IKEA Indonesia Case Study :

Commercial Development & Protection of

Intellectual Property Right:

PRESENTED BY :
Adi (1506772643)
Adian (1506699150)
Agus (1506772441)
Alvin (1506699195)
Moko (1506699636)
 Chapter Overview
Basic New Product Process
Opportunity Identification &
Selection

Concept Generation

Concept Evaluation

Development Strategic Launch

Planning

Strategic Launch
Launch Implementation
 Chapter Overview
Strategic Launch Planning

Strategic Launch Decision Overall directions, incl. Target Market

Tactical Launch Decision Marketing Mix (IMC & 4P)

TRADEMARK MARKETING TARGET MARKET

PLAN

UNIQUE VALUE STP

 Chapter Overview
Strategic Launch Implementation

“How to deliver the new product’s value to the

target consumer”

Product Life Cycle

Communication Program

ATAR
 IKEA at a Glance

Largest Furniture Retailer

Multinational Company which sells
Ready to Assemble Furniture

Founded in Sweden (1943) by

Ingvar Kamprad Until March 16, IKEA has
389 stores in 48 countries
 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”
 IKEA’s Concept

IKEA is known for its modern architectural designs for

various types of home appliances & furniture
 IKEA’s Concept

IKEA’s interior design is often associated with

eco-friendly simplicity: For People & Planet

Sustainable Cotton & LED Lighting

 IKEA’s Concept

Together we save money by democratic design process:

We do our part, you do your part
“Quality product at low prices”
 IKEA’s Concept

Good at cost control, operational details, & continuous

development & innovation
 IKEA’s Concept

IKEA as a family recreational site

Showroom Warehouse

Food Market Smaland

 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)
Strategic Platform Decision
 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
 Current Situation
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
 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)

SWOT

Opportunities Threats
- Emerging markets - Direct competition from Ace, Informa,
- Growing online sales and Internet Courts, Best Pongs
presence - Difficult economic condition
- Expand into many more cities - Changing customer needs
Porter’s Five Forces Model

Threat of new
entrants
LOW

Bargaining Rivalry among Bargaining

power of existing power of
suppliers competitors buyers
WEAK HIGH STRONG

Threat of
substitutes
LOW
 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)
The Target Market Decision
 Chapter Overview
Target Market Decision
• Markets are so complex that one product cannot close to meeting all needs and desires
• Segmenting a market:
Geographic & Behavioral &
End-Use Benefit Segmentation
Demographic Psychographic

Original concept
generation

Parallel
development,
Method of keeping two or
operations three target
alternatives in
development

Concept testing or
product use testing
 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
 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
 Chapter Overview
Positioning
• The best to communicate the products to customer needs and or competitive pressure:
• Attributes (feature, function, or benefit)
• Surrogates
 IKEA Unique Value
Shopping Experience
• Display every products in rooms
• Customer move along a path through a “maze”
 IKEA Unique Value
Shopping Experience
• Self-services
 IKEA Unique Value
Shopping Experience
• Swedish Restaurant & child play area
 IKEA Unique Value
Shopping Experience
• “You don’t need a decorator, you can get a harmony in your flat just like that”
 IKEA Unique Value
European product quality & design
• Focus on simplicity & functionality
IMPLEMENTATION OF THE STRATEGIC PLAN
Product Life Cycle & Product Adoption

THE LAUNCH CYCLE

The Launch Cycle
 Awa – T- A - R
Awareness – Trial – Availability – Repeat
AWARENESS
Prelaunch and Preannouncement
Prelaunch and Preannouncement
Announcement, Beachhead & Early Growth
Announcement, Beachhead & Early Growth

Story Telling Comp.

