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What does IKEA do best to connect with its core consumers?

IKEA is a Swedish company that makes and sells furniture in different countries. It was

formed by 17-year-old in 1943. At its core, IKEA is all about experience. In this age and day, a

company ought to commit itself to delight its customers by giving them a wonderful experience

(Pontefract). Every organization ought to remember that it exists for this reason. Customers are

the core of an organization, and if the customers are not there, then there is unlikely to be an

organization. If an organization fails to delight its customers, who are the people it ought to be

working for, the organization's success has limited chances. IKEA is an example of brands that

knows how to connect with their customers effectively.

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From its showrooms to the social media, Ikea brand knows how to convey a deep

understanding of how people live, and it is committed to helping people better their everyday life

(Pontefract). It connects to its core customers by being ever-innovative; bringing its creativity to

real life by creating original and authentic content and branded experiences aimed at building

stronger connections with its consumers around the world. Its iconic catalogue is one way the

company connects to its customers. For instance, its 2015 catalogue is available online, and

IKEA presents it in 32 different languages, has 67 printed editions and is available in 46

countries around the world (Miner). The catalogue 2015 catalogue app has a theme "Where the

Everyday Begins and Ends" and can be accessed via IOS and Android devices (Miner). It has

extended features where a customer can choose from more than 300 IKEA products. Their

marketing strategy is also consumer-centric, enabling the company to connect more to its

customers.

IKEA has continued to demonstrate the mantra of always putting its core customers first,

which impresses them (Pontefract). IKEA has continuously dedicated itself to service and value

with intentions of appreciating and delighting its customer base (Pontefract). IKEA practices

value-based services and connects to its customers using various platforms, including social

media. It intends to improve the lives of many people by offering affordable quality products and

value. IKEA brand creates contents that connect with how people shop and also how people live.

Describe their core segments in terms of:

1) demographics

IKEA’s segmentation, targeting and positioning involve a series of consequent marketing

decisions constituting the core of the company's marketing decisions (Dudovskiy). IKEA uses
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mono-segment positioning and adaptive positioning of its market. Demographic segment relates

to the age, gender, life-cycle stage, and occupation of its core customers. In terms of age, IKEA’s

segment is people who are 22 and older. These are age group consist of you young maturing

adults and people who are older. This group can understand and manage to purchase the

offerings of the company. Regarding gender, IKEA’s segment consists of both males and

females. It does not discriminate based on gender.

The life-cycle stage of the demographic segment consists of bachelor stage young, single

people who are not living at home. Another stage is for newly married young couples with no

children. Another segment is Full Nest I youngest child under six, Full Nest II youngest child six

or over, and Full Nest III, which consist of older couples with dependent children. Another

segment is the Empty Nest I composed of married couples, no with no children living with them

and Empty Nest II, which include married couples, retired, with no children living at home. The

last group is the Solitary Survivor I in the labor and Solitary Survivor II, who are retired people.

Regarding occupation, IKEA's core segment comprises of students, employees, and professionals

(Dudovskkiy). Its demographic segment in terms of education is high school graduate or higher

(IKEAMyWay).

2. Psychographics

Psychographics relate to consumer's lifestyles, which include consumer's activities, interests,

and opinions (Chapter 02 ppt). Psychographics explain buyers’ purchase decision and choices.

IKEA target segment is people with the “do itself and save money doing it” attitude and lifestyle.

In terms of social class, IKEA’s core segment is people from all the social classes, who include

the lower class, working-class, and middle class. IKEA targets people from different lifestyles,
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including the redesigned, struggler, mainstreamer, and explorer (Dudovskiy). The redesigned

lifestyle describes a person who has unchanging values; the person is likely to stick with what

he/she is familiar with. A struggler is a person who has the "You Only Live Once" attitude and

approach. The person focuses more on the present and looks for a chance to escape. A

mainstreamer desires to fit in the society; he/she sticks with the value for money and strives for

security. An explorer is a person who realizes the need for change, discovers, and desires to

become different. IKEA core psychographic segments are these groups.

