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HISTORY
History
IKEA in
orange
regions in
the map.
Today:
349 stores
43 countries
MARKETS PRODUCTS
GLOBAL:
USA
Europe
Australia
Asia: China, Japan
Entering India
Furniture
Appliances
Electronics
Home Line...
CUSTOMERS DIFFERENTIATORS
Masses, not niche
Low to
upper mid-income
One Stop Shop
In-house Ikea brand
Signature Swedish de...
COMPETITORS
Walmart
Target
Ebay
Amazon
Home Depot
Costco
EXPANSION
Action:
Enter India, Africa,
Latin America
E-COMMERCE
Action:
Improve e-commerce
experience and deliver
faster, ...
COMPETITION
In-city competitors short
drive away &
online competitors that
take away the need for
one-stop shop.
Defense:
...
STRENGTHS
Complete furniture solutions
Ikea design
Rich store experience
WEAKNESSES
Not for quick, small buys:
• Fewer sto...
PRODUCTS
Theme based yet solo products
Various price points
Modular storage
Easy to assemble
Food, with a
European touch
In-store restaurant
Product extends to service
Augmented Services
PRODUCT
LIFE CYCLE
Reverse positioning
strips away “sacred”
product attributes
while adding new ones.
“IKEA … innovative
m...
EXPEDIT is being stopped much to the
outrage of loyal customers but is being
reintroduced as Kallax this April.
Example of...
How many new
products (NET)
does Ikea create
per year?
Source: http://www.dallasfed.org/assets/documents/institute/events/...
Prices as low as $2.99 advertised
PRICING STRATEGY
Market need identified
> Cost is set to meet need, mostly low cost
> In-house designers create product towards set cost
Ma...
Price control methods
- By using minimal flat-packaging
- Due to economies of scale
- By being in a position to bargain wi...
Does the same Ikea
chair cost the same
everywhere?
No. Higher costs as
you move away
from Sweden due
to extra shipping &
h...
Source: http://www.dallasfed.org/assets/documents/institute/events/2010/10micro_landry.pdf
TARGET CUSTOMER
COST BASIS SEGMENT
Students, First Jobbers
Living in rented apartments. Low inc.
FAMILY LIFE CYCLE BASIS SEGMENT
New famil...
FEW CHANNEL PARTNERS: Control over brand interaction at POP
You buy IKEA at IKEA.
Own design, manufacturing, exclusive ret...
CUSTOMER RETENTION STRATEGIES
1) Member only deals, Ikea Family Card
2) Refund policy, credit offered instead of cash
3) Getting new customers through existing ones
4) End to end solns.
They do not lose customers in the process of thinking, buying, delivering.
5) Interest-free installment payment plans.
Thus, ease in beginning Ikea relationship and road for long-term association.
IKEA
THE
BRAND
Iconic
Sensible
Advertising focuses on COST
SPACE SENSITIVE SOLUTIONS
CHOICES
SIMPLE SWEDISH DESIGN
LIFE SOLUTIONS
TIES BRAND WITH EVERYDAY FAMILY LIFE
MARKETING MEDIA USED:
CATALOGUE
70% of marketing spend
Published annually
62 languages
300 pages
12,000 products
Takes 10 months to develop
208 ...
TV, REALITY SHOW
Part of ‘MADE BY IKEA’IMC by Ogilvy that boost sales by 7%
Research showed Women in 30s no longer looked ...
APP
Ikea E-commerce
SOCIAL MEDIA, officially
Apart from
Facebook, Youtube, Pinte
rest, Ikea has made a
Share Space page where
people
can creat...
Social Media, unofficially
Online forums where Ikea
fans discuss products and
DIY changes such as
changing a 4 legged stoo...
GUERILLA MARKETING
Such as this in Brooklyn, NY.
Whatever you need for your
apartment you can get in an Ikea
box
INNOVATION
& EXPERIENTIAL MARKETING
Ikea turned a monorail in Japan
Into an Ikea space
THE STORE ITSELF
The Ikea journey markets
everything in the store to
you when you came to buy
one or just a few. It tells ...
Ikea CSR
For every LED light bulb
sold in stores during the
campaign period*, the
IKEA Foundation donated
€1 to UN Refugee...
Ikea PR: Good Crisis
Management
Horsemeat in
Meatballs scandal.
Responded with
timeliness, transparency, hone
sty and humi...
‘Green Campaign of the
Year’
Award Winning PR
Ikea banned the use of
incandescent bulbs.
PR announced green move
by arrang...
MARKETING STRATEGY
CUSTOMISED AS PER
MARKET
IN CHINA:
Positioning – Aspirational brand, not
absolutely low cost
Location -...
MARKETING
SUGGESTION 1
Improve e-commerce
experience.
By being present on Amazon
Ikea competes with other
brands and loses...
MARKETING
SUGGESTION 2
Sharp & early targeting
Create Ikea Student
Compete with Amazon Prime by
offering free shipping to
...
