Publications
Publications
- September 1998 (Revised July 1999)
- HBS Case Collection
Costco Companies, Inc.
By: David E. Bell and Ann Leamon
Abstract
Costco Companies, one of the major players in the wholesale club industry, has developed a new class of membership that offers discounted services--auto, health, and home insurance, business credit card processing, real estate services--in exchange for a higher annual fee ($100 vs. $40). The case poses two questions: 1) how should the new membership be marketed, to whom, and how much should be spent on the effort? and 2) what are the potential risks and benefits for Costco, which generated $22 billion in 1997 selling products in bulk, in offering services? Which question is emphasized depends on whether the case is taught in a marketing or a retailing course.
Keywords
Cost vs Benefits; Cost Management; Brands and Branding; Marketing Strategy; Supply and Industry; Service Delivery; Service Operations; Risk and Uncertainty; Retail Industry
Citation
Bell, David E., and Ann Leamon. "Costco Companies, Inc." Harvard Business School Case 599-041, September 1998. (Revised July 1999.)