Ikea Media Plan

Comms 332 Midterm

Morning Jensen

Betsey Broadwater

Sam Pugmire

Tyler Carter

The following is a 2013 media plan for IKEA. The targetis women ages 18-34 with higher income levels, living inmetropolitan markets with a high concentration ofcolleges and IKEA stores. The foundation and focus ofthe media strategy are the various times of the year forexpected influx of furniture sales, including back-to-school time, popular real estate sales months, theThanksgiving/Christmas holidays, and other nationalholidays. The media outlets thathave been selected support thestrategy by effectively deliveringthe unique benefits of IKEAand demonstrating how thestore fits into thelives of our target.

EXECUTIVE SUMMARY

SITUATION ANALYSIS IKEA Group is an international company, founded in Sweden in 1943. IKEA has developed into a major retail experience with 123,000 employees in 25 countries or territories. Its annual sales average about $27.8 billion.

Last year, 590 million people visited IKEA’s showroom displays, gaining inspiration for their own homes.

In 2011, retail sales of furniture reached $67.5 billion. Sales are expected to reach $68.8 billion in 2012. Furniture sales declined as a result of the 2008-2010 recession, but is expected to rebound 22% within the next five years.

IKEA’s range consists of 9,500 home furnishing articles, designed primarily to suit customers seeking functionality and style at an affordable price. In 2011, 198 million copies of the IKEA catalogue were printed in 27 different languages. IKEA stores also include restaurants serving typical Swedish foods, and have mini-markets that offer Swedish groceries.

IKEA's goals of sustainability and environmental design are central to its business strategy. It has launched a new sustainability plan to take the company through to 2015. This will combine social, environmental and economic issues.

IKEA’s top five sales countries are: Germany 16%, USA 11%, France 10%, UK 7%, and Italy 7%.

SWOT ANALYSISSTRENGTHS • Strong global brand attracts key consumer groups. • Promises the same quality and range worldwide. • Its vision 'to create a better everyday life for many people. • A strong concept based on offering a wide range of well-designed, functional products at low prices. •'Democratic designs' reaching an ideal balance between function, quality, design and price. • Offers more than just furniture, but an experience for the whole family. • Focus business strategy on sustainability and environmental design.WEAKNESSES • The size and scale of the global business causes difficulty in controlling standards and quality. • Some countries where IKEA products are made do not support working condition legislation-this could represent a weak link in IKEA's supply chain, affecting consumer views of IKEA's products. • Balancing the need for low-cost products with delivering good quality. • IKEA also needs to differentiate itself and its products from competitors. IKEA believes its offering of good quality products at low prices is incomparable. • Because of the large scale of the business, it is difficult for IKEA to keep its consumers and stakeholders fully informed about environmental activities. IKEA produces publications in print and online as well as major TV and radio campaigns to enable the business to communicate with different target audiences.OPPORTUNITIES • A growing demand for greener products and consumers seeking sustainability in their purchases. • A growing demand for low-priced products due to the financial trends in a market recovering from financial crisis. • Trends in the current financial climate may result in consumers trading down from more expensive stores. • Demand for reduced water usage and lower carbon footprints.THREATS • Social trends, such as the slowdown in first time buyers entering the housing market, affect IKEA’s core market segment • Economic factors, such as the recession, reduce disposable income and slow down consumer spending The current financial market forces more competitors, such as Pottery Barn, Sears, JC-Penney, Ashley Furniture, and Raymour & Flanigan, to enter the low-price household and furnishings markets. IKEA needs to emphasize its unique qualities to compete with these competitors.

