mm case stude ikea.docx
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Marketing ManagementIKEA Case StudyTRANSCRIPT
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Marketing Excellence
Group Members:
Ch. Usman Ali
Bushra Javed
Hassan Raza
Mahnoor Malik
Tehmas Zaki
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1. What are some of the things IKEA is doing right to reach consumers in
different markets? What else could it be doing?
IKEA is a Swedish company registered in the Netherlands that designs and sells ready-to-
assemble furniture (such as beds, chairs, and desks), appliances, and home accessories. IKEA is
founded in Sweden in 1943 by a 17-year-old Ingvar Kamprad and is known globally for its
modern architectural designs and its interior design work is often associated with eco-
friendly simplicity. IKEA’s vision is “to create a better everyday life for the many people”.
IKEA is leader in furniture retail and consists of 300 stores around 38 countries and still
expanding. It is successful because it provides unique Value preposition1 to its customers at
extremely low price. Value preposition is the core marketing strategy that IKEA is using to get
global customers. IKEA is convincing potential consumers by claiming and by practically doing
it that IKEA’s products and services will add more value than other similar offerings at lowest
possible price. IKEA’s mission of providing value at lowest possible price predicated on
Kamprad’s statement that “People have very thin wallets. We should take care of their interests”.
IKEA adheres to this policy by reducing prices across its products by 2% to 3% annually.
To get its mission IKEA procures its raw materials from multiple companies all over the world
and thus it can save a lot of money and charge low price to the customers. Today IKEA works
with approximately 1300 suppliers from 53 countries.
When IKEA expands in new country, it studies that country’s market and do consumer’s need
analysis and then designs products to cater that country’s needs. When it expanded in China,
IKEA gave importance to the local taste in China. They placed plastic placements with “Year of
the Rooster” themes which sold to thousands of people quickly. When IKEA realized US
shoppers were vases as drinking glasses because they considered IKEA’s regular glasses were
too small. So, they customized the size to fit the needs of the US markets.
1 A marketing statement that summarizes, why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.
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Some of the great things IKEA does to reach consumers are given below:
IKEA’s products are stylist and customized.
Wide range of products according to the need of customers.
Low priced furniture store provides reassemble furniture and casual furniture.
Products available for different sections of the society.
Product adaptation according to the need of different market.
Diversify product line product depth.
Concept of flat packaging which makes it easier to consumers to transport the furniture
IKEA earns a huge amount of revenue because of its low price strategy from consumers around
the globe. However, IKEA does not have stores in South Asian markets. South Asia has a huge
market for furniture especially in Pakistan. Due to its low price strategy and with its innovative
products , IKEA can make its roots in Pakistan with no much completion as there is not much
companies exists. Besides, India, Bangladesh can be a profitable market for IKEA.
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