Client:

• IKEA began in Sweden.

• 1943: Ingvar Kamprad started the company at the age of 17.

• The name : Came from his initials “I.K.” & then he added the “E” & the “A” from the words Elmtaryd & Agunnaryd, which was the farm he grew up on.

• IKEA is now a successful home furnishings store & the world’s largest furniture retailer.

• Offer: A wide variety of very affordable products with a unique store layout.

• August, 2010: Had 280 stores in 26 countries. (That belong to the IKEA Group.)

Business idea: “…offering 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.”

16%

11%

10%

7%7%

49%

Top 5 Sales Countries:

Germany U.S.A.France ItalyUK (other countries)

Able to offer affordable furniture through cost-cutting & close supplier relations while placing an emphasis on the design process.

Offer display stores that provide amenities: restaurants, child playrooms & grocery stores.

Easy to use website with “Ask Anna,” IKEA USA's Automated Online Assistant.

They collaborate with nonprofit organizations such as Greenpeace & the World Wildlife Fund (WWF).

Competitive Advantages:

A strong global brand which attracts key consumer groups and promises the same quality and range worldwide

A clear vision ‘to create a better everyday life for many people’

Strong concept based on offering a wide range of well designed, functional products at low prices

‘Democratic design’ which balances function, quality, design, and price. IKEA’s cost consciousness makes sure that low prices are taken into account when each product is designed.

Strengths:

Strengths - Continued:

Increased use of renewable materials in production‘Smarter’ use of raw materials with less waste; Volume

commitments (creating long-term partnerships with its suppliers therefore, by buying large volumes over a number of years IKEA can negotiate lower prices)

Long-term partnerships with suppliersEconomies of scale (buying raw materials in bulk at

cheaper unit costs)Delivering products directly from the supplier to IKEA

stores (cuts handling costs, road miles, and lowers the carbon footprint)

New technologies

Weaknesses:

The size and scale of the business: This could make it hard to control standards and quality. Some countries where IKEA products are made do not implement the legislation to control working conditions. This could represent a weak link in IKEA’s supply chain, affecting consumer views of IKEA’s products. The IWAY code is backed up by training and inspectors visiting factories to make sure that suppliers meet its requirements. In addition, there is the need for low cost products. This needs to be balanced against producing good quality.

Need to differentiate itself and its products from competitors. IKEA believes there is no compromise between being able to offer good quality products and low prices.

IKEA needs to keep good communication with its consumers and other stakeholders about its environmental activities. The scale of the business makes communication a difficult task. IKEA produces publications in print and carries out major TV and radio campaigns to enable the business to communicate with different target audiences.

Opportunities:

IKEA provides solutions for a sustainable life at home with tips and ideas on their website. They also have a sustainable use of resources by aiming for a zero waste to landfill, wastewater treatment, and programs to reduce its use of water.

IKEA aims to reduce their carbon footprint by reducing energy use and using renewable energy, and by cutting their use of air transport and reduce packing.

IKEA is also adopting social responsibility by the support for charities such as the World Wildlife Fund (WWF), UNICEF, and Save the Children.

IKEA builds trust through good communication with consumers, co-workers, key opinion former, and the press.

Threats:

Social trends such as the slowdown in first time buyers entering the housing market, is a core market segment for IKEA products.

Market forces are more competitors entering the low price household and furnishing markets. IKEA needs to reinforce its unique qualities to compete these.

Economic factors such as the recession, slows down consumer spending and disposable income reductions.

1.) Rooms-To-Go 2.) Pier 1 Imports3.) Target

Top 3 Competitors:

Competitors:

Competitors:

Competitors:

IKEA Round Rock Store:

Located: 3701 North I-35, # 1 IKEA Way, Round Rock, TX. 78665

Opened: November 2006 Currently expanding: Expected to

be 306,000 sq. ft. by Summer 2012. Adding a 3-level parking garage to keep the 1,200 parking spaces.

Offers: 41 different room-settings, supervised children’s play area, & a product picking & delivery service, The Exit Bistro & the Swedish Foodmarket.

Education: Recently graduated with Bachelor’s degree in Business from UT

Employment: Human Resources in local firm. Marital Status: Single Kids: None Pets: Two calico cats Household Income: $20,000-$29,999 Interests: Concerts at local venues. Often shops

conservatively at trendy, but affordable apparel retailers. Art museums & watching documentaries.

Lifestyle: “Fast fashion” retailers contribute to Michelle’s trendy & always evolving sense of style. This is true in her habits of shopping for home décor, as well.

Hobbies: Watches shows like Top Chef and Project Runway. Nightlife on weekends in downtown Austin. Entertain in her 1 bedroom apartment in South Austin.

Personality Type: Michelle is an innovator.

Target Audience - Female:

Michelle

Age: 24

Education: Graduated from a St. Edward’s with a Bachelor’s degree in Communications

Employment: Works in sales for Dell for the past 4 years, been promoted twice.

Marital Status: Engaged Kids: None Pets: 1 dog - Pit bull/Boxer mix Total Household Income: $30,000-$39,999 Interests: Enjoys action films & TV shows about

health & fitness. He stays up to date about current affairs.

Lifestyle: Since having his girlfriend recently move in with him, Michael wants to buy furniture that is more fitting for 2 people.

Hobbies: Michael is active & utilizes all of Austin’s outdoor activities. On weekends Michael hikes with his girlfriend.

