Costco – Promotion Activities

Costco is widely known for its “no frills” operations and its promotional activities fit very nicely with this reputation.  In the retail industry, it is rare to find a company that doesn’t use flashy marketing promotions, sales, and signs throughout the store to increase customers and build business, but Costco’s strategy (which I think they want people to believe isn’t really even strategic)  is far different than standard retail promotions.

Costco’s social media presence is practically absent.  Costco does use a Facebook page, which at first look, is representative of its Northwest roots with pictures of its Issaquah employees dressed in red for the American Heart Association’s Go Red for Women Campaign and a picture of Russell Wilson after the Super Bowl.  The page is full of the organic customer-to-customer strategy with customers posting links for other customers to get deals at Costco warehouses.  Costco’s twitter account feels even less official.  Check out about.com’s description in the article Tweetailing Best & Worst Practices of Top Retail Chains – Social Media Marketing by Barbara Farfan.

“The third largest retail chain in the U.S. is just not that into Twitter. There’s a Twitter account that’s labeled as the “official” Costco (COST) account, but it is so pathetic that it’s hard to believe Costco is actually really associated with it.”

http://retailindustry.about.com/od/retailbestpractices/a/Tweetailing-Best-Worst-Walmart-Target-Costco-Top-Retail-Chains-Social-Media-Marketing.htm

Costco doesn’t advertise on television and rarely in the media at all.  Must of its branding is done by word of mouth and customer-to-customer relations as described on the Facebook page.

Costco is in the news.  Wall Street Journal, The New York Times, Business Week all have written articles on how Costco differs so drastically from  other retail companies for reasons such as the no advertising policy and lack of need to advertise, as well as the treatment of its employees, who are described as better paid, better trained and happier than employees at similar retailer chains.  These articles clearly paint the picture that Costco is much more concerned with taking care of its employees and keeping operating expenses low to stick to its policy of no mark-up over 15% than advertising to a new customer base.

Therefore, the work that is done is more for existing customers than the top of the funnel.  I love Costco’s organic and easy approach to promotions.  My only suggestion would be to increase involvement in its employees and customers’ communities.  I think this would fit with their promotional (non)-strategy and even increase the positive PR in the news.

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