Professional Documents
Culture Documents
Group- 5
Mastahat Ahmed Arif Md. Salehin Md. Nur Rahman Abdullah Md. Salim Sarker Md. Jahidur Rahim Tabrez Nazir 11164011 11164012 11164020 11164021 11164035 11164022
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Case Introduction
On July 21, 1998, Pat Turpin, Vice president of Executive member services for Costco Companies Inc had to recommend how to market a new service program Costco developed a portfolio of services Services would be available with a annual membership fee of $ 100 Testing was also conducted
Case Introduction
Never really had to market before Through services they wanted to offer good value to customers Turpin felt, marketing a new service related program is a big challenge Selling insurance is very different from selling products
States in 1983
Costco followed the business format of price club Costco also expanded internationally and in other parts of US In July 1998, Costco operated in 24 states UK, Canada, Mexico and Asia with 278 outlets Warehouses- designed to operate efficiently Costco had two types of members
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million
In FY 1997- earned $312 million on sales of $21.5 billion Costco provides- good brands, large size at good value Through high volume purchase and close relationship low price advantage
Identification of issues
Major Issue
Significant Challenges
Method for marketing the service related program Selecting the target customer Pricing the service is difficult It is more than just a marketing question
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Analysis of issues
Costco is new in service offerings Selecting target customer is a BIG challenge Product offerings vs. Service offerings Previous record of stopping many offerings like- paper towel, orange juice Less variety in offerings may create an impression among the consumers that This service is not for me Price lowering trend may create suspect in consumer mind
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Recommendations
They should not try to do a lot of things at the same time They should increase variety in their offerings Iron clad rule for making profit should be relaxed They should be consistent in bringing change or quality improvement They should offer the service of established brands Employee capabilities should also be increased They can also offer services in international market More human touch should be there in service offerings
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Conclusion
Service offerings could be profitable for Costco because service has shorter payback period compared to building and stocking in the warehouse
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