Made for Marketing MBA class at the University of San Francisco.

4. HISTORY

5. History
IKEA in
orange
regions in
the map.
Today:
349 stores
43 countries

6. MARKETS PRODUCTS
GLOBAL:
USA
Europe
Australia
Asia: China, Japan
Entering India
Furniture
Appliances
Electronics
Home Linen
Kitchenware
Bathroom ware
Décor
Food

7. CUSTOMERS DIFFERENTIATORS
Masses, not niche
Low to
upper mid-income
One Stop Shop
In-house Ikea brand
Signature Swedish design
Focus: Solutions
(Storage, modular etc)
Low cost, low involvement,
low commitment buy
Standard, mix & match-able
furniture. Encourages return
buy.

8. COMPETITORS
Walmart
Target
Ebay
Amazon
Home Depot
Costco

9. EXPANSION
Action:
Enter India, Africa,
Latin America
E-COMMERCE
Action:
Improve e-commerce
experience and deliver
faster, cheaper.
OPPORTUNITIES:

10. COMPETITION
In-city competitors short
drive away &
online competitors that
take away the need for
one-stop shop.
Defense:
Continue to offer
complete, assembled
looks by home stylists
and do product pairing
online. Also highlight Ikea
brand & look.
‘CHEAP BRAND’ TAG
Consumers seek better
designs & quality.
Defense:
Run an advertising
campaign on the option of
durable furniture to tackle
the current low-quality
reputation of Ikea.
THREATS:

11. STRENGTHS
Complete furniture solutions
Ikea design
Rich store experience
WEAKNESSES
Not for quick, small buys:
• Fewer stores in city.
• Located in the outskirts.
• Painful store navigation.
IKEA VS WALMART:

12. PRODUCTS

13. Theme based yet solo products

14. Various price points

15. Modular storage
Easy to assemble

16. Food, with a
European touch

17. In-store restaurant
Product extends to service

18. Augmented Services

19. PRODUCT
LIFE CYCLE
Reverse positioning
strips away “sacred”
product attributes
while adding new ones.
“IKEA … innovative
marketing and
phenomenal growth …
brilliant reverse
positioning.”

20. EXPEDIT is being stopped much to the
outrage of loyal customers but is being
reintroduced as Kallax this April.
Example of reverse positioning
• A scratch-resistant and sturdier system
• Child-friendly rounded edges
• Thinner shelves to reduce wood consumption

21. How many new
products (NET)
does Ikea create
per year?
Source: http://www.dallasfed.org/assets/documents/institute/events/2010/10micro_landry.pdf

22. Prices as low as $2.99 advertised
PRICING STRATEGY

23. Market need identified
> Cost is set to meet need, mostly low cost
> In-house designers create product towards set cost
Market need drives cost drives design

24. Price control methods
- By using minimal flat-packaging
- Due to economies of scale
- By being in a position to bargain with material
suppliers
- By saving assembling cost

25. Does the same Ikea
chair cost the same
everywhere?
No. Higher costs as
you move away
from Sweden due
to extra shipping &
handling expenses.
IKEA sources the
bulk of its goods
in Eastern Europe
and in Asia.
Source: http://www.dallasfed.org/assets/documents/institute/events/2010/10micro_landry.pdf

26. Source: http://www.dallasfed.org/assets/documents/institute/events/2010/10micro_landry.pdf
TARGET CUSTOMER

27. COST BASIS SEGMENT
Students, First Jobbers
Living in rented apartments. Low inc.
FAMILY LIFE CYCLE BASIS SEGMENT
New families, parents
Nest building. They return as needs grows.
BEHAVIOURAL BASIS SEGMENT
DIY People
They like to assemble and make.

28. FEW CHANNEL PARTNERS: Control over brand interaction at POP
You buy IKEA at IKEA.
Own design, manufacturing, exclusive retail
outlets and online store.
Own merchandising, display, in-store
promotion choices.
1300 suppliers worldwide for raw materials
Long-term relationships developed
Yet cost competition encouraged

29. CUSTOMER RETENTION STRATEGIES
1) Member only deals, Ikea Family Card

30. 2) Refund policy, credit offered instead of cash

31. 3) Getting new customers through existing ones

32. 4) End to end solns.
They do not lose customers in the process of thinking, buying, delivering.

33. 5) Interest-free installment payment plans.
Thus, ease in beginning Ikea relationship and road for long-term association.

