Costco is the largest membership warehouse club chain in the United States. It is also the third largest retailer in the United States and the ninth largest in the world. It operates on a very successful but unorthodox business model. Costco is a very interesting case when it comes to Public Relations Strategy. To begin with it doesn’t even have a Public Relations Department. The strategy simply works on the basis of word of mouth. Costco has received celebrity endorsements and had articles written on it without spending a penny.
Costco is geared towards much targeted audience i.e. small business owners as well as families with descent income. To buy at Costco, you have to be a member and Costco believes by making their customers pay upfront they can make them comeback for most of their grocery needs. Costco is a heavily discussed company in media due to its treatment of customers and employees. It is considered Anti-Walmart by media and some in Wall Street criticize it for its higher wages and health benefits to its employees compared to its competitors like Walmart (Sam’s club).
Costco has very strong community relations and its Anti-Walmart policies helps it to have the Idol image which everyone loves and wants to write about. This is an interesting case where a company has created a situation by achieving efficiencies in their business model and passing the rewards back to its customers and employees. The result is a perception of this good image which everyone wants to write about. It is a public secret that Costco doesn’t spend on advertising and its CEO gets $650 k compared to $18.1 million earned by the Walmart CEO.
Costco’s PR and community management activities are geared towards existing customers. They rely on these customers to spread the word and create awareness on their brand based on their shopping experience. Costco has already built a respectable image in the nation and communities. We feel that this image can be leveraged further to improve their PR and Community activities. Since they are targeting small business owners in the local communities, they should participate more in raising awareness on issues (social, economic, political) faced by the communities and helping the communities develop programs to combat these issues.