IKEA plans to enter the Indian market with an initial investment of 1.5 billion euros over two phases involving 25 stores. It will target India's growing middle class, especially "Stivers" and "Seekers", with modular, budget furniture. IKEA faces challenges in India including a lack of do-it-yourself culture, the need to change its sourcing strategy, and adapting store formats and designs to local tastes and preferences. Its marketing strategy will involve both traditional and digital campaigns to build awareness and educate customers on self-assembly.

1. IKEA – Entering India
Marketing Plan
Group H

2. Ikea’s plans to enter India are
becoming a reality

3. Ikea plans to enter India
• Part of expansion strategy in emerging
markets
• Entering in about 1-2 years.
• Two-phase program = 25 stores.
• Total investment of 1.5 billion EUR
• Commit to 30% of local sourcing

4. Why do we shop in IKEA?

5. IKEA in a glance
Revenues Bn EUR
9.0
%
338 Stores Founded in 1943
776 Million visits First flagship Store 1958
Best employer for
26 Countries working moms
1,018 Suppliers
100% manufacturing outsourced

6. Ikea in emerging markets
Challenges Takeaways
• Corruption • Non-market strategy
• Bureaucracy • Adjust products offering to local
• Competitor with low prices taste
• No brand recognition • Important marketing efforts
• No culture of “Do-it-yourself” • Opening small stores before flagships
• Scandinavian design • Educating in “Do-it-yourself”

7. The Indian Market
2nd world largest population World Largest democracy
Largest Open market economy 400 MM people in the middle class
+7% Annual growth rate By 2025 middle class will be world’s
5th largest consumer economy

8. Ikea’s Challenges in India
• No “Do-it-yourself” culture

9. Ikea’s Challenges in India
• Needs to change sourcing strategy

10. Ikea’s Challenges in India
• Store Format – Low % of car ownership

11. Ikea’s Challenges in India
• Competitors with very low prices

12. Ikea’s Challenges in India
• Low Home and Garden expenditure
• US: US$2,000
• China: $300
• India <$50

13. Ikea’s Challenges in India
• Scandinavian design too plain

14. Ikea’s Challenges in India
• No brand awareness

15. MARKETING PLAN

16. Competition Analysis
Organized Branded Retailers  Operate branded retail
stores in Prime Locations
 Range of offering
 High Quality, High Price
 Serves High-End and Upper
middle-class customers
Low-end Braded Retailers  Operate in shopping malls
 Low quality, Low Price
 Basic Designs
 Serves Middle-class
customers

17. Competition Analysis
Local Unorganized Players  Operate mom n pop stores
 Basic Designs
 Low Quality, Low Price
 Serves Middle-class and
lower middle-class
customers
Customized Furniture Makers  Customized Designs
 High/Low quality – depends
on customer preferences
 Serves all kinds of
customers
 Time consuming

18. Competition Analysis

19. Segmenting the market by income levels, we are
targeting the Strivers and Seekers
Globals 6.3% 21.7%
Strivers 3.8 % 20.9 %
Seekers 15.2% 30.6%
Aspirers 14.6% 13.7%
Deprived 3.8% 2.6%
2015 2025

20. Target Market

21. Target Market
Loves to Shop
Uniqueness = Status Symbol
Loves unique imported designs Changes her furniture frequently

22. Target Market
Young Software Engineer
Lives in small apartments
Moves to new
cities for jobs in 3-
Loves Modular,
5 years
easy-to-carry
furniture
Traveled Abroad
0-1 kid

23. Target Market
Student moved to Metro for higher
education
Functional Designs
Compact study table to fit in
the room Looking for budget
furniture having resell
value

24. Target Market
Quick furniture
Just got married
One-stop shop for her new
home

25. Ikea needs a different positioning statement
to attract this target market
“Your Partner in better living. We do our part, you
do yours. Together, we save money”.
More emotional
“Made for all, IKEA is the world’s most loved furniture and
maker of quality home design solutions, which will make
your home unique, and most importantly – yours!
Due to our passion for making your home, a better place
to live in.”

26. Blueprint Expansion
• Location: Mumbai • Location: Mumbai + Delhi • Location: Mumbai + Delhi +
• Store Format: In (New) Bangalore (New) + Mumbai
shopping mall • Store Format: In Shopping (Flagship)
mall • Store Format: In Shopping mall
+ New store as Flagship store
in Mall or City.

