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Brand Management stratgy

The IKEA brand is the sum total of the emotional and rational values that consumers associate with the
IKEA trademark and the reputation of our company. The brand image is the result of over 50 years work
by IKEA co-workers at all levels all over the world.

Marketing communication :

The overall task of IKEA marketing communication is to build the IKEA brand and inspire people to come
to the stores. The IKEA concept builds on a relationship with the consumer. Nine key messages are used
within the IKEA marketing communication to build this relationship. These are

• The IKEA concept is based on the market positioning statement. "We do our part" focuses on their
commitment to product design, consumer value and clever solutions. By using inexpensive materials in a
novel way and minimising production, distribution and retail costs, their customers benefit from low

• The IKEA product range is developed to be extensive to have something that appeals to everyone and
to cover all functions in the home. The products are modern not trendy so they are practical enough for
everyday use.

• IKEA is the home furnishing specialist- IKEA products are functional and appealing; they enable people
to improve their home life through practical solutions to everyday problems.

• Low price is not appealing unless it represents good value for money. This is where IKEA is able to
make a real difference. IKEA is committed to having a good relationship with our suppliers and so we are
able to purchase good quaility, economically produced designs that are bought in bulk to keep costs
down. By making all their furniture flat packed they cut down on transportation and assembly costs.

• Function - IKEA products are based on a functional approach to design. IKEA design means products
that are attractive, practical and easy to use. They don't have unnecessary features, they give genuine
solutions for specific home furnishing needs

and are made of the most suitable materials for their purpose.

• The right quality- IKEA products are subjected to rigorous tests to make sure that they meet national
and international safety standards.

• Convenient shopping- The IKEA store offers "everything under one roof", most of it available for
immediate take-away. IKEA offers service where they need it, but allows customers to make most of the
decisions themselves. This means that they need to make it easy to choose the right products by
displaying them correctly, describing them accurately and having a simple returns policy.
• A day out for the whole family- IKEA aim to look after thier customers by planning for their needs. Not
only do they provide inspiration and ideas, but they also encourage people to touch, feel and use the
products on display to see how they would fit into their own home. They have new products arriving all
the time, seasonal themes, play areas for children, special events and a great value family restaurant.

• Swedish IKEA, - The key IKEA messages all have their roots in the Swedish origin of IKEA. Swedish
furniture is light and fresh yet unpretentious. The warm welcoming Swedish style has become a model
of simplicity, practicality, and informality that is now world renown.

Marketing Mix of IKEA:

IKEA is a world famous brand of affordable home furnishing products. As of August 31,
2016, the brand had 340 stores operating across 28 countries. Apart from its affordable
products, the brand is also known for great quality and matchless designs. When it
comes to design and quality, IKEA is known for its passion and for managing low prices
while providing products that are unequalled in beauty. So, IKEA has brought a great
match of quality and prices for its customers. Everybody wants to have a beautiful home
and decorate it to the best of his capability. However, to afford designer furniture and
great looking home furnishing products is not possible for all.

In this sense IKEA is no less than a boon for the middle class customers who are
looking for affordable products that are good in quality. The product range of IKEA is
equally vast. It sells more than 9500 products from its stores which are designed to
provide a matchless shopping experience. IKDEA mainly targets the middle class.
However, it has used unique and innovative methods to market its brand and to grow its
market presence and customer base. Here is an analysis of the marketing mix of IKEA
that analyses the four P’s in its marketing mix – Product, Place, Price and Promotion.

A lot of IKEA furniture is designed to be “Do ItYourself” DIY rather than be
pre-assembled by the consumers. This will allow consumer to get the product
at a lower cost and use of packaging. This is also a practice point for many of
the chain in the Asian countries where public transportation is being utilized in
everyday’s life. However, the flat-pack distribution channel allows the
consumers for an easier access of public transportation from the store to their
homes for the assembly of their purchase. IKEA Group had also identified the
product by a single name. Most names are Swedish in origin. Giving an
example, a product named “DUKTIG”, meaning good and well behaved is a
direct translation to the kids toy, “EFFEKTIV” which means efficient and
“SKARPT” being translate into sharp or clever.

