Analyzing Consumer Markets
IKEA-The quintessential ‘cult’ brand
Come on aboard, let’s
start our journey
• Was founded in 1943 by 17 year old Ingvar
Kamprad.• Currently a retail titan in
home furnishings• Considered a “one stop
sanctuary for coolness• Each year more than 650
million visitors walk through it’s stores
Scandinavian Roots
• The company stays true to it’s Scandinavian roots
• Most products have Swedish names (think HEKTAR, BILLY and LACK)
Some Superb Statistics
• One-tenth of all furniture purchased in UK comes from IKEA
• IKEA has lowered it’s prices by an average of 2-3 percent every year since 2000
• The world’s largest IKEA, in Stockholm, covers 594,000 square feet
What is IKEA doing right?
WELL PLANNED STORE DYNAMICS• Designed in a winding,
so consumers can experience the entire store at one glance• It adopts a one way
format, featuring different inspirational room sets
Cheaper storage and
transportation• Consumers pay for the items, visit the warehouse, and pick up their purchases in flat boxes
• Consumers load the items in their car, take them home, and completely assemble the product themselves
• This strategy makes storage and transportation easier and cheaper for the store
Low operational costs
• The company buys in bulk• It controls the supply chain• Uses lighter packaging
materials• Saves on electricity through
low wattage light bulbs All this helps in reducing operational costs for the
company
Adaptive Attitude
• The company caters to local and regional tastes
• Showrooms in each country or region vary according to the demographics of that region as well.
There is always scope for
improvementWhere can IKEA
improve?
Start initiatives to develop more
eco-friendly products
Start tapping the markets in India and China
with huge potential
Invest more in marketing and
publicizing through social
media
PROS of IKEA’s Marketing Strategy
• The pricing of IKEA products enables consumers across a range of economic and financial status to buy their products
• They develop localized products for different markets
• Unique and memorable in store experience
CONS of IKEA’S Marketing Strategy
Needs to provide services for home delivery and
service in countries where DIY is less prevalent (ex-
India)
IKEA needs to get on the social
media advertising bandwagon, else it may
hinder sales
SUMMARY• Largest furniture retailer in
the world• 350 stores in 43 countries• Conducts exhaustive study of
consumer markets, accordingly develops localized products
• Currently expanding into other countries
DISCLAIMER
This presentation was created by Amitesh Chawla of DTU during a
marketing internship under Professor Sameer Mathur