Ikea

IKEAs Business
IKEA is an international home product

company that designs and sells ready
to assemble furniture appliances and
home accessories
IKEAs Company History*

1926
1943
1947
1951
1953
1955
1956
1957
1958
1965
IKEAs Founded
Furniture Introduction
Furniture Catalogue
IKEA designs its own
Furniture
IKEA introduces Flat
packages
IKEAs Timeline
Source: www.ikea.com
IKEA stores open at

Almhult
Stockholm
MARKETING ANALYSIS
SWOT, PEST and the Marketing Mix
POSITIVE INFLUENCES
OPPORTUNITIES
STRENGTHS
Untapped markets like middle

east and Asian countries
Better advertisements
Online sales
Demand for greener and
environment friendly products
SWOT
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
NEGATIVE INFLUENCES
EXTERNAL EXAM
INTERNAL EXAM
Wide range of products and

styles
Cheap and affordable
One stop shop
Easy shipping and
transportation
Eco friendly and recycling ofS
products
Functional design of
products
Appealing shopping
experience
WEAKNESSES
Assembly of furniture
W
Yet to invade upcoming
global markets
Products dont last long
Product dimensions
unsuitable for global
markets
Advertisements in the form
of catalogues mostly
Technological
PEST Analysis
Flat sized packaging

Innovative designs
Social
Lesser carbon
footprints
Ecologically
sustainable
Recyclable products
Online tips on reducing
environmental impact
(CSR)
Political
T
Furnitu
re
Market
FDI Policies
Labor laws
Taxes and duties
Environmental Laws
Economic
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
4P's Marketing Mix

Product
Price
Marketin
g Mix
IKEA's Product Price

Matrix
Product Price Mix
STYLE
Scandinavia
n (Sleek
Wood)
PRICE
RANGE
High
Medium
Low
Modern
(Minimali
st)
Country
Young
(NeoSwede
traditional) (bare
bones
Finding Smarter ways

to make Furniture
Strategy followed by IKEA
Price
Qualit
y
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

Product
Price
Marketin
g Mix
Placemen
t
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

Product
Price
Marketin
g Mix
Promotio
n
Placemen
t
Communication
Strategy for
America
Perceptual Map
Segmentation
IKEA INVADES AMERICA

1985
Mid 1990s
1997
1998
1999
2000
2001
2002
First store
Companys fortune
changes
Revenues double
($600 mn to $1.27
bn)
3rd largest
store
PROMOTION STRATEGIES
Commitment-free approach to furniture
Unboring
advertisement
Web site advertisement
The Law of Candor : When you admit a
negative, the prospect will give you a positive
The Law of the Category: If you cant be the
first in a category, set up a new category that
you can be first in
Additional Customer facilities: child-care,
restaurants and help desk
INDIAN FURNITURE
As of 2006, the Indian furniture market is estimated to be
MARKET
worth US$ 7.9 billion
Source: http://www.ibef.org/download/Furniture_170708.pdf
PROBLEMS FACED BY
INDIAN FURNITURE
INDUSTRY
IKEA INVADES INDIA
Source: http
://online.wsj.com/news/articles/SB100014241278873242
66904578458840277908564
New
Diversification
Existing
Markets
Markets
Market
Development
Market
Penetration
Product
Development
Existing
New
Products & Services
Integrated Communications Strategy
IKEAS INITIAL
COMMUNICATION
STRATEGY IN INDIA
IKEAs communication
strategy*
Media Channels covered
TVC - National
Print across the country
Digital in every digital platform
Pull Strategy
CSR initiatives
A pull strategy is where interest for a specific product or service is
created within a target audience that then demands the product
from channel partners.
A pull selling strategy is one that requires high spending on
advertising and consumer promotion to build up consumer
Source:
demand for a product
http://www.livemint.com/Money/jI27GvmsK5stzTn61yyWUN/I
keas-consumer-challenge-in-India.html

Ikea

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What are the steps involved in IKEA's pricing strategy?

What are the steps involved in IKEA's pricing strategy?

What are some of the challenges faced by the Indian furniture industry?

What are some of the challenges faced by the Indian furniture industry?

IKEAs Business

IKEA is an international home product

IKEAs Company History*

IKEA stores open at

SWOT, PEST and the Marketing Mix

Untapped markets like middle

Organized sectors like Wal

Wide range of products and

Flat sized packaging

4P's Marketing Mix

IKEA's Product Price

Finding Smarter ways

Step 1: Establish Retail Price

Using the matrix, IKEA would

Step 2: Select Manufacturer

Step 3: Determine the

Step 4: Design Phase

4P's Marketing Mix

IKEA for kids:

IKEA provides clean feeding

4P's Marketing Mix

IKEA INVADES AMERICA

IKEA INVADES INDIA

Integrated Communications Strategy

Media Channels covered

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