Running Head: MARKETING COMMUNICATIONS BRIEF OF IKEA, NEWZEALAND 0

MARKETING
COMMUNICATIONS BRIEF OF
IKEA, NEWZEALAND
MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 1

Table of Contents
TASK 1: Background analysis................................................................................................... 3

History of IKEA ..................................................................................................................... 3

Organizational structure ......................................................................................................... 3

Vision & mission statement ................................................................................................... 3

Core values and beliefs .......................................................................................................... 3

IKEA product portfolio .......................................................................................................... 4

Task 2: Analysis of potential competitors ................................................................................. 4

Strength of the Danske Mobler .............................................................................................. 4

The weakness of the Danske Mobler ..................................................................................... 5

Strengths of freedom furniture ............................................................................................... 5

The weakness of freedom furniture ........................................................................................ 6

Task 3: SWOT analysis ............................................................................................................. 6

Strengths ................................................................................................................................. 6

Weakness ................................................................................................................................ 7

Opportunities .......................................................................................................................... 7

Threat ..................................................................................................................................... 8

Task 4: Current marketing strategies ......................................................................................... 8

Segmentation strategy ............................................................................................................ 8

Target market ......................................................................................................................... 8

Positioning strategy ................................................................................................................ 9

Task 5: Marketing strategies (4 Ps) ........................................................................................... 9

Product ................................................................................................................................... 9

Pricing .................................................................................................................................. 10

Place ..................................................................................................................................... 10

Promotion ............................................................................................................................. 10

Task 6: Digital marketing communication strategies .............................................................. 10

MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 2

Context ................................................................................................................................. 10

Content ................................................................................................................................. 11

Conduct ................................................................................................................................ 11

Conversation......................................................................................................................... 11

Cadence ................................................................................................................................ 11

Crisis..................................................................................................................................... 11

Task 7 ....................................................................................................................................... 12

References ................................................................................................................................ 13
MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 3

TASK 1: Background analysis

History of IKEA
This organization was originated in Sweden in 1943. This organization was established
by Ingvar Kamprad. IKEA started to trade in furniture after five years. IKEA first outlet was
opened in 1958 in Almhult, Smaland and the name of the store was Mobel-IKEA. It has gotten
high-level success as the organization's West German executives released a store in 1973 in
Konstanz. Organization also opened many stores in other portions of the world like Japan,
Australia, Canada, and Hong Kong, Singapore and so on. The organization later expanded in
many nations in 1990 and 2000. The biggest market of IKEA is Germany as it holds 53 stores.
IKEA operates more than 424 stores in 52 different nations (IKEA, 2011).

Organizational structure
IKEA is operated and owned by an intricate range of for-profit and not for profit
organizations. Structure of the organization is divided in two portions operations and
franchising. Intersystem of IKEA is owned by IKEA inter holding, an organization registered
in Luxembourg. IKEA inter holding, in turn, is preserved by Interogo foundation based in
Liechtenstein. The INGKA holding in 2016 sold its manufacturing, design, and logistic
subsidiaries to inter holding of IKEA. Ingvar Kamprad, in June 2013 resigned from inter
holding of IKEA board. Mathias Kamprad his youngest son interchanged perludvigsson as a
chairman (Dudovskiy, 2017).

Vision & mission statement

Vision and mission statement of IKEA both are link by the overall objectives of the
organization. The vision of an organization is an inspirational view that supports the business
to create a focus directed towards the future by inspiring stakeholders, customers, and
motivates employees to gain objectives. IKEA wants to provide the surety that organization is
accessible for everyone by creating a better everyday life. For this organization reinvest a large
amount of profit in stores, sustainable solutions, and product development by regularly
lowering values. The mission statement of IKEA is to communicate all the objectives to
employees, customers, and stakeholders. It continues to work according to the mission by
increasing product quality at affordable prices (Jurevicius, 2013).

Core values and beliefs

IKEA believes each individual has valuables to deal and strive to hold similar values in
the method of work. Identity of IKEA is reflected by core values and beliefs as togetherness is
 MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 4

in the heart of IKEA culture. It builds IKEA strong to trust each other in a direction by forcing
toward positive change and generate an important impact for the generations. The organization
regularly staying close to reality by finding a solution toward impossible challenges as part of
the success of an organization and source an inspiration to go forward to move on a subsequent
challenge (Siddle, 2018).

