Week 8 Case Please Follow the example case and complete the following case study.  Please note that all sections must be complete.  The key issues section is critical.  Look for the terms and concepts that we have learned and apply them to the case.  Do not define the key issues.  What in the case makes them the key issue?  Grading Rubric: Case Summary 2 points Key issues 10 points Personal Analysis 3 points Case Questions 9 points Conclusion 2 points CASE STUDY MARKETING THE IKEA FANTASY AROUND THE WORLD Companies who market internationally often have to work hard to find an effective and profitable balance between standardizing their marketing strategies while still reflecting an understanding of the unique characteristics and consumer behavior present in those markets. IKEA, the Swedish furniture and furnishings company, is a good example of a retailer trying to find that sweet spot between standardization and adaptation. Its unique mission is to “create a better everyday life for the many people,” in particular, helping consumers with “thin wallets,” to be able to afford stylish furniture and home furnishings, as the store describes its niche. The company has 370 stores in 47 countries worldwide and a goal of 500 stores by 2020. To put its international footprint into perspective, IKEA has stores in more countries than Walmart and these are more profitable than Target and Lowe’s. In Beth Kowitt’s  Fortune  article “How IKEA Took Over the World,” the company is recognized as having mastered one of the hardest retail challenges: selling high volumes of inventory at a consistently low price in vastly different marketplaces, languages, and cultures. How have they achieved a successful balance between standardization and adaptation in their international markets? First of all, the company credits marketing research for much of its success. Mikael Ydholm, head of research, says “The more far away we go from our culture, the more we need to understand, learn, and adapt.” At the same time it must look for points where cultures intersect. With a focus on volume production, IKEA does not want to have to adapt its products for each country market. But it has figured out how to show the same product working into the lifestyles of different locations around the world. By visiting the homes of consumers in different countries it has uncovered the similarities and differences in how consumers around the world use and interact with IKEA products. Through its research, IKEA pays special attention to the subtle differences that are so important in international marketing. It also takes its time to develop strategy. For instance, it’s taken the company 6 years to move into South Korea, but even with that kind of lead time mistakes were still made; for instance a map mislabeled what South Koreans call the East Sea as the Sea of Japan. Much of IKEA’s recent international growth has been built on the growing middle-class markets in emerging mar ...

1. Week 8 Case
Please Follow the example case and complete the following case
study. Please note that all sections must be complete. The key
issues section is critical. Look for the terms and concepts that
we have learned and apply them to the case. Do not define the
key issues. What in the case makes them the key issue?
Grading Rubric:
Case Summary 2 points
Key issues 10 points
Personal Analysis 3 points
Case Questions 9 points
Conclusion 2 points
CASE STUDY
MARKETING THE IKEA FANTASY AROUND THE WORLD
Companies who market internationally often have to work hard
to find an effective and profitable balance between
standardizing their marketing strategies while still reflecting an
understanding of the unique characteristics and consumer
behavior present in those markets.
IKEA, the Swedish furniture and furnishings company, is a

2. good example of a retailer trying to find that sweet spot
between standardization and adaptation. Its unique mission is to
“create a better everyday life for the many people,” in
particular, helping consumers with “thin wallets,” to be able to
afford stylish furniture and home furnishings, as the store
describes its niche. The company has 370 stores in 47 countries
worldwide and a goal of 500 stores by 2020. To put its
international footprint into perspective, IKEA has stores in
more countries than Walmart and these are more profitable than
Target and Lowe’s. In Beth Kowitt’s
Fortune
article “How IKEA Took Over the World,” the company is
recognized as having mastered one of the hardest retail
challenges: selling high volumes of inventory at a consistently
low price in vastly different marketplaces, languages, and
cultures. How have they achieved a successful balance between
standardization and adaptation in their international markets?
First of all, the company credits marketing research for much of
its success. Mikael Ydholm, head of research, says “The more
far away we go from our culture, the more we need to
understand, learn, and adapt.” At the same time it must look for
points where cultures intersect. With a focus on volume
production, IKEA does not want to have to adapt its products
for each country market. But it has figured out how to show the
same product working into the lifestyles of different locations
around the world. By visiting the homes of consumers in
different countries it has uncovered the similarities and
differences in how consumers around the world use and interact
with IKEA products.
Through its research, IKEA pays special attention to the subtle
differences that are so important in international marketing. It
also takes its time to develop strategy. For instance, it’s taken
the company 6 years to move into South Korea, but even with
that kind of lead time mistakes were still made; for instance a

