Palmers Limited Case Study

salutes they overlook the quality. While BC tries to look slightly to their customer, Cost pay less attention to their look and more to provide the lowest prices for their members. From 1997 to 2001, W all told-Mart store numbers racket were increased by 53, Bis stores went up by 50, still Cost went up by 91 . Costs telephone line strategy Is actually artless, To generate high sales volumes and rapid Inventory turnover by offering members very low prices on a limited selection of nationally branded and select private-label products In a wide range of merchandise categories (Thompson, 2008) .They invite able to implement this strategy very successfully. They have also been very successful in making their customer believe that product is a bump quality than their competitors, interestingly their competitors in most cases dont abide the same kind of product. Costs marketing strategy is ingenuous yet effective, the idea of providing the lowest price and good quality product is a strategy to be reckon with. Plus there marketing idea of Treasure Hunt has allowed them to saved tons of money from broad advertisement.After a membership base Is established In an area, most new memberships came from word of mouth. This simple marketing and advertisement strategy has allowed Cost to keep Its marketing expenses low relative to those at representative retailers, discounter, and supermarkets. Cost is also known for its price strategy. They have become a master in providing clear quality products even including both(prenominal) brand products at the lowest price possible to their customers.Instead of marking up their cap to 20 or 50 percent like their competitors they decided to cap their mark up to only 14 percent, which itself a key element in Costs pricing strategy. This also indicates that Cost is exhausting to do what it takes to please their customer to increase their profits so they can make their shareholders happy at same time. Its this price strategy t hat has allows Cost to only only make profit over the year, but Increase their member to $110. Costs product selection strategy Is also very Impressive. Unlike their competitor who carry from where from 40000 to 1 50000 SKU items , Cost decided to selecting Ana prove only auto mess I en ratiocination Includes everyday Items sun as kitchen supplies, Electronics, health and beauty products, automotive supplies, gasoline, games, cleaning supplies, canned goods, Food. They categories their product in commercial and professional use. Plus, Costs treasure hunt merchandising strategy is also an attention grabber. Out of the 4000 items on the floor about 1000 were the treasure hunt product, meaning their prices with constantly changing.In most cases these were higher last products like furniture and TV. Costs growth strategy is also quite remarkable. On average they have been possibleness about 20 to 25 new stores each year. Most of them in American but some internationally as well inclu ding Canada, Korea, I-J, Japan, Canada, and Mexico. In recent year they experimented by opening independent article of furniture store to sell high end bigger furniture items which resulted in good success. Later earlier than opening more stores they instead added extra space about 45000 square feet to the Cost it self and called it Cost Home.Now the furniture category has become on of the tope 5 selling items on Costs website. They are very innovative when it comes to their warehouse and management strategy. Costs CEO, Jim Senegal, quoted, Cost is able to offer lower prices and deter values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing, and accounts receivable. We run a tight summons with extremely low overhead which enables us to pass on dramatic savings to our members. They stored the inventory on racks above the items being sold in the warehouse. T hat reduced their labor cost and saved them a portion out time on handling and stocking. They treat their manager as entrepreneur and allows them to decide what item should be sold in their store. They adored most of the inventory directly from the manufactures. It either came directly to the store or went to their distribution center called crosschecking depots. The point of these depots were to reduce the transportation cost by making sure all truck are full when they come the store.As an investor I wouldnt would want to invest in a corporation that has a good reputation, consistently growing, good sustainable growth, and good future plans. Lets talk about sustainable growth rate, which basically means that a firm can grow while keeping its positivity and financial policies unchanged. Sustainable growth model allows us to segregate reasons or changes that have led as a company to substantial growth so at the same time we can segregate the causes for those change. It is represen ted in four steps.