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Final IKEA Case Study

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Final IKEA Case Study

  1. 1. IKEA Indonesia Case Study : Commercial Development & Protection of Intellectual Property Right: PRESENTED BY : Adi (1506772643) Adian (1506699150) Agus (1506772441) Alvin (1506699195) Moko (1506699636)
  2. 2. Chapter Overview Opportunity Identification & Selection Concept Generation Concept Evaluation Development Launch Basic New Product Process Strategic Launch Planning Strategic Launch Implementation
  3. 3. Chapter Overview Strategic Launch Planning Strategic Launch Decision Tactical Launch Decision Overall directions, incl. Target Market Marketing Mix (IMC & 4P) MARKETING PLAN TARGET MARKET STP TRADEMARK UNIQUE VALUE
  4. 4. Chapter Overview Strategic Launch Implementation Product Life Cycle Communication Program ATAR “How to deliver the new product’s value to the target consumer”
  5. 5. IKEA at a Glance Multinational Company which sells Ready to Assemble Furniture Largest Furniture Retailer Founded in Sweden (1943) by Ingvar Kamprad Until March 16, IKEA has 389 stores in 48 countries
  6. 6. IKEA at a Glance Story behind the name… IKEA name combines the initials of IKEA founder, Ingvar Kamprad, (IK) with the first letters from the names of the farm and village where he grew up - Elmtaryd and Agunnaryd (EA) Vision… “To create a better everyday life for the many people”
  7. 7. IKEA’s Concept IKEA is known for its modern architectural designs for various types of home appliances & furniture
  8. 8. IKEA’s Concept IKEA’s interior design is often associated with eco-friendly simplicity: For People & Planet Sustainable Cotton & LED Lighting
  9. 9. IKEA’s Concept Together we save money by democratic design process: We do our part, you do your part “Quality product at low prices”
  10. 10. IKEA’s Concept Good at cost control, operational details, & continuous development & innovation
  11. 11. IKEA’s Concept IKEA as a family recreational site Showroom Food Market Warehouse Smaland
  12. 12. IKEA Indonesia • First opened in Oct 15th 2014 at Alam Sutera, Tangerang • 35.000m2 in size • Franchise owned by PT HERO SUPERMARKET, Tbk • Adapt same layout with other IKEA (Showroom, Market Hall, Food Market, & Smaland)
  13. 13. Strategic Platform Decision
  14. 14. Current Situation 1. Macro-environment Situation • 4th world’s most populous country by approx. 260 million • GDP was worth US$936.955 billion in 2016 • Large number of young and middle-aged : economy booster median age : 28,2 yo and working age : 66% of population • Indonesian middle class : 17.3 million households have a potential purchasing power drive demand and spending in the country • Property growth in Jabodetabek (O : 12,2% ; A : 12,4% ; L : 11,6%) • Shopping habits (a form of entertainment activity) • Trend: shift to prefer modern stores than traditional market
  15. 15. 2. Micro-environment Situation • Furnitures and furnishing sales value in Indonesia was estimated at US$1.7 billion in 2013 • Rapid development of property market • Competition : IKEA – Informa – ACE Hardware – Courts Current Situation
  16. 16. SWOT Analysis Strengths - Powerful brand image - Diversified product - Supply chain integration - One stop shopping Weaknesses - DIY may be unappealing to Indonesian - Only one location - Ads don’t appeal enough to target market (young people) Opportunities - Emerging markets - Growing online sales and Internet presence - Expand into many more cities Threats - Direct competition from Ace, Informa, Courts, Best Pongs - Difficult economic condition - Changing customer needs SWOT
  17. 17. Porter’s Five Forces Model Rivalry among existing competitors HIGH Threat of new entrants LOW Bargaining power of buyers STRONG Threat of substitutes LOW Bargaining power of suppliers WEAK
  18. 18. Strategies of IKEA Indonesia 1. Location • Standard of IKEA store must be in the main highways or toll roads, where it is easy for customers to access • IKEA needs a spacious place to build the giant store • Alam Sutera has been predicted to be a commercial center outside Jakarta. 2. Aggressiveness Less aggressive to open another stores in Indonesia. 3. Experience • Self-service and In-store experience • Do-It-Yourself concept (democratic design process)
  19. 19. The Target Market Decision
  20. 20. Chapter Overview Target Market Decision • Markets are so complex that one product cannot close to meeting all needs and desires • Segmenting a market: End-Use Geographic & Demographic Behavioral & Psychographic Benefit Segmentation Original concept generation Method of operations Concept testing or product use testing Parallel development, keeping two or three target alternatives in development
  21. 21. IKEA’s Segmenting & Targeting Segmenting • Middle class customers • Lovers of modern furniture & accessories • Colorful & novel product Targeting • Aiming to appeal people of all ages, sexes, geographic, locations, all who have one thing in common: likes simplicity, functionality and quality • Single who have high income or married and have average income level couples
