Channel Distribution of Ikea

1866 WordsAug 18, 20098 Pages
Introduction IKEA is a privately-held, international home products retailer that sells flat pack furniture, accessories, and bathroom and kitchen items in their retail stores around the world. The company, which pioneered flat-pack design furniture at affordable prices, is now the world's largest furniture manufacturer. IKEA was founded in 1943 by Ingvar Kamprad in Sweden and it is owned by a Dutch-registered foundation controlled by the Kamprad family. IKEA is an acronym comprising the initials of the founder's name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home county. The company distributes its products through its retail outlets. The chain has 315 stores in 36 countries, most of them in Europe, the United…show more content…
These catalogues are available in any IKEA store (prices are guaranteed not to increase while the catalogue is valid, which is again attracting consumers). The positioning strategy IKEA prices are as much as thirty percent to fifty percent, certainly at least twenty to thirty percent, below those of fully assembled competing products. The exact level of undercutting varies from country to country and from period to period. There are also BTIs, ‘breathtaking items’, which have a very low price. Low costs are translated into low prices as IKEA pursues a deliberate price leadership strategy. For example, IKEA does not deliver, although it will organize delivery at the purchaser’s cost, if it is needed. At a cost it will even organize assembly for the customer. One of the best-known features of IKEA is its catalogue. It is itself well designed, almost a collector’s item. This catalogue has become something of a design icon, rather like the London underground map or the Coca-Cola bottle. It is the main mechanism of advertising. Promotion is centered on this catalogue. The aim of the company is to use the catalogues to promote innovative approaches, which are then talked about and publicity generated by word of mouth initiated by those who have seen the catalogue. The catalogue also helps the consumer to find the relevant product before entry into the store. The next positioning strategy of IKEA is colorful and attractive

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