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369 MKT

Creative Advertising Development- CW 2

SID: 2757476

Executive Summery Background Information Research IKEAIt is vital to understand IKEAs business model and core strategy in order to establish a successful execution of a promotional campaign. IKEA is a market-driven business that places the customer concern in the center of the business activity throughout the scope of business activities (Jobber 2010). This can be perceived in IKEAs vision A better everyday life for the many people (IKEA 2011). Ikeas long-term successful retail strategy is based on the companys unique resources and capabilities that have established Ikea as the worlds largest furniture retailer (Mintel 2011, BBC 2012). The Ikea Company currently operates in 26 countries with 280 stores and employing 127,000 people, Ikea also launched 28 different language catalogues (Mintel 2011, Ikea 2011). Appendix 1 highlights important IKEAs resources and capabilities, which give IKEA a competitive advantage in the market over the other competitors. The resources and capabilities build core competencies that allow IKEA to establish the businesss unique selling point that can deliver customer value (see Appendix 2). Ikea unique selling point 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 2011). IKEA core idea to satisfy customer needs with below the market price furniture (IKEA 2011 and Johnson, Wittington and Scholes 2011). Ikea provide over 9500 products in the Ikea warehouse and catalogue (Ikea 2011). The products are well arranged and illustrated in context of a home, in order to demonstrate the simplicity and perfect design that can fit every home by providing item specifications. This enables the customer to make a better-informed purchase decision with reduced perceived risk during the high involvement decision. Ikea had 42.3 million visits in UK, and more then 400 million people in 38 countries have read the catalogue (Ikea 2011, Ikea 2012). The catalogue is one of the fundamental marketing tools for Ikea. It is one of the most widely distributed commercial publications in the world (Ikea 2012). Nevertheless, Ikea marketing mix also consists of print media, TV, radio, and Internet based communication. However, the company focuses mainly on print media since it has proven to be successful in communicating Ikeas values and products.

Target AudienceIKEA`s core concept is focusing on high quality products that can appeal to different demographic markets in terms of modern designs and costs (The Economist 2011). The target market is middle class primarily Bs and Cs with lower disposable income, this is why Ikea appeals to their emotional needs of well designed and highly functional furniture at low price (Johnson, Wittington and Scholes 2011). Ikea attracts a lot of students, families, first-time house buyers, tenants and landlords that want to 1

369 MKT

Creative Advertising Development- CW 2

SID: 2757476

furnish their homes with stylish furniture even if there is limited space (PR Week 2005). The core customer profile is customers aged between 25-50 years old, and 80% of them are women, majorities have children (Thinkbox 2012 and Johnson, Whittington, and Scholes 2011). This is why, Ikea provides children area and restaurant on premises to ensure a better shopping experience. Mintel (2011) identifies that single pre-families adults (37%) and pre-family couples (28%) market is growing and more of them can be found shopping in IKEA. In order, for Ikea to better understand consumers better Ikea launched Ikea Family Loyalty Card to ensure that Ikeas consumers are retained through further targeted discounts schemes that appeal to the consumers needs (Campaign 2010, 2012 ). Ikea positions the business as "Your p partner in better living. We do our part, you do yours. Together we save money." This indicates that Ikea focuses on all generated value to be passed on to the consumers (Ikea 2011). Appendix 2 displays Porters Value Chain that is tailored to Ikea.

