A group of people that are identified by a business as a potential buyer group for any product or service is known as the “Target Market”. The target market is established as a group of potential customers because of their shared characteristics like occupation, age, income, and living style. Costco is an MNC based in America and operates a chain of membership warehouses internationally. Costco offers quality branded products at substantially low prices as compared to other whole sellers. Costco’s target market is small to medium-sized businesses that buy for reselling purposes and for everyday business usage, but individuals and families can also shop from Costco. Let’s learn about ‘Costco Target Market Demographics’.
Costco Target Market Demographics
Costco is an international membership warehouse that has the vision to offer the best place for efficient buying and operating practices for members that give incomparable savings with good quality. Costco’s target market is based on a business model that supports selling branded products at reasonably low prices. This allows customers to purchase items in bulk so that small to medium-sized businesses are the potential customers for Costco. As of 2022, Costco’s target market is educated and middle to upper-class individuals such as those who are small business owners or working somewhere in management.
What is Costco?
Costco Wholesale Corporation is an American multinational company (MNC) that drives only membership chains for retail stores or warehouse clubs and big-box stores. The company was founded in Seattle in 1983. As of 2022, Costco has 834 total warehouses worldwide, of which 575 are in the United States and the rest of them are situated in Canada, Mexico, Japan, United Kingdom, Korea, Taiwan, Australia, Spain, France, China, and Iceland. Costco was titled number one by the American Customer Satisfaction Index (ACSI) in the retail store industry, especially in 2014.
The business operations of Costco are divided into three main segments including US operations, Canadian operations, and other international operations. Major revenue of Costco is generated from retail sales and a lesser part from membership fees. Costco executes direct sourcing and inventory management techniques efficiently so that customers get access to the warehouse and make purchases through memberships.
Costco’s target market
Identification of the target market is the first step in the decision-making process for any company or business when deciding about the design, packages, and advertisement of their products or services. Management of a company tries to place their maximum marketing efforts and resources on the target market while executing marketing strategies. Specifically, the target market is a subset of the total market. The business model of any company can be divided into more than one target market such as the primary market (core focus) and secondary market (smaller market but has a growth potential).
Costco’s target market is not generally ethnicity or gender specific. Costco targets people with age 30 or above who have families, and from middle to upper-class educated professionals. Costco offers branded merchandise at comparatively lower prices that attract customers to buy in bulk which in turn lifts profitability along with high customer retention rates as it ensures economic sustainability. Costco offers the most exclusive and comparatively largest product categories for their customers under one roof. These categories include electronic appliances, groceries, automotive supplies, jewelry, sports goods, hardware, stationery, apparel, housewares, furniture, office supplies and equipment, and much more. Costco also provides self-service gasoline stations at different locations such as the USA, UK, Canada, Japan, Australia, Spain, Taiwan, Mexico, and Iceland. Following are the criteria by which Costco categorizes its customers:
- Age: People aged 30 or above who have their families fall into Costco’s target market as Costco offers branded products at low prices and highly rewarding member services.
- Gender & Marital status: It has been shown from statics that when it comes to gender Costco is equally visited by males and females. But mostly they are married, well settled, and have families.
- Salary: Costco targets middle or upper-class consumers internationally with an average income of $93,000. Educated professionals or business persons who want to spend their earnings on good quality products prefer to buy from Costco.
When it comes to the best-fit customer, Costco emphasizes bulk buyers either male or female and specifically small to medium-sized business owners or educated professionals. This positioning focuses on targeting people in middle to higher pay range and who wish to get the best quality branded products at low prices.
Conclusion
Now we’ve learnt about ‘Costco Target Market Demographics’, Costco subdivides its target market into age, gender, marital status, and income or salary. Middle to upper-class educated professionals who are quality and brand conscious and willing to buy in bulk are the main target market of Costco. As per marketing research analysis, bulk retailing is Costco’s key competitive advantage that supports Costco to gain a competitive edge in the wholesaler market. Costco directly procures products in bulk quantities from manufacturers and in return gives the lowest possible prices to its customers.
Frequently asked questions (FAQs)
- What is Costco?
Costco is an international membership warehouse or an American multinational company (MNC) that drives only membership chains for retail stores or warehouses. It was first founded in 1983 in Seattle, Washington, U.S.
- What are the features of Costco’s products?
Low warehouse prices and branded products.
- What is Costco’s target market?
Educated and professional Individuals with age 30 and above with medium or upper range income who have families and want to buy branded and good quality products at comparatively lower prices in bulk come under Costco’s target market.