IKEA product portfolio

IKEA product portfolio is a collection of amenities or products offered by the
organization to decrease the negative impact on the environment by the perspective of sage
health for customers. The idea of the organization is to keep low cost by use of resources to
design product and strive to use recyclable and renewable materials in products. The
organization is working together with skilled manufacturers to design and find methods to catch
the most obtainable of raw material. The organization is working with flat packs and capable
enough to offer a product to a customer at a low price. The product range of IKEA approaches
at a different level. The organization is leading this industry at a good level (Peterson, 2019).

Task 2: Analysis of potential competitors

For IKEA two competitors are Danske Mobler and freedom furniture (Frank, 2019).
Danske Mobler organization is known as a leading firm within the industry. It carefully looks
to make strategic decisions. The organization continuously analyse competitive positioning
within the business environment by reviewing strategies and make decisions. Freedom is one
of the major homewares and furniture retailer by more than 65 outlets in New Zealand. It builds
interacting procedure to undertake and cording among all departments like logistics,
operations, finance, management information system, and so on.

Strength of the Danske Mobler

 Distribution and reach

Danske Mobler organization has a large number of stores and support a strong network
of distribution by providing surety about the products that are available easily to customer’s at
large number timely. For example, an organization uses marketing channels like direct
marketing and direct mail to customers by a full product catalogue that drive the internet,
telephone, and retail purchase.

 Cost structure
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The organization has a low-cost structure that supports to yield low cost and trade in a
product at a low worth and make it reasonable for customers. For example, to increase profits
organization finds appropriate ways to identify excessive expenses that not provide additional
value to business activities. Analyst within the organization provides insights to increase the
profitability of a particular product by replacing the least profitable products and apply many
strategies to decrease costs.

The weakness of the Danske Mobler

 Research and development

Danske Mobler is spending a large amount of money on research and development

expenses within the industry and spending lesser money on the departments that had an
important benefit as an outcome of their inventive products. For example departments not care
about the development of the department as there is gape of training to develop skills and
competences.

 Low current ratio

The current ration of Danske Mobler presents the ability of the organization to come
across the short term financial obligation. It shows that an organization will have the problem
of liquidity in the future. For example, the organization experienced prices and distress that
varied much more than before.

Strengths of freedom furniture

 Financial position

Freedom furniture has a strong monetary position by consecutive profits in recent years
by reserves of accumulated products and used to finance upcoming capital expenditures. For
example, a balance sheet of an organization is listed in the order of accounting equation and
delivers creditors and investors an easy and clean view of organization economic position,
debts, and resources that used for purposes of financial analysis.

 Automation

It has applied automation at many stages of production that allow effective use of
sources by decreasing costs with consistency in quality of product and ability to scale up and
down product according to the market demand. For example, an organization to support
customers around the clock has developed software to contact the business by messaging than
 MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 6

email and it is easy to integrate by automated customer support desk and follow up to get the
surety about the teams to connect personally at right time in the journey.

The weakness of freedom furniture

 Workforce diversification

The workforce at freedom furniture concentrates on local workers rather than racial
backgrounds. Diversification lack makes it hard for employees to adjust to the workplace by
losing talent. For example, managers within the organization provide certain instruction to
complete specific tasks that fail to fill comprehend instructions that employee make errors to
complete a task without receiving clarity.

 Market research

Freedom furniture has not researched a market that serves for the past two years. The
organization is deciding based on two-year data. There is the requirement of evolving research
according to time. For example, the organization can test a program to determine the need to
make changes based on actual and real base.

Task 3: SWOT analysis

IKEA is known for its effective and simple approach to retails. Organization assured to
keep cost low and transfer values to customers as a product of organization are ready to use
and flat packed to easily assembled for customers themselves. For this IKEA holds an efficient
online presence as a key strategic driver to approach towards retailing with huge dividend
toward shareholder of the organization (Broad, 2011).

Strengths
 Reputation and presence of market

IKEA is the furthermost valued furniture retailer and has good value as a furniture
retailer brand with a value of 17.4 US billion in 2018. The IKEA system franchise holds more
than 423 stores in 52 nations and markets. It has a strong reputation for a brand and global
presence to ensure that consumers will select IKEA over competitors. It offers 12000 product
and produces 2.5 billion visitors of IKEA websites and more than 957 million visits in the
previous years. For example, IKEA can produce products by effective ways of lowering cost
and without impacting expectations of customers at different places as holds goodwill at an
effective level.
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 Strong financial position

IKEA has reported a profit of 38.8 billion. It can be attributed to concepts by effectively
that translated into an array of product assembled by the customers themselves and led to a
high reduction in cost. It has focused to maintain cost leadership that imposes a positive impact
on its revenue. For example, ready to assemble approach attracts customers to make decisions
through innovative strategies to target a large number of customers.