MEDIA OBJECTIVES AND STRATEGIES

TARGET AUDIENCE • IKEA focuses on delivering high-quality products at the lowest prices to appeal to as many people as possible. Within this broad market, we have chosen to target 18-34 year-old women with access to an income level of $75,000-$99,999. These women typically live in metropolitan areas that contain multiple IKEA locations. • Customers ages 25-34 years old are likely to shop at a value furniture store like IKEA, with 37% reporting that they have in the past. They are likely to be experi-encing life changes that increase their need for furniture, such as getting married, moving houses, or having children. We have also included 18-24 year olds because they account for a substantial amount of furniture buyers. These individuals may be moving out of their parents’ homes and furnishing a new place or wanting to change up their existing rooms with more mature decor. • We are targeting women in particular because they are more likely to shop at furniture stores like IKEA, whereas men shop more for furniture at home improve-ment stores. Houses with higher income brackets are more likely to shop at value furniture stores like IKEA, because they like deals and bargains when buying fur-niture. Our target is consumers with an income of $75,000-99,999 because they are also the most likely to have purchased furniture in the last 24 months. • IKEA is likely to appeal to these consumers because of its low prices, ability to take home items on the same day of purchase, and its ability to complete an entire room in one stop. Their main motivators for buying furniture are replacement of worn-out items, desire for updated style, and a sale or good deal. Their key factors when deciding on a furniture retailer are price, good quality, and a good selection. • They get inspiration for furniture when looking through retailers’ catalogues as well as their websites. They are also motivated by free shipping and delivery and would like an interactive tool that enables them to see how the furniture will look in a room and bring their potential purchase to life.

MEET STEPHANIE: Stephanie is a 20-year-old student at the University of Southern California with a busy schedule and fast-paced lifestyle. She is about to start her junior year and is moving into a new apartment with three of her best friends. She plans to live at the apartment for her remaining two years of school and wants furniture that is good quality for a great deal and will help to organize their minimal space. Her roommates all want to go shopping together, but have very different styles. Despite their differing styles, they all can agree that their furniture needs to be trendy, with an easy delivery and set up, and an online catalogue.

MEET ANNE:

Anne is a 32-year-old mother of two. She is a stay-at-home mom who spends her time taking care of her kids, cooking, cleaning, and doing yoga. She is married to Troy, a computer analyst. Anne and Troy have recently been discussing furniture updates for their new home that provide functionality, style, and durability. Their current items are worn-out and dated and they’ve never properly furnished their youngest daughter’s room. Anne doesn’t trust Troy’s style, so he is letting her handle the furnishing decisions. She needs a place to shop that is family friendly

and easy to maneuver. She’s been exploring different furniture store options because they recently purchased a home for their growing family.

MEDIA BUDGET

For our media budget, we have determined the best times of the year for furniture sales to be as follows:

• Beginning of the main college semesters: August and January • High sales months for the housing market: May, June, July, and August • Holiday season: November and December • National holidays

We will target the first three times more directly and with more funds, but also ensure that national holidays get covered under our various year-long runs.

Traditional: TELEVISION

Television: For television, we have chosen to have five, three-week flights throughout the year. These flights are strategically placed according to our four target times. The first flight is the beginning of January. The second flight is the end of May and beginning of June. The third flight is the beginning of July. The fourth flight is the end of August and beginning of September. The final flight is the end of November and beginning of December. The strategic dispersion of the television flights ensures that the entire age range of our target market is maximized. Both the Stephanies (18-24) and the Annes (25-34) will be exposed to television advertisements at appropriate times in their lives. The total cost amongst the five markets for the year is $37,895,400.

Traditional: MAGAZINE Our magazine strategy correlates with the television strategy to expose the target market to the message during the four peak times of the year for furniture sales. We have chosen three of the top ten women’s magazines in which IKEA advertisements will appear. For each magazine, we recommend to advertise three months out of the year. Below are the magazines, their individual costs, and reasoning behind months chosen for advertising.• Cosmopolitan: Advertisements in the magazine are estimated to be $189,600.00 per full page ad. The magazine has a circulation of approximately 2,915,000. Therefore, the cost per thousand is $65. The total cost to advertise in Cosmopolitan for 2013 is $568,800. We decided to run our flights in Cosmopolitan during the months of January, August, and December because we are using this magazine to target the younger portion of our target market. January and August mark the beginnings of new semesters where students are moving in and out of new apartments in college. December is also included to incorporate regular holiday shopping.• O, The Oprah Magazine: Advertisements in the magazine are estimated to be $118,240.00 per full page ad. The magazine has an approximate audience of 2,436,000 readers. Therefore, the cost per thousand is $49. The total cost to advertise in O, The Oprah Magazine in 2013 is $354,720. Oprah Magazine appeals more to the older portion of our target. We chose May, July, and December for the

