You are to assume the role of the chief strategist at Clubco, a chain of membership-only warehouse club retail stores. The CEO wants you to differentiate the business membership from the regular membership to increase new business memberships.
Clubco opened its first location in 1983 and was only for businesses. Businesses of all sizes could purchase needed inventory in bulk for resale and also purchase equipment such as commercial appliances. As more locations opened across the nation, Clubco began offering memberships for the general public and immediately saw significant increases in brand awareness and sales.
Currently there are 600 Clubco warehouse stores in the United States and 100 in Canada. Each store offers a wide variety of merchandise including clothing, jewelry, media, tires, pharmacy services, optical services and much more. Rather than only focusing on business needs, Clubco now focuses on the general consumer.
A business membership and a general membership are priced at $60 annually with the option of adding affiliate card holders. The only perk for business membership is that products can be purchased for resale.
In an attempt to gain more business memberships, Clubco opened 12 Clubco Business Centers that eliminated the general consumer items and focused solely on carrying larger quantities of inventory that businesses purchase, providing volume orders by pallet or truckload. More than 70% of the items at Clubco Business Centers cannot be purchased at a typical Clubco store. Any Clubco member, business or general, can shop at the Clubco Business Centers. This endeavor did not lead to an increase in business memberships.
The CEO is unhappy with the significant decrease in business memberships. The company was founded on business memberships and the business relationships have always been an important part of the Clubco’s business strategy. The CEO wants you to analyze the business membership and determine how to differentiate it from the general membership to increase business memberships. An analysis of products, services, and branding should be included.
