Marketing Mix Of Costco Companies Inc

Posted by Zander Henry on Aug-22-2018

1. marketing mix

1.1. Understanding the marketing mix

• The marketing mix is an important set of marketing tools and characteristics that a firm uses to increase penetration in the target market groups
• Using the marketing mix strategically includes focusing on seven important aspects of marketing and branding for an organization, namely: product, place, price, promotion, people, process, and physical evidence

1.2. Importance of marketing mix

• The marketing mix helps a company choose and decide on a suitable marketing strategy
• The marketing mix also helps a company in resource and budget allocation to different aspects of the marketing strategy and product development
• The marketing mix also allows a company to choose the right and effective marketing tactics for its promotional needs

2. Marketing mix for Costco Companies Inc

Costco Companies Inc makes use of the marketing mix strategically to achieve not only the marketing objectives but also the broader organizational objectives.

Marketing Mix Costco Companies Inc is presented below:

2.1. Product

Product is one of the most important components of the Costco Companies Inc Marketing mix. The distinctive characteristics of the product by Costco Companies Inc are:

2.1.1. Quality

• Costco Companies Inc maintains the high quality of products
• High product quality is maintained by adding value during different stages of the value chain
• Costco Companies Inc procures raw materials from reliable and trusted suppliers only
• These raw materials are processed under carefully maintained environments to maintain high and consistent quality of the products
• High quality promise and delivery also provides Costco Companies Inc with a distinctive competitive advantage

2.1.2. Ease of use

• The products manufactured and sold by Costco Companies Inc are relatively easy to use
• All products come with a user manual, which is easy to understand and which provides simple instructions for product use
• The consumers can also call the 24/7 helpline to understand details about product usage
• Also, retail representatives provide detailed instructions and explanations regarding the use of the product at the time of the sale

2.1.3. Portfolio broadness

• Costco Companies Inc has a broad portfolio of products
• The broad portfolio helps Costco Companies Inc in reaching different target groups in the market
• Also, the broad portfolio allows financial strength to Costco Companies Inc
• The broader product portfolio also adds more value for Costco Companies Inc

2.1.4. Benefits of product consumption

• Costco Companies Inc offers functional benefits to consumers of the product use
• These functional benefits are promised and delivered – however, they are also delivered by other similar products
• The distinguishing aspect of Costco Companies Inc is its delivery of emotional benefits to the consumer
• Products manufactured and sold by Costco Companies Inc promise consumers an ego boost, confidence, and security
• Costco Companies Inc also promises fulfilment of psychological needs on product consumption
• These psychological needs include, for example, the need for empathy, the need for belonging, and the need of feeling loved.

2.1.5. Different SKUs

• The products by Costco Companies Inc are available in different sizes
• Costco Companies Inc has made use of different SKUs to increase market penetration
• Different SKUs can be brought and used as per the consumption needs of the consumers, and the target markets
• Through the production of different SKUs, Costco Companies Inc has also increased the trial rate
• Different SKUs have also helped Costco Companies Inc improve its product accessibility

2.2. Price

Costco Companies Inc marketing mix focuses on a hybrid strategy for pricing to obtain maximum value for its products. The marketing mix Costco Companies Inc uses a combination of a number of techniques for pricing its products, which are detailed below:

2.2.1. Premium pricing

• By using premium pricing for some of its product ranges, Costco Companies Inc encourages favorable brand and product perceptions in target consumer groups
• Premium pricing for products also encourages a favorable quality perception of Costco Companies Inc products amongst consumers
• With premium prices, Costco Companies Inc has successfully also made some of its product ranges exclusive by restricting sales and production. This, in turn, leads to a perception g luxury in consumption products
• Premium prices add a touch of privilege and high value in Costco Companies Inc products
• Using elements of premium prices in other product ranges has also allowed Costco Companies Inc to maintain significantly high profits and a consistent business growth

2.2.2. Psychological pricing

• Since Costco Companies Inc has a number of different product ranges and product groups, the use of psychological pricing has been beneficial
• With the use of psychological pricing, Costco Companies Inc also successfully adds more value to its products from the point of view of customers
• Costco Companies Inc also gains higher sales with psychological pricing
• Consumer purchase a higher amount of Costco Companies Inc products because of its use of psychological pricing
• Costco Companies Inc is able to increase its target audience and broaden its target purchaser groups

2.2.3. Geographical pricing

• Costco Companies Inc is able to penetrate different regional markets optimally with the use of geographical pricing
• For offshore locations, geographical pricing also allows Costco Companies Inc to cover shipping and customs expenses
• Geographical pricing also allows Costco Companies Inc to maintain consistent revenue growth by altering pricing in different markets based on local currency value

2.2.4. Bundle pricing

• For some product ranges, Costco Companies Inc is also known to use bundle pricing strategy popularly
• Costco Companies Inc also uses bundle pricing during sales
• Bundle pricing increases the trial rate for consumers
• Costco Companies Inc experiences higher return on the cost of gaining a new customer
• With bundle pricing, Costco Companies Inc is also able to control costs and prices by lowering marketing and distribution expenses
• The use of bundle pricing also adds value to the umbrella brand name of Costco Companies Inc.

