Comparing Sam's Club And Costco: Building A Number Of Customers

In order for Costco to stay competitive in the market and ahead of its competitors, it is essential to venture into different products and services. Costco’s main products vary, which include: groceries and frozen products, fresh meats and produce, bakery goods, beverages and liquors, health and beauty products, seasonal goods, office products, appliances and electronics. To increase Costco’s product differentiation over its competitors and increase sales, Costco began to introduce other products; such as pharmacy, gasoline, auto insurance, and a food court. In addition, extends more services to executive card members that include check printing, payroll services, identity protection, free roadside assistance with Costco’s auto insurance, and traveling benefits.

Costco and Sam’s Club website features are very similar when it to comes the way their search engine and display ads function. The only thing Costco has different from Sam’s Club is their new navigation is vertical not horizontal the website is displaying more of the category right from the home page for faster browsing. The site’s redesigned navigation ensures you never miss that one-of-a-kind Costco value. On their website you can easily find many features of a featured product on Costco home page by hovering over the image, also the website has new features where you can find a Costco warehouse and look up your Costco Cash Card balance directly from the home

Costco is a recognized and successful retail chain including several locations, glowing feedback, and a wonderful overall reputation. Known by several audiences to be considered a “big-box” store, Costco offers various products in its stores at low, discounted prices, accompanying a membership card. Before and after researching this company, the author of this paper has heard exceptional feedback regarding the company for its initiative to keep prices low, employee morale high, and customer satisfaction to be one of its top priorities. Within this body of work, the author will dissect and discuss some of Costco’s stakeholder perspectives and how some of the perceived initiatives may help aid the company within its

I have been working at Sam's Club for almost a year, and the company have been using rules that are based on Hackman's five core dimensions. First Skill variety, before you get hired you have to filled out an applications on which you have to selected your skills and describe them so they can have an idea of your abilities and knowledge. Sam’s club likes when an employee have many skills it allowed them to put that employee in the position that best fit them and that will be beneficial to the company as well. Also during the interview you will be asked questions related to your skills that you have selected on your application. For task identity, the company always try to match employees with the right tasks, they try to see what the person

There are many strengths of Costco’s business. One of the main strengths is customer loyalty. Last year in the U.S. and Canada, the customer membership renewal rate was ninety-one percent. The global customer membership renewal rate was eighty-eight percent. These high renewal rates

If internal customers (employees) are not satisfied with the company, they have no motivation to make external customers happy. Costco values this fact and makes sure their employees are well-compensated. The best case study of customer-friendly and employee- friendly practices is Costco. Costco customers find it easier to make buying decisions due to fewer choices and the fact that Costco's items are competitively priced. A study was done in 2000 by two professors from Columbia University and Stanford University found that people are more likely to commit to purchases when fewer choices were available instead of more. Costco proves that satisfying both external customers and internal customers promote a successful

Economies of scales are defined as “the reduction in long-run average and marginal costs arising from an increase in size of an operating unit” (Business Dictionary, 2016). Some of the causes of this could be technology that decreases the cost of production or even better management that makes production output increase. For example, Walmart which has a larger volume of business compared to Publix, a smaller supermarket is more profitable. One of the main reasons is the reduction in marginal cost due to the relationship with a supplier. Because Costco makes larger orders from suppliers to accommodate their wholesale stores they are offered better deals. The larger volume of shipment is also granted better discounts as well. Let’s say at Publix and apples costs $1.50 each but a pack of 10 at Costco is $10. It costs Publix $0.75 to buy, ship, and stock every apple. The pack of 10 at Costco gives them a $2.50 profit. The because Costco is buying so much to accommodate its wholesale customers because of economies of scale they can be offered even bigger markdowns. Costco could set the price of their apples even cheaper, which entices customers to buy even more. When buying wholesale there is a cheaper price because of the additional amount of

As can be seen, Costco garners loyalty from the

One of the business problems that has been identified by Comcast is providing a great customer experience. In the past Comcast struggled with customer experience due to the lack of customer satisfaction. Over the years the customer experience did improve but there were some road blocks still preventing Comcast from moving forward. In order to provide a great customer experience Comcast had to modify their strategic plan to improve customer satisfaction. In order to provide a great customer experience Comcast had to find the root cause of why customer satisfaction was still not at its targeted goal. After making many observations at their call-center locations it was discovered that job satisfaction was impacting customer satisfaction.

