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

Opportunity Identification & Selection

Concept Generation

Concept Evaluation

Development

Launch

Basic New Product Process

Strategic Launch Planning

Strategic Launch Implementation

Chapter Overview

Strategic Launch Planning

Strategic Launch Decision

Tactical Launch Decision

Overall directions, incl. Target Market

Marketing Mix (IMC & 4P)

MARKETING PLAN

TARGET MARKET

STP

TRADEMARK

UNIQUE VALUE

Chapter Overview

Strategic Launch Implementation

Product Life Cycle

Communication Program

ATAR

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

target consumer”

IKEA at a Glance

Multinational Company which sells Ready to Assemble Furniture

Largest Furniture Retailer

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

Food Market

Warehouse

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

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

Current Situation

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)

Opportunities

- Emerging markets

- Growing online sales and Internet presence

- Expand into many more cities

Threats

- Direct competition from Ace, Informa, Courts, Best Pongs

- Difficult economic condition

- Changing customer needs

SWOT

Porter’s Five Forces Model

Rivalry among existing

competitors

HIGH

Threat of new entrants

LOW

Bargaining power of

buyers

STRONG

Threat of substitutes

LOW

Bargaining power of suppliers

WEAK

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. AggressivenessLess 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:

End-UseGeographic & Demographic

Behavioral & Psychographic

Benefit Segmentation

Original concept generation

Method of operations

Concept testing or product use testing

Parallel development, keeping two or three target alternatives in development

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 - RAwareness – Trial – Availability – Repeat

AWARENESS

Prelaunch and Preannouncement

Prelaunch and Preannouncement

Announcement, Beachhead & Early Growth

Story Telling Comp.

Catalogue Ad

Announcement, Beachhead & Early Growth

TRIAL

IKEA Catalog – Augmented Reality Vlogger Endorsement

TV – Sponsored Content Dedek gemes Vlog

Advertisement 1

TRIALTRIAL

Advertisement 2

TRIALTRIAL

AVAILABILITY

China, Poland, Italy, Sweden

1.600 Suppliers

389 stores in 48 countries

27 Distribution Center - 16 Countries

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

AVAILABILITY

REPEATREPEAT

REPEATREPEATREPEAT

REPEATREPEATREPEAT

REPEATREPEATREPEAT

14%

75,000 Customer / Mth

Customer Engagement Award 2015

REPEATREPEATBRANDING MANAGEMENT

• 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

• 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.

REPEATREPEATChoosing Brand Name

HighBrand

Loyalty

Other BrandAssets

More/BetterBrand

Associations

HighPerceived

Quality

HighBrand

Awareness

Reduced

marketing

costs

Increased

trade

leverage

Patents or

trademarks

Strong

channel

relationships

Creates

positive

image

Helps

customer

process

information

Supports

quality

positioning

Supports

higher-price

strategy

Easier to

make

brand

associations

Increased

liking and

familiarity

Provides value to customer:Assists in customer information processing

Increases confidence in purchase

Increases satisfaction in product use

Provides value to firm:Increases effectiveness of marketing programs

Increases customer loyalty and trade leverage

Facilitates brand extensions

Is a source of competitive advantage

Managing Brand Equity

Characteristic Examples

Delivers benefits desired by customers. Starbucks offers “coffee house experience,” not just

coffee beans, and monitors bean selection and

roasting to preserve quality.

Stays relevant. Gillette continuously invests in major product

improvements (MACH3), while using consistent

slogan “The best a man can get.”

Prices are based on value. P&G reduced operating costs and passed on savings

as “everyday low pricing,” thus growing margins.

Well positioned relative to competitors. Saturn competes on excellent customer service,

Mercedes on product superiority. Visa stresses

being “everywhere you want to be.”

Is consistent. Michelob tried several different positionings and

campaigns between 1970 and 1995, while watching

sales slip.

The brand portfolio makes sense. The Gap has Gap, Banana Republic, and Old Navy

stores for different market segments; BMW has the

3-, 5-, and 7-series.

Marketing activities are coordinated. Coca-Cola uses ads, promotions, catalogs,

sponsorships, and interactive media.

What the brand means to customers is well

understood.

Bic couldn’t sell perfume in lighter-shaped bottles;

Gillette uses different brand names such as Oral-B

for toothbrushes to avoid this problem.

Is supported over the long run. Coors cut back promotional support in favor of

Coors Light and Zima, and lost about 50% of its

sales over a four-year period.

Sources of brand equity are monitored. 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 Report Card

• 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”).

Brand Equity & Branding Strategies

• 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 & Positioning

• 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.

Global Branding Leadership

Intan Khatulistiwa Esa Abadi• Established in 1989• Surabaya based local company• Manufacture of rattan furniture and

accesosries

Ingvar Kamprad Elmtaryd Agunnaryd

Study Case IKEA di Indonesia

2016

Today

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Swedish IKEA trademark registration

1/1/2006

Swedish IKEA trademark registration

1/1/2010

Indo IKEA brand registration

12/1/2013

Swedish IKEA open in Indonesia

6/30/2014

Swedish IKEA trademark for class 20 & 21 in 2010 is deleted

5/31/2015

Swedish IKEA trademark registration

6/1/2012

Swedish IKEA trademark registration in 2012 is approved

6/1/2014

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

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

1/1/2006

Indonesian Law : a trademark is not actively used for commercial purposes for 3 consecutive years, it may be removed for trademark register

11/30/2013

12/1/2013

Indo IKEA raise case in Jakarta Commercial Court to remove IKEA trademark registration in 2010 for class 20 & 21

9/1/2014

9/2/2014

Swedish IKEA appeal to Supreme Court

5/31/2015

Brief DescriptionBrief Description

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

Lesson Learned

Conclusion

IKEA has clear product & service differentiation vscompetition 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 CREATION

VALUE 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 IMPORTANTFOCUS 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

LOWER PRICEGOOD QUALITY

ECO-FRIENDLY

DESIGN CONSULTATION

THANK YOU