2.3. Placement

Costco Companies Inc places high importance on the placement of its products because it directly relates to accessibility for consumers.

2.3.1. Company-operated stored

• The company maintains stores operated by the management of Costco Companies Inc in all markets
• Company-operated stores give Costco Companies Inc higher control over operations as well as store layout and design
• Costco Companies Inc also interacts directly with the consumers and gathers important details regarding consumer behavior and consumer feedback through company-operated stores
• The company operated stores also give leverage to Costco Companies Inc in terms of decisions regarding the stocking of different product items

2.3.2. Licensed stores

• Costco Companies Inc licensed stores also allow consumers to enjoy the various product offerings by the company
• Licensed stores also decrease the risk of financial and physical investment for Costco Companies Inc in unstable markets
• Licensed stores have also given Costco Companies Inc high business growth, and a boost for rapid market expansion and penetration
• Through licensed stores, Costco Companies Inc has also learned about local consumers and cultures
• Licensed stores and shops encourage sales of products by Costco Companies Inc by aligning it with local cultural values
• Licensed stores also help Costco Companies Inc in localizing its product offerings to enhance brand equity and band image

2.3.3. E-commerce

• Costco Companies Inc has developed a successfully operational website for online order placement and order tracking
• Costco Companies Inc also encourages sales through social media portals, where the company takes orders through direct messages, as well as through a mini-shop model
• The company also stocks products with online retailers such as Amazon and eBay, as well as smaller local online retailers as well
• Online retailing, and using the internet to make sales has boosted the sales for Costco Companies Inc and has also increased the accessibility of its products for consumers.

2.3.4. Supermarkets and hypermarkets

• Costco Companies Inc also places its products in supermarkets and hypermarkets across the country
• A large number of Costco Companies Inc target groups shop from supermarkets and hypermarkets
• Placement in supermarkets and hypermarkets also improve cost efficiency for Costco Companies Inc

2.3.5. Partner agents

• In offshore locations, Costco Companies Inc also makes use of partner agents for its products’ placement
• These partner agents are assessed and evaluated on strategic compatibility and reliance
• Costco Companies Inc contracts with partner agents in other countries and markets for its product placement to ensure quality control and terms of negotiation

2.4. Promotion

The marketing strategy for Costco Companies Inc also places high importance on the promotional tactics and strategies used. The promotional strategies allow the Costco Companies Inc to interact with the consumers and influence them directly. Costco Companies Inc uses a 360-degree approach in its promotional activities, and makes use of the following means of promotion:

2.4.1. Digital marketing

• Costco Companies Inc has corporate profiles on all social media websites and portals
• Costco Companies Inc uses its social media presence to directly, engage with consumers
• This direct engagement and interaction allows Costco Companies Inc to understand the customers, their needs and demands
• Costco Companies Inc uses this feedback and incorporates it in its broader marketing and organizational strategy
• Costco Companies Inc also maintains a corporate website – which highlights company information, product information as well as information regarding any ongoing campaigns and sales

2.4.2. Reward Programs

• Costco Companies Inc has a loyalty card program for its customers
• The loyalty card allows customers to redeem points in exchange for products or other exciting gifts, as directed by the company
• Each purchase is entered into the loyalty card by Costco Companies Inc and is valued for points against the products’ monetary value
• The loyalty card can be purchased or is given complementary by Costco Companies Inc on high valued purchases
• Frequent usage and purchase of products by Costco Companies Inc also has rewards against the loyalty card

2.4.3. Community Influencers

• Costco Companies Inc makes use of community influencers as its on-ground promotional efforts
• Costco Companies Inc identifies strong and confident individuals to be brand ambassadors in their communities
• Costco Companies Inc provides these brand ambassadors and community influencers with its product range and invites them to use it themselves to see benefits

2.4.4. Conventional marketing

• The company places advertisements in consumer-related magazines. This largely includes home decor, and home management magazines
• Magazine ads are not very frequent, but appear twice every quarter of the fiscal year
• In high-density locations, Costco Companies Inc also makes use of out of house hoardings
• Hoardings increase visibility for Costco Companies Inc and also work towards building stronger brand recall
• Costco Companies Inc also produces TV advertisements
• All TV advertisements have an emotional appeal to them
• TV advertisements by Costco Companies Inc have progressed to include a slice of life elements and characteristics
• TV advertisements by Costco Companies Inc also highlight the functional benefits of the product

2.5. People

The marketing mix of Costco Companies Inc also places an essential focus on people development and people building. This is because Costco Companies Inc realizes the importance of employees in building strong customer relationships. Costco Companies Inc develops its employee and people by focusing on the following aspects:

2.5.1. Training

• Costco Companies Inc makes sure that all employees undergo regular training sessions for skill development and enhancement
• Trainings at Costco Companies Inc are not the only field related, but also focus on essential management and organizational skills
• Training sessions and activities at Costco Companies Inc also identify with the employee's own needs of progression, development and growth
• All training sessions and activities designed and carried out by Costco Companies Inc take into consideration business goals and objectives, as well as employee's personal goals and aspirations
• Costco Companies Inc, therefore, tries to develop the employee as an organizational member, as well as an individual
• All training is engaging, and hands-on so that employees do not only learn but also experience

