Costco Wholesale Corporation - Essay Example

?Marketing Mix 7P’s 0 INTRODUCTION:                 Costco Wholesale Corporation operates a worldwide sequence of membership storehouses, primarily in the name of "Costco Wholesale", that bring extremely high quality, brand name goods at considerably lesser costs than are normally found at usual wholesaler or trader. The storehouses are planned to assist minute-to-medium- ranged industries to decrease the expenses in buying for resale and for daily company use. Customers can also buy the products for their personal requirements.  It operates membership storehouse which offer a limited verity of chosen products at extremely low costs. The study consists of 7Ps of Costco Wholesale Corporation. So that this will helps to analysis price, place, promotion, product, people, process and physical evidence of Costco Wholesale Corporation.  1.2 PRODUCT DESCRIPTION:              Costco Wholesale Corporation offers various categories of products to its consumers. So that the product is useful to both wholesalers as well as those who want the product for their private use.  Members of the Costco Wholesale Corporation can also shop for personal brand Kirkland brand name goods, designed to be of equivalent or superior quality than nationwide brand names. Such product includes coffee, cookies, luggage, detergent, juice, appliances, tires house ware items etc. Various “Categories of the Costco products include groceries, candy, appliances, television and media, automotive supplies, tires, toys, hardware, sporting goods, jewellery, watches, cameras, books, house wares, apparel, health and beauty aids, tobacco, furniture, office supplies and office equipment. Costco is known for carrying top quality national and regional brands, with 100% satisfaction guaranteed, at prices consistently below traditional wholesale or retail outlets” (Company profile, 2010). The main aim of every company is to increase its overall profitability so that wide variety of goods in one roof helps the Costco Wholesale Corporation to attract more customers and increase profitability. 1.21 DIFFERENTIATION:       The product differentiation of the Costco wholesale corporation is the procedure by which merchandise of the Costco is differentiated from product offered by any other companies, so that it appeals more to its target spectators. Other than differentiating the product offered by the Costco Wholesale Corporation from its competitors, this procedure should guarantee that the product is different from every other goods the business offers. “The challenge company’s face in creating product differentiation is to come up with a strategy which not only creates value for buyers, but also makes it difficult for rival companies to emulate. Whatever the company does to achieve this can be termed as a product differentiation strategy” (Product Differentiation, 2011). A flourishing product differentiation policy will shift the rivalry of the manufactured goods from cost to other non-price features. This assists the business to reinforce its position in the marketplace to enlarge in trades and the direct result of a high-quality product discrimination approach and implementation. 1.3 PROMOTIONAL STRATEGY:       Promotion of warehouse products represents the various view of communication in the marketing activity. Promotion in the case of service is different from the promotion activity of the product. It helps to generate positive as well as negative reaction about the product. “Promotion includes advertising, public relations, sales promotion and personal selling” (Lamb., Hair & McDaniel, 2009. pg 47). Costco Wholesale Corporation is mainly promoted through Publish Medias, TV, broadcasting, internet, leisure program etc… Publish Medias comprise ad in news term paper, magazine etc. These ad provide the various information regarding the type of product with there prices. Promotion through the T V media consists of the ad through different state and global channel. Promotion of the product offered by Costco Wholesale Corporation is to be decided on the basis of strategy related to improvement, publication, sales improvement etc...Therefore good promotion strategy should be adopted to give idea about the product in the target market. Proper promotion strategy should be adopted to capture the customers or to generate positive reaction about the service in the mind of the target customers. Customers are the king of the market. So that to maintain customer’s effective promotional strategy must be necessary. 