IKEA Marketing Management
Marketing Management Project Advertising Campaign for Student: Smolkova Katia Professor: Laura Mitchell Moscow 2003 Table of Contents Adapting Marketing to the New Economy 3 Building Customer Satisfaction, Value and Retention 4 Winning the Markets through Market Oriented Strategic Planning. Dealing with Competition 6 Advertising and Promotional Campaign for Ikea 10 SWOT analysis 14 * I covered almost all subjects from your list I just didnt separate them, for example, I wrote about price strategies and programs in Building customer satisfaction, value and retention Adapting Marketing to the New Economy To begin with I’d like to say that Ikea is very good at introducing its products to foreign countries. Now Ikea has 154 stores in 22 countries and territories. Last year 286 million people visited the Ikea Group’s stores (Ikea stores working with franchise) around the world. Ikea franchisees operate in the following 14 countries and territories: Australia (1), United Arab Emirates (2), Greece (1), Hong Kong (4), Iceland (1), Israel (1), Kuwait (1), Malaysia (1), the Netherlands (1), Saudi Arabia (2), Singapore (1), Spain (3), Taiwan (1) and USA (1). This gives a grand total of 175 IKEA stores in 31 countries and territories. But I would like to devote this project discussing Ikea campaigns held in Russia, and at the end of it I’ll try to introduce my own advertising and promotional campaign that can used by Ikea management and marketing departments in order to attract more customers. On March 2000 the first Ikea store was opened in Russia in Himki, very soon, in 2001, their second store began operating in Teplii Stan. ... Today more than 30 Russian factories collaborate with Ikea. There are even factories where Ikea orders constitute almost 80% of their production. This shows us that the marketing management department of Ikea found the right way to introduce its products on the Russia market. ... Three big stores are situated there: ‘Ikea’, ‘Ashan’ and ‘Mega’. ... For example, people come to ‘Ashan’ or ‘Mega’ to buy food or clothes and they don’t think about purchasing any furniture, they decide just to see what’s there in Ikea (it is so close why not go there, like an excursion), so they go through it, take catalogue, they may like it and next time if they decide to buy furniture, they will come to Ikea (as it has already become an alternative for them)! I will discuss some other Ikea techniques later on. Now it seems to Ikea that during these 3 years Russian customers got well acquainted with the assortment of goods, their quality, that’s why Ikea is planning to open 3 more stores in Moscow, 2 more in Saint-Petersburg and their first store in Kazan. ... I am sure that Ikea did all that before coming to the Russian market. ... Although the Ikea furniture is offered on quite affordable prices, still the average income in Russia is too low to talk about lower classes buying Ikea furniture. As Ikea states ‘ their business is to offer a wide range of home furnishings with good design and function at prices so low that as many people as possible will be able to afford them. ... It sounds impossible, but Ikea’s good reputation and constantly increasing number of stores proves that they somehow manage to do this. ... Ikea doesn’t charge people for things they can do easily on their own. That’s why Ikea says ‘our business idea is based on a partnership with the customer. ... Ikea always makes sure that the high quality of its products remains stable. Ikea has trading service offices in 33 countries. ... Ikea stores are very large, and it can be rather difficult for you to understand where you can find what you are looking for, that’s why you are offered an Ikea map, which shows where the necessary items are, like where you can find furniture for kitchen, living room, dining-room, restaurants etc. Ikea does its best to make sure that people are not upset with the service of the company, for example make sure that customers don’t have to spend hours in queues or have problems finding the necessary products. In Ikea you can pay either in cash or by credit cards; they take Eurocard, MasterCard and Visa. ... When Ikea comes up with a new product line, it receives a name, for example, ‘Poeng Armchair’, ‘Allerum Sofa’, etc. ... When you buy furniture you should be able to measure the size of the items, in order to understand whether they fit to your room or not, that’s why Ikea has special paper rulers, which you can find everywhere in the store and use them whenever you like, plus you can also find special Ikea pencils which also can be used by everyone to make different notes. Ikea also offers special service for babies and children. ... Parents can be sure- Ikea will take care of their children. Children also get some presents from Ikea, for example a nice T-shirt with Ikea symbol. There is also a special menu for children in Ikea restaurant. ... All this makes up Ikea brand name, which increases the products’ value and which makes people loyal to the company [brand equity]. ... Ikea really pursues customer-oriented policy- they do everything in order to make customers be more satisfied with the services and products, as they understand that their business completely depends on customers’ attitude towards the company. But one of the most important points here is that Ikea focuses not only on customers, but on their mainly on their needs! ... This again proves that the management of the firm has to react very fast on the rapidly changing environment and always be ready to make important decisions. ... Ikea manages the problem with competition really well. ... Ikea uses market differentiated pricing, which means that the company takes into account unique conditions that exist in each foreign market. ... Ikea realizes that many people want to have well-designed furniture, but not many people can really afford this. Ikea offers prices that are 30 to 50 percent lower than fully assembled competing products. It is achieved by purchasing in large volumes, low transportation costs, low rental costs (stores are located in the suburbs), distribution policy (when customers purchase from Ikea stores they are responsible for transportation and assembling) and DIY (Do It Yourself) marketing.