IKEA Marketing Strategy Presentaion
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A case study on IKEA giving a brief description of its marketing strategy
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IKEA Marketing Strategy Presentaion
- 2. IKEA’s Business IKEA is an international home product company that designs and sells ready to assemble furniture appliances and home accessories
- 3. IKEA’s Founded Furniture Introduction Furniture Catalogue 196519581957195619551953194719431926 1951 IKEA designs its own Furniture IKEA introduces Flat packages IKEA stores open at • Almhult • Stockholm IKEA’s Timeline IKEA’s Company History* *Source: www.ikea.com
- 4. MARKETING ANALYSIS SWOT, PEST and the Marketing Mix
- 5. INTERNALEXAM EXTERNALEXAM SWOT W O T S STRENGTHS • Wide range of products and styles • Cheap and affordable • One stop shop • Easy shipping and transportation • Eco friendly and recycling of products • Functional design of products • Appealing shopping experience OPPORTUNITIES • Untapped markets like middle east and Asian countries • Better advertisements • Online sales • Demand for greener and environment friendly products WEAKNESSES • Assembly of furniture • Yet to invade upcoming global markets • Products don’t last long • Product dimensions unsuitable for global markets • Advertisements in the form of catalogues mostly THREATS • Organized sectors like Wal Mart, Office Depot, Staples, etc. • Unorganized sectors like local manufacturers and carpentry stores • Competitors opting for similar designs with a contemporary twist to cater to upper class POSITIVE INFLUENCES NEGATIVE INFLUENCES
- 6. • FDI Policies • Labor laws • Taxes and duties • Environmental LawsFurniture Market Political P • Recession reduces disposable income and hence the demand (Low prices advantage) • Enjoys economies of scale • High barriers of entry for competitors due to low prices offered to consumers EconomicE • Lesser carbon footprints • Ecologically sustainable • Recyclable products • Online tips on reducing environmental impact (CSR) Social S • Flat sized packaging • Innovative designs Technological T PEST Analysis
- 8. Product Price Mix STYLE PRICE RANGE Scandinavi an (Sleek Wood) Modern (Minimali st) Country (Neo- traditiona l) Young Swede (bare bones High Medium Low IKEA's Product Price Matrix
- 9. Finding Smarter ways to make Furniture Strategy followed by IKEA Price Quality
- 10. Implementation Steps Establish Retail Price Select Manufacturer Determine the material used Design Process
- 11. Step 1: Establish Retail Price • Using the matrix, IKEA would set the price range. • It would survey the competition to establish a benchmark and then sets its own price point 30-50% lower than rivals.
- 12. Step 2: Select Manufacturer • More than 1800 manufacturers in more than 50 countries • Build long term relationships • IKEA circulates a description of proposed product's specifications and target cost and encouraged them to compete for the production package • Sometimes it might have different product component from different supplier
- 13. Step 3: Determine the material used • Done by IKEA engineers • Focus on cost efficiency • Using different types of wood for a single wooden product • Using high quality materials on furniture surfaces that were visible and most likely undergo stress • Using low quality material on surfaces that were low stress and less visible to the customer
- 14. Step 4: Design Phase • Use internal competition to select a designer • Flat packaged boxes to make it easier for consumers to transport the furniture home + save shipping costs
- 15. 4P's Marketing Mix Marketing Mix Product Price Placement
- 16. Customer Experience at IKEA • Bright and inviting experience for customers • Resembles Modern Theme park with childcare centers • Restaurants serving various delicacies
- 17. IKEA for kids: You shop, kids play • IKEA provides clean feeding and changing rooms for small children • Restaurant has a special menu just for kids
- 19. 4P's Marketing Mix Marketing Mix Product Promotion Price Placement
- 21. Perceptual Map
- 22. Segmentation
- 23. Video 1
- 25. Video 2
- 27. Video 3
- 29. IKEA INVADES AMERICA 2002200120001999199819971985 Mid 1990’s First store Company’s fortune changes Revenues double ($600 mn to $1.27 bn) 3rd largest store
- 30. PROMOTION STRATEGIES •Commitment-free approach to furniture – “Unboring” advertisement •Web site advertisement •The Law of Candor : When you admit a negative, the prospect will give you a positive •The Law of the Category: If you can’t be the first in a category, set up a new category that you can be first in •Additional Customer facilities: child-care, restaurants and help desk
- 31. INDIAN FURNITURE MARKET •As of 2006, the Indian furniture market is estimated to be worth US$ 7.9 billion Source: http://www.ibef.org/download/Furniture_170708.pdf
- 32. PROBLEMS FACED BY INDIAN FURNITURE INDUSTRY
- 34. Market Development Diversification Market Penetration Product Development Products & Services Markets Existing New ExistingNew
- 35. IKEA’S INITIAL COMMUNICATION STRATEGY IN INDIA Integrated Communications Strategy
- 39. IKEA’s communication strategy* • Media Channels covered – TVC – Print – Digital • Pull Strategy • CSR initiatives Source: http://www.livemint.com/Money/jI27GvmsK5stzTn61yyWUN/Ikeas- consumer-challenge-in-India.html
Editor's Notes
- 1985: problems beds and kitchen cabinets did not fit American sheets and appliances, sofas were too hard, dimensions in centimeters and not inches and kitchenware was too small for American serving-size Mid 1990’s 1997-2001 2002: 14 stores in USA serving 30 mn customers