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Costco’s marketing strategy is still very conventional. The company does
not spend money on advertising campaigns or promotions of its products in
newspapers, radio, television, billboards, etc., through this standard the
company saves around 2% per year in its operational costs. The use of email, in
addition to the company’s website, and occasionally sending coupons to existing
members is the direct and only ways that the company uses to promote certain
products with its customers. When there is an opening of a new store, it is
possible that marketing managers make phone calls to potential clients about
the future opening. Word of mouth advertising has been the best showcase for
this organisation for decades. By providing their clients with quality products
and services, Costco has gained one of the most loyal customer bases in the industry.

This has been an essential and key element for using word-of-mouth advertising,
which is not only the cheapest but one of the most effective methods as
well.  

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To cope with the strong
digital competition, Costco has
developed an e-commerce website so their clients can make purchases from the
comfort of their home. On
their website they show products, online sales, display seasonal items, display
daily offers, promote exclusive items, etc. Another use of Costco’s website is
to show all the departments that exist in it. The website also allows online
purchases for users, whether or not they have a Costco membership, however
those who are not members have to pay an additional fee. The tracking of
purchases made is also possible, an aspect that reflects the efforts of the
organization to participate in electronic commerce by delivering electronic
invoices and offering different payment options. In addition, Costco has developed a partner program with Google
with the purpose of offering at home delivery on the day of purchase
constituting an important advantage over its physical and digital competitors. However
Nikki Baird, a contributor at
Forbes understands perfectly how Costco’s digital strategy completely misses
the point. In summary, she said, “Costco is perhaps doing the best it can with
what it’s got. But because its online choices are inherently designed not to
support each other, what Costco really has is a lot of disjointed online
content that does not connect to commerce – and certainly does little to help
promote either Costco’s brands or its connections with customers.”

This strategy to digitalise
the brand mainly targets younger generations.  This approach to attract younger clients has
forced Costco to foray into the world of social media platforms. Nonetheless, Costco’s social
media marketing strategy is very lacking, although the company has presence on
platforms like Facebook, Twitter and Instagram, the company puts little to no
effort in them. An advise Tanner Jones said is that, “what Costco should be
doing is creating all social media accounts possible and get discounts to their
customers. Most people already are aware of, and love, the Costco name and
brand and doing this will make it easier to reach their customers and give them
the products they want.” 

Costco should further
develop its technologies in marketing. The only ones they are trying to
implement are customer insight and social media marketing. They use customer
insight because they gather information on their clients when they first
register for a Costco membership. The data they collect helps them figure out
potential new clients. As previously stated, they have also implemented social
media marketing by opening accounts in different platforms but because they are
not updated regularly, they barely make a positive impact for the company.