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Case
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Reference no. 9-599-041
Subject category: Marketing
Published by: Harvard Business Publishing
Originally published in: 1998
Version: 12 July 1999
Length: 21 pages
Data source: Field research

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.
Location:
Size:
USD22 billion revenues, 55,000 employees
Other setting(s):
1998

About

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.

Settings

Location:
Size:
USD22 billion revenues, 55,000 employees
Other setting(s):
1998

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