2.5.2. Organizational ownership

• Costco Companies Inc works on strengthening the organizational commitment in its employees
• Costco Companies Inc builds employee loyalty so that people can reflect their optimal best at work
• Costco Companies Inc also understands that satisfied employees will lead to happy and satisfied customers
• Costco Companies Inc regularly shares different reward programs for employees, including stock sharing, so that their organizational commitment and ownership is enhanced
• Costco Companies Inc also includes employees in decision making at different managerial levels, and regularly takes their feedback for different projects and products – which also work towards building organizational ownership

2.5.3. Motivation building

• Costco Companies Inc employees are the face of the organization
• Costco Companies Inc are motivated through the exciting and creative organizational culture
• Employees are also motivated through different reward programs and bonuses that Costco Companies Inc distributes
• Another source of motivation is appreciation programs where management appreciates and acknowledges the work and performance of different employees

2.5.4. Succession planning

• Costco Companies Inc remains one of the leading players in the industry also because of its focus on succession planning
• Costco Companies Inc conducts succession planning for all managerial levels
• Succession planning is done through internal promotions as well as external recruitments to meet the needs and demands of the vacant job position at Costco Companies Inc
• Strategic succession planning has allowed Costco Companies Inc to be prepared for different challenges, and also be resourceful enough to deflect them

2.6. Process

Costco Companies Inc has organized and systematic processes in place to make sure that the business experiences consistent growth.

2.6.1. Operations

• All operations at Costco Companies Inc are clearly defined and communicated to the employees
• Costco Companies Inc makes sure that employees are well trained, and knowledgeable of all processes relates to operations
• All stages of operational processes focus on maintaining a high quality level and standard of the products
• Systematic process re in place for all operation – from procurement to the final sale of the products
• All operational processes are maintained, checked, and uploaded through the internal portal of the organization for supervisory purposes
• The use of online portals for operational processes also builds a strong backup for managerial purposes at Costco Companies Inc

2.6.2. People Management

• Costco Companies Inc has also defined clear processes for people management through streamlining its human resource management department
• Costco Companies Inc has defined guidelines regarding recruitment, training, compensation management, and performance appraisal of employees
• All people related processes are not only communicated to the management and supervisors, but also to employees to create a sense of transparency, and an environment of trust
• Progressive people management systems and processes have allowed Costco Companies Inc to keep its workforce motivated and happy – which reflects in satisfied customers

2.6.3. Quality maintenance

• Costco Companies Inc also has defined policies and processes for managing and maintaining quality
• All products undergo triple quality checks to ensure that customers receive the best product
• In addition to quality checks at the production and distribution level, the management has also placed separate quality maintenance and quality check department
• The quality maintenance department has experts who make sure that not only the final product but also the processes involved in producing the product were infused with quality

2.6.4. Store management

• Costco Companies Inc manages store management through stringent and closely monitored policies and processes
• These processes relate to not only the floor and space design but also to the performance of the employees at the store
• The processes for store management also regularly monitor footfall and work on strategies to increase footfall through different tactics, and changes in the store design and store management
• The company also has a systematic process for customers who interact with the products and feel them before making the purchase
• The final sale at the store is also clearly defined – for the employees and the customers both
• Processes and policies are important for Costco Companies Inc for maintaining quality of the products, and for ensuring that the company does not experience any unnecessary expenses and costs

2.7. Physical evidence

The physical evidence is also important in the marketing strategy for Costco Companies Inc as it works towards influencing the consumers in favor of the brand and its offerings. The physical evidence for Costco Companies Inc include:

2.7.1. Store atmosphere

• The store design and management for Costco Companies Inc is exciting and creative
• The store atmosphere makes the customers feel relaxed and comfortable –so that they can interact with, and enjoy product offerings by Costco Companies Inc at ease
• The store design is also important for Costco Companies Inc because it controls the level and nature of experience and interaction that the customers have with the product and the brand
• With company-operated stores, it is easier for Costco Companies Inc to control and manage the store atmosphere to be able to positively influence customers and to be able to appeal to them emotionally

2.7.2. Packaging

• Costco Companies Inc has unique packaging, which is different from other players in the industry
• Costco Companies Inc also has a vibrant touché to its packaging, which is regularly changed in terms of colors and patterns
• The logo for the company is simple, and recognizable by the consumers easily
• The brand logo has also become a symbol of confidence, ambition, and aspiration for consumers who use products by Costco Companies Inc
• The packaging of the products is sophisticatedly done and matches the brand image developed and maintained by Costco Companies Inc

2.7.3. Website design

• The website design is simple and easy to use
• Costco Companies Inc has a customer friendly user interface which allows easy navigation and understanding of its various product offerings
• The corporate website of Costco Companies Inc also has the brand logo, and is packaged similarly to the products offered by the company
• The design patterns, and color change on the website with changes to the product packaging to match various campaign needs and sale offerings