Costco Strategy

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What are the chief elements of Costco’s strategy? How good is the strategy? 1) A chief element of Costco is to allow members to buy high quality items with low-price.

• Costco always let the customer find a comparable point in price. So Costco always provide some items easy to see in other supermarkets, and set a lower price. So Costco’s customers can easily make comparisons when shopping. This can enhance the value of customer good impression. And feel really affordable. Then feel the shopping value that Costco provide.

• Costco make the return policy become life-long retreat of general goods and electronic goods retreat in 90 days. Because of this kind customer is less. It is in Costco’s profit affordable range. Therefore, the long return policy is the strategy that Costco can afford and other companies can not afford for the cost. It is an effective signal that delivery the quality information.

• Costco use a membership-based shopping. Basic membership is only pay $50 per year. Then they can buy lower than the wholesale price. Members pay annual membership fees to help reduce the Costco operations and management costs. Makes the prices as a whole are lower than other competitors, thus creating more value back to members. So, more often to shop in Costco, you can save more, and you only need to pay a small annual membership fee.

• In commodities, any goods you buy in the Costco store, in addition with the original manufacturer’s guarantee, and you can enjoy a full refund guarantee from Costco. For members, any time when the membership card is valid, if you are not satisfied, you can cancel membership card. Costco will refund you the full membership fee. For customers, a full refund is quite secure. I think some business will not make such a guarantee if there goods quality is not really good. So this reflected that Costco’s goods are high quality. Customer service is also high quality.

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