The ability to identify and, more importantly, understand customers is arguably the most fundamental characteristic of successful marketers. In fact, our Definition of Marketing places the need to understand customers right at the center of what marketer must do. Marketers that have a firm grasp on knowing their customers find it is an ongoing exercise and one that is not always easy. It often requires spending considerable time and money researching their target market with the goal of gaining deep customer insight. From this knowledge, all other decisions flow such as what products to offer, how to reach the target market with the right promotion, what is the optimal price to charge, and many more.
But what happens when the research shows the main customer, who has been the focus of so much attention, is changing? For instance, when a target market begins to age This may be an issue that could soon face warehouse retailer Costco. As discussed in this story from Time, Costco’s customer base is typically an older, suburban residing group. They want the savings offered by bulk purchasing but also have the space in their homes to store extra items. And, of course, they have cars, SUV’s and mini-Vans to haul their purchases.
But as Costco’s customer get older, younger groups, including the so-called millennial generation (i.e., young adults), are not shaping up to fit Costco’s traditional target market. Younger groups are more interested in city living and getting around by walking, taking a taxi or public transportation, rather than by automobile. They also do not have the need or household space for purchasing large quantities of a single product.
Of course, Costco research shows this is happening and, as the story points out, they are making some effort to reach this group. However, it is unclear how strong an effort they are putting forth and whether they really view this as an issue worthy of a signficant strategy change.
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