I walked to Costco it's, my favorite supplier I came to a halt when I realized that I didn't pick up a flyer I gripped my cart tightly and sped past aisle seven I finally made it to the food court and it smelt like heaven I glanced at some signs and they informed me about the sales I also checked my phone and my mom said "Pick up four pales" I raced to the checkout to get a good spot in line I was told that my membership expired so I had to pay fine I am officially broke from all the money I had to spend
What are the two types of core competencies that drive a firm’s competitive advantage? Which firms demonstrate a clear competitive advantage because of (a) major value-creating skills/core capabilities and/or (b) superior assets or resources? Which firms have demonstrated sustainable sources of competitive advantage? The two core competencies that drive a firm’s competitive advantage are cost leadership and differentiation.
