Overview of IKEA
IKEA is a home furnishings corporation which is formed in Swedan in 1943, by Ingvar Kamprad (Ikeafoundation, 2018). IKEA believes that home is a significant and effective place in the world and kids its most vital and dynamic people. The main vision of the firm is to create a better regular life for many people by rendering ample of home ware and furniture products to the customers at lower price as much as possible. Recently, the company is seeking two outstanding and effective individuals to join climate action portfolio that are committed to generate a lasting change. It is analyzed that the company has a team of subordinates who engage and work closely and effectively with partners to build, handle and communicate company’s sessions and seminars. The subordinates are based in offices in the Indian and Netherlands (Ikeafoundation, 2018).
The good and effective cause programs and campaigns in IKEA stores and centers give subordinates and consumers a good opportunity to work and engage with partners work effectively and directly. In today’s globalization world, the company is a biggest and leading furniture retailer, recognized and famous for its Scandinavian style. The company carries approx 9500 products including accessories and home furniture. These several products are available in all the company’s stores and key target audience can order online through IKEA’s website. In UK, the company has approx 18 stores who provide innovative and attractive products to the customers around the world. In today’s modern world, by producing innovative furniture and home ware products, the firm has been able to compete with rivals in the international market (Ikeafoundation, 2018).
Marketing strategies are integral part of IKEA to cater products and services in the international market. If the company wants to increase and enhance the sale in Australia then it marketing strategies need to be considered effectively. Without marketing strategies, it is quite difficult to attain competitive edge in such market. The marketing strategies for IKEA are presented below.
Segmentation is one of the leading and effective approaches that used by IKEA while initiating the business in Australia. Segmentation is done by IKEA after considering various areas such as geographic, psychographic and demographic (Bowonder, Dambal, Kumar & Shirodkar, 2010). These segmentations can be used by the company to divide the market for catering the furniture and home ware products to the customers in all over the world. By using segmentation strategy, the company could able to identify and analyze the preferences, choices and needs of the customers for selling the products (Dudovskiy, 2017).
Marketing Strategies for IKEA in the Australian Market
To attain maximum goals and objectives, it is needed to identify potential and effective customers in Australian market. Targeting includes selecting specific groups identified and measured as a result of segmentation consumers for the brand. It shall be analyzed from the various studies that IKEA uses differentiated targeting strategy to fulfill the needs, wants and desires of the customers who seek for the value for money furnishing solutions (Burt, Johansson, & Thelander, 2011). The people who are between the age group of 22 to 27 years would be considered the target market of IKEA. Along with this, the company also considers youngsters, students, professionals, and middle and working class people who buy the products for fulfilling the needs and requirements (Edvardsson & Enquist, 2011). In addition, the target market for the company will be urban areas that have an increased population of millennial. By implementing targeting strategy, the firm has been able to increase and enhance the sales, growth and development internationally ( Bhasin, 2018).
IKEA is a positioned as the international leader in the home ware and furnishing retail chain. It has been studies that the strongest and dynamic sales and revenue are coming from warehouse locations and catalog shoppers. It further states that distributors are limited so there is more one on one with the customers rendering IKEA a competitive benefit (Edvardsson & Enquist, 2008). The company is positioned with exporting, direct investment and franchises. The positioned of the organization adds its competitive benefits and strengths for struggling with competitors in the global market. To position the products, the organization promotes and improves diversity and equality throughout the whole firm that gives it an additional layer of competitive benefits to management of the company and strength in the international market. It showcases that IKEA uses value based positioning strategy to cater the products in the Australian market (Bhasin, 2018).
The current and recommended marketing mix for IKEA has been detailed below.
Product: IKEA is a leading and growing retail chains across the world. The company offers ample of products such as eating, desks, mirrors, beds, chairs, cooking, clothes baby and children products, decoration, and safety products. In addition, the company provides storage furniture, sofas, kitchen cabinets, TV, tables, rugs, and textiles (Chaffey & Smith, 2013). Innovative and effective product strategy such as brand recognition shall be considered while exploring and implementing the business in Australia. By initiating this strategy, the organization could able to struggle and handle the competitors globally. It shall be observed that IKEA products must be associated and interconnected with no-frills simplicity to maintain its cost leadership business strategy. Along with this, the Corporation shall promote the idea of democratic design. In this way, the firm can attract and retain wide range of key target audiences internationally (Dudovskiy, 2017).
Segmentation and Targeting Strategies
Price: IKEA struggles with rivals and local supermarkets by using pricing strategy. Low prices constitute the company vision, concept and business opinion. The company makes furniture and home ware products at reasonable prices to increase and boost the sale and revenue in the new market. It is recommended that IKEA shall use low cost strategy to manage operational details and attract various Australians in the international market. Apart from this, psychological pricing strategy can also provide a great opportunity to the firm to increase and improve the sale in the foreign market. By using low cost pricing strategy, IKEA could able to sustain its low prices due to the strong economies of scale. It should offer the products at low cost so that people would be able to buy them. It is explained that the company shall use price point perspective to sale the majority of its furniture products and services internationally (MBAskool, 2018).
