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.

Abstract
 1. Introduction
 2. Literature Review
  2.1. Important Strategic Options
  2.2. Foreign Retailers’ Competitive Position in MatureMarkets
 3. Methodology
 4. Results
  4.1. The Costco Business Model in Japan
  4.2. Consumer Responses to the Costco BusinessModel
 5. Discussion and Conclusions
  5.1. Conclusions and Implications
  5.2. Limitations and Recommendations for FutureResearch
 References

• Jung-Yim Baek(University of Marketing and Distribution Sciences)
• Shuguang Wang(Ryerson University) Corresponding Author