3. map mislabeled what South Koreans call the East Sea as the Sea
of Japan.
Much of IKEA’s recent international growth has been built on
the growing middle-class markets in emerging markets, which
was a logical step for IKEA. It has always excelled at creating a
sense of fantasy for customers who visit its stores. Tom Novak
describes it as a creation of “domestic tableaux and scenes from
a home life we imagine living.” In his
Trend and Tonic
post he describes how “these fantasies of new living are crucial
for emerging global powers like China, India, and Brazil who
all have rising middle classes.” IKEA is carefully tracking the
growth of the middle class in these markets and has opened
stores in countries like Croatia, Indonesia, Thailand, and China.
In fact China is the market where it is experiencing the fastest
growth and which has eight of the largest stores.
Novak argues that IKEA’s minimalism translates well across
cultures because its simple furniture is chic yet practical. He
also suggests that Sweden as the “country of origin” for the
IKEA concept may enjoy the unique ability to appeal politically
or ideologically to other cultures. It may be seen as able to fill a
void for international consumers who are drawn to the Western
fantasy but who want to avoid Western controversy. In fact,
products retain their Swedish names in markets around the
world as a way to build on the positives of IKEA’s brand
identity.
Although IKEA may work hard to keep a more universal
product approach, when it comes to its catalogs it defers to
adaptation of language and culture. The company prints 212
million catalogs a year. Kowitt reports that catalogs come in 32
languages and 67 versions, which enables the company to do a
better job of reflecting local customers and customs. Photo
shoots for the catalogs are all done in a studio in Sweden

4. where an employee is responsible for making sure that shots
taken of each room set-up are appropriate and culturally
sensitive for each of the different catalog versions being
produced. For instance, they want to ensure that the Taiwanese
catalog doesn’t feature glass products from mainland China and
that Israel’s catalogs don’t picture Persian rugs.
The company admits that it has made cultural
faux pas
in the past with its catalog, like photoshopping women out of
catalogs for Saudi Arabia and removing a lesbian couple from a
version for Russia. IKEA Communications officer Kajsa
Orvarson says, “We have done mistakes, but we are becoming
more and more aware of how to improve and to share our
values."
DISCUSSION QUESTIONS
CS 14-1Discuss how IKEA’s approach has helped you to better
understand the debate that exists between standardization
compared with adaptation for international markets.
CS 14-2Compare and contrast two countries according to the
Hofstede cultural model using the online tool at
http://geert-hofstede.com/countries.html
. How might this tool help a company like IKEA do a better job
of marketing in each country?
CS 14-3The text talks about the difference between low and
high culture. Is IKEA trying to position its brand to be one or
the other? Would this be different depending on the country
location?
format to follow

5. WEEKLY CASE INSTRUCTIONS
This assignment is due by midnight on Sunday, at the end of
each week. No late assignments will be accepted without
advance permission from the instructor.
On every case assignment you must meet the minimum
standards for depth and organization. Any case analysis that is
under 500 words (not counting title and references) will receive
a zero. Each case also must have a minimum of 3 outside
references, not counting the textbook.
Below is a Sample Case Analysis. This sample gives you a
clear example of how the required case analysis format should
be delivered. Follow this format in your analysis.
Do not use the Key Marketing Issues used in the sample case.
Each case will have its own set of Key Marketing Issues which
you will choose based on the details of the case content and the
class reading. Follow this format on all 8 case analyzes.
Sample Case Assignment Analysis Format
MRKT 5000 Online Course
(Instructional notes in red)
(Your name here)
Can Pepsi make Pepsi One the One? (This is a case from a
previous edition of the Marketing text – not currently in your
text book. This is only a sample analysis to demonstrate
analysis format only)

6. CASE SUMMARY:
Pepsi One is an innovative product launched in the market by
PepsiCo to keep the image of innovation, fast movement, and
competitiveness. The case includes the steps of a new-product
development process. Emphasizing the launch of the product
and the ways that Pepsi One is getting more familiar to the
target market. Pepsi One is becoming a successful product by
getting more market share from the main competitor Coca-Cola.
(Each case to be analyzed will be read from the text, with
specific questions assigned
)
KEY MARKETING ISSUES
Line extension
– Development of a product that is closely related to existing
products in the line but meets different customer needs. Pepsi
One is a product that tries to differentiate itself from the normal
diet products, to reach different target markets.
.
Product modification
– Change in one or more characteristics of a product. Pepsi
changed the sweetener to acesulfane potassium (ace K) to create
the Pepsi One.
Aesthetic modification
– Changes to the sensory appeal of a product. Pepsi tried to
appeal as a not a new diet drink but a new way of tasting a soda.

