Ikea Company Marketing Mix
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[pic 4][pic 5][pic 6]Table of ContentsIKEA GROUP 2Introduction 2Company Background 2The story behind the name 3Vision and business idea 3IKEA’s global strategy 3The Barriers Which IKEA Faced On Global Expansion 4Tariffs barriers 4Non-tariff barriers: 4The Modification Ikea Made Of The Marketing Mix To Meet The New Market Need 5Products 5Place 5Promotions 6Price 6IKEA GROUPIntroductionThis document is introducing IKEA company as the worlds largest furniture retailer and covers the following items:The company background. The barriers which IKEA faced on global expansion. The Modification IKEA made of the marketing mix to meet the new market need. COMPANY BACKGROUND IKEA is a home furnishings company founded in Sweden, in 1943, by Ingvar Kamprad, who began by peddling useful items to neighbors on his bicycle. and still has control over the company through the INGKA Foundation, based in the Netherlands. Swedish company IKEA was the worlds largest furniture retailer since the early 1990s. It sold inexpensive furniture of Scandinavian design. Nowadays, the company operated in 55 countries with a workforce of 76,000. IKEA offered nearly 12,000 items to the home furnishings market worldwide. It sold a wide range of products including furniture, accessories, bathrooms and kitchens at 186 retail stores in 30 countries across Europe, North America, Southeast Asia, Middle East and Australia. IKEA enjoyed high brand equity.[pic 7]IKEA believes that home is the most important place in the world and children its most important people.The IKEA Foundation is the philanthropic arm of INGKA Foundation, the owner of the IKEA Group of companies. IKEA aim to improve opportunities for children and youth in some of the world’s poorest communities by funding holistic, long-term programs that can create substantial, lasting change. In the early 1980s – with IKEA stores in 20 countries and expanding – IKEA founder, Ingvar Kamprad, realized he needed to protect the unique IKEA Concept as part of the company’s growth. He wanted total independence and a long-term ownership structure, so the stock market wasn’t an option. Plus, he believed that all the companies operating under the IKEA Brand had to build resources before they could expand.
The story behind the nameThe IKEA name combines the initials of IKEA founder, Ingvar Kamprad, (IK) with the first letters from the names of the farm and village where he grew up – Elmtaryd and Agunnaryd (EA). The IKEA logo has hardly changed during the company’s history and the 1967 version remains a consistent symbol of the IKEA business.[pic 8]The IKEA logo 1951, 1954, 1967, 1981 and 1983.Vision and business ideaIKEA vision is “To create a better everyday life for the many people”.IKEA business idea is “to offer 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 work hard to achieve quality at affordable prices for IKEA customers through optimizing IKEA entire value chain, by building long-term supplier relationships, investing in highly automated production and producing large volumes. IKEA vision also goes beyond home furnishing. IKEA want to create a better every day for all people impacted by IKEA business.IKEA’s global strategyThe concept which IKEA calls “democratic”It is a main concept of design that, according to Kamprad, “was not just good, but also from the start adapted to machine production and thus cheap to assemble.”.A key feature of IKEA: self-assemblyKamprad quickly realized that flat-packed furniture reduced transport and warehouse costs, and damage (IKEA had been having a lot of problems with furniture damaged during the shipping process). Moreover, customers seemed willing to take on the task of assembly in return for lower prices. By 1956, self-assembly was integral to the IKEA concept.The barriers which IKEA faced on global expansion Tariffs barriers:A tariff is a tax that is placed on imported goods by governments.Non-tariff barriers:Import licensesExport licensesImport quotasSubsidiesVoluntary Export RestraintsLocal content requirementsEmbargoCurrency devaluationTrade restrictionPacking and shipping regulationsHarbor and airport permitsGovernmental laws and regulations and political issuesPoor infrastructure and poor transportationTHE MODIFICATION IKEA MADE OF THE MARKETING MIX TO MEET THE NEW MARKET NEED This section will demonstrate two examples of the marketing mix strategies IKEA adopted in the Brazilian and the Indian markets.