By Costco finding ways to insure they are cost efficient they are able to offer their customers reasonable prices. Out of the three rivals BJ’s seem to have a weaker strategy out of the rivals. One thing that hurt their strategy is they are not well known and focuses most of their business in the eastern part of the U.S. Another thing that could hurt BJ’s strategy is their smaller packaging.
Costco Case 1. Although customer’s repeatedly ask Costco to carry other items outside its price/ quality zone Costco should not give in and carry those items. Costco is dedicated to providing the best quality products at the absolute best value for customers and if they go outside that zone it would affect the way business is done and cost past down to customers. According to Costco’s website “their buyers are the best in the business at negotiating added values and extras not found anywhere else. Plus, our bare-bones operation keeps costs low, so the prices remain low and your savings enormous.” 2.
The reason why Costco decided to focus on small business owners is that they realized that these people are often some of the wealthiest people in their communities: they have successful businesses, they want to buy good stuff, but they don’t want to spend a lot of money. Of course, not every Costco shopper is an entrepreneur, but this customer base has remained the focus of the Costco marketing effort. Even the Costco members’ magazine includes many articles offering small business advice. 2) Deliver bigger value, not just lower prices: Costco doesn’t just offer low prices, it offers exceptional bargains on elegant, sophisticated products that people really want to buy. Costco is not just a mass market retailer; instead they’re a curator of high-value offerings, priced at a discount.
We have discovered a few weakness. Compared to our competitiors are clothing material is not that high quality. We also cannot keep up with the current fashion that celebrities are wearing due to the prices. This would drive our customers away because we want to keep our prices as low as possible. Our last weakness is that we are not a big company.
By shopping at Goodwill, they can achieve this at a cheaper price. The bargain hunters are looking for a good deal regardless of their income. Being able to find good quality, inexpensive items is important to bargain shoppers. They also want to feel like they got a great item at an awesome low price. Finally, the resellers are looking for good quality, low priced merchandise that they can sell again for a profit.
Aside from this, customers who do not want to pay for a membership fee and would just want to buy the same goods can buy them from supermarkets, but with a higher value. 3. Competitive force of supplier bargaining power A high competitive force of supplier bargaining power can be observed in the North American wholesale club industry. The said wholesale clubs partner with private-labeled brands in order to offer great deals to their customers. Wholesale clubs are able to get the products at a cheaper price; however, the suppliers make sure that competition between brands/products offered in the wholesale club is not high.
Although many might argue that Wal-Mart is misleading its customers by using the opening price point, I believe that overall Wal-Mart prices are lower than their competitor’s prices. At my work, I conducted a little survey by asking my colleagues if they think Wal-Mart is good for America. My colleague’s responses were based on consumer’s point of view and stated that Wal-Mart is a good store to have, pointing out the convenience and low prices. However, our society is not only comprised of consumers and shareholders. There are also workers and suppliers, who don’t think that Wal-Mart is good for America.
Costco is providing items in bulk and at low prices; consumers gravitate toward discounting hoping to get the most out of their money. Sam’s is decreasing product costs by buying from low cost labor countries like China and Mexico. BJ’s is focusing on retail shoppers offering more grocery items and smaller quantities of packaged goods. Does one rival have a better strategy than the others? I think Costco has the best strategy due to the cost efficient distribution through the use of the cross dock distribution.
They lower their prices and make their products alternative to competitors that are more expensive. Both companies defraud their consumers by pretending to deliver high culture to the masses (Cave & Klein, 2000). Consumers normally do not recognize the false advertisement because IKEA and Old Navy put their items in popular shows and commercial, so that customers will buy
One of the biggest areas that have seen a great change in consumer spending is grocery stores. More and more people are switching from name brand products to off brand and store brand products. People are also opting for discount food stores, such as ALDI, for cheap variations of the food they love. Lastly, one of the biggest new trends is using coupons. With the use of coupons people can reduce their final bill, and save money.