Competitors AnalysisMintel (2011) identifies that the furniture market is in a decline, which is driven by the 2.5% increase in VAT. Consequently, this has a heavy influence on the consumer activity since replacement purchasing had declined as well. This has put and enormous strain on the promotional activities of competing companies to capture the potential consumers attention. Ikea faces high competition form specialized and non-specialized companies that use furniture as part of their range (see Appendix 4). Most specialized competitors have adopted the interest free credit and delay payments offers on top of their half price guarantee in order to overcome the affordability issues in the market. This creates an opportunity for the consumer to acquire desired products by affordable driven offers. For example: DFS Furniture Targeting pre-family couples Brand is position is targeting the higher end market Most recent advert (see appendix) presents a highly sophisticated environment that uses a dog as a mood elevator that tries to communicate the brand personality Focusing on interest free credit and 50% off offers Available in-store and on-line Magnet Kitchen Targeting single pre-family adults Brand is position is targeting the higher end market Most recent advert (see appendix ) presents a sophisticated kitchen layout with dimed lightning that can communicate romantic setting for dinner. Displays men cooking can support target audience. Focuses on interest free credit, 50% off offer, and displays price of 2,980 that suggest high end market Available in-store, on-line, and in a brochure

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369 MKT

Creative Advertising Development- CW 2

SID: 2757476

Dreams Targeting customer that want to purchase bedroom furniture at affordable price According to the price on the advert (see appendix) the furniture is target at middle class market The advert focuses on 3 for 2 deal on bedroom furniture, 0% interest free credit is available Available on-line, in-store, or over the phone Mintel (2011) identifies that the non-specialist retail outlets are expanding their ranges into furniture and homeware products in search for better returns. For example: Argos Targeting the same market as IKEA The most recent advert for Argos (see appendix) the advert displays a contemporary well designed living room that identifies the price of three low involvement product that the consumer could use to bring color into their home. Available on-line, in-store, and in catalogue that is mentioned on the advert but it is not very visible M&S Target market is unclear due to the latest advert not using any furniture to demonstrate quality or class (see appendix ) Focuses on 50% off on all furniture range Identifies only available in-store B&Q Identifies several different prices in the most recent advert (see appendix ) which can be translated that the target market and middle class Advert focuses on unbelievable prices that will stimulate consumers interest Further the advert identifies hundreds of items in store which illustrates a wide rage for the choice of buy Available in-store

Creative Development Print Advert Concept 1The original concept of the first advert incorporates an imaginary setting using Rapunzel from Tangled as the selling point for Ikeas products that are launched in the new Ikea catalogue (see Appendix ). The advert displays the Ikea catalogue as the trunk on the tree, with branches leading out of the trunk to different products that are available in the Ikea catalogue. The branches symbolize different opportunities for the consumer to revitalize their home this spring. The spring factor is developed through bright colors that are aiming to attract attention and communicate refreshing (Lee and Barnes 1990). Color can be seen as an important tool for influencing the customers emotions and responses (Lee and Barnes 1990). The use of symbolism and spring colors wants to inspire the consumer to acquire an Ikea catalogue this spring. By using Rapunzel, the advert establishes a

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369 MKT

Creative Advertising Development- CW 2

SID: 2757476

humor appeal and positive tone of voice. It is important to understand the tone of voice that the advert communicates due to the fact it tries to portray Ikeas values and personality. In this case, the advert is trying to establish a cheeky and rebellious tone of voice through the fantasy character Rapunzel. The tone of voice and humor, help to ease the transition of the message between the advert and the audience. The purpose of this advert is to create awareness of the IKEA catalogue. The branches in the tree provide compelling information to stimulate interest for the potential customer to acquire a catalogue. The advert title Turn your home into a fairytale this spring with the new IKEA catalogue establishes the customers need or want to acquire the catalogue to browse through ideas how to brighten up their home (Yeshin 2006). This interest can be turned into motivation and satisfying the need of esteem and status. Maslow (1943) he proposed a Hierarchy of Needs that can be related to what needs might be satisfied during a purchase (Jobber 2010). In this case, the visual element satisfies the need of esteem and status, since buying products for the consumers home is more of status appeal to satisfy the ego. The advert present more low involvement products trying to appeal the consumer through impulse buying. This is where the IKEA catalogue presents an opportunity for the consumer to window shop throughout the catalogue.

Print Advert Concept 2The second advert (see appendix ), focuses on premium household theme where the potential customers want to improve their homes throu