34. IKEA
THE
BRAND
Iconic
Sensible

35. Advertising focuses on COST

36. SPACE SENSITIVE SOLUTIONS

37. CHOICES

38. SIMPLE SWEDISH DESIGN

39. LIFE SOLUTIONS

40. TIES BRAND WITH EVERYDAY FAMILY LIFE

41. MARKETING MEDIA USED:

42. CATALOGUE
70% of marketing spend
Published annually
62 languages
300 pages
12,000 products
Takes 10 months to develop
208 million copies printed in 2013
i.e more than double no. of Bibles

43. TV, REALITY SHOW
Part of ‘MADE BY IKEA’IMC by Ogilvy that boost sales by 7%
Research showed Women in 30s no longer looked for complete
solutions but pieces to add to their already full homes. “They had
retail blindness. They saw kitchenware, not kitchens. They saw
lamps and rugs, not living rooms.
TV Commercial – One Room in Paradise
Making the best of houses as tight as dollhouses

44. APP

45. Ikea E-commerce

46. SOCIAL MEDIA, officially
Apart from
Facebook, Youtube, Pinte
rest, Ikea has made a
Share Space page where
people
can create wish-
lists, share items they like
and go through others’
picks.
Their catalogues also
have QR codes that take
them through digital
brand experiences on
their smartphones &
tablets.

47. Social Media, unofficially
Online forums where Ikea
fans discuss products and
DIY changes such as
changing a 4 legged stool to
3 legged one for greater
stability.
Note: This site is not
affiliated with IKEA in any
way.

48. GUERILLA MARKETING
Such as this in Brooklyn, NY.
Whatever you need for your
apartment you can get in an Ikea
box

49. INNOVATION
& EXPERIENTIAL MARKETING
Ikea turned a monorail in Japan
Into an Ikea space

50. THE STORE ITSELF
The Ikea journey markets
everything in the store to
you when you came to buy
one or just a few. It tells you
visual stories.
Starts with basic comfort –
living room & beds, ends
with delight – food, and has
everything else in between.
Single Exit.

51. Ikea CSR
For every LED light bulb
sold in stores during the
campaign period*, the
IKEA Foundation donated
€1 to UN Refugee Agency
to light refugee camps.
Total: €7.7 million.

52. Ikea PR: Good Crisis
Management
Horsemeat in
Meatballs scandal.
Responded with
timeliness, transparency, hone
sty and humility.
• Stopped selling product
temporarily.
• Changed meat partner.
• Did not play victim.
• Apologised.

53. ‘Green Campaign of the
Year’
Award Winning PR
Ikea banned the use of
incandescent bulbs.
PR announced green move
by arranging interviews by
US Ikea President Mike
Ward and sending out
stories to press and TV
channels.

54. MARKETING STRATEGY
CUSTOMISED AS PER
MARKET
IN CHINA:
Positioning – Aspirational brand, not
absolutely low cost
Location - Near rail networks as people use
public transport more than cars
Communication – Use of local social media
like Weibo
gg

55. MARKETING
SUGGESTION 1
Improve e-commerce
experience.
By being present on Amazon
Ikea competes with other
brands and loses on-stop-shop
advantage.
Improve call to action on
website and product delivery.
Tap into new, growing
behavioural segment:
online shoppers with no time to
visit and haul things into vans.

56. MARKETING
SUGGESTION 2
Sharp & early targeting
Create Ikea Student
Compete with Amazon Prime by
offering free shipping to
students.
Create a Move-into-Hostel
collection with
desk, mirror, book case
ensemble.
Tie up with schools to include
Ikea discount and free meal at
Ikea in student welcome kit.
Catch this segment early for
future sales.

57. MARKETING
SUGGESTION 3
Real Customer Service
Ikea Handymen
Currently the ‘Ask Anna’
button only redirects you on
the website.
IKEA needs a branded team
like the Geek Squad for a
single, strong promise of
good and complete customer
service. A team you can
call, ask for
packing, delivery, repair, ass
embling help etc

58. MARKETING
SUGGESTION 4
Teaser Stores to showcase
furniture samples and
promote Ikea food
Small in-city stores for quick buys.
Purpose: Brand engagement
Centered around occasions:
Mother’s Day
Holiday season
Providing a small portion of Ikea
goods and food. People may also
place order from this teaser store.
MINI
IKEA ON
?

59. OVERALL
PERFORMANCE
STAR ON BCG MATRIX
As it continues to grow and expand
online and offline.
Revenues going up continuously.
No end of the road in sight.

60. LEARNINGS
SUCCESS FACTORS
Sell an experience, not just products
Merits of sticking to a single brand
Keep it simple and basic
Offer food at the end of the line!
FAILURE FACTORS
Catch up with new trends. App doing
well but e-commerce needs to be
stepped up.

61. Any Qs?