Customer Behavior Analysis of Ikea

IKEA is the world’s largest furniture retailer, specialising in selling stylish, inexpensive, self assembly Scandinavian design furniture, home accessories, kitchens and bathrooms in their retail stores around the world. Delivering good quality contemporary design furniture to the middle class consumer is not the only focus of the IKEA group; it also sells a lifestyle that customers around the world recognise and embrace. IKEA is a global company that has invested and is present in many countries; it promotes its products and services using the same brand in all markets coordinated from its one main corporate office in Sweden which is responsible

Place : IKEA’s philosophy is « getting the product to the right place at the right moment » for that costumers can go in IKEA stores, online or even ask for a delivery service.

Unfortunately, for IKEA, I am well-aware of its main weaknesses, which are; its limited product designs, and its DIY concept for customers that prefer items assembled. Essentially, this weakness provides Zappos with a unique opportunity to capitalize on the market of unsatisfied IKEA customers. For example, Ferrell & Hartline (2014) explains that, “some customers may not appreciate IKEA’s do-it-yourself approach. Moreover, IKEA targets young, cost-conscious customers who want stylish furniture. However, these same consumers also like convenience and usually have the money to pay for it. Consequently, for them, the time and effort involved in shopping for furniture, bringing it home, and assembling it may not be worth it. Furthermore, some customers enjoy having a conversation with a salesperson and getting individual ideas and advice from employees. Therefore, these customers may continue to buy furniture from traditional retailers” (p.498).

IKEA organizes its retail outlet by a “maze-like” structure in which one area is where furniture are placed in a showroom format, where another is where all the similar items are grouped together. Designing the retail store in a “maze-like” structure have a psychological impact on customers’ decision-making skills regarding purchasing its products. This is because by holding their customers as long as possible, the better product knowledge they will have and they will feel more compelled to buy IKEA’s goods, thus increasing IKEA’s sales.

This analytical report has been written on behalf of IKEA and will address and assess the six marketing processes used by IKEA and their impact on the businesses overall success. A marketing plan is one of the most important processes for businesses to undertake as the development of a marketing plan will offer a reference document to assist businesses in executing their marketing strategies. It will also help to develop a structured approach to creating services and products that satisfy customer needs and wants.

The threat of substitute products and services is low as there are no too many products and services available that can substitute the demand for furniture, home appliances and a range of other products offered by IKEA. For instance the need for furniture or appliances (e.g. chair, mattress) for basic and decent accommodation is inevitable, unless the individual decides to follow

IKEA is a worldwide expanded company. They enlarge their showrooms to North America, Europe, Australia and Asia. Customers can check out IKEA’s product in the show rooms and also by checking out IKEA’s websites to get their selected products to be home delivered. This is an effective way of selling their products as customers who are busy with their own work can purchase their preferred products online whenever they want to. Thus, this is an advantage for both customers and IKEA’s company as their sales doesn’t stop at the showroom itself.

Ikea was successful in entering the furniture retail market in Sweden because it capitalized on good timing and original ideas. At the time of Ikeas initial phases, furniture prices in Sweden rose 41% faster than other household goods between 1935 and 1946. Ingvar Kamprad, the founder of Ikea Saw this as a great opportunity to offer quality furniture at a much lower price than other retailers, that the majority of people can actually afford. Ikea was also able to overcome adversity through creativity in business processes. When initially traditional retailers fought against Ikea’s ideas and banned them from selling at the Stockholm Trade Fair, the took orders or got names of customers in order to sell to them after the event. On another occasion, they overcame trouble with the retail cartel by establishing manufacturing sources in Poland instead of Sweden. This actually resulted in lower costs for Ikea and therefore allowed them to sell products at even lower prices than before. They also differentiated themselves from other companies not only through price but also through store design and location. Instead of locating in downtown hubs, Ikea set up its stores in areas with a lot of land to provide ample parking space which went hand in hand with their concept of cash-and-carry retailing. Furthermore, within the stores established many basic practices, such as wide

market as many consumers actively buy into the cost-conscious mentality. Furthermore, the standard of living is higher than most countries. Quality is highly important as consumers are driven by value and demand quality products (Ferrell & Hartline, 2014). Ringstrom (2016) acknowledge that, IKEA relishes in the fact and status that they are a place for individuals that enjoy value and have thin wallets. The goal is to make customers and potential customers aware of their higher-quality goods all the while maintaining a popular appeal. They essentially build their success from low priced goods and

