Marketing: The Costco Strategy

1218 Words Feb 6th, 2018 5 Pages
Costco's typical pricing strategy is to undercut competition and make up for this with high volume sales. The company applies this strategy to the wedding gown business as well. Costco offers one of the lowest prices of any company on its wedding dresses. The company's business plan ensures that the details have been fleshed out, and that has led to the unique distribution strategy for wedding gowns.

The trunk shows are a unique distribution method for wedding gowns, and this is a unique strategy for Costco as well. There are a few reasons why this method would have been chosen. The first is that the wedding gown business is highly seasonal, and that would encourage Costco to keep gowns in store for a relatively short period of time. However, the more important element is that this strategy meshes very well with the pricing strategy. Costco's objective is to sell a large number of wedding gowns in a short period of time. The trunk show accomplishes just that, by placing a tight time frame on the purchase decision. Brides-to-be are compelled to visit the store when the trunk show is on, and only then. This allows Costco to maximize the daily throughput of wedding gowns, and minimize excess inventory. Any unsold inventory from one show simply is taken to the next one.

The trunk shows also…
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