Pricing/Distribution/Positioning of Bridal Gowns at Costco
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I need help with some homework questions. Read this article:
Berk, Christina Cheddar (2011 March 7). Here Comes the Bride, All Dressed by Costco. CNBC Available on 2011 March 8 at
http://www.cnbc.com/id/41950692
(1) How do pricing and distribution complement each other when gowns are available at Costco? What are implications for positioning and targeting, as we discussed in Module 1?
(2) Saks, Bergdorf, Neiman-Marcus and specialty bridal shops will be taking note! Should these stores offer discounts and maybe reduce prices? Your answer should refer to at least one or two of the articles in the background section.
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Solution Summary
This solution discusses the marketing of bridal gowns at Costco, and how pricing and distribution complement each other. It also discusses positioning and targeting, as well as competition. Examples and helpful links are included.
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Pricing and distribution complement each other for wedding gowns at Costco because the warehouse operation is able to offer lower priced, designer gowns to their large customer base. With prices ranging from $699 to $1399, the prices of the dresses are not considerably cheaper than the average price of $1099 brides pay for their gowns, according to the Knot. The value, however, is a bride's ability to purchase a designer dress, typically ranging from $2000 to $7000, at heavily discounted prices. In addition, it is a further win for both a bride and Costco in that additional wedding items can be purchased from the store from engagement rings to honeymoon packages to flowers and appetizers. The volume of traffic that the warehouse chain offers is substantial. In addition, with 560 stores, the chain's buying power is enormous as well. This is also a great way for Costco to develop the bridal customer to gain more of their spending dollar: not just on wedding associated items, but also as the couple then progresses on in life as newlyweds to parents.
Costco is utilizing market segmentation to take advantage of this market niche. The chain is dividing the market, and has identified brides as a group with distinct needs and characteristics who can benefit from a particular product mix. Undoubtedly Costco looked at the size, purchasing power and profile of the bridal segment and figured out how to become more accessible to it. The wedding gown is often the starting point for the ...
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