7. New-product development process –
A seven-phase process for introducing products: Idea
generation, Screening, Concept testing, Business analysis,
Product development, Test marketing, Commercialization. The
PepsiCo performed all phases of new-product development in
order to ensure the product would succeed in the market.
Product differentiation –
Creating and designing products so that customers perceive
them as different from competing products. Pepsi One tries to
differentiate itself being the only low calorie drinks that taste
exactly as a regular drink (Pepsi).
Product design –
How a product is conceived, planned, and produced.
Styling –
The physical appearance of a product. Pepsi One omits the
word “diet” and even the word Pepsi, is secondary to the thick,
black lettering of the word “One”.
Product positioning –
Creating and maintaining a certain concept of a product in
customers’ minds. Through advertising the company tried to
keep the idea of the product in customer’s minds.
(These are the issues in this particular case – each case will
have a different set of Key Issues)
Personal Case Analysis
I learned that Pepsi One was a product created by a
modification of an existent product “Pepsi Diet”. The product
modification was the sweetener used. A new taste of cola was

8. added to the appeal for a low calorie soft drink. By trying to
differentiate Pepsi One from a classic Diet product, PepsiCo
shows its innovative style and gain market share from Coca-
Cola.
CASE QUESTIONS
1- Is Pepsi One a new product, a modified product, or a line
extension? Explain your answer.
Pepsi One is a new product, line extension and a modified
product. Pepsi changed the sweetener to acesulfane potassium
(ace K) to create the Pepsi One and tried to be unique by being
a low calorie soft drink, which tastes a regular soft drink.
.
2- In what way is Pepsi One positioned?
Pepsi One was positioned by including characteristics that
target market most desires. Understanding the diet aspect of
Pepsi One helped attract an unusual market segment for a diet
drink: cola-loving males in their 20s and 30s. The product is
not made to compete head to head with Diet Pepsi.
3- Over the years, PepsiCo has had a number of product
failures. Evaluate PepsiCo management’s decision to introduce
Pepsi One?
PepsiCo was launched just after test indicated consumers liked
its taste as much as its creators did. In extensive home-use
tests, almost 70 percent of Pepsi One tasters reported they
would purchase the product again. To differentiate Pepsi One
from the horde of diet soft drinks, PepsiCo focused on the
product’s taste, which is almost indistinguishable from the taste
of sugared soft drinks.

9. CONCLUSIONS
The company that wants to be competitive needs to be
innovative and always introduce new products in the market.
PepsiCo used
line extension of
its Diet products to create Pepsi One. Pepsi One is a
product modification
as well
,
which was consisted of in changing the sweetener to acesulfane
potassium (ace K). This
aesthetic modification
provided the
product differentiation
that appealed to customers as product with low calorie that
tastes as a regular soft drink. The different
product design
that included change on the
styling
never seen before
,
helped to
position the product
among the cola-loving males in there 20s and 30s. By being
innovative Pepsi One is guaranteeing its position on the soft
drinks market, taking some market share from its big rival
“Coca-cola.”
Works Cited
(Each analysis must include a minimum of three outside
references, not counting the text or references from the case
subject directly)

10. Bramhall, Joe, “Pepsi Inc”, Hoovers,
http://www.hoovers.com/xm-holdings/--ID_60656--/free-co-
factsheet.xhtml
“Choosing a soft drink”, Soda pop.com Click & Learn: http://
www.pepsicity.com/rpsm/edOid/105548/rpem/ccd/lookLearn.do
Deitz, Corey, “Learn the Difference to Make the Best Choice
For Yourself”, Your Guide to softdrinks, December 29, 2005,
Pepsi and Coke Comparison Chart
http://pop.about.com/od/satelliteradio/a/blsatcomparecht.htm
Company Profile, “Pepsi, Inc”, February 10, 2006, NAMC
Newswire,
http://www.newswire.com/companyprofiles/xmsr.html
Insight from Standard & Poor’s, S&P Boosts Pepsi to Strong
Buy, BusinessWeek online, February 9, 2006,
http://www.businessweek.com/investor/content/feb2006/pi2006
0209_35961.htm?chan=tc