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Kirkland Signature Private Label – Powering Costco

Kirkland Signature Private Label – Powering Costco
Case Code: MKTG422
Case Length: 12 Pages
Period: 1995-2020
Pub Date: 2020
Teaching Note: Available
Price: Rs.300
Organization : Costco Wholesale Corporation
Industry :Wholesale
Countries : United States
Themes: Brand Loyalty/ Brand Strategy/ Brand Differentiation/Consumer Marketing
Kirkland Signature Private Label – Powering Costco
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case ‘Kirkland Signature Private Label – Powering Costco’ describes how ‘Kirkland Signature,’ the private label brand of Costco Wholesale Corporation (Costco), a US-based membership warehouse club, became the leading private label accounting for nearly 30% of all the private-label grocery business in the US, and how it enabled Costco, in the process, to emerge as the leading retailer in the US. Kirkland Signature, introduced in 1995, contributed to over a quarter of Costco’s net sales of US$152.7 billion in 2019 and nearly 26.2% of the company’s overall net sales in 2018.

The case touches upon the history of private label products in the US and their revival toward the end of the 20th century. Costco was one of the first contemporary US retailers to focus on building its private label range due to the interest shown by Jim Sinegal (Jim), former CEO of the company.

The case then details the private label strategy of Costco. It delves into the various factors such as quality, price, innovative packaging, and products that helped Kirkland Signature become the cornerstone of Costco’s success. The case ends with a note on the future plans of Costco for the ‘Kirkland Signature’ product range as well as the need for it to further innovate and differentiate itself owing to the rising competition in the private label space from other retailers like Walmart and Target.

Issues

The case is structured to achieve the following teaching objectives:

  • Learn about the rising popularity of private label brands.
  • Understand the reasons behind the success of private label brands like Kirkland Signature.
  • Understand the benefits of private label brands for retailers.
  • Become aware of how private labels can grow into a national brand without a deep marketing budget.
  • Understand how private label brands can help retailers withstand and grow despite the onslaught from online retailers.

Contents

Keywords

PrivateLabelStrategy,Retailing, Packaging Strategy, CustomerLoyalty, PurchasingPower,CustomerValue, Wholesaling, Brand Differentiation, Loyalty Program, Product Development

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