IKEA is a multi-global company situated in different regions and countries with

different languages. According to Founder Mr. Ingvar Kamprad, he realized
that by remembering names rather than a particular product code which is
lengthy and difficult to remember. In linguistic aspects, the interpretation of the
words presents a whole new different level of the product where recently they
have released a new product named “LYCKHEM” which bears the meaning of
bliss. IKEA has a list of product strategies, such as doing product that are
multi-purpose, simple to use or fix, worth the price and durability. Different
kinds of goods are based on consumers’ needs and demands. This shows
that IKEA is concern about the requirement of what an individual consumer
needs and trying to fulfil the demands for all customers. For example, product
that meets the market criteria such as beds and kitchenware’s that is
convertible into different functions.

The imperative of an individual product Pricing serves as an essential feature
of the marketing mix. The products are usually charged according to the
balance of affordability by consumers for them to make their purchases and
by determining the amount of sales achieved by IKEA will obtain a profitability
target to their ultimate objective. Theoretically, there are a set of strategies
concerning pricing has been adopted by IKEA: The Long-Term Aspiration of
IKEA An analysis has been conducted by IKEA on how the company positions
per se in the marketing place with three proposals and determining how the
‘furniture-giant’ is being properly financed.

Below are the following examples of the three proposals: · Profitability

achievement for the forthcoming investments · Pricing to be kept at
reasonable range to ‘shut out’ competitors · Capabilities of maximizing sales
target through contemplation of PricingAfter contemplation of the three
elements, the decision made has to be firm as once the selected proposal is
in progress, the difficulty of changing the proposal would seems too far-

Reducing a lower price in several ways:

Economics of Scales
IKEA adopted a system that using large-scaled economies to contract for
long-term producers for their goods, so as to set its price cheaper. Minimal
Packaging IKEA is concern about their packaging of products. The packaging
is created in cardboard brown. In addition to the low cost incurred, cardboard
are easy to recycle and that makes it able to reduce spending in order to sell
goods cheaper. The Short-term Aspiration of IKEA The tactics adopted by
IKEA in terms of promotional offers and sales of goods includes the following
pricing aspects: Penetration in Pricing – Setting a reasonable price to
encroach the industry. Destruction of Pricing – A mechanism referred as
“Price Wars”, the term explains reduction in prices to an extent of eliminating
competitors in the relevant market industry. Promotional Pricing – Sales
pricing placed to an extent of the complacency of the individual consumer
through their special offers so to allow them to make the purchase within their
budget expectations.


In every advertisement from different countries they created, they always
display slogans related to the goods and IKEA. Each country’s IKEA has
different slogans and advertising methods which adapted to the countries
culture itself. IKEA have shown high profile of the high profile of the
advertisement campaigns which also includes the online advertisements.

IKEA can provide sponsorship for the events functions.
Example: dinner and dance, wedding functions and also the fashion shows.
IKEA provides the furniture (e.g. seats, tables and the stage table) CONDUCT
SURVEYS Retention in Customers uprising : Customer surveys being done
periodically allows an organization to obtain customers feedback with their
point of view towards the company which would tremendously improve the
customer retention. Performance feedback: Customers are the best ‘judiciary’
function of an individual product and services offered by the company. A
customer suggestion can help the company to make any adjustments on their
products and services accordingly.