3. Sociocultural

Sociocultural segmentation combines social and cultural factors that define a given segment.

They include things like culture, race, region, language, education, and economic class.

Sociocultural factors may also relate to consumer preferences. IKEA sociocultural segment is not

specific to a given culture. The company has managed to reach the world's diverse cultures. It

has its market in Asia, Europe, and America. It integrates its global marketing strategies with its

local marketing activities, taking into consideration the social and cultural differences among its

segments. For instances, its catalogue has been translated into a variety of languages so that it

can reach the different segments that use different languages. IKEA emphasizes more on value

and sustainability in its products and processes. All these strategies are meant to meet the needs

of its large sociocultural segment.

4. Psychological variables

IKEA success has been its ability to understand the needs of the customers, and the

company’s focus on improving its customer’s everyday lives. Motivation, learning, attitude,

perception, and belief system inform consumer purchase behavior. Regarding behavioral
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segmentation, IKEA analyses the degree of loyalty and comes up with hardcore loyal, softcore

loyal, and switchers. Another variable is the benefit sought. IKEA's core segments are people

looking for cost-effective and quality goods. On personality, IKEA's segments are people who

are ongoing and determined. On the user-status, IKEA's target segments are anon-users, potential

users, first-time users, and regular users (Dudovskiy).

What are some of the things IKEA is doing to reach consumers in different markets (i.e.,

lifestyle, geography, etc.)?

IKEA has achieved success out of providing a unique value proposition to its consumers. It

provides leading-edge Scandinavian design at relatively low prices. The company’s vision is to

create a better everyday life for many people (Dudovskiy). IKEA Has opened many showrooms

and stores across different parts of the world to enable it to reach its target customers. The

company has stores in Europe, Asia, the Americas, Russia and Australia. It has more than 400

stores operating in 52 different countries. IKEA has established a retail distribution system that

leveraged urban locations in different markets (IKEAMyWay). Most of its stores are located

inside or near large urban markets in the US and other countries. IKEA has mainly targeted

young adults, young married couples, and young professions who are beginning to start their life

of independence and gives them products of value. IKEA also uses the internet to make their

products known to the existing and potential customers, their catalogue is also on the internet,

and everyone can access it.

What else could IKEA do to be even more successful?

To become more successful, IKEA should consider taking advantage of the opportunities

available and work on its weaknesses. IKEA has a strong brand name and a strong capital base
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which it could use to its advantage. They should open more stores in different countries and even

reach countries where they have no stores. For instance, there are numerous growing economies

in Africa where IKEA can decide to invest. Also, the company should increase its offerings and

also meet the demand of people from the economy and upper class. The company has mainly

targeted the younger adults who are starting to build themselves. It should target a larger

demographic and psychographic segment. It should also work on its reputation in the media as it

has recently faced criticism over poor quality. IKEA should also build an online system to guide

its consumers to more sustainable use.

IKEA has essentially changed the way people shop for furniture. Discuss the pros and cons of

their strategic approach, especially as the company plans to continue to expand globally in

emerging markets?

IKEA’s business strategy has been built upon the concept that starts with the idea of

providing a range of products for home furnishing home that are affordable to many people

(Garvey). IKEA achieves this concept by combining quality, function, design and value. The

approach has changed how people shop for furniture. This approach has its advantages and
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disadvantages. Some of the benefits of this approach include IKEA can offer products at

affordable prices, which has enabled it to command a large market. IKEA has also been able to

increase its product offerings, placing it at a better competitive advantage over its competitors

(Pontefract). The strategy has also enabled IKEA to place its brand name higher in the global

market. IKEA has managed to improve and expand its international market presence

aggressively.

IKEA's strategic approach has disadvantages as well. IEKA relies on low-cost raw materials to

produce cheap products. These materials are likely to compromise on the quality of the products.

It is challenging to use inexpensive materials to produce high-quality products. Also, IEKA

focuses more on improving the everyday life of many people. With the nature of the products it

offers, it might not be possible to make the life of everyone better. People have different needs,

tastes, and preferences which might not be satisfied with this approach.

