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IKEA Marketing Strategy Presentaion
IKEA is an international home products company known for its flat-pack furniture and accessories. It was founded in Sweden in 1943 and has since expanded globally. The document discusses IKEA's history, business model, marketing strategies, and expansion into international markets like India. IKEA keeps costs low by designing products to be affordable, easy to assemble, and ship in compact packages. It uses a multi-pronged approach including competitive pricing, wide selection, convenient shopping experiences, and environmental sustainability to attract customers.
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IKEA Marketing Strategy Presentaion
- 2. IKEAâs Business IKEA isan international home product company that designs and sells ready to assemble furniture appliances and home accessories
- 3. IKEAâs Founded Furniture Introduction FurnitureCatalogue 196519581957195619551953194719431926 1951 IKEA designs its own Furniture IKEA introduces Flat packages IKEA stores open at ⢠Almhult ⢠Stockholm IKEAâs Timeline IKEAâs Company History* *Source: www.ikea.com
- 4. MARKETING ANALYSIS SWOT, PESTand the Marketing Mix
- 5. INTERNALEXAM EXTERNALEXAM SWOT W O T S STRENGTHS ⢠Wide rangeof 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 donât 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 â˘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
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- 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 waysto make Furniture Strategy followed by IKEA Price Quality
- 10. Implementation Steps Establish RetailPrice Select Manufacturer Determine the material used Design Process
- 11. Step 1: EstablishRetail 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: SelectManufacturer ⢠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: Determinethe 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: DesignPhase ⢠Use internal competition to select a designer ⢠Flat packaged boxes to make it easier for consumers to transport the furniture home + save shipping costs
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- 16. Customer Experience atIKEA ⢠Bright and inviting experience for customers ⢠Resembles Modern Theme park with childcare centers ⢠Restaurants serving various delicacies
- 17. IKEA for kids: Youshop, kids play ⢠IKEA provides clean feeding and changing rooms for small children ⢠Restaurant has a special menu just for kids
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- 29. IKEA INVADES AMERICA 2002200120001999199819971985Mid 1990âs First store Companyâs fortune changes Revenues double ($600 mn to $1.27 bn) 3rd largest store
- 30. PROMOTION STRATEGIES â˘Commitment-free approachto furniture â âUnboringâ advertisement â˘Web site advertisement â˘The Law of Candor : When you admit a negative, the prospect will give you a positive â˘The Law of the Category: If you canât be the first in a category, set up a new category that you can be first in â˘Additional Customer facilities: child-care, restaurants and help desk
- 31. INDIAN FURNITURE MARKET â˘Asof 2006, the Indian furniture market is estimated to be worth US$ 7.9 billion Source: http://www.ibef.org/download/Furniture_170708.pdf
- 32. PROBLEMS FACED BYINDIAN FURNITURE INDUSTRY
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- 34. Market Development Diversification MarketPenetration Product Development Products & Services Markets Existing New ExistingNew
- 35. IKEAâS INITIAL COMMUNICATION STRATEGYIN INDIA Integrated Communications Strategy
- 39. IKEAâs communication strategy* â˘Media Channels covered â TVC â Print â Digital ⢠Pull Strategy ⢠CSR initiatives Source: http://www.livemint.com/Money/jI27GvmsK5stzTn61yyWUN/Ikeas- consumer-challenge-in-India.html
Editor's Notes
- #30Â 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 1990âs 1997-2001 2002: 14 stores in USA serving 30 mn customers