Positioning and Strategies


Companies should strategize and position effectively in the market to target the right customers and become productive and profitable. Costco Wholesale Corporation is a retailer in the form of a membership-only warehouse club. The company offers various products, including clothing, electronics, consumer goods, health and beauty, furniture, and grocery. The unlimited product mix is an essential strategy for the business to target a larger client base and become more profitable (Courtemanche & Carden, 2014). Furthermore, the approach enables the company to maintain low prices, taking advantage of economies of scale to remain competitive in the market.

Costco has a diverse clientele in the United States and other countries, such as Canada. Besides its vast operations in these two countries, the company is improving its global services to target customers outside the region. The marketing team packages the products in bulk to sell to businesses as well as large families. As a result, the company can effectively improve its cash flow by selling larger quantities to more customers than its competitors.

Businesses should differentiate their operations to position their brands in the global market effectively. Differentiation takes various forms, including selling unique products to target more customers or using a different pricing strategy from what competitors use. Costco has implemented the procedure in two ways: selling a broad range of products and maintaining a low price compared to its competitors (Gamble, Thompson, & Peteraf, 2013). The two aspects of marketing have allowed the company to position itself effectively to meet the demands of global customers.

Differentiation plays a critical role in market growth since a company can attract more customers. For instance, when business processes are differentiated, customers would identify with the brand, become loyal, and prefer the company’s products. Consequently, the business attracts and maintains a loyal client base. The wide range of products offered has enabled Costco to target more customers both locally and globally through economies of scale (Thompson, 2017). The strategy also provides the much-needed opportunity for Costco to expand its operations to new global markets.


Pricing Strategies

  • Costco has a competitive pricing strategy, offering goods at a lower price than competitors, which attracts more customers. The company focuses on selling in volumes to achieve economies of scale by attracting more customers using the low price strategy (Thompson, 2017). Besides the low cost of bulk goods, the company uses a unique pricing strategy for limited edition products.
  • Costco product offerings are always available, allowing the business to rely on competition and the amounts sold when deciding on the price of its products (Thompson, 2017). Besides, the company makes special pricing provisions for those in Costco membership to reward their loyalty and attract more partners towards the business.

Rationale: Costco focuses on the economies of scale and the need to remain competitive in the market. Using a low-price strategy attracts more customers to the business, provides more profits, and improves productivity. The company stays competitive by offering customers value for their money when purchasing its diverse products (Thompson, 2017). A low price strategy for quality products is always a value-addition tool for marketers.

Product Strategies

  • Costco as a leading retail brand in the United States should target its diverse products to the needs of the global client. The company has a wide range of products to meet the different needs of the local and international customers (Thompson, 2017). Costco continues to expand in the global market by adding its product range, depending on the needs of the new market.
  • Costco focuses on selling value to the customers to compete effectively with its leading rivals such as Walmart. In addition to its diverse products, the company provides other services, including Life Services, photo printing services, and business facilities, which have allowed it to expand its operations (Thompson, 2017). The broad focus on operations has improved its profitability.

Rationale: Costco has an effective product mix and an opportunity to continue expanding its operations in the global market. The vibrant product mix has allowed the company to remain profitable and competitive in the local and international markets (Thompson, 2017). For example, Costco can compete successfully with Wal-Mart, which has a smaller product mix targeting fewer customers.

Place (Distribution and Channel) Strategies

  • The place where a company sells its products plays a vital role in its performance in the market. The leading markets for Costco are in the United States, where it has over 500 warehouses out 700 in its global operations as well as 100 stores in Canada (Thompson, 2017). The company maintains the market to keep serving loyal customers, including its members in the two countries.
  • Costco has more opportunities in other markets outside the United States and Canada. Therefore, the marketing team should explore other prospects to expand its operations (Miller & Washington, 2017). Besides the physical warehouses in other countries across the world, the company should use its website to market its products to potential customers even in areas without physical presence.

Rationale: Costco is a global brand, indicating that it targets a local and global client base. Hence, besides concentrating on the United States and Canadian markets, the company should also explore the opportunities in other countries. A broader market for the company enables it to sell in larger volumes, hence maintain its low and unique pricing strategies (Courtemanche & Carden, 2014). Additionally, the approach is profitable for the company to compete successfully in the global market.

Process Strategies

  • Businesses should streamline their operations to add value to their customers, hence become productive and profitable. Costco, as a membership warehouse club, emphasizes value pricing to attract more members and customers (Courtemanche & Carden, 2014). In addition to the full range of products offered to the customers, the company offers both specialty departments and convenience stores, which provide competitive customer experience.
  • Besides the value pricing strategy, the company focuses on the quality of the brand name. Therefore, the company provides free concierge services to some categories of its customers, including those purchasing the premium-priced goods from its warehouses.

Rationale: Costco should benefit from streamlining its marketing processes for its customers, the most critical stakeholders. Value pricing and efforts to promote the brand name has created a strong reputation for the company in the United States and Canada as well as extending to the international market (Courtemanche & Carden, 2014). Furthermore, it becomes the foundation for the company’s intentions to continue its operations to the global market.

People (Staff) Strategies

  • Costco gives priority the stakeholders, including staff and clients. The company’s management creates a favorable working environment for employees. It has a competitive compensation plan for all its workers, improving their competence and loyalty to the company. The firm has operational development programs, which provide adequate benefits to members of staff.
  • Besides the employees, Costco relates well to customers, meeting all their needs in a friendly environment. The company rates among the best places for shoppers to purchase their goods (Courtemanche & Carden, 2014). The business provides value to all its customers without any form of discrimination.

Rationale: People are the most critical stakeholders in any business. Thus, by focusing on the needs and interests of employees and customers, Costco is gaining an advantage in the market. Employees are motivated to serve the customers, who in turn, are willing to buy from the company, creating a profitable mutual relationship (Courtemanche & Carden, 2014). Consequently, Costco’s performance in the local and international market continues to improve.

Promotion Strategies

  • Businesses should communicate with their customers by sending a message about their product offers. Having a substantial advertising budget is one of the sources of competitive advantages for Costco (Miller & Washington, 2017). The company capitalizes on ambush marketing and heavy discount promotion to attract more customers.
  • The company should focus on the power of the new media as an advertising tool to reach potential customers. For instance, the marketing team can focus on the viral nature of social media in promoting the company’s new products (Courtemanche & Carden, 2014). Online campaigns promote sales and discount programs to its real and potential customers.

Rationale: promotion remains one of the most critical elements of the marketing mix since a company should do more than merely produce and wait for customers. Use of the social media in addition to the traditional promotion channels would allow the company to reach its local and global clients (Gamble, Thompson, & Peteraf, 2013). The strategy is critical amid the company’s efforts to expand to the global market. Furthermore, it allows the marketing team to reach large geographical locations even without physical locations in the international markets.


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