Kirkland signature products is one of the most significant brand at Costco since 20 years. And by having their private label product they achieved their goal of offering Kirkland members a unique value in their everyday purchasing. Today, Kirkland signature label is almost in every item in local stores. However, the most used product from Kirkland at Costco is toilet paper. Toilet paper has been Costco Wholesale Corporation's best-selling product for many years now, most recently in 2015, which is the contributing factor to why Costco cares more about toilet paper than most other retailers. Typical of the company's strengths, it's a basic, no-frills commodity that people always need toilet paper. According to the Motley Fool website, “the warehouse chain sells approximately $400 million worth of its own Kirkland-branded toilet paper each year, or nearly 0.4% of total revenue” (The Motley Fool, 2016). This paper will show the supply chain of Kirkland signature toilet paper at Costco.

What is Costco’s business model? Is the company’s business model appealing? Why or why not?

This is due to the fact that customers are forced to buy in bulk. A strategy taken by Costco wholesales to increase store turnover and profitability. Additionally, to increase its market influence, Costco has added services such as automobile, gas, optometry, pharmacy, and printing at very low prices in the past decade. “What’s better than to rotate my car’s tires, fill my prescription, gas my car, all the while I am finishing my shopping”, a dad might say while shopping at Costco. Finally, unlike any other mega-retailer, Costco has included its own employees as primary target market. By respecting the employees and paying them high wages, Costco has created a positive feedback loop for itself. Highly paid employees will have high loyalty toward the company, and they will shop at Costco for their needs. At the same time, due to their high loyalty, staff will provide high quality customer service for common customers. This generates positive word-of-mouth advertisement leading to an increase in membership sig-ups translating into higher profits for the company (Ingram, 2013).

Bigger and better are what the customers of Sam’s Club are asking for. Sam’s Clubs goal is to provide customers with savings on bulk items. Customers have been more willing to buy premium food and brands verses the generic brands. The demand for electronics has reached an all-time high at Sam’s Club and customers are asking for more exciting brands. Sam’s Club looks at these new demands as an opportunity to attract more customers. Wealthier customers are the people Sam’s hopes to attract with it its new growth plan. The new growth plan has been put into action with the hopes of continued customer growth and the ability to keep up with competitors.

The Grocery Store Industry performance is based on customer experience. Customer experience includes waiting time, helpfulness of staff, amount of choices, out of stock items, and amount of space in isles. Based on the metrics from Consumer Reports which ranked grocery stores on overall customer experience, Costco Wholesale compared with competitors in the industry is towards the top of performance ("Consumer reports ' best," 2014). Out of 55 large grocery chains looked at, Costco was ranked number 4. Costco gives their consumers a small amount of choices in products compared with most grocery stores. One example of this is their 360 count Advil. If they sold different sizes of the same product, almost no one would buy the 360-count bottle. By only selling the 360-count bottle in stores, it is predicted that only one in 10 customers will not but the product (Weitzner, The Costco Craze: Inside the Warehouse Giant). Costco does this so that customers have an easier time selecting a product to purchase. Costco was also rated high on the metric was due to the large warehouse isles. The one thing that made them ranked lower than the top three grocery stores was waiting times for check out. The biggest complaint by customers at Costco is the line for checking out. Customers said that there is never enough checkout lines open for them to be able to purchase their items (Weitzner, The Costco Craze: Inside the Warehouse Giant).

According to Perreault, Cannon, and McCarthy (2014), “Marketing is the performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client” (p.7). Sam’s Club is a division of Wal-Mart Stores Inc., a membership warehouse club solution for small business and everyday living. Since 1983, they’ve worked to provide their members quality products at incredible values. Sam’s Club, main focus is to serve their members. Whether it’s offering them quality products at an incredible value or remodeling their clubs to improve their shopping experience, they keep their members at the heart of everything they