Costco Wholesale Corporation Promotional Strategy

Wholesalers face tough competition in the organic food industry. To maintain a competitive edge as an organic food wholesaler, Costco Wholesale Corporation should effectively utilize the four marketing promotional mix strategies. Importantly, as products, organic foods are not consistent in meeting consumer demand. Therefore, it is necessary to maintain quality and adopt a managed transportation approach.

Secondly, since organic foods do not have standard pricing, companies face the challenge of setting up the appropriate price for the new product. In the current market, organic food prices are not based on facts. Since the consumer may not have a general knowledge of the fluctuating prices, they might be unwilling to pay for these organic foods. As far as promotion is concerned, there are a limited number of PR approaches on organic foods. Another problem with the organic food market is that it is characterized by limited channels of distribution which, could adversely affect organic food business.

Push or Pull Strategy?

Prior to deciding a promotional strategy, it is important to note that, unlike other food products, organic foods are less consistent. There are two ways through which producers can promote the sale of organic foods. The first approach that could be employed is the pull strategy. Pull strategy involves the stimulation of the customer’s interest in a given product. In addition, the pull strategy persuades the retailers to seek out consumer demands (Kerin, Steven, and William 45).

Therefore, wholesalers can utilize the push promotion strategy to meet consumer demands. The push strategy involves the promotion of a product to the wholesaler. While the two strategies have advantages, they also have disadvantages.

The most effective marketing approach for Costco Wholesale Corporation would be the push promotional strategy. It is important to weigh the costs and benefits associated with the two strategies to establish the effectiveness of the push strategy in selling the new product. In the push strategy, consumers buy goods directly from the wholesaler. In this case, organic foods could are through point-of-sale avenues. In the push strategy, products are visible on shelves.

As argued by Kerin, Steven, and William (47), in conjunction with newspaper marketing, the push strategy is used by the wholesaler to the retailers with the hopes of creating consumer demand. In line with this view, the push strategy utilizes a company’s trade promotion approaches in creating customer demand for a particular product. On the other hand, the pull strategy is characterized by high costs of advertisements. Costco Wholesale Corporation should embrace a cost-effective approach in marketing its products to attain a competitive edge in its area of business operations. Through a push strategy, advertising costs are significantly reduced or transferred to create consumer demands.

Promotional Mix

In the promotional mix, there are four marketing approaches at the advertiser’s disposal. While the elements of the promotional mix are essential to a marketing plan, understanding how to integrate these elements into the company’s marketing strategies is necessary.

Personal Selling

This promotional approach involves a one-on-one interaction between the buyer and seller (Kerin, Steven, and William 220). The importance of this approach in marketing organic foods is that it will generate a direct contact with the consumer. Costco should partially utilize personal selling because it is expensive.

Advertising

As a form of a non-personal marketing approach, advertising utilizes various media outlets in promoting products, services, and ideas for the company (Kerin, Steven, and William 224). Costco Wholesale Corporation will effectively incorporate advertising into the company’s marketing plan by communicating with prospective customers by way of television and magazine advertisements.

Direct Marketing

Another marketing approach to be used by the company is direct marketing. Through this method, advertisers could directly reach their target customers either by mail or direct email. This approach would be sufficient for the company since it will help in generating sales (Kerin, Steven, and William 250). The effectiveness of direct marketing in selling organic foods is that it will help Costco Wholesale to take part in one-way communication. The various approaches through which direct marketing interprets consumer demands include order confirmations and offering special promotions.

Sales Promotion

This marketing element is comprised of all marketing approaches. Being an effective marketing plan, Costco could utilize sales promotion in stimulating purchases of its organic foods. Since the primary objective of this strategy is to increase sales, Costco Wholesale could use sales promotion to let prospective customers aware of new products in the market (Kerin, Steven, and William 227). Various ways in which the corporation could integrate its marketing strategy include point-of-purchase displays and coupons.

Public Relations

This approach is used by businesses to stimulate their prospective market. In most cases, PR campaigns are effective in creating a positive image for the company (Kerin, Steven, and William 228). Costco Wholesale could integrate this approach in its marketing strategy to provide information on product development. Considering its health implications, Costco Wholesale could communicate benefits associated with organic foods to increase customer confidence.

Works Cited

Kerin, Roger A., Steven William Hartley, and William Rudelius. Marketing: The Core. New York, NY: McGraw-Hill/Irwin, 2007. 1-400. Print.