COSTCO Consumer, Stakeholder & Strategic Target Audience

Current Consumer Characteristics:

Costco Customers value:

·       Quality

·       Savings

·       Service

The current consumer for Costco is aging quickly, and Costco is looking to the millennial's to fill the gap.  The shopping trends of millennial's are much different than their parents.

”The NGA recently presented survey results by digital marketing company Santy, which found that millennial's tend to:

·       Avoid shopping for groceries on a set day of each week (unlike their parents), instead spreading grocery visits through the week and weekend.

·       They prefer short shopping trips of typically an hour or less” (Investopedia, 2015).

·       “More concerned about organic and natural products than other cohorts [age-groups]”- Industry watcher and packaging expert Jill Ahern (Investopedia, 2015).

·       Millennial's prefer natural and organic products and are thrifty

Video:  Anderson Cooper takes us to Costco and shows us who shops here and what are they buying?

Current Consumer Demographics:

Costco customer demographics compared to Wal-Mart/Sam’s Club customers:

Quora.com Blogger Ammon Allred, Knowledge Quester, Cultural Consultant, etc. Describes the Costco customer demographic

“On the whole, Costco shoppers tend to be more:

·       affluent

·       urban

·       well-educated

·       liberal

Than Walmart shoppers, which isn't surprising given the marketing and product strategies of each company” (Gross, 2004).

Physiographic Consumer Demographics:

Social Class, Life style and Personality of the Costco Consumer

Social Class

Upper & Middle class dominate

Life Style

Aspirer, Succeeder, Explorer dominate

Personality

Goal Oriented, Driven, Educated

Stakeholder’s Characteristics

“Primary stakeholders may have a financial position in your company, whether they invested money to help you grow or they're employees counting on your paychecks to pay their rent. Decisions you make can affect their income” (Johnston, 2014). “Secondary stakeholders, on the other hand, are those whose incomes won't be affected by your decisions” (Johnston, 2014). “Nongovernmental organizations, activists, churches and neighbors are common secondary stakeholders” (Hummel, N.D).

·        129,000 full and part-time within the U.S (Costco Corporate Profile, 2015).

·        189,000 full and part-time worldwide (Costco Corporate Profile, 2015).

·        In 2014, Costco was ranked by Glassdoor as the 2^nd best employer in the word (Levine-Weinberg, 2014)

http://launch.newsinc.com/share.html?trackingGroup=90003&siteSection=seattlepi_nws_biz_sty_vmppap&videoId=26517755

·        President Obama praised Costco in his 2014 State of the Union address. One of the reasons is because they are “the undisputed wage leader among big-box retailers” (Levine-Weinberg, 2014) with an average hourly wage of almost $21. Costco also offers its employees other great benefits, such as health insurance, which 88% of their employees take advantage of.

Investors

·        Costco has been a publicly traded company since December 5, 1985 (Costco Investor FAQs, 2015).

·        Currently, there are 1,716,996 shares of common stock for Costco (Costco Stock Information, 2015)

·        As of 4/27/15 close, Costco’s stock price is $146.96 (Costco Stock Information, 2015)

·        Costco is “A long-term investor’s dream” (Levine-Weinberg, 2014) because even though they have one of the lowest profits of major US companies, they have “a very efficient business model that allows it to consistently generate a strong return on invested capital” (Levine-Weinberg, 2014). “Costco is also growing much faster than other big-box retailers” (Levine-Weinberg, 2014).

Secondary

Since Costco is such a large corporation, it affects not only the communities around its stores, but really everyone because of the potential impact they could have on the Earth. Costco “strives to do right by the rest of the world through its business practices” (Levine-Weinberg, 2014). Some of the things they do include using solar power and implementing sustainable fishing practices. “As of 2013, it had the second-largest solar power generation among U.S. companies, trailing only its much-larger rival Wal-Mart” (Levine-Weinberg, 2014).They also stopped selling a number of at-risk fish species (Levine-Weinberg, 2014).

Closer to home, Costco has secondary stakeholders in the residents of the communities surrounding each of its locations, which includes:

·        474 locations in 43 U.S. States & Puerto Rico

·        89 locations in nine Canadian provinces

·        26 locations in the United Kingdom

·        10 locations in Taiwan

·        11 locations in Korea

·        20 locations in Japan

·        7 locations in Australia

·        34 locations in 18 Mexican states

·        1 location in Spain (Costco Corporate Profile, 2015)

Strategic Target Audience:

            A. Proposed Primary Target Audience:

                    Costco’s primary targeted audience is small businesses (Costco Wholesale.) . Since Costco’s sells their products in balk packaging it makes it easier for small business to purchase, and resell the product. When Costco opens a new warehouse, their marketing team will contact small local businesses to offer them a membership with Costco (Khurana, A.). Costco will also use direct mailers to other business that meet their profile that they have constructed as their target market.

                    B. Proposed Secondary Target Audience:

           

            Costco's secondary targeted audience is large families, or individuals that are interested in buying products in balk packaging (Costco Wholesale.) . These individuals tend to be more affluent, urban, well-educated, and more of a liberal view (Khurana, A.). Their marketing team will market to individuals that meet their customer profile. Costco's marketing team also believes in the marketing strategy, word-of-mouth (Khurana, A.). They do that by making sure that their members had a positive experience, to attract potential new members. 

References

Costco Wholesale. (2015, August 31). COST 10K 2014. Retrieved April 22, 2015, from http://www.sec.gov/Archives/edgar/data/909832/000090983214000021/cost10k2014.

htm#sA5709D9D8C998CE83EF486675C5F199C

Khurana, A. (2010, December 7). Marketing Strategy of Costco. Retrieved April 29, 2015, from http://www.managementparadise.com/forums/marketing-management/209222-marketing-strategy-costco.html

Costco. (2015). Corporate Profile. Investor Relations. Retrieved from http://phx.corporate-

ir.net/phoenix.zhtml?c=83830&p=irol-homeprofile

Costco. (2015). Investor FAQs. Investor Relations. Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-faq

Costco. (2015). Stock Information. Investor Relations. Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-stockquote

Gross, D. (2004, August 10). Shop The Vote. Retrieved from www.slate.com: http://www.slate.com/articles/business/moneybox/2004/08/shop_the_vote.html

Hummel, C. (N.D.). Who Are Secondary Stakeholders. eHow. Demand Media, Inc. Retrieved from http://www.ehow.com/info_8744802_secondary-stakeholders.html

Investopedia. (2015, April 27). Why Costco Is Boosting Its Organic Offerings. Retrieved from www.investopedia.com: http://www.investopedia.com/stock-analysis/042715/why-costco-boosting-its-organic-offerings-cost-wmt.aspx?partner=YahooSA

Johnston, K. (2014, May 14). The Difference Between Primary and Secondary Stakeholders. eHow. Demand Media, Inc. Retrieved from http://www.ehow.com/facts_7267188_difference-between-primary-secondary-stakeholders.html

Levine-Weinberg, A. Is Costco One of the Best Companies in America? Seattle PI. The Motley Fool. Retrieved from http://www.seattlepi.com/business/fool/article/Is-Costco-One-of-the-Best-Companies-in-America-5756868.php