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GREAT BUYER BENEFIT: Costco
Imagine a store that provided such good deals that customers would be willing to pay a fee just to get in the door. That is what Costco does.
Costco, a retail
discount chain based in Issaquah Washington, charges its customers a yearly membership fee of $30 to $35 for the privilege of shopping at any one of the chain's 250 locations. Costco does not
accept credit cards or rebate coupons, does not advertise, and packages the customer's goods in used cardboard boxes.
What customers get when they walk in the door is a warehouse full of bulk
hard and soft goods, foods and apparel at dramatic savings. Merchandise is top quality national and regional brands offered at prices consistently below traditional wholesale or retail
operations.
Costco's 18 million customers agree the company offers high net buyer benefit. Customers' biggest complaints are out-of-stock items and waiting for re-orders. Customer's
praise for Costco is "What a deal!"
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MEDIUM BUYER BENEFIT: Wal-Mart Stores Inc.
"Everyday Low Prices" have made Wal-Mart Stores the world's largest retail company.
Wal-Mart was founded in 1962 when Sam Walton, convinced that consumers would flock to a discount
store with a wide variety of merchandise, opened his first Wal-Mart store. By building a sophisticated distribution system, Sam Walton was able to control expenses and pass the savings on to
customers in the form of low prices.
Wal-Mart is an example of medium net buyer benefit. Every-day low prices are a form of price stability. Wal-Mart's customers are obviously
delighted with the "can't beat the price" deal they are getting, but they're not so excited about the benefit that they are willing to pay an annual fee to shop at Wal-Mart, like Costco's
customers.
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LITTLE BUYER BENEFIT: My Corner Store
I probably have the worst corner store in the world. The building is run down, poorly lit and not very clean. The parking lot is full of pot holes, and strewn with candy wrappers.
The stock is dusty, over-priced and probably out of date. The owner is grumpy, and peers over a haze of cigarette smoke as he tries to short change me on every purchase.
The only thing
good I can say about My Corner Store is that it is open, and it's 2 miles closer to my house than its nearest competition.
My Corner Store is an example of low net buyer benefit. The
only benefit the proprietor offers is convenience. As a result of his poor sales, he feels under pressure to discount. Thus his refusal to spend money on overhead or even make an effort
to improve his service. My reaction to the low net buyer benefit every time I leave the store is "What a rip-off!"
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