Costco

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1-10-13
BMMT
Costco is basically a retail/wholesale store that defies the laws of retailing. They take the rules, bend, and do the complete opposite of it and makes a profit off of that strategy. Costco’s demographic is based on and catered to college-educated individuals with an annual salary of at least $100,000 a year. What makes them unique is that they do the opposite of what you see and know about most retail stores and they have become successful at doing that. This strategy alone is why Costco has become a multi-billion dollar company and has also beat competitors in their industry. One “rule of retail” Costco has broken and having and selling a small selection of their products. Jim Sinegal has implemented this process because he knows that if there is a large amount of a certain product, customers will have a hard time deciding which one, thus causing the costumer to leave and also causing a sales decrease for that product. So he limits the selections of the products so the consumer would have a much easier selecting that certain brand for that product, thus resulting in the customer buying the product and an increase in sales for that product. Also Costco stores have aisles with no signs at all, but one main aisle called the racetrack. The racetrack is so you can see any and every product in each row, so you can get a better look at the products that offer. The aisles with no signs are purposely made that way. The reason why is because, Costco wants customers to stumble upon something they might have not been looking for, but may be interested in purchasing and this key method works every time. Also Costco products are 30% lower than all of the largest supermarket chains and the mark-up prices are no more than 15% for every item. Costco has become successful at using these specific methods and strategies because they know and understand what the consumer wants and they build a philosophy around that and try to modify and adjust that to the...
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