1.4 PRICING STRATEGY: Price strategy used by the Costco Wholesale Corporation is the value pricing strategy. Pricing is one of the marketing mixes of the product which influences purchasing decision process of the consumers. This pricing approach is to sell the extremely high value merchandise or service at a very small, value cost. Pricing Strategy (Improve profit by executing right pricing strategy, 2011). Under this value pricing strategy price of the product is made on the basis of its value it generates for the consumer. This is normally on the most cost-effective and profitable type of pricing. Many of the time consumers of the product connect the price of the product with the quality of the product. So we can see that price of a particular product largely depends upon its quality. If the firm sells its product at high price it helps the firm to make huge earning in a small time it the firm sells its product at lower price it leads to competition and fight. 1.5 PLACE: Place in marketing mix consists of the company performance that make the product accessible to the targeted consumer. The Costco Wholesale Corporation is established in Issaquah, Washington. They have a lot of store locations as of September 2010, with 572 in the United States, 8 in Japan, 79 in Canada, 7 in South Korea, 23 in the United Kingdom, 32 in Mexico, 6 in Taiwan and 1 in Australia. According to F. Lao “place meaning availability of the right products to the right market target at the right place, right time, right quantity, right costs, and right condition ” (Lao, 2011). Costco has had achievement using an infill plan when choosing a region to make a store. An infill plan is the use of land inside a developed area for additional construction. Costco enters new marketplace, but they do not do it as aggressively contrasted to entering existing markets. Costco is tentative when entering new marketplace because they rely on word of mouth advertising, and they are afraid of the lack of knowledge with the warehouse. Clearly, it would hurt their dealing if they are not able to reach their goal market. 1.6 PEOPLE: People are the most important part of any deal or familiarity. Personal selling, Training and customer service are the main components of people in marketing mix. The people factor in the marketing mix highlights the main role played by person’s condition of the Costco Wholesale Corporation. According to Chaffey and Chaffey Dave “the people element of the marketing mix refers to how an organisation’s staffs interact with customers and other stakeholders during sales and pre- and post-sales communications with them” (Chaffey & Dave, n.d. pg-245). The Costco Wholesale Corporation is the biggest wholesale club operator in the United States. It has a wide verity of customers. Most of them are traders. Costco Wholesale Corporation also attracts persons not related to businesses looking for quality services and products at discounted prices. The Costco Wholesale Corporation operates about 565 membership warehouse stores. It serves almost some 56 million cardholders in Australia US, Canada, Mexico, Japan, Rico, Taiwan, South Korea and the UK. Stores offer services and goods such as home and car insurance, real estate services, mortgage and travel packages. Costco offers their customers various models of their products as they walk through their warehouse. The company gives their consumers a 100% pleasure guarantee on goods and membership. When a Costco warehouse opens in a given place, dealers contact traders around the region to see if they would be interested in becoming members. 1.7 PROCESS: Process is another part of marketing mix. Process mostly concentrates on how clients are managed from first to last point of contact. Process covers Procedures, Accessibility, Controls, Information flows, Booking, Payments, Speed and timing of delivery of the Costco Wholesale Corporation. Costco Wholesale required deploying an essential document capture solution that can control very high capacities daily and decrease work costs connected to improve output and document capture. Costco dramatically accelerated the document capture process with Oracle Document Capture and abolish indexing processes and manual scanning that allows Costco to manage rising document volumes with the similar number of workers. According to jobber process is “the procedures, mechanisms and flow of activities by which a service is acquired. Process decisions radically affect how a service is delivered to customers” (Jobber, 2009). Costco’s business process was to create fast stock turnover and high sales volumes by offering members low costs on a limited choice of nationally labelled and selected private label goods in extensive range of merchandise. The company’s business process is built upon client memberships, those who join and renew yearly. 