The Enduring Enigma of Costco's $1.50 Hot Dog and Soda Combo

[Jeffery]

The Enduring Enigma of Costco's $1.50 Hot Dog and Soda Combo
Mental Floss Jake Rossen

The price hasn't changed in nearly 35 years. What kind of
sorcery is this?

Excerpt:

When Costco president W. Craig Jelinek once complained to
Costco co-founder and former CEO Jim Sinegal that their
monolithic warehouse business was losing money on their
famously cheap $1.50 hot dog and soda package, Sinegal
listened, nodded, and then did his best to make his take on the
situation perfectly clear.

"If you raise [the price of] the effing hot dog, I will kill
you," Sinegal said. "Figure it out."

~ ~ ~

The articles goes on to explain how Costco set in stone "value, good will, foot traffic," as well as how Cosco survived changing times.

The takeaway:

Create an online membership product wherein the price never increases and will create virtual foot traffic aka access to related products? Me thinks so.

[10x]

I think rotisserie chicken is the same too. https://edition.cnn.com/2019/10/11/busin...index.html

[Kurt]

This brings up the too often ignored marketing concept of intangible benefits, which can't be measured. Costco can probably measure things like the average spend of people that buy hotdogs and chickens vs those that don't. Those are tangible benefits.

What is hard to measure is the benefits of the free publicity Costco gets from these. Jeffery's OP is an example. Good will and tradition are also part of branding and are intangible. Too often we only focus on what we can measure...

[Jeffery]

I think rotisserie chicken is the same too. https://edition.cnn.com/2019/10/11/busin...index.html

Reminds me of a time. back in the day, when I worked at a new grocery store in town.

Red necks we were. We didn't know of 4-lane highways and rotisserie chickens. Unheard of in our neck of the woods.

One day the Big Boss from the Big City visited the store and had a little meeting with us "stock boys" wherein he spoke of things like suggestive selling, customer service with a smile and on and on.

At the end of the meeting he asked us if we had any ideas how to increase foot traffic. He was pf the thought his brand new swanky store was foreign to our small country community and they were reluctant to visit the store.

I raised my hand and explained the fancy schmancy New York deli was serving the wrong food to red necks and that huge deli was already in the red according to the fancy schmancy Deli Mgr from NY.

He asked me what I would do differently? Simple I relied. Knock a whole in the wall, install a pick-up windows that served people outside the store. Only sell greasy chicken and french fries inside one of those new fancy smancy food bags. There would be long lines, etc.

He actually did exactly that with one exception.. insetad of traditional oven baked chicken.. rotisserie chickens! And syrupy cola. It was a big hit. Construction workers to city hall customers lined up daily. Foot traffic increased inside the store. Many people would have their kids pick-up bags of the chicken while we lowly stock boys put on the bag boy hats.

Jack, the owner made it right, free rotisserie chickens for the stock crew daily.   The girls often said.. we were the cheapest dates in the whole county. Darn right.