Enter the World of Costco
Costco started as a small company in Washington State in the 70’s named Price Club. The founders Sol and Robert Price sought out to create a new and revolutionary way to shop, and the result we now know today as Costco Wholesale. Costco is now a top five company in America. They are focused on serving their members, shareholders, employees and the community. Costco holds truth to their mission statement which consists of “providing the best products at the lowest possible prices”. Over the years Costco has added a Pharmacy, food court, tire center, optical, hearing aid center, gas station, and one hour photo. They also work in cooperation with car dealerships, travel agents, and various other trades and organizations for the benefit of their members. In this paper we will look at outrageous customer services and three principals of customer service. We will also cover intergrading principals of customer service personally and professionally. Often in this paper we will use Costco as a model to explore the concepts of customer services. The goal of this paper is to get a clear understanding of what outrageous customer service is and what it looks like in action through the Costco experience.
A Wholesale Customer In the article “What Makes Costco One of America’s Best Companies” by Daniel Ferry, He writes what he believes is the reason Costco is such a huge successful and profitable origination. Ferry writes, “To me, Costco 's customer
turnover, which is made possible by low prices and limited product selection. This business model is appealing for them and has many benefits. Firstly, by setting up the business approach to rapidly
Costco is the greatest wholesale mega store in today’s market opening its first store in 1983 in Seattle, Washington. Its mission statement is "Costco 's mission is to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission we will conduct our business with the following Code of Ethics in mind: Obey the law, Take care of our members, Take care of our employees, and Respect our vendors. If we do these four things throughout our organization, then we will realize our ultimate goal, which is to reward our shareholders."
Costco’s Strategy is to sell quality items at low prices and to create a treasure hunt like atmosphere with a set of variable famous brand items available at low prices each week that
Costco is a recognized and successful retail chain including several locations, glowing feedback, and a wonderful overall reputation. Known by several audiences to be considered a “big-box” store, Costco offers various products in its stores at low, discounted prices, accompanying a membership card. Before and after researching this company, the author of this paper has heard exceptional feedback regarding the company for its initiative to keep prices low, employee morale high, and customer satisfaction to be one of its top priorities. Within this body of work, the author will dissect and discuss some of Costco’s stakeholder perspectives and how some of the perceived initiatives may help aid the company within its
There are many strengths of Costco’s business. One of the main strengths is customer loyalty. Last year in the U.S. and Canada, the customer membership renewal rate was ninety-one percent. The global customer membership renewal rate was eighty-eight percent. These high renewal rates
Costco's mission is to “continually provide our members with quality goods and services at the lowest possible prices (Costco Wholesale Mission Statement - Profits and Prices Revolve Around Ethics, 2013)
Costco is a world-wide membership warehouse store that is devoted to provide the best prices on brand-name goods. One of their missions is to provide their customers with the convenience of exclusive member services to make their shopping experience more enjoyable. Some adjectives that describe Costco is customer oriented, international and diligent.
Costco Wholesale has generated a revolution in how people shop: for the first time, many Americans are willing to 'pay' for the privileges of membership to a store so they can buy its products and save money. Like Wal-Mart, Costco prides itself on its low, low prices. However, in stark contrast to Wal-Mart, Costco has also made its exemplary treatment of its employees part of its marketing and sales strategy. It advertises itself as an ethical company, a company where it is a pleasure to work. This use of its HR police as a marketing strategy has proven to be effective, particularly with its target audience. While it caters to a wide and diverse audience in terms of its product diversity, on the whole Costco's target consumer is more affluent and educated than the average consumer at a big box store like Sam's Club. Costco's target audience members are interested
Every company and/or organization starts and operates to achieve a single major goal, which is normally included in the company’s mission statement. Setting a goal, however, does not translate into success on its own; it is only the fist step. Understanding market segmentation is the second most important aspect of doing business. “Sellers and advertisers want to be able to determine what the potential market is for their product or service, as well as the best ways to reach potential consumers” (Terrell, 2013). Once a goal is set, an organization first must decide if it wants to operate locally, regionally, nationally, and/or internationally, as the size of the geographic coverage has a large
“The key elements of Costco strategy are extremely low prices, a limited selection of naturally branded and private label products, a treasure hunt shopping environment, strong emphasis on low operating costs, and ongoing expansion of its geographic network of store locations.” To provide low prices Costco caps its markup on brand merchandise at 14% compared to 20% to 50% at other supermarkets. The equals out to a sales revenue that only equales several million dollars. This number excludes all other operating factors including the membership fees. Another important element of the strategy is that unlike other retailers they don’t offer window displays or any other thrills with in the stores. They know because of the reputation and because of the value that they offer their customers that the items that they sell offer value over all else.
In 1983, Costco Wholesale Corporation, the fourth-largest retailer in the United States, was founded by former Price Club executive, Jim Sinegal, and lawyer Jeffrey Brotman. Costco focuses on selling products at low prices in bulk packaging and focuses mostly to large families and small businesses. They sell products like flat-screen TVs, gallon jugs of mayonnaise, and coffins. Costco operates 556 stores worldwide: 405 in the United States, 77 in Canada, 31 in Mexico, 21 in the United Kingdom, 9 in Japan, 7 in South Korea, 6 in Taiwan, and 1 in Australia. Costco employs 140,000 employees and accumulates $70 billion in annual sales. It became the first company to rise from zero to $3 billion in sales in less than six years, and reached
Costco Wholesale Corporation, which began operations in 1983 in Seattle, originated the membership wholesale club retail concept. By providing low prices on consumables like fresh foods, health and beauty care items, high-quality apparel, electronics, jewelry and other general merchandise, the company pioneered the retail concept that encourages members to visit regularly to achieve savings. In the meantime, the retailer has been successful in encouraging members to spend the savings on impulse big-ticket, discretionary purchases.
Today’s customers are more aware and empowered, and have more bargaining power due to the exponential increase in competition – direct, indirect or substitute. In retailing, they want hassle-free shopping, have less time at their disposal to locate the shop and the merchandise and are reluctant to keep waiting. The modern format retail stores are doing their best to anticipate the customer’s demands and are going all out to redesign their store interiors, offer more choices in varieties and assortments, and are giving as many services as feasible.
Costco Wholesale Corporation (Costco) is a retail membership warehouse chain which was founded by Jim Sinegal and Jeff Brotman in 1983. Headquartered out of Issaquah, Washington, Costco has grown in to one of the largest wholesale giants in the industry. The company’s business model was to generate high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of nationally branded and selected private-label products in a wide range of merchandise categories (Gamble & Thompson Jr., 2009, p. 217). This
Today’s organizations fail to realize the value of their customers when it comes to the success of their business. Without customer loyalty the success of your business will always be uncertain. Organizations must sensitively tailor the designs of a successful firm to the particular challenges of understanding, attracting, and keeping valuable customers. “Having satisfied customers just aren’t good enough”. Kenneth Blanchard and Sheldon Bowles, co-authors of Raving Fans, believe this concept is needed to have a successful business. I agree with this concept of customers being the focal point of any business. I would want more than just a satisfied customer; I want a “Raving Fan”.