Weakness
 Negative media attention

The organization is operating in many different markets globally and has faced much
criticism over time with different issues. Organization employees complained about activities
of questionable promotion and poor treatment that can damage reputation and loyalty. For
example, an organization only focus to provide standardized quality service and products.

 Products at low quality

This is a difficult task to decrease the cost by maintaining the same quality of a product.
For example, the reduction of cost by maintaining the same quality product put a negative
influence on the goodwill of the brand as the raw material cost is increasing and this is not
possible to maintain the quality at low cost.

Opportunities
 Global expansion

Expansion of IKEA with the emerging markets in the developing nations is an untapped
base of customer that can be leveraged for effective profitability. For example, an organization
can make plans for expansion in a larger market like China and South America by cost
leadership strategy with hopes to yield benefits for the organization.

 Expansion in the grocery market

In today’s time, everyone likes healthier food that has increased demand for grocery
products in many nations. It is a great option for IKEA to upsurge the business of grocery and
introduced stores of grocery within exists demand. For example, an organization can
successfully be aligned by a growth strategy to manage food and restaurant outlets.
 MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 8

Threat
 Stiff competition

It is operating in 52 nations and has stiff completion with international and local brands.
For example, in India, local competitors like Pepperfry is an online furniture retail store that is
providing a tough time to IKEA.

 Lawsuits

The organization underwent many litigation and lawsuits matters because of its recent
issues of discrimination of employee with poor quality of products that offered. For example,
IKEA was subjected to lawsuits from its customers that were injured by its products.

Task 4: Current marketing strategies

Segmentation strategy
The organization employs a market segmentation strategy that aims to attract specific
market segment (Jacquelyn, 2017). One of the important stations of division is to marketplace
the sustainability of the product. This present that product is made in a way to meet the
requirements and demands of a market that present kind for the environment with the future
generation. The organization adopts a green approach that appeals to a marketplace that is
apprehensive about the environment (Cronin, 2011). IKEA design products to reduce wasted
space in transportation and consumption. For example, the foldable lounger is an example to
save the idea that is easy to carry and use around according to the requirements. For example,
the electrical product of IKEA are vitality efficient as the consumption of electricity is lesser
than the general voltage product in the marketplace as save water consumption.

Target market
Based on marketing strategy target marketplace of organization is younger customers
that focus on space-saving and lifestyle. These customers just starting their lifestyle and may
move to a new apartment or place or young couple that decides to move in together. This kind
of customers holds the low budget and save money as focus on the future and environment.
The next type of customers are students that look toward a product that can deliver convenience
to current lifestyle. The traits of the target marketplace are lower-income as they are not in
employees and holds a simple approach with usability. They require to solve daily requirement
without many hassles (Aghdaie & Alimardani, 2015). The third target market of IKEA is older
customers. The requirement of this kind of customers is light, not bulky and older customers
MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 9

incline to be downsizing. It shows that they are marketing their previous house and moving to
apartment-style for security and comfort. This customer seeks a simple product that delivers
comfort. For example, these tend to green approach towards lifestyle as like to environment-
friendly approach towards the future generation.

Positioning strategy
Based on the target market IKEA position the product to meet the requirements. IKEA
designed the product according to the requirement of markets. It is observed by minimalist and
simple method from the products of IKEA. The organization does not target to deliver the
highest eminence product that is built by solid materials by the ability to preceding a long time
(Pankhania & Modi, 2019). The organization aims to deliver simple products tested by
durability. It is detected within the store of IKEA to educate customers that produce relatively
low-priced but this one does not despicable that produces are not durable. The organization
uses many different kinds of technology about the store that use advance programs to tackle
customers by determining a suitable product.

Task 5: Marketing strategies (4 Ps)

The organization consists that segments of the New Zealand market contains of highly
accomplished adults with a high level of income and IT savvy young adults (Akram, 2012).
This segment will be more profitable and increase profits with presentable new market
segments.

Product
Furniture of IKEA is deliberate to be “Do It Yourself” in place of pre-assembled by
customers. This will support the customer to get the manufactured goods at low cost by use of
packaging. This will be a practice as public transport is utilized in everyday life. For example,
the channel of the flat-pack will be easy for the customers with easy public transportation from
store to home. This is a multinational organization situated in many nations by different
languages. Founder of IKEA referred that remembering names in place of product code is
difficult and lengthy to remind. For example, it has presented a new product known as an
LYCKHEM, it bears the sense of bliss. The organization has shown concern about the needs
of a single and try to fill the demand of all consumers. For example, a product that encounters
the criteria of a market like kitchenware and beds that is convertible in different functions.
MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 10

Pricing
There are many strategies concern about the pricing and long-term objective of IKEA
is analysis has been led by the IKEA according to the position of an organization. The
organization has analyzed position within the market by determining that the furniture huge is
properly financed. For example, to achieve profits with the investment pricing kept at a
reasonable rate to shut out rivals.

