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ISSN : 2233-4165(Print)
ISSN : 2233-5382(Online)
Journal of Industrial Distribution & Business Vol.9 No.2 pp.7-16

The Localization Strategies and Success of Costco : Focusing on a Japanese Mature Retail Market

Jung-Yim Baek**, Shuguang Wang***
** First Author, University of Marketing and Distribution Sciences. Tel: +81-78-796-4966, E-mail:
*** Corresponding Author, Ryerson University. Tel: +1-416-970-5000, E-mail:
December 14, 2017. January 1, 2018. January 15, 2018


Purpose - This research addresses the question of how an international retailer like Costco can succeed in a foreign mature market and satisfy the local consumers. Our study aims to promote our understanding of how foreign retailers influence local consumers in a mature market with differentiated business models.
Research design, data, and methodology – Our study uses company publications, secondary sources of information and the results of a questionnaire survey consisting of 106 participants. Consumer responses were solicited through a questionnaire survey conducted in the city of Kobe in December of 2013.
Results - Product differentiation from local retailers in a mature market like Japan gave Costco a competitive edge. Compared with local supermarkets, Costco was preferred by Japanese consumers for its variety of goods that it carries, as well as in-store promotion large package of selling units, in-store amenities, and customer services.
Conclusions - First, a theoretical framework is proposed in this study that can aid in developing localization strategies in a mature market such as Japan. Second, it reveals that an international retailer can succeed in a foreign market by stimulating local consumers to change their purchasing behavior, without having to alter the prevailing format of operation.

JEL Classifications: D30, L81, F23.






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