MARKETING
SUGGESTION 3
Real Customer Service
Ikea Handymen
Currently the ‘Ask Anna’
button only redirects you on
the websi...
MARKETING
SUGGESTION 4
Teaser Stores to showcase
furniture samples and
promote Ikea food
Small in-city stores for quick bu...
OVERALL
PERFORMANCE
STAR ON BCG MATRIX
As it continues to grow and expand
online and offline.
Revenues going up continuous...
LEARNINGS
SUCCESS FACTORS
Sell an experience, not just products
Merits of sticking to a single brand
Keep it simple and ba...
Any Qs?
IKEA Marketing
IKEA Marketing
IKEA Marketing
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IKEA Marketing

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Made for Marketing MBA class at the University of San Francisco.

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IKEA Marketing

  1. 1. HISTORY
  2. 2. History IKEA in orange regions in the map. Today: 349 stores 43 countries
  3. 3. MARKETS PRODUCTS GLOBAL: USA Europe Australia Asia: China, Japan Entering India Furniture Appliances Electronics Home Linen Kitchenware Bathroom ware Décor Food
  4. 4. CUSTOMERS DIFFERENTIATORS Masses, not niche Low to upper mid-income One Stop Shop In-house Ikea brand Signature Swedish design Focus: Solutions (Storage, modular etc) Low cost, low involvement, low commitment buy Standard, mix & match-able furniture. Encourages return buy.
  5. 5. COMPETITORS Walmart Target Ebay Amazon Home Depot Costco
  6. 6. EXPANSION Action: Enter India, Africa, Latin America E-COMMERCE Action: Improve e-commerce experience and deliver faster, cheaper. OPPORTUNITIES:
  7. 7. COMPETITION In-city competitors short drive away & online competitors that take away the need for one-stop shop. Defense: Continue to offer complete, assembled looks by home stylists and do product pairing online. Also highlight Ikea brand & look. ‘CHEAP BRAND’ TAG Consumers seek better designs & quality. Defense: Run an advertising campaign on the option of durable furniture to tackle the current low-quality reputation of Ikea. THREATS:
  8. 8. STRENGTHS Complete furniture solutions Ikea design Rich store experience WEAKNESSES Not for quick, small buys: • Fewer stores in city. • Located in the outskirts. • Painful store navigation. IKEA VS WALMART:
  9. 9. PRODUCTS
  10. 10. Theme based yet solo products
  11. 11. Various price points
  12. 12. Modular storage Easy to assemble
  13. 13. Food, with a European touch
  14. 14. In-store restaurant Product extends to service
  15. 15. Augmented Services
  16. 16. PRODUCT LIFE CYCLE Reverse positioning strips away “sacred” product attributes while adding new ones. “IKEA … innovative marketing and phenomenal growth … brilliant reverse positioning.”
  17. 17. EXPEDIT is being stopped much to the outrage of loyal customers but is being reintroduced as Kallax this April. Example of reverse positioning • A scratch-resistant and sturdier system • Child-friendly rounded edges • Thinner shelves to reduce wood consumption
  18. 18. How many new products (NET) does Ikea create per year? Source: http://www.dallasfed.org/assets/documents/institute/events/2010/10micro_landry.pdf
  19. 19. Prices as low as $2.99 advertised PRICING STRATEGY
  20. 20. Market need identified > Cost is set to meet need, mostly low cost > In-house designers create product towards set cost Market need drives cost drives design
  21. 21. Price control methods - By using minimal flat-packaging - Due to economies of scale - By being in a position to bargain with material suppliers - By saving assembling cost
  22. 22. Does the same Ikea chair cost the same everywhere? No. Higher costs as you move away from Sweden due to extra shipping & handling expenses. IKEA sources the bulk of its goods in Eastern Europe and in Asia. Source: http://www.dallasfed.org/assets/documents/institute/events/2010/10micro_landry.pdf
  23. 23. Source: http://www.dallasfed.org/assets/documents/institute/events/2010/10micro_landry.pdf TARGET CUSTOMER
  24. 24. COST BASIS SEGMENT Students, First Jobbers Living in rented apartments. Low inc. FAMILY LIFE CYCLE BASIS SEGMENT New families, parents Nest building. They return as needs grows. BEHAVIOURAL BASIS SEGMENT DIY People They like to assemble and make.
  25. 25. FEW CHANNEL PARTNERS: Control over brand interaction at POP You buy IKEA at IKEA. Own design, manufacturing, exclusive retail outlets and online store. Own merchandising, display, in-store promotion choices. 1300 suppliers worldwide for raw materials Long-term relationships developed Yet cost competition encouraged
  26. 26. CUSTOMER RETENTION STRATEGIES 1) Member only deals, Ikea Family Card
  27. 27. 2) Refund policy, credit offered instead of cash
  28. 28. 3) Getting new customers through existing ones
  29. 29. 4) End to end solns. They do not lose customers in the process of thinking, buying, delivering.