1.8. PHYSICAL EVIDENCE: Physical evidence is the material part of a service. It includes the physical form of the service Place of availability, Atmosphere, Layout and Decor of the Costco Wholesale Corporation. Physical evidence is the atmosphere in which the service is distributed and any tangible products that facilitate the communication and performance of the service. It refers customer’s knowledge of the company during the website and connected support. It contains issues for instance site ease of use, accessibility and performance. According to Christine Ennew and Nigel Waite “the need for physical evidence within the marketing mix arises directly from the typically intangible nature of the services” (Ennew & Waite, 2006). Physical environment of Costco Wholesale Corporation is great. Market’s leading products are utilized in every division of the company and personnel’s ability level is high in technological issues. 1.9. CONCLUSION: Costco is the biggest membership warehouse association in the united state. It concentrates on selling goods and markets mainly to large families and traders. Marketing mix study is a basic step towards efficient strategy. The marketing mix is the most prominent marketing phrase. Its elements are the strategic, basic parts of the marketing plan. Marketing mix is applied commonly in conversation of marketing strategy as it gives a simple strategic outline for changing different elements of a firm’s product offering to control the demand for commodities within target market. The 7p’s of marketing including the product, price, place, people, promotion, process, physical evidence. These 7 ps are mainly depending the success of the Costco Wholesale Corporation. Reference List Company profile, 2010. [Online] Costco Wholesale Corporation. Available at: http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-homeprofile [Accessed 1 March 2011]. Chaffey & Dave, D., n.d. [Online] Internet Marketing: Strategy Implementation and Practice, 3/E. Available at: http://books.google.co.in/books?id=esPNB_teMv4C&pg=PA215&dq=marketing+mix+people&hl=en&ei=MBeYTaamN8XirAfpxPHzCw&sa=X&oi=book_result&ct=result&resnum=8&ved=0CFcQ6AEwBw#v=onepage&q=marketing%20mix%20people&f=false [Accessed 3 March 2011]. Ennew, C. & Waite, N., 2006. Financial services marketing: an international guide to principles and practice. [Online] Butterworth-Heinemann. Available at: http://books.google.co.in/books?id=-J6vgXBctcsC&pg=PA177&dq=physical+evidence+in+marketing+mix+7+p's&hl=en&ei=YUGVTYzYK8SzrAem7NnpCw&sa=X&oi=book_result&ct=result&resnum=2&ved=0CDoQ6AEwAQ#v=onepage&q&f=false [Accessed 1 March 2011]. Improve profit by executing right pricing strategy, 2011. [Online] AbhinavAgrawal. Available at: http://www.google.co.in/imgres?imgurl=http://abhinav.sonaliagrawal.com/wp-content/uploads/2008/10/pricing_strategy.png&imgrefurl=http://abhinav.sonaliagrawal.com/improve-profit-by-executing-right-pricing-strategy-23.htm&usg=__yBdR0gM0ZSgS2tKP6CqcGVfvobY=&h=491&w=368&sz=66&hl=en&start=1&zoom=1&tbnid=qAdTewizqXRbuM:&tbnh=130&tbnw=97&ei=eVqVTc2GCYbovQPy47X2Cw&prev=/images%3Fq%3Dvalue%2Bpricing%2Bstrategy%2Bof%2Bcostco%26um%3D1%26hl%3Den%26sa%3DN%26tbs%3Disch:1&um=1&itbs=1 [Accessed 1 March 2011]. Jobber., 2009. Foundations of Marketing 2E. [Online] Tata McGraw-Hill Education. Available at: http://books.google.com/books?id=91lpsALoMd8C&pg=PA103&dq=jobber,+D+and+Fahy,j+(2009)&hl=en#v=onepage&q=marketing%20mix&f=false [Accessed 1 March 2011]. Lao, F., 2011. Marketing Management. [Online] Rex Bookstore, Inc. Available at: http://books.google.co.in/books?id=gvNEvyUWfM0C&pg=PA184&dq=meaning+of+place+in+marketing+mix&hl=en&ei=PXiUTenBJ5GurAfY9eHlCw&sa=X&oi=book_result&ct=result&resnum=9&ved=0CGYQ6AEwCA#v=onepage&q=meaning%20of%20place%20in%20marketing%20mix&f=false [Accessed 1 March 2011]. Lamb, CW., Hair, JF. & McDaniel, C., 2009. Essentials of Marketing. [Online] Cengage Learning. Inc. Available at: http://books.google.co.in/books?id=9Kf_O1eI0J4C&pg=PA46&dq=marketing+mix+promotion&hl=en#v=onepage&q=marketing%20mix%20promotion&f=false [Accessed 3 March 2011]. Product Differentiation, 2011. [Online] Buzzle. Available at: http://www.buzzle.com/articles/product-differentiation.html [Accessed 1 March 2011]. Read More