That's just a taste of the "anti-marketing marketing" culture that pervades Costco-a culture that has helped catapult the retailer to No. 1 in the warehouse category with 450 stores and sales of $47.1 billion in 2004. In fact, Costco controls about half the market. The usual No. 1 everything Wal-Mart comes in at No. 2 with its warehouse banner Sam's Club.
Mr. Benoliel, 60, credits Costco's meteoric rise to the relentless focus on "marketing, not advertising." There is no agency. There is, in fact, no advertising, at all, but for the monthly magazine Costco Connection. Produced in-house, of course. The no-frills philosophy dates back to Costco's founding more than 25 years ago when every single line item on a typical retail financial plan was scrutinized. One of the first to go: advertising. "We devote a lot of attention to marketing, just not advertising," he says.
So what's the marketing strategy? "If we do a superb job of delivering value to members, they will be our best ambassadors and we don't need to buy time in television, in radio or magazines and newsprint because the best kind of advertising is word-of-mouth," says Mr. Benoliel, who started at Costco 13 years ago as head of real estate, transitioning to his current position in 2001.