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Marketing Strategies: Costco Add in library

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Discuss costco leadership strategy and costco marketing mix strategy?




Costco follows all the HR policies and procedures and is focused towards the overall development of the employees and hence they have a group of effectively engaged and efficiently committed workforce. The workers are hardworking and as a result more productive and their rate of turn-over is also low. The organizational structure of Costco follows four major policies and they are as follows – maintaining the rules of business ethics, obeying the laws and legislations, taking care of the workforce, and respecting its employees. Maintaining a long-term and healthy relationship with the employees has been the key factor for the sustainability and success of the organization (Stack, 2013).

Costco Leadership Strategy

Leadership strategies need a continuous augmentation in order keep pace with the ever-changing environment both within the organization as well as outside the organization. Mostly The Company follows the democratic or rather more specifically participative leadership style and affiliative leadership style which gives importance to the employees, involves them in the decision –making process of the company, which has been working well for the company. In order to continue their winning streak, the company needs to follow an authoritative leadership style as well, which is very useful when the organization is undergoing a change, and the employees need a new vision and guidance, it envisages a new vision among the employees of the company (Vella, 2014). The authoritative leaders are the best when there is a need to motivate and inspire the workforce. Although coercive leadership style must be avoided in order to avoid spreading dissatisfaction among the employees. Transformational leadership style is the best suited for the organizations to maintain a healthy leader with employees but also to ensure continuous success and sustainability for the organization. It is future oriented, ensures proper and effective communication, and is also inspirational for the employees. All the leadership styles have their own positive and negative aspects, and a company must try and implement all the leadership styles according to the situations they are in and get benefitted by them (de Vries, 2012).

Costco Marketing Mix Strategy                                   

The core competencies of the company are helping them to achieve success in their business. The company believes in the continuous augmentation of the sales as well as the products mix and has made many improvements to do so. The company of late has been generating profits and hence reporting good results (Hutt & Speh, 2013). The current strategy of the company includes offering low prices of a selected range of branded products to its member countries, especially in the merchandize category. A brief SWOT analysis of COSTCO is as follows –

Strength - The Company’s strength includes good quality of goods, effective and competitive prices, loyal group of customers, well-established brand, and a wide range of products.

Weakness - One of the major weakness of the Company is that is mainly dependent on the geography, its major percentage of sales comes from one country only. Moreover, the company mostly concentrates on the older generation as the products available are only for them, in order to sustain their loyal customers and not the younger generation (Salonen, 2011).   


Opportunity – The Company must now focus to target the younger generations now, as the age group between18-35 will drive the maximum amount of profits for the company. The company has now started to make efforts for the same. The company must also focus on the overseas expansion of the business that will make it a global company and will also help in increasing the market shares as well as the sales (Kaan Zülfikar ; ÇAM, 2013).         

Threat – Competition is the biggest threat for all the companies in today’s business world. The internet retailers are also a threat to the company.

From the above SWOT analysis it can be concluded that, the company can change the promotional strategies that is being currently used in order to expand further.  Since COTSCO is a membership only club warehouse, the organization should promote the various facilities that are provided to those who hold the club membership.  Facilities, in forms of rewards or cash prizes, could also be given to those members of the club who refer others to join COTSCO. Since the organization already has an official website using which the members can order products, they should utilize this site to the fullest in order to promote their organization. A art of this website could be dedicated to promote the various offers that are being made available to the customers: currently such offers are only being published in the a small part of the home page.

As the organization already allows users to register to the club by updating their email-ids to the website, the very same process can also be used   for the purpose of promotion, The organization could send the details of the new arrivals and the various new deals that the club provides to their members through these electronic mails.

The very same website can be used to communicate with the users: users should be allowed to review  the products or services provided by the organizations, and any issue raised by them should be solved by the organization. The details of these issues and the solutions should be provided on the website, such that the  potential customers feel that their opinions matter to the organization: thus creating a brand value of the organization. Last but not the least, the organization could also provide sponsorship to certain events in order to fulfill the purpose of branding.


The company COSTCO is earning huge profits, and the lowering of the gas prices have added to its advantage, but nothing can be taken for granted. To sustain its present status, the company must now augment its leadership styles and also use the above mentioned marketing mix to expand its business globally and also to attract new group of younger customers. This will not only help the company to retain its loyal customers as well its loyal employees and help in sustaining in the market for a longer period of time but will also help to generate huge amounts of profits.



1. de Vries, R. (2012). Personality predictors of leadership styles and the self–other agreement problem. The Leadership Quarterly, 23(5), 809-821. doi:10.1016/j.leaqua.2012.03.002

2. Hutt, M., & Speh, T. (2013). Business marketing management. Australia: South-Western, Cengage Learning.

3. Kaan Zülfikar ; ÇAM, D. (2013). Investigating certain statistical analyses used in multiple prediction studies by SWOT analysis. Ankara Universitesi Egitim Bilimleri Fakultesi Dergisi, 46(2), 277-295. doi:10.1501/egifak_0000001306

4. Salonen, A. (2011). Service transition strategies of industrial manufacturers. Industrial Marketing Management, 40(5), 683-690. doi:10.1016/j.indmarman.2011.05.005

5. Stack, L. (2013). Leadership strategies for the four stages of change. Highlands Ranch, Colo.: Productivity Pro, Inc.

6. Vella, D. (2014). 15 Characteristics and Leadership Styles of Effective Business Leaders. Retrieved from


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