Innovation Approach: Customers can be the best source to derive new

innovative ideas. By looking objectively, there is a concern that has to be
taken into consideration by adopting customer’s opinion; for example, the raw
materials usage and cost incurred. However subjectively, the customers may
suggest new proposition in order to improve a particular product or even
propose a new product that would benefits the company and consumers.
ORGANISING TOURS IN COMPANY IKEA can organize weekly or monthly
tours to let customers understand their products. The tours will explain the
products of the methods for saving space and convertible.SALES



STRATEGY: Purchase of the first item, Free of the second same item Gift
card to friends, customers (office gifts to customers) and family: the customers
of IKEA can purchase this over the counter. Gift vouchers: the gift voucher
can purchase over the counter. Buy one get one free: this promotion can be
conducted twice a year for clearance sales, (e.g. great Singapore sale), with
the cheapest item free. Purchase above a certain amount with 30% off: the
customers can bought their purchase above a certain amount (e.g. $100 and
above) with $30 off for their purchase. Competitions: IKEA can be the
sponsorship for the variety show. The participants can grab and go items
above a certain amount (e.g. $500). The team (a group of 2) of participants
whom grab the items of the nearest amount to the targeted amount can take
the items home. Membership: the members can apply their membership
online with the NO MEMBER CARD SYSTEM. Purchase over the counter: the
members just have to notify the cashier their login id (e.g. 6 digits) for
accumulating of points to redeem the items in store. Monthly lucky draws: the
customers may fill the receipt with the particulars and they can drop in the
receipt in the lucky draw box at the counter.

Catalogues IKEA catalogue is published annually. The first catalogue was

published at Sweden, the catalog is now available in 55 versions, In 36
countries, in 27 languages, are recognized for their marketing tool of the
furniture giant, taking up their annual revenue of 70% of the marketing budget.
The catalogues are available in the retail outlets and sending them through
mails to household. DIRECT MARKETING STRATEGY IKEA website
provides online shopping. IKEA catalogue is a form of direct marketing, to
allow consumers to buy their products immediately. It not only can explore the
potential customers, but also to enhance the corporate image. This may lead
to a certain market segments prefer through catalogue shopping.


IKEA is renowned for their competitiveness approach and their innovative
creation results. It produces a limited amount of products and mostly relies on
its network of suppliers. Products through IKEA suppliers are able to create
atmospheric unique designs featuring environmental responsibility materials
and the efficiency usage of resources. IKEA expansions presents an
enormous challenge for distribution, adaptions to the future necessitates
regular adaptations to distribution structure. Facing future challenge of people
with higher education is more computer technology. Most prefers ordering
their customised design furniture online. E-shopping and receiving daily
orders via telephone are continuously uprising, which requires the efficiency
and flexibility distribution solutions towards each individual customer’s

Competitive advantage in the Marketing strategy of IKEA –

Coordinating with designers across the world and testing their ideas so as to
provide the growing home furnishing needs is one of the biggest advantages that
Ikea has over other players in the markets.

Wide-range, artistically designed, eco-friendly and affordable furniture at low cost

will always be the driving force for the company.

IKEA has garnered respect in eyes of the community it serves and for the
employees who work for them which has created positive word of mouth and has
helped the company in increasing the share of wallet of the customers.

Long-term strategic partnership across the supply chain has helped the company
in manufacturing and delivering the items on time.

BCG Matrix in the Marketing strategy of IKEA –

IKEA home furnishing solutions in the developed nations are stars whereas in the
developing nations it is the question mark due the low awareness level and
inclination of customers towards local players.

Distribution strategy in the Marketing strategy of IKEA –

IKEA coordinate with supply chain stakeholders like designers, material

suppliers, product developers and its stores all over the world to make
their products available to the consumer.

They had partnered with 1002+ suppliers in 51 countries who help them in
maintaining the quality of home furnishing /Kitchenware & appliances in its 380
stores worldwide.
Brand equity in the Marketing strategy of IKEA –

Branding is the essential element when it comes to marketing your products.

Positive word of mouth, CSR activities and empowering their co-workers has
helped the company in creating awareness and popularising their brand even in
the markets in which they are not present.

Its various popular advertising campaigns like “Home is the most important place
in the world” or its “unboring” and various others TV campaigns helped the
company in creating top of mind awareness.

Competitive analysis in the Marketing strategy of IKEA –

Many national & international players are giving head-on competition to IKEA.
Companies like practicer, TepeHome, Kelebak, EnglishHome, Fabfurnish.com
and much more are dealing in online and Offline mode while IKEA has only
franchised stores which mean low infrastructure cost and high visibility.