Place
This is renowned for the approach of competitiveness with innovative creation results.
This produced a partial amount of product and relies on a supplier’s network. Products of IKEA
with the suppliers can generate an atmosphere with unique design including environmental
accountability materials and efficient usage of resources. For example, most preferable
customer orders are online. Online shopping and everyday orders by telephone are continue
uprising that requires effectiveness and flexibility distribution solution for each customer’s
expectation.

Promotion
In an advertisement from the different nation as creating display slogans associated to
products and IKEA. For each national organization has different advertisement and slogan that
adapted by the nation itself. The organization has presented a high profile campaign
advertisement that includes online advertisement. For example, IKEA provides furniture in
dance, dinner, wedding function, and function show. These present the retention regarding
customers uprising for this organization regularly conduct surveys to get customers to feedback
to improve customer’s retention. For example, performance feedback is the best judiciary
utility of an individual’s product and amenities offered by the organization. A suggestion of
customer helps to adjust according to product and services.

Task 6: Digital marketing communication strategies

Social media sites like Facebook and Twitter are significant vehicles for carrying
content (Wymer, 2011). For IKEA these consists of words, pictures, text, and videos. These
are created by the customer’s potential around the globe from a customer’s perspective and
need the inspiration to generate further values for these customers.

Context
This strategy of IKEA is started by the organization with the generation of contents. It
remains as a pull medium for IKEA by seeking the pull and pushes content that is important
MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 11

for the push forward in the chain. For example, a product of IKEA with a brand page pushed
out to observers. This pushed to the social media domain by A IKEA acts as a substance for a
model of engagement and participation.

Content
This is an intent that represents a wall beyond that the organization passed by control
of the brand to the customers and online community (Smith, 2011). IKEA accelerate the brand
messaging that gives right to encourage the online community by modification. For example,
Brand management gives the right to the manager by keeping control of the messaging and
brand image.

Conduct
It is an everyday part of most of our lives. IKEA refers to many sources that build image
like online survey, public circumstances, etc. For example, the organization engages with the
audience by sending messages about the medium to choose and alert customers by an online
presence.

Conversation
The conversation is considered as conveying information that markets considered (Lee
& Carter, 2011). Increase level of interaction will lead to building relations with audiences
(Smith, 2011). Conversation between marketers and customers by a feedback loop increase
community with the online community in hopes of manipulating buy decisions. For example,
the internet has changed the concept of word of mouth and describe practices to outgoing mail
from users.

Cadence
This helps IKEA to understand the constant flow of actual-time data and deliver the
right data to the right audience. For example, IKEA can respond to split-second shift of
attention and interest.

Crisis
Social media can both solve and generate a crisis and incredible fickle nature of social
conversations requires IKEA to be on a constant state of readiness. It includes the responding
at the flashpoint by prepare to make and launch content in a variety of circumstances and
formats. For example, Traditional crisis management requires procedures for written releases
and press conferences on social media.
MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 12

Task 7
Following are the recommended three important negotiation method that should be
applied to meeting with the Swedish owners.

Power distance catalogue the grade of disparity that occurs and is acceptable without
and with control. A high score in the chart of Sweden indicates that people accepts an
imbalanced hierarchical power distribution and individuals understand their abode in the
system. A lower dispersed of New Zealand present that power is pooled and widely distributed
and member of the society did not accept the situation in the condition at which power is
unequally distributed. Listen more than talk negotiation focused and identify the side to get
longer and appreciated delivery schedule.

Uncertainty avoidance index at high-level attempt to make lifespan as expectable and

manageable as possible. People with high avoidance in New Zealand find situations by not
control and stop to try. People with low UAI scoring nation like Sweden are more relaxed and
open or inclusive. Always willing to walk with practical need and not an emotional need. This
is the best way to take emotion out the equation.

Long term orientation refers to the time horizon person in a society display. Sweden
with long term orientation tends to as a programmatic. New Zealand as a short-term oriented
nation, people tend to place more emphasis on principles, consistency and truth are nationalistic
and religious. It sends a proposal to the customer with tend to make sure something receives in
concession. They like to receive something in return.
MARKETING COMMUNICATIONS BRIEF OF IKEA, NEW ZEALAND 13

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