  22. 22. Chapter Overview Diffusion of Innovations • Five factors that measure how a new product will diffuse into the marketplace: Relative Advantage: how superior is the innovation Compatibility: Does it fit with the current product usage and end-user activity? Complexity: Will frustration or confusion arise in understanding the innovation’s basic idea Divisibility: How easily can trial portions of the product be purchased and used Communicability: How easy is it for the user to see the benefits of using the product
  23. 23. Chapter Overview Positioning • The best to communicate the products to customer needs and or competitive pressure: • Attributes (feature, function, or benefit) • Surrogates
  24. 24. IKEA Unique Value Shopping Experience • Display every products in rooms • Customer move along a path through a “maze”
  25. 25. IKEA Unique Value Shopping Experience • Self-services
  26. 26. IKEA Unique Value Shopping Experience • Swedish Restaurant & child play area
  27. 27. IKEA Unique Value Shopping Experience • “You don’t need a decorator, you can get a harmony in your flat just like that”
  28. 28. IKEA Unique Value European product quality & design • Focus on simplicity & functionality
  29. 29. IMPLEMENTATION OF THE STRATEGIC PLAN
  30. 30. Product Life Cycle & Product Adoption THE LAUNCH CYCLE
  31. 31. The Launch Cycle
  32. 32. Awa – T- A - R Awareness – Trial – Availability – Repeat
  33. 33. AWARENESS
  34. 34. Prelaunch and Preannouncement
  35. 35. Prelaunch and Preannouncement
  36. 36. Announcement, Beachhead & Early Growth
  37. 37. Story Telling Comp. Catalogue Ad Announcement, Beachhead & Early Growth
  38. 38. TRIAL
  39. 39. IKEA Catalog – Augmented Reality Vlogger Endorsement TV – Sponsored Content Dedek gemes Vlog Advertisement 1 TRIALTRIAL Advertisement 2
  40. 40. TRIALTRIAL
  41. 41. AVAILABILITY China, Poland, Italy, Sweden 1.600 Suppliers 389 stores in 48 countries 27 Distribution Center - 16 Countries
  42. 42. LEAN LAUNCH • Just In Time • No Over production • No Over Processing • Flexible AVAILABILITY
  43. 43. REPEATREPEAT
  44. 44. REPEATREPEATREPEAT
  45. 45. REPEATREPEATREPEAT
  46. 46. REPEATREPEATREPEAT 14% 75,000 Customer / Mth Customer Engagement Award 2015
  47. 47. REPEATREPEATBRANDING MANAGEMENT
  48. 48. • A distinguishing word, name, or symbol used to identify a product. – Registering trademark is a must – Benefit : • Provide notice to everyone about our exclusive right • Entitles us to sue in court for trademark infringement • Established commercial right • Established right for deposit registration with custom
  49. 49. • Assess the role or purpose of the brand. If the brand is to aid in positioning, choose a meaningful brand name like DieHard. • Possibility of extension to a line of products. If so, choose carefully so that it is not a limitation in the future (Allegheny Airlines became US Airways). • Possibility of long-term position in market. A dramatic novelty name usually doesn’t do as well if a long-term position in the market is sought. • Avoid an irritating or insulting name. Can especially be a problem when entering foreign markets. • Be careful of regional differences in language. An acceptable name in some Spanish dialects may be offensive in others. • Allocate enough time to brand selection. The brand name should not be a last-minute rush job. • Don’t choose the wrong comfort level. A provocative and controversial brand name such as Yahoo! or Bluetooth may be a great strategy,. • Other pitfalls. Not identifying the key decision makers; people involved in decision don’t understand brand naming; getting “stuck” on a brand name early in the process; not hiring the best patent attorney. Source: Lee Schaeffer and Jim Twerdahl, “Giving Your Product the Right Name,” in A. Griffin and S. M. Somermeyer, The PDMA Toolbook 3 for New Product Development, Wiley, 2007, Ch. 8. REPEATREPEATChoosing Brand Name
  50. 50. High Brand Loyalty Other Brand Assets More/Better Brand Associations High Perceived Quality High Brand Awareness Reduced marketing costs Increased trade leverage Patents or trademarks Strong channel relationships Creates positive image Helps customer process information Supports quality positioning Supports higher-price strategy Easier to make brand associations Increased liking and familiarity Provides value to customer: Assists in customer information processing Increases confidence in purchase Increases satisfaction in product use Provides value to firm: Increases effectiveness of marketing programs Increases customer loyalty and trade leverage Facilitates brand extensions Is a source of competitive advantage Managing Brand Equity