Catalogue Ad
TRIAL
 TRIAL
TRIAL

IKEA Catalog – Augmented Reality Vlogger Endorsement

TV – Sponsored Content Dedek gemes Vlog

Advertisement 1 Advertisement 2
TRIAL
TRIAL
 AVAILABILITY

China, Poland, Italy, Sweden

1.600 Suppliers

27 Distribution Center - 16 Countries

389 stores in 48 countries

AVAILABILITY

LEAN LAUNCH
• Just In Time
• No Over production
• No Over Processing
• Flexible
REPEAT
REPEAT
REPEAT
REPEAT
REPEAT
REPEAT
 REPEAT
REPEAT

14%
75,000 Customer / Mth

Customer Engagement
Award 2015
BRANDING MANAGEMENT
REPEAT
• 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
 Choosing Brand Name
REPEAT
• 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.
 Managing Brand Equity
High High High More/Better
Other Brand
Brand Brand Perceived Brand
Assets
Loyalty Awareness Quality Associations

Reduced Easier to Supports Creates Patents or

marketing make quality positive trademarks
costs brand positioning image
associations
Increased Supports Helps Strong
trade Increased higher-price customer channel
leverage liking and strategy process relationships
familiarity information

Provides value to customer: Provides value to firm:

Assists in customer information processing Increases effectiveness of marketing programs
Increases confidence in purchase Increases customer loyalty and trade leverage
Increases satisfaction in product use Facilitates brand extensions
Is a source of competitive advantage
 Brand Report Card
Characteristic
Delivers benefits desired by customers.
Stays relevant.
Prices are based on value.
Well positioned relative to competitors.
Is consistent.
The brand portfolio makes sense.
Marketing activities are coordinated.
What the brand means to customers is well
understood.
Is supported over the long run.
Sources of brand equity are monitored.
Examples
Starbucks offers “coffee house experience,” not just
coffee beans, and monitors bean selection and
roasting to preserve quality.
Gillette continuously invests in major product
improvements (MACH3), while using consistent
slogan “The best a man can get.”
P&G reduced operating costs and passed on savings
as “everyday low pricing,” thus growing margins.
Saturn competes on excellent customer service,
Mercedes on product superiority. Visa stresses
being “everywhere you want to be.”
Michelob tried several different positionings and
campaigns between 1970 and 1995, while watching
sales slip.
The Gap has Gap, Banana Republic, and Old Navy
stores for different market segments; BMW has the
3-, 5-, and 7-series.
Coca-Cola uses ads, promotions, catalogs,
sponsorships, and interactive media.
Bic couldn’t sell perfume in lighter-shaped bottles;
Gillette uses different brand names such as Oral-B
for toothbrushes to avoid this problem.
Coors cut back promotional support in favor of
Coors Light and Zima, and lost about 50% of its
sales over a four-year period.
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 Equity & Branding Strategies
• 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”).
 Global Branding & Positioning

• 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 Leadership
• 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.
 Study Case IKEA di Indonesia

Ingvar Kamprad Elmtaryd Agunnaryd Intan Khatulistiwa Esa Abadi

• Established in 1989
• Surabaya based local company
• Manufacture of rattan furniture and
accesosries
 Brief Description
Brief Description Swedish IKEA open in Indonesia
6/30/2014

Indo IKEA brand registration

Swedish IKEA trademark registration 12/1/2013
1/1/2006
Swedish IKEA trademark for
class 20 & 21 in 2010 is
Swedish IKEA trademark registration deleted
1/1/2010 5/31/2015

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016
6/1/2014
Today
Swedish IKEA trademark registration in
2012 is approved
6/1/2012
Swedish IKEA trademark registration

1/1/2006 No business activity 1/1/2009

1/1/2010 No business activity 1/1/2013

Indonesian Law : a trademark is not actively used for commercial purposes for 3 consecutive
years, it may be removed for trademark register
1/1/2006 11/30/2013

Indo IKEA raise case in Jakarta Commercial Court to

remove IKEA trademark registration in 2010 for
class 20 & 21
12/1/2013 9/1/2014

Swedish IKEA appeal to Supreme Court

9/2/2014 5/31/2015
 Lesson Learned
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
 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 VALUE
CREATION CAPTURED
 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
 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
GOOD QUALITY
LOWER PRICE
ECO-FRIENDLY

DESIGN
CONSULTATION
THANK YOU