27. MARKETING MIX

28. PRODUCT PLACE
PRICE PROMOTION

29. PRODUCT PLACE PRICE PROMOTION
In the Indian Market IKEA will define its
product offering according to the Heat Map
STYLE
Scandinavian Modern Country Young Swede
(sleek wood) (Minimalist) (Neo-traditional) (bare bones)
High
PRICE
Medium
Low
STYLE
Scandinavian Modern Country Young Swede
(sleek wood) (Minimalist) (Neo-traditional) (bare bones)
High
PRICE
Medium
Low

30. PRODUCT PLACE PRICE PROMOTION
The Inorbit malls offer the activities and
services that attract high traffic of customers
• First store in Mumbai
• Offers easy access to
target population
• Offers movies,
restaurants,
playgrounds and shows
and offers that attract
potential customers.
• It is common activity
for leisure time to go
to the shopping
centers.

31. PRODUCT PLACE PRICE PROMOTION
The price IKEA establishes has to be parity
or lower to branded competitors
Bedroom Products
• Mantain it’s value
Pull out storage unit proposition of low
Multi-storage… prices
Eight wall storage cabin • In India offering
Cushions competitive prices with
branded competitors
Bed Comforters
Bed spread and cushion… • Internationally IKEA
prices 30%-50% lower
Basic Wardrobes
than competitors but
Queen Bed in India given intensive
competition in price
€- € 100 € 200 € 300 € 400 € 500 € 600
IKEA could maintain a
IKEA Price Competitors Price 10% - 15%

32. PRODUCT PLACE PRICE PROMOTION
IKEA will use traditional and non-traditional
marketing strategies in India
• Magazines
Traditional • Billboards • Increasing brand
Marketing • TV Ads awareness
• Product placement in Tv • Communicate the
value proposition
• Educate in the DIY
concept
• Digital Marketing • Attract customers to
Non - Traditional • Social Media Campaign the store
Marketing • Special Campaigns

33. Digital Marketing

34. Digital Marketing

35. Print Ad 1

36. Print Ad 2

37. Social Media Campaign

38. In the first year we are projecting sales for
EUR 53.3 MM increasing 56% CAGR
Year 1 Year 2 Year 3 Year 4 Year 5
Mumbai + Mumbai + Mumbai + Delhi +
Mumbai Mumbai
City Delhi Delhi Bangalore
Penetration/ City:
Mumbai 25% 30% 35% 40% 50%
Delhi 25% 30% 35%
Bangalore 30%
Target Market: 623,922 748,707 1,711,153 2,003,470 2,926,129
Avg Expenditure EUR 85 90 90 95 107.5
Number of Stores 1 1 2 2 4
Indian Suppliers 10% 15% 20% 25% 30%
Revenue 53,033,400 67,383,614 154,003,774 190,329,637 314,558,905
COGS 29,161,449 37,144,364 85,103,282 105,437,481 174,687,407
Gross Profit 23,871,951 30,239,250 68,900,492 84,892,156 139,871,498
Operating Cost 26,516,700 30,322,626 77,001,887 85,648,337 157,279,453
Operating Income (2,644,749) (83,376) (8,101,395) (756,181) (17,407,954)
Total Financial income
and expence - - - - -
EBITDA (2,644,749) (83,376) (8,101,395) (756,181) (17,407,954)
Tax (1,057,900) (33,351) (3,240,558) (302,472) (6,963,182)
EBT (1,586,850) (50,026) (4,860,837) (453,709) (10,444,773)
Minority Interest - - - - -
Net Income (1,586,850) (50,026) (4,860,837) (453,709) (10,444,773)
-3% 0% -3% 0% -3%

39. Timeline: The marketing activities are
taken place months before the opening
2013 2014
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Design Print Ads
Billboards
Magazines
Pre-Launch
Develop Digital Media
Develop Social Media Campaign
Develop and roll-out the website
Develop TV Ads
Design catalog
Design Prerolls for Theaters
Establish Sponsorships and
Partnerships
Execute the Sponsorships for famous
events (IPL 2013)
Air the TV Ads
Put the Print Ads - Billboards and
Magazines
Launch
Product Placement in TV shows
Do the Social Media Campaign
Special Launch Events - Public
Launch Catalog
Show the pre-rolls in theaters
Special Festive Season Events
Sepcial Wedding Season Events

40. Q&A