  51. 51. Characteristic Examples Delivers benefits desired by customers. Starbucks offers “coffee house experience,” not just coffee beans, and monitors bean selection and roasting to preserve quality. Stays relevant. Gillette continuously invests in major product improvements (MACH3), while using consistent slogan “The best a man can get.” Prices are based on value. P&G reduced operating costs and passed on savings as “everyday low pricing,” thus growing margins. Well positioned relative to competitors. Saturn competes on excellent customer service, Mercedes on product superiority. Visa stresses being “everywhere you want to be.” Is consistent. Michelob tried several different positionings and campaigns between 1970 and 1995, while watching sales slip. The brand portfolio makes sense. The Gap has Gap, Banana Republic, and Old Navy stores for different market segments; BMW has the 3-, 5-, and 7-series. Marketing activities are coordinated. Coca-Cola uses ads, promotions, catalogs, sponsorships, and interactive media. What the brand means to customers is well understood. Bic couldn’t sell perfume in lighter-shaped bottles; Gillette uses different brand names such as Oral-B for toothbrushes to avoid this problem. Is supported over the long run. Coors cut back promotional support in favor of Coors Light and Zima, and lost about 50% of its sales over a four-year period. Sources of brand equity are monitored. Disney studies revealed that its characters were becoming “overexposed” and sometimes used inappropriately. They cut back on licensing and other promotional activity as a result. Brand Report Card
  52. 52. • Umbrella branding strategy • Kellogg’s uses corporate name as part of all cereal brands. • Kraft uses Planters, Di Giorno, Maxwell House as well as Kraft in its brand names. • Individual branding strategy • No P&G cleaning products carry the P&G name (Tide, Bold, Mr. Clean, etc.). • Clorox does not use the Clorox name on many of its cleaning products (409, SOS) and does not use it at all on non-cleaning products (Hidden Valley, KC Masterpiece). • Other Option for branding strategy • ConAgra Foods used individual branding for years on its products (Orville Redenbacher, Reddi-Wip, Healthy Choice, Peter Pan) but now uses a unifying logo (smiling plate with spoon) and slogan (“Food You Love”). Brand Equity & Branding Strategies
  53. 53. • Standardization: Gillette uses the same brand name and positioning worldwide (“The Best A Man Can Get”). • Adaptation of Positioning: Canon sells the same camera worldwide but uses the “So Advanced, It’s Simple” positioning in North America. • Adaptation of Brands: General Mills cereals are marketed in Europe through a joint venture with Nestle and are sold under the Nestle corporate name there. Global Branding & Positioning
  54. 54. • Consistent brand management: develop brand manuals, set up workshops, train brand managers, consider intangibles such as quality reputation. • Frito-Lay runs a “market university” three times a year to encourage sharing of successful practices among managers worldwide. Global Branding Leadership
  55. 55. Intan Khatulistiwa Esa Abadi • Established in 1989 • Surabaya based local company • Manufacture of rattan furniture and accesosries Ingvar Kamprad Elmtaryd Agunnaryd Study Case IKEA di Indonesia
  56. 56. 2016 Today 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Swedish IKEA trademark registration 1/1/2006 Swedish IKEA trademark registration 1/1/2010 Indo IKEA brand registration 12/1/2013 Swedish IKEA open in Indonesia 6/30/2014 Swedish IKEA trademark for class 20 & 21 in 2010 is deleted 5/31/2015 Swedish IKEA trademark registration 6/1/2012 Swedish IKEA trademark registration in 2012 is approved 6/1/2014 1/1/2006 1/1/2009No business activity 1/1/2010 1/1/2013No business activity 1/1/2006 Indonesian Law : a trademark is not actively used for commercial purposes for 3 consecutive years, it may be removed for trademark register 11/30/2013 12/1/2013 Indo IKEA raise case in Jakarta Commercial Court to remove IKEA trademark registration in 2010 for class 20 & 21 9/1/2014 9/2/2014 Swedish IKEA appeal to Supreme Court 5/31/2015 Brief DescriptionBrief Description
  57. 57. Lesson Learned For Global Business, popularity and reputation does not automatically give a right to own the trade mark. It is important to secure trademark in every country that a business trade in and to understand the laws which apply Lesson Learned
  58. 58. Conclusion IKEA has clear product & service differentiation vs competition  Great advantage IKEA Indonesia has tried to fully adapt IKEA Global Concept • Good product quality & modern look • Product Visualization in real layout • Self Service & DIY Concept • Complete Shopping Experience • Lower price??? VALUE CREATION VALUE CAPTURED
  59. 59. Conclusion Just like this fancy food & drinks… It will be interesting to try for the 1st time, but if the taste are not good and not justify the price, will you come back? BUSINESS SUSTAINABILITY IS VERY IMPORTANT FOCUS ON WHAT CUSTOMER NEED THE MOST
  60. 60. Suggestion IKEA Indonesia has to relook again for their concept & value to be applied in Indonesia Leave the concept which can’t be captured by customer & focus on emphasizing the one best captured as an added value LOWER PRICE GOOD QUALITY ECO-FRIENDLY DESIGN CONSULTATION
  61. 61. THANK YOU

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