Place: It is seen that IKEA uses an effective and excellent distribution and place strategy to handle and overcome the competitors in the global market. It shall be stated that the firm has a strong and unique distribution network that helps in attracting wide range of people in the new country. Today’s, the organization has approx 25 distribution centers and it performs business functions and activities in more than 50 countries around the world. There are approx 9,500 products sold in the market by the company (MBAskool, 2018). It is suggested that IKEA should transform products from suppliers to company’s stores internationally. This will help in minimizing the handling costs, reducing carbon footprints and declining transport. As a furniture retailer, the company should use online channels extensively to sell and promote its products to the key target audience across the globe (Dudovskiy, 2017).
Promotion: It is analyzed that IKEA uses various promotional tools and methods such as online ads, TV, print, and billboards to promote and improve the product quality in the competitive market. The company has introduced a UK wide advertising programs and campaigns to encourage its furniture and home ware products internationally (Lee & Carter, 2011). The main idea behind the campaign is that a social cluster leads to a dispute or conflict which could be ignored according to the company (Hellström & Nilsson, 2011). It is noted that IKEA shall highly and extensively focus on the online channels, print media, seminars and campaigns to make a strong position and brand image internationally. Direct selling and online advertisements must be done by IKEA to offer various solutions and sale ample of furniture products globally (MBAskool, 2018).
Product, Price, Place, Promotion, People, Process, and Physical Evidence Strategies
People: An overwhelming study reveals that IKEA provide favorable and dynamic working environment and culture to people to improve their performance and effectiveness in the new market. The worker culture at IKEA is based on the fun, togetherness and enthusiasm. Customer satisfaction and accountability are main core values of the firm. It is recommended that the company should deeply focus on the people management to run business successfully and smoothly. There should not be any discrimination and injustice on the basis of ethnicity, religion and race (Dudovskiy, 2017).
Process: The Company uses tremendous business processes and approaches to handle and overcome the rivals internationally. IKEA follows a clean environmental slogan and process to grow and survive business internationally. The organization shall focus on the process, code of conducts and ethics to build and improve the effectiveness and efficiency in the Australia (MBAskool, 2018).
Physical evidence: It has been found that IKEA has approx 350 stores in more than 50 countries around the globe (MBAskool, 2018). Thus, physical evidence shall be placed or considered by the company while selling the products. The firm should use effective packaging strategy along with this, documentation must be done to capture entire key target market segment (Dudovskiy, 2017).
Partnership: It is seen that IKEA Company cooperates and communicates with trade unions, and companies to develop a dynamic image and to maintain a positive environment. The company should more emphasize on the partnership to build and improve reputation in the Australia. Through partnerships, the company can improve and save the rights and interests of the children and it can also minimize the negative impact of CO2 emissions (IKEA, 2018).
Conclusion
It is concluded that IKEA is a fostering and growing brand in the market that is rendering innovative furniture products to the key target audience. The above analysis reveals that IKEA should use differentiated strategy to satisfy the wants and preferences of the customers. At the end, marketing mix is suggested to implement the business functions and actions in the new market.
References
Bhasin.H.,(2018). Marketing strategy of IKEA[Online], Retrieved from https://www.marketing91.com/marketing-strategy-ikea/
Bowonder, B., Dambal, A., Kumar, S., & Shirodkar, A. (2010). Innovation strategies for creating competitive advantage. Research-technology management, 53(3), 19-32.
Burt, S., Johansson, U., & Thelander, Å. (2011). Standardized marketing strategies in retailing? IKEA’s marketing strategies in Sweden, the UK and China. Journal of Retailing and Consumer Services, 18(3), 183-193.
Chaffey, D., & Smith, P. R. (2013). eMarketing eXcellence: Planning and optimizing your digital marketing. Routledge.
Dudovskiy.J.,(2017). IKEA segmentation, targeting and positioning cost conscious customers [Online], Retrieved from https://research-methodology.net/ikea-segmentation-targeting-positioning-targeting-cost-conscious-customers/
Dudovskiy.J.,(2017).IKEA 7Ps of marketing [Online], Retrieved from https://research-methodology.net/ikea-7ps-marketing/
Edvardsson, B., & Enquist, B. (2008). Values-based service for sustainable business: Lessons from IKEA. Routledge.
Edvardsson, B., & Enquist, B. (2011). The service excellence and innovation model: lessons from IKEA and other service frontiers. Total Quality Management & Business Excellence, 22(5), 535-551.
Hellström, D., & Nilsson, F. (2011). Logistics-driven packaging innovation: a case study at IKEA. International Journal of Retail & Distribution Management, 39(9), 638-657.
IKEA.,(2018). Our partnerships[Online], Retrieved from https://www.ikea.com/ms/en_JP/about_ikea/our_responsibility/partnerships/index.html
Ikeafoundation.,(2018). About us[Online], Retrieved from https://www.fastcompany.com/company/ikea
Jonsson, A., & Foss, N. J. (2011). International expansion through flexible replication: Learning from the internationalization experience of IKEA. Journal of International Business Studies, 42(9), 1079-1102.
Lee, K., & Carter, S. (2011). Global marketing management. Strategic Direction, 27(1).
MBAskool.,(2018). IKEA Marketing mix (4Ps) strategy [Online], Retrieved from https://www.mbaskool.com/marketing-mix/services/17066-ikea.html
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