Market analysis in the Marketing strategy of IKEA –

Home furnishing industry is facing intense competition from Local outlets &
online e-commercestart-ups. The only driving force is the novelty in the style &
design factor which is shaping the industry demand side.

IKEA have functional & design leadership in the furnishing /Kitchenware &
appliances segment in most of the markets it is in.

Customer analysis in the Marketing strategy of IKEA –

Customers of IKEA are the working class people who are looking for value for
money home furnishing solutions. These are majorly in the age group of 20-50
years. These are the consumers who have an inclination towards the stylish &
modern home furnishing solutions.

IKEA of sweden,home furnishing retail stores was founded by Ingvar Kamprad(ofBmtaryal

Agunnaryd,sweden)in 1943 has thrived well and grown into a successful ,global network

spanning over 36 countries with its 265 shopping centares,hosting 410 million shoppers a
year. IKEA with its retailing concept sells a lifestyle and make contemporary design on

affordable luxury to the global middle class consumers around the world enjoy its good

taste and recograre value.

Ikea’s sales are growing approximately 15%yearly and maintain operating margins of 10%

which are among the best in home furnishing. IKEA maintains these profits even while it

cuts prices steadily Ikea’s culture, promulgated by kampard,includes egalitarianism, steely

competitiveness, relation cost cutting frugality and design culture. IKEA is well known for

its” cut pries” and it goes deeper when it wants to hit rivals in certain segments. It helps that

frugality is deeply untrained in the corporate Dna as the obsession with design. The cost

obsession fuses with the design culture. Design is accepted if they can be made affordable.

Ikea 12 full time designers along with so freelances work hand in hand with its production

teams to identify the appropriate materials and least costly supplies. With a network of

1300 suppliers in 53 countries Ikea works overtime to find the right manufacture for the

right product. Simplicity, a tenet of Swedish design, helps keep cost down. They look to find

innovative use for discarded and unusual materials.

IKEA will need to source twice as much maternal as today in 2010, if sales keep growing at

their historical average. They can’t increase by more than 20 stores a year because supply is

the bottle week. Since Russia is a source of timber, IKEA aims to turn it into a major supplier

of furnished products, thus, IKEA would be able to overcome the supply contain

(bottleweek) and envisage on keeping the pace of sales growth intact. Adding to the

challenge, the suppliers and designers have to customize some IKEA product to make them

sell better in local markets. Line manager unit’s people’s houses in the U.S and Europe to

peek into their closets. The American market poses special challenge for IKEA because of the

huge differences inside U.S Americans what more comfortable sofas, higher quantity

textiles, more spacious entertainment units, now U.Smanagers are paying more attention to
the tiniest details.

IKEA has stumbles before. Foray into Japan 30years ago was a disaster. Japanese wants high

quality and great material and not low price and particleboard. If IKEA would have realised

this market needs, it would have averted disaster. Adoptability to market needs is just as

important as culture, cost obsession and competiveness. IKEA does not, currently have

conspicuous competitors.

Store visit to any IKEA will provide with an enthralling experience the world over-spacious

slow. Rooms, sheer number of items,” gentle coercion “fully accessorized displays,

restaurant playrooms and ect.Ikea can extended its product ranges(diversification)such as

rags,carpets,and other interior decorating item.They can diversify home furnishing to

offices, factories, steel furniture ‘and target affluent and lower income groups. Because

competition may increase and ikea is also seeing more competition than ever,for instance,in

Japan nations has a lock on low cost furniture. The great challenge of IKEA as it become

larger and more diverse is how to keep the core founding values alive. IKEA is still run

manager who were trained by kamprad himself and personal devoted to the founder.Asthe

direct link with Kampar disapper,the culture may start to fade. IKEA they fore should plans

for successive, succeeding leadership reviewed mission, vision and goals. Product

densification, novel marketing strategies market penetration and well planned short kea

and long-term strategis .Ikea’s culture should evolve with time.

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