IKEA, founded in 1943 by Ingvar Kamprad, has a vision “to create a better everyday life for the many people”. With its business idea of “offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”, IKEA’s operational processes continues to focus on creating quality products and services at low costs as well as environment sustainability. (IKEA, 2016) More than being a furniture merchant, IKEA sells a brand that is easily recognizable, chic, stylish, minimalist and modern. It believes that everyone will leave IKEA store with something they like, be it the products or services. Its success is evident internationally where there are more than 300 stores in 35 countries. (Freden, 2015) The case study will

They have integrated this concept in every business decision and global strategy, and have never strayed from the original objective of IKEA. The pioneer of IKEA’s concept was the standardized process of providing customers with disassembled furniture to be arranged at home also known as the ready-to-assemble kit. This helped increase storage and maintain large inventories at the store, which in turn eliminated warehousing costs and permitted the consumers to obtain ownership of their purchase on the same day itself. Involving customers in the value chain was a historic move by IKEA as it drastically reduced costs on every level. IKEA’s shoppers are half-consumers and half-producers because they have to self-assemble their purchases. Even though IKEA provides assistance, the customers prefer to order, carry and transport their own goods. The concept of flat packaging has further encouraged self-handling of purchases. It has also improvised storage capabilities and further reduced shipping costs. This new store model allowed IKEA to have its staff focus on boosting rapid movements of consumers and in store displays, rather than handling and delivering huge, bulky furniture items. The self-service strategy has become popular amongst the shoppers as well as IKEA’s competitive

Consumer behaviour is defined as the study of customers and the methods that they take to choose a product or service. Marketers spend millions of dollars in research of consumer behaviour and the creation of consumer strategies. These consumer strategies are used in different industries to improve the image of a company and increase their sales. These strategies increase a customer’s desire for a particular product, and can often confuse them into believing that their product is a necessity. This is how small businesses are able to become wealthy global industries, such as McDonald’s and IKEA.

Human: IKEA employs over 123,000 people worldwide; a decline of 5,000 personnel decline from 2008. In North America there are approximately 15,500 employees. IKEA is bouncing back from the recession and with that new job opportunities are posted everyday on their website. At present they are looking to hire 98 people for varying positions across North America. Human resource retention a strategy for the company to reduce costs and hiring within is encouraged. Experience: IKEA was established almost 70 years ago, and the original founder still participates in some activities. Experience is also derived for the Board of Directors. Relationship with Customers: IKEA truly takes care of their customers, and their customers are brand loyal. Some of the current strategies they have in place to satisfy customers are their services offered in store, like childcare, and also 90-day return policies, and customer service contact information. On the market research website SocialMention.com, IKEA has a 5:1 sentiment rating; this is the ratio of people on social medias that write about the brand in a positive way. Relationship with Suppliers: IKEA has developed a name for building very strong, long-term relationships with its suppliers. It currently works with over 1,400 supplies across the globe. IKEA tends to

In order to produce a product which is different with others, IKEA implement “Limited Customer Service” method to the consumers. For example, Customers need to build up the furniture on their own because IKEA sell their furniture product without assembling it. This method will help IKEA to reduce their assembling and install cost, saving the space for the warehouse and other costs which is unnecessary. Besides that, the transportation service for the customers is not provided and if the customers want to transport their item back to home they need to request for transport service provider on their own. The IKEA’s product is different when compare with their competitors due to the “self-service” strategy they implement. For examples, fewer staff is needed to be in the store of IKEA because the explanatory catalogs, informative displays and labels that IKEA provided for the customers to get the information they wanted and they can walk around in the store and pick the item they like as a free and comfortable way. This process helps the IKEA to reduce their cost and increase the customer

I will write this essay about my experience at the IKEA store in my hometown, Uppsala Sweden. The store is one of the biggest stores in EU and not that old either so it’s a little different from other IKEA store in other cities nearby. Just want to say how I like the costumer strategy IKEA is using, there markets in such a way that everything you have at home could improve their products. Their furniture is adapted simply and quality manner. Their audiences are primarily families, students and newly married couples because their products cheap and they are very easy to put and build together. People around here in Sweden is saying that Ikea family is the “Sweden's best home-loving loyalty club” that is there loyalty program, are you a member of Ikea family gives you more of IKEA and always a better deal. And if you leave your email address to get their newsletter and be the first to take advantage of