Value: The Reasons On The Value Of IKEA

The well-known ‘build-it-yourself’ product design makes them progressive and makes them running ahead of the competition. IKEA is the only big brand in a category further not present in global markets, there are no real competitors operating in the same category. In 2013 775 million customers visited IKEA in 2013, and its website hosted 1.2 billion visits (4). Due to the ‘build-it-yourself’ product design IKEA is able to provide their customers with high quality and low cost products, even the customers with limited income and limited living space

* IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring

IKEA specializes in ready-to-assemble furniture that is of good quality. It also specializes in food and other cheap accessories for the house. Because of its uniqueness and low prices for such good quality, it is very likely that consumers may deem it incomparable and thus reduces their ultimate range of choices for alternatives.

”The IKEA Concept starts with the idea of providing a range of home furnishing products that are affordable to the many people, not just the few.” *http://www.ikea.com/ms/en_GB/this-is-ikea/the-ikea-concept/index.html

IKEA-products are extremely popular, there are very few people that never heard about the yellow-blue brand. Moreover, it will (even) be hard to find people that have no products from IKEA in their houses. This makes us wonder: “Why is IKEA so successful?” We will analyze IKEA’s marketing department to answer this question. We think IKEA’s marketing strategies are very unique and therefore an important factor causing IKEA’s success. Our main belief was that IKEA is a company with a great proficiency in pricing. However, after some readings about the company we discovered all the 4p’s of the marketing mix are very well developed and still very innovative. IKEA’s marketing strategies are based on its democratic design statement; “Democratic design brings good design to the many

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

IKEA´s mission statement: IKEA offers a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible can afford them"

Since IKEA follows low cost strategy, their target customers are mostly low to middle income people, students or young people who want more value of money. Moreover, they try position themselves as a family friendly store. IKEA mainly does promotional activity through catalogues where customers get chance to choose their product. IKEA also depends on online promotion and other traditional channels to reach to customers. IKEA has online sales presence in 13 countries and they got more than 1.5 billion visitors in the year 2014 on their website (Dudovskiy, 2015). IKEA also provides loyalty cards worldwide by which customers can receive discounts of specific products.

In some instances IKEA’s expansion to a new country had lacked sufficient research. This is evident from its expansion to United States and Japan. IKEA entered Japan with a local partner but had failed to win over Japanese consumers as they had underestimated the significance of cultural differences. The rush into Japanese market and Japanese customers’ unacceptance for flat pack and self-assembling their own furniture were some of the reasons for failure. Whereas, in US, IKEA had initially replicates its existing business model and products when in expanded its business operations in that country. However, there arise need to customize its products to cater the local customers’ needs. For instance, American customers demand for bigger beds and closets. Hence, several marketing strategies were also changed for the American

IKEAs brand image is built on their long term strategic focus to produce products from sustainable materials in an aim to care for the environment and earth’s natural resources. This aligns with IKEAs vales to promote social, environmental and economic development. IKEAs concept of customers shopping for mass produced, standardised products in a ‘self-service’ environment allows for cost efficiency

IKEA is the largest furniture chain in the world, and in 2011 the Swedish company operated over 270 stores in 25 countries. In 2011 IKEA sales soared to over $35 billion, or over 20% of the global furniture market. Most of its stuffs believed IKEA will massive growth throughout the world in the coming decade because IKEA could provide what customer wanted: good design, and good made contemporary furniture with an affordable price. In one word, IKEA’s global approach focuses on simplicity, attention to detail, cost consciousness, and responsiveness in every aspect of its operations and behavior. (Jones, 2013)

Based in Denmark, IKEA International A/S is one of the world 's top retailers of furniture, home furnishings, and housewares. The company designs its own items, and sells them in the more than 140 IKEA stores that are spread throughout approximately 30 different countries worldwide. The company also peddles its merchandise through mail-order, distributing its thick catalogs once a year in the areas surrounding its store locations. IKEA is characterized by its efforts to offer high-quality items at low prices. To save money for itself and its customers, the company buys items in bulk, ships and stores items unassembled using flat packaging, and has customers assemble many items on their own at home. The company is owned by

Ikea's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that as many people as possible can afford to buy them (www.ikea.com)

IKEA’s strategy before the mishaps in America could be characterized as going against the norm charting their own path to success using low priced manufactures to secure lower selling prices aimed to target those who were of older age and of middle class standing. Their new strategy was to target those of a younger demographic, young married couples, college students, and 20-30 something singles. By reemphasizing design, promoting through hip quirky advertisements, and encouraging consumers to do away with their old furniture, IKEA revenues doubled in a four-year period. IKEA today has adapted somewhat of a local customization strategy where their store layouts will resemble that of many local household layouts as proven by their success in China where they failed to expand beforehand. They also keep their prices extremely low in some areas as China by sourcing a large percentage of products in the area of operation.

Touch experience play an important role for the perception that respondents have towards IKEA. The most common and interesting phenomenon is that always see people sleeping on the bed, sitting on the sofa chatting with friends and hold the pillow. Our respondents said that they like this kind of experiential shopping which they could touch and experience everything in IKEA that make them feel good.