Upload
vikas-sonwane
View
833
Download
25
Embed Size (px)
DESCRIPTION
A case study on IKEA giving a brief description of its marketing strategy
Citation preview
IKEA’s Business
IKEA is an international home product company that designs and sells ready to assemble furniture appliances and home
accessories
IKEA’s Founded
Furniture IntroductionFurniture Catalogue
196519581957195619551953194719431926 1951
IKEA designs its own FurnitureIKEA introduces Flat packages IKEA stores open at
• Almhult• Stockholm
IKEA’s Timeline
IKEA’s Company History*
*Source: www.ikea.com
MARKETING ANALYSISSWOT, PEST and the Marketing Mix
INTE
RN
AL
EXA
M EXTER
NA
L EXAM
SWOT
W
O
T
S
STRENGTHS• Wide range of products and styles• Cheap and affordable• One stop shop• Easy shipping and transportation• Eco friendly and recycling of
products• Functional design of products• Appealing shopping experience
OPPORTUNITIES• Untapped markets like middle east
and Asian countries• Better advertisements• Online sales• Demand for greener and
environment friendly products
WEAKNESSES• Assembly of furniture• Yet to invade upcoming global
markets• Products don’t last long• Product dimensions unsuitable for
global markets• Advertisements in the form of
catalogues mostly
THREATS
• Organized sectors like Wal Mart, Office Depot, Staples, etc.
• Unorganized sectors like local manufacturers and carpentry stores
• Competitors opting for similar designs with a contemporary twist to cater to upper class
POSITIVE INFLUENCES
NEGATIVE INFLUENCES
• FDI Policies• Labor laws • Taxes and duties• Environmental LawsFurniture
Market
Political
P
• Recession reduces disposable income and hence the demand (Low prices advantage)
• Enjoys economies of scale• High barriers of entry for
competitors due to low prices offered to consumers
EconomicE
• Lesser carbon footprints• Ecologically sustainable• Recyclable products• Online tips on reducing
environmental impact (CSR)
Social S
• Flat sized packaging• Innovative designs
Technological
T
PEST Analysis
4P's Marketing Mix
Marketing Mix
Product
Price
Product Price MixSTYLE
PRICE RANGE
Scandinavian (Sleek Wood)
Modern(Minimalist)
Country (Neo-traditional)
Young Swede (bare bones
High
Medium
Low
IKEA's Product Price Matrix
Finding Smarter ways to make Furniture
Strategy followed by IKEA
Price
Quality
Implementation Steps
Establish Retail Price
Select Manufacturer
Determine the material used
Design Process
Step 1: Establish Retail Price
• Using the matrix, IKEA would set the price range.
• It would survey the competition to establish a benchmark and then sets its own price point 30-50% lower than rivals.
Step 2: Select Manufacturer
• More than 1800 manufacturers in more than 50 countries
• Build long term relationships• IKEA circulates a description of proposed
product's specifications and target cost and encouraged them to compete for the production package
• Sometimes it might have different product component from different supplier
Step 3: Determine the material used
• Done by IKEA engineers• Focus on cost efficiency• Using different types of wood for a
single wooden product• Using high quality materials on
furniture surfaces that were visible and most likely undergo stress
• Using low quality material on surfaces that were low stress and less visible to the customer
Step 4: Design Phase• Use internal competition to select a
designer• Flat packaged boxes to make it easier
for consumers to transport the furniture home + save shipping costs
4P's Marketing Mix
Marketing Mix
Product
Price Placement
Customer Experience at IKEA
• Bright and inviting experience for customers
• Resembles Modern Theme park with childcare centers
• Restaurants serving various delicacies
IKEA for kids:You shop, kids play
• IKEA provides clean feeding and changing rooms for small children
• Restaurant has a special menu just for kids
4P's Marketing Mix
Marketing Mix
Product
Promotion
Price Placement
Communication Strategy for America
Perceptual Map
Segmentation
Video 1
Video 2
Video 3
IKEA INVADES AMERICA
2002200120001999199819971985 Mid 1990’s
First store
Company’s fortune changes
Revenues double ($600 mn to $1.27 bn)
3rd largest store
PROMOTION STRATEGIES
•Commitment-free approach to furniture – “Unboring” advertisement•Web site advertisement•The Law of Candor : When you admit a negative, the prospect will give you a positive•The Law of the Category: If you can’t be the first in a category, set up a new category that you can be first in•Additional Customer facilities: child-care, restaurants and help desk
INDIAN FURNITURE MARKET•As of 2006, the Indian furniture market is estimated to be worth US$ 7.9 billion
Source: http://www.ibef.org/download/Furniture_170708.pdf
PROBLEMS FACED BY INDIAN FURNITURE INDUSTRY
Source: http://online.wsj.com/news/articles/SB10001424127887324266904578458840277908564
IKEA INVADES INDIA
Market Development Diversification
Market Penetration Product Development
Products & Services
Mar
kets
Existing New
Existi
ngN
ew
IKEA’S INITIAL COMMUNICATION STRATEGY IN INDIA
Integrated Communications Strategy
IKEA’s communication strategy*• Media Channels covered– TVC– Print– Digital
• Pull Strategy• CSR initiatives
Source: http://www.livemint.com/Money/jI27GvmsK5stzTn61yyWUN/Ikeas-consumer-challenge-in-India.html