Personality Type: Michael is a Thinker. He is mature and responsible,& he shops responsibly.

Target Audience – Male:

Michael

Age: 28

Increase store location awareness among the surrounding areas communities and consumers by 5 percent in the next year leading to a 10 percent sales increase at the IKEA Round Rock store.

Marketing Objective:

Marketing Budget:

IKEA’s annual sales summary for 2010 = 23.1 billion Euros (About 30.52 billion U.S. dollars)

# of IKEA stores in 2010: 280 Take annual sales & divide it by 280 stores = About 109.03

million U.S. dollars Proposed Advertising Budget: $285,000 Comes to an average of about $23,750 to run the scheduled

advertisements each month. Advertising Media Selections: Billboards, pedicab

advertising, Bench displays & Bus exterior displays = $282,180. $2,820 will go towards any unexpected expenses that may occur.

The advertising media selections would be spread out over the period of a year.

43%

24%

16%

17%

1%

Advertising Budget:Billboards Bus Exterior Displays Bench Displays

Pedicab Ad. Unexpected Expenses

Billboards:

A total of 13 billboards will be utilized over the period of a year throughout the Round

Rock & Austin areas & communities.

Advertising Media Selection: 

Billboards: 

Company: 

LAMAR Advertising

Size: 

14' X 48' 

Costs per unit per month: 

$5,000 

Type of time period: 

6 months/Continuous 

# of units: 

3

Costs per month for 3 units: 

$15,000 

Costs Per Time Period: 

$90,000 

Advertising Media Selection: 

Billboards: 

Company: 

Johnson Outdoor Advertising

Size:

 14' X 48'

 Costs per unit per month:

 $1,200

 Type of time period:

 Per month/Pulsating

 # of units:

 10

Costs per month for 10 units: 

$12,000 

Costs Per Time Period: 

$31,200 

Billboards:

A total of $121,200 of the budget will be spent on billboard advertisements.

3 of the billboards will be done through LAMAR Advertising.

LAMAR will do the more elaborate billboards.

10 billboards will be done through Johnson Outdoor Advertising.

Good way to reach a large # of consumers.

Example of a Billboard Ad.:

Costs to run units:

Units 1-2 will run in the months of December 2011, January & February 2012.

$7,200 Units 3-4 will run in the months of March, April & May 2012.

$7,200 Units 5-6 will run in the months of June, July & August 2012.

$7,200 Units 7-8 will run in the months of September, October & November 2012.

$2,400 Units 9-10 will run in December 2012 only.

TOTAL PER YEAR: $31,200

Pulsating Schedule for Johnson Outdoor Advertising Billboards:

Each unit or billboard will

run for 3 continuous

months at the different

increments scheduled.

Bench Displays:

Advertising Media Selection: 

Bench Displays: 

Company: 

Blue Line Media

Size: 84" w by 30" h

Costs per unit per month: 

$300

Type of time period: 

6 months/Continuous

# of units: 

25

Costs per month for 25 units: 

 $7,500

Costs Per Time Period: 

$45,000 

• A total of 25 bench displays will be utilized.

• Dec. 2011 - May 2012: bench displays will run.

• $45,000 of the budget will be spent on bench displays.

• Way to generate a local presence.

• Cloth that can be purchased at IKEA will be on some of the bench’s as displays with a sign. The sign will have the IKEA logo & the stores address.

• Other bench displays will have an ad on the backrest of the bench.

Example of a Bench Display:

Sign on the bench would have the IKEA logo as well as the address for the IKEA Round Rock store.

Bus Exterior Displays:

Advertising Media Selection: 

Bus Exterior Displays: 

Company: 

Blue Line Media

Size: Bus exterior

Costs per unit per month: 

$4,500

Type of time period: 

3 months

# of units: 

5

Costs per month for 5 units: 

$22,500

Costs Per Time Period: 

$67,500

• 5 buses will be covered in IKEA advertisements on the exterior of the bus.

• October - December 2012: Bus displays will run.

• A total of $67, 500 of the budget will be used for bus exterior displays.

• High exposure rate.

• Like “moving billboards.”

Example of a Bus Exterior Advertisement:

Pedicab Advertising:

• 40 Pedicabs will be utilized.• January – March, 2012:

Pedicab advertisements will run.

• $48,480 of the budget will be spent on pedicab ads.

• Have a high exposure rate, mobile.

• Back panel is about eye level with customers.

• Each pedicab with feature 2 IKEA pillows to capture the consumer’s attention & for passengers to enjoy.

• Ads will be promoted during high traffic times in the downtown Austin area & in the high traffic areas.

• Ads will be promoted in the day & at night. (Backlit at night.)

Advertising Media Selection:

Pedicab Advertisements

Company:

DirtNail Pedicabs

Size: Back Panel Sides A & B4’ w x 3’ h

Costs per unit per month:

$400

Type of time period:

3 months

# of units:

40

Costs per month for 40 units:

$16,000

Costs Per Time Period for Pedicabs:

$48,000

# of Pillows per pedicab: 2Costs per pillow: $6

Costs of pillows for all pedicabs: $480

Total Costs with Pillows Per Time Period:

$48,480

Example of a Pedicab Advertisement:

• Oct. – Dec., 2012: advertising for the Round Rock store will be at its peak.

• Consumers are exposed to IKEA ads in the months previous to the busiest shopping times of the year.

Media Selection Schedule:

Any Questions???