Are there any strategic partnerships IKEA should consider, and why?

IKEA is currently having several partners, including Addidas and Sonos (Dudovskiy).

However, it should consider partnering with the Maersk Group. Maersk Group is a company that

deals with shipping commodities across the world. This partnership would make IKEA reach

wider market easily because Maersk reaches various destinations delivering cargo. It will also

boost IKEA’s sales.

What companies make sense from an alignment perspective?

From an alignment perspective, IKEA should consider aligning itself with online stores

like Alibaba and Amazon. These companies will enable smooth online business, in case IKEA
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decides to open online shops with the company. These companies are global, just like IEKA and

will facilitate more business.

What are the benefits and risks for IKEA in pursuing these strategic partners?

Some of the benefits include improved sales which will reflect on higher profits. Also,

IKEA will reach a wider market segment through strategic partners. Some of the risks include

spreading of risks. By choosing strategic partners, IKEA will spread its risk with the partners.

Also, IKEA will partner with the companies at a cost. Partnerships may affect customers in

various ways; some customers may switch while others may remain loyal.

How do customers’ new capabilities affect the way IKEA markets its business?

Marketing exists to assist companies to understand, reach, and deliver value to their

clients. Consumers are the cornerstone for marketing. The modern consumer is changing and is

becoming more sophisticated. Their capabilities are also changing, and more people can afford a

more luxurious life. These changes have impacted the way IKEA markets its products. It has

mainly targeted young adults, students, young couples, who don't earn much. The changes in

their capabilities will force IKEA to adjust its marketing strategies.

What brands are positioned in direct competition with IKEA?

The brands that are positioned to compete with IKEA directly include Amazon, Wayfair,

Target, and Walmart. All these companies are international and offer similar products with those

offered by IKEA. Amazon has recently launched its furniture brand called Rivet and Stone &

Beam. Some of the other companies have the ability to reach more markets compared to IKEA.
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How can IKEA use Customer Relationship Management (CRM) advances to better position

itself?

CRM is business software that helps individuals and groups maximize their

communications with customers and sales efforts (Tarnovskaya et al.). CRM can empower IKEA

to build relationships more effectively and offer the best customer experience from evaluation, to

purchase and beyond. It will provide IKEA with access to information on customer interest and

behavior, which will enable IKEA to pursue and anticipate the right opportunity timely and

appropriately.
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Work Cited

"3. Target Audience Insights". #Ikeamyway, 2020,

https://ikeasocialmediamarketingplan.wordpress.com/target-audience/.

Dudovskiy, John. "IKEA Business Strategy And Competitive Advantage: Capitalising On IKEA

Concept - Research-Methodology". Research-Methodology, 2019, https://research-

methodology.net/ikea-business-strategy-competitive-advantage-capitalising-ikea-

concept/.

Dudovskiy, John. "IKEA Segmentation, Targeting And Positioning: Targeting Cost-Conscious

Customers - Research-Methodology". Research-Methodology, 2019, https://research-

methodology.net/ikea-segmentation-targeting-positioning-targeting-cost-conscious-

customers/#_ftn1.

Garvey, Pauline. Unpacking IKEA: Swedish Design for the Purchasing Masses. Routledge,

2017.

Goldstein, Ben. "What Does CRM Do? | How CRM Software Helps Your Business". Nutshell,

2020, https://www.nutshell.com/blog/what-does-crm-do/.

Miner, Tori. "IKEA: A Brand That Knows How To Connect With Content". Brandchannel,

2014, https://www.brandchannel.com/2014/07/24/ikea-a-brand-that-knows-how-to-

connect-with-content/.

Pontefract, Dan. "How IKEA Delights Its Customers". Forbes, 2016,

https://www.forbes.com/sites/danpontefract/2016/06/08/how-ikea-delights-its-

customers/#713fc8df3ca4.
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Tarnovskaya, Veronika V., and Leslie de Chernatony. "Internalizing a brand across cultures: the

case of IKEA." International Journal of Retail & Distribution Management (2011).