Costco

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COSTCO NOTES COMPANY BACKGROUND - The idea was created of membership discount store by Sol Price in 1976 - JU Sinegal used to work there however started his own operation called Costco in 1983 o The same year walmart launched their warehouse membership called Sams Club - 1985- became a public company - Costco merged with Price Club in 1993 and reached 16 billion in annual sales - 1997 they changed the name to Costco COSTCO’S MISSION AND BUSINESS MODEL - “To continually provide our members with quality goods and services at the lowest possible prices” - The business model was to generate high sales volumes and rapid inventory turnover by offering members very low prices on a limited selection of nationally branded and select…show more content…
ecuted merchanding techniques - They opened 127 stores in 2005- 08 - Another 20-24 was planned - Most of the efforts were on the US in States were did they did not have a warehouse - And metropolitan areas that were large enough to support 2 stores - 2008- 102 stores outside states (76 canada) (20 UK) (8 Japan) (6 Koreia) (5 Tiawan) - Costco was a 50-50 partner to open 31 stores in Mexico WEBSITE SALES - they operate 2 websites - WAREHOUSE OPERATIONS - Costco is able to offer lower prices and better values by eliminating all the frills and costs associated with the conventional wholesalers and retailers - Warehouses range in size from 70000 to 205000 sq ft - Since the customers were attracted to them they were never located on prime real estate sites - The managers displayed a lot of authority o They functioned as entrepreneurs running their own operations COSTCO MEMBERSHIP BASE AND MEMBER DEMOGRAPHICS - Attracted the most wealthy customers in discount retailing - Average income- 75000- with 30% of incomes 100000 - Members were affluent urbanities, living in nice neighborhoods - They had two memberships o Gold star- were individuals who did not qualify for a business membership o Business- people with a business license o Business membership 50 o Gold star paid 50 which included a spouse card o Executive membership 100 • 2% savings- up to 500 • also merchant credit card processing, small business loans, auto and home

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