Social Media Case Study : Costco

The use of social media marketing has become a standard way in which organizations advertise their products or services. Social media marketing allows consumers to have immediate access to other consumers reviews or to post a review about a product or service. There is engagement between the company and the consumer (Evans, Dave 2010). Social Media emerged in the late 1980’s when websites such as Prodigy, Compuserve and America Online. Prodigy was first of it’s kind and was known as a ”consumer online service”. Half of the page is devoted to advertising. Facebook, Twitter, Myspace, Hi5, Bebo and Orkut are all social media platforms that are utilized as platforms today.

In this era of internet marketers, Social Media (blogs, social networks, content communities, wiki 's and podcasts), have largely changed the face of marketing and media. Social media relies on consumer generated content and hence doesn’t conform to the ideals of traditional media where content, both commercial and other, is ‘engineered’ to suit the need of a promoter or seller. (Fernando 2007). This hence is in direct contrast with the traditional promotional mix as consumer interaction and orientation is at an optimum. This medium, in the light of a business communication strategy, is highly conversational, collaborative and credible. This involves opinion makers, journalists, seasoned practitioners and the audience who interacts with one another on a regular basis. (Fernando 2007). This high level of interaction and involvement is devoid in the traditional media and the marketing field as well. Capon and Hulbert have observed that the modern consumer is different: demanding, individualistic, involved, independent, better informed and more critical (2000 cited Constantinides, E 2006). Social Media as a whole provides the

Costco Corporation was founded by a pair of entrepreneurs, James Sinegal and Jeffrey Brotman. Costco is a large wholesales retailer where low price is only a fraction of why they are so successful. Their profit margins, ethical standards, and happy employees all contribute to why Costco is a successful business with over 488 locations serving around 48 million cardholders in eight countries. Costco has an annual sale of over $50 billion due to the strategies they implemented to keep their workforce of 125,000 motivated. It is known across the world that Costco treat their employees well and in return the employees are highly motivated to work for Costco and make it a success. Costco is the top warehouse club and the fourth largest retailer in the United Sates.

Costco is a wholesale discount store that operates in locations throughout the world but mainly in the United States. Members are required to purchase a membership in order to shop at the store. The founders of the business, Jim Sinegal and Jeff Brotman, opened their first location in Seattle, Washington. At the end of 1984 there were nine Costco stores in five states. Throughout the years Costco has continued to grow and as of August 2014 there were 663 locations worldwide with 468 stores in 43 U.S. states and Puerto Rico (Costco, 2016).

It operates 527 membership warehouses, 80% of which are located in the United States.[2] Costco's two main competitors are Sam's Club and

Costco Wholesale is a retail warehouse club with 698 stores in eight countries (Costco Wholesale, n.d.). The modern day Costco began in 1993 when Price Club, founded by Sol Price in 1976, merged with Costco, founded by Jim Sinegal and Jeff Brotman in 1983. When the two companies initially merged they utilized the name PriceCostco, but later reverted back to the name Costco (Costco Wholesale, n.d.). At the time of the merger, Costco had 206 locations and has quickly grown, now servicing over 170 million club members worldwide (Costco Wholesale, n.d.). The following analysis identifies the organization’s strengths, weaknesses, opportunities and threats by examining Costco’s organizational environment, leadership strategies and human

In 1983, Costco Wholesale Corporation, the fourth-largest retailer in the United States, was founded by former Price Club executive, Jim Sinegal, and lawyer Jeffrey Brotman. Costco focuses on selling products at low prices in bulk packaging and focuses mostly to large families and small businesses. They sell products like flat-screen TVs, gallon jugs of mayonnaise, and coffins. Costco operates 556 stores worldwide: 405 in the United States, 77 in Canada, 31 in Mexico, 21 in the United Kingdom, 9 in Japan, 7 in South Korea, 6 in Taiwan, and 1 in Australia. Costco employs 140,000 employees and accumulates $70 billion in annual sales. It became the first company to rise from zero to $3 billion in sales in less than six years, and reached

Costco Wholesale Corporation, which began operations in 1983 in Seattle, originated the membership wholesale club retail concept. By providing low prices on consumables like fresh foods, health and beauty care items, high-quality apparel, electronics, jewelry and other general merchandise, the company pioneered the retail concept that encourages members to visit regularly to achieve savings. In the meantime, the retailer has been successful in encouraging members to spend the savings on impulse big-ticket, discretionary purchases.

Costco Wholesale Corporation (Costco) is a retail membership warehouse chain which was founded by Jim Sinegal and Jeff Brotman in 1983. Headquartered out of Issaquah, Washington, Costco has grown in to one of the largest wholesale giants in the industry. The company’s business model was to generate high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of nationally branded and selected private-label products in a wide range of merchandise categories (Gamble & Thompson Jr., 2009, p. 217). This

In 2008, Costco’s sales totaled almost $71 billion at 544 warehouses in 40 states, Puerto Rico, Canada, the United Kingdom, Taiwan, Japan, Korea, and Mexico. More than 50 of Costco’s warehouses generated sales exceeding $200 million annually and 2 stores had sales exceeding $300 million. Sales per store averaged $130 million annually, about 75 percent more than the $75 million per store average at Sam’s Club, Costco’s chief competitor in the membership warehouse retail segment.

This study can be briefly discussed through the lens of literature review, data collection methods and findings. Based on the literature review, social media marketing is a non-traditional method of marketing which requires special attention and strategy building to give firms better communication grounds with the consumers to achieve brand image and loyalty. To be exact, solid media strategies are required for firms to stay competitive. As an approach to understand the effect of social marketing on brand loyalty

Also, social media can serve as brand evaluation forums where consumers evaluate the quality of the product or service by referring to other consumer’s review (Dwyer, 2007). So the brands need to handle UGC or all kind of conversation with consumers on social media platforms with care. If they are failure then the brand image will be damaged and destroyed and it would be very hard for them to rebuild the confident and brand

One of the key takeaways from the sixth chapter “Who Own Your Brand?” is collective branding, the concept whereby the consumers as well as the marketers together shape the brand image. Which has been primarily facilitated through technology, which has given the customers the power to influence theory decisions and buying behaviors. Consumers have become much more conscious of their purchasing decisions and how they spend (jelly beans). Therefore, marketers have to acknowledge this change and make sure they adapt accordingly as well as work with the consumers. In addition, social media can have tremendous influence on consumers purchasing decisions. If there is one well-placed video, picture, advertisement, tweet or comment that goes viral or starts trending, millions of potential consumers can be influenced to purchase the product. This can be strengthened when a celebrity uses a certain product and posts it on a social media platform. Even though this does not give the consumers the control of the retailer’s brand’s decisions, it can have a tremendous influence on the outcomes for the brand. Therefore, this new level of consumer power to influence and connections made through social media have created three fundamental behaviors, “honesty, illumination and immediacy that a retailer needs to implement.

To gain more number of consumer shares, a particular brand company need to be actively present on Social media as the way social media has grown in past few years the best way for any brand to build the brand trust. The era of technology has changed the way of almost each and everything and so has affected the branding and community engagement. Marketers in the current scenario find it difficult building one on one relationship with the customers as it takes a lot of time and cost although being beneficial, due to

Costco Wholesale Corporation entered the wholesale club industry in the early 1980s. The idea behind a wholesale club was to maximize profits by minimizing operational costs and maximizing inventory turnover ratio. The company experienced tremendous growth from 1997 up to 2001 and has caught the attention of its competitors. Costco Wholesale is one of the largest retailer stores in the market. The company has differentiated and positioned itself well in the market through its mission statement. The company’s mission statement well understood throughout the firm.