  30. 30. 5) Interest-free installment payment plans. Thus, ease in beginning Ikea relationship and road for long-term association.
  31. 31. IKEA THE BRAND Iconic Sensible
  32. 32. Advertising focuses on COST
  33. 33. SPACE SENSITIVE SOLUTIONS
  34. 34. CHOICES
  35. 35. SIMPLE SWEDISH DESIGN
  36. 36. LIFE SOLUTIONS
  37. 37. TIES BRAND WITH EVERYDAY FAMILY LIFE
  38. 38. MARKETING MEDIA USED:
  39. 39. CATALOGUE 70% of marketing spend Published annually 62 languages 300 pages 12,000 products Takes 10 months to develop 208 million copies printed in 2013 i.e more than double no. of Bibles
  40. 40. TV, REALITY SHOW Part of ‘MADE BY IKEA’IMC by Ogilvy that boost sales by 7% Research showed Women in 30s no longer looked for complete solutions but pieces to add to their already full homes. “They had retail blindness. They saw kitchenware, not kitchens. They saw lamps and rugs, not living rooms. TV Commercial – One Room in Paradise Making the best of houses as tight as dollhouses
  41. 41. APP
  42. 42. Ikea E-commerce
  43. 43. SOCIAL MEDIA, officially Apart from Facebook, Youtube, Pinte rest, Ikea has made a Share Space page where people can create wish- lists, share items they like and go through others’ picks. Their catalogues also have QR codes that take them through digital brand experiences on their smartphones & tablets.
  44. 44. Social Media, unofficially Online forums where Ikea fans discuss products and DIY changes such as changing a 4 legged stool to 3 legged one for greater stability. Note: This site is not affiliated with IKEA in any way.
  45. 45. GUERILLA MARKETING Such as this in Brooklyn, NY. Whatever you need for your apartment you can get in an Ikea box
  46. 46. INNOVATION & EXPERIENTIAL MARKETING Ikea turned a monorail in Japan Into an Ikea space
  47. 47. THE STORE ITSELF The Ikea journey markets everything in the store to you when you came to buy one or just a few. It tells you visual stories. Starts with basic comfort – living room & beds, ends with delight – food, and has everything else in between. Single Exit.
  48. 48. Ikea CSR For every LED light bulb sold in stores during the campaign period*, the IKEA Foundation donated €1 to UN Refugee Agency to light refugee camps. Total: €7.7 million.
  49. 49. Ikea PR: Good Crisis Management Horsemeat in Meatballs scandal. Responded with timeliness, transparency, hone sty and humility. • Stopped selling product temporarily. • Changed meat partner. • Did not play victim. • Apologised.
  50. 50. ‘Green Campaign of the Year’ Award Winning PR Ikea banned the use of incandescent bulbs. PR announced green move by arranging interviews by US Ikea President Mike Ward and sending out stories to press and TV channels.
  51. 51. MARKETING STRATEGY CUSTOMISED AS PER MARKET IN CHINA: Positioning – Aspirational brand, not absolutely low cost Location - Near rail networks as people use public transport more than cars Communication – Use of local social media like Weibo gg
  52. 52. MARKETING SUGGESTION 1 Improve e-commerce experience. By being present on Amazon Ikea competes with other brands and loses on-stop-shop advantage. Improve call to action on website and product delivery. Tap into new, growing behavioural segment: online shoppers with no time to visit and haul things into vans.
  53. 53. MARKETING SUGGESTION 2 Sharp & early targeting Create Ikea Student Compete with Amazon Prime by offering free shipping to students. Create a Move-into-Hostel collection with desk, mirror, book case ensemble. Tie up with schools to include Ikea discount and free meal at Ikea in student welcome kit. Catch this segment early for future sales.
  54. 54. MARKETING SUGGESTION 3 Real Customer Service Ikea Handymen Currently the ‘Ask Anna’ button only redirects you on the website. IKEA needs a branded team like the Geek Squad for a single, strong promise of good and complete customer service. A team you can call, ask for packing, delivery, repair, ass embling help etc
  55. 55. MARKETING SUGGESTION 4 Teaser Stores to showcase furniture samples and promote Ikea food Small in-city stores for quick buys. Purpose: Brand engagement Centered around occasions: Mother’s Day Holiday season Providing a small portion of Ikea goods and food. People may also place order from this teaser store. MINI IKEA ON ?
  56. 56. OVERALL PERFORMANCE STAR ON BCG MATRIX As it continues to grow and expand online and offline. Revenues going up continuously. No end of the road in sight.
  57. 57. LEARNINGS SUCCESS FACTORS Sell an experience, not just products Merits of sticking to a single brand Keep it simple and basic Offer food at the end of the line! FAILURE FACTORS Catch up with new trends. App doing well but e-commerce needs to be stepped up.
  58. 58. Any Qs?

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