“O” Magazine because the audience who reads this magazine is likely to be entering the housing market. May and July are key times in the housing market, when the audience is more likely to be purchasing a new home. Furniture shopping will be peaking during these summer months to get their new houses furnished and complete. December is also included for general holiday shopping purposes, especially among a slightly older crowd with more practical holiday wishes. • Elle: Advertisements in the magazine are estimated to be $84,730.00 per full-page ad. The magazine has a circulation of approximately 1,072,000. Therefore, the cost per thousand is $79. The total cost to advertise in Elle in 2013 is $254,190.

Elle tailors to both the younger and older portions of our target. That is why we chose the months of June, August, and November, which cater to the both the housing market, beginning

of the fall school semester, and the pre-holiday season.

Traditional: BILLBOARD

Our final traditional type of media will be outdoor advertising on yearly billboards and other, less-traditional outdoor mediums, such as bus stop and bus wraps on bus routes near universities. First, there will be one billboard per city that is up year round. The price for this is $120,000 per market, which is $600,000 total for the year. Secondly, there will be guerrilla advertising tactics implemented, like furnished bus stops with coordinating bus wraps, during four additional months of the year. These months will include June, July, August, and December. This flighting schedule encompasses the main three peak furniture sale times (housing market boom, beginning of the fall school semester, and Christmas holiday). The price for this is $40,000 per market, which is $200,000 total for the year. The grand total for outdoor advertising for 2013 is $800,000.

Non-Traditional:DIRECT MAIL

For direct mail, we plan for fun pop-up cards to be delivered to our target at four different times of the year. In order to be effective with our direct mail campaign we will purchase four total lists (two per target demographic) and run four total flights. The first list will include women in the older portion of our target - the 25-34 year old “Annes.” We plan to reach 200,000 of these women per target city (1M total) throughout the year. With the cost for a list of one thousand names averaging about $300, it will require $300,000 for the year to purchase the two lists to reach these women. We plan to send direct mail to the “Anne” category of our target during the month of June because this is a prime time for buying new homes. We also will send mail in the month of December to reach her during the Holiday shopping season. The second list will include women in the younger portion of our target - the 18-24 year old “Stephanies.” We plan to reach 200,000 of these women per target city (1M total) throughout the year. It will require $300,000 for the year to purchase the lists to reach these women. We plan to send direct mail to the “Stephanie” category of our target during the month of August because this is when the majority of these women will be returning to school and moving into new apartments that need furnishing. Like Anne, we will aslo reach this target segment in the month of December to reach her during the Holiday shopping season.

Non-Traditional:DIGITAL

We plan to have three forms of digital advertising going year round. These will include paid searches, banner ads, and a pre-roll video. The reason for have a year long digital campaign is to reach our target when they aren’t at their furniture purchasing peak. We have identified the most popular times to buy furniture, but that does not mean that at least some members of our target won’t be needing furniture at other times of the year as well. Our digital campaign, in combination with the year long billboard, will help guide our target during the off-times of where to buy furniture. For digital, we have designated $6 million as the yearly budget, with $2 million going to each category of digital (paid searches, banner ads, and pre-roll video).

2013 FLOW CHART

Month Medium Week 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 5 Total

Television $37,895,400R/F

Magazine $1,177,710Cosmopolitan $568,800

Circulation Oprah $354,720

Circulation Elle $254,190

Circulation

Outdoor $800,000Billboard #1 $600,000

Guerrilla $200,000

Digital $6,000,000Paid Search $2,000,000

Banner $2,000,000Pre-roll Video $2,000,000

Direct Mail $600,000Anne $300,000

Stephanie $300,000

GRAND TOTAL$46,473,110

$550,000 $3,439,130 $6,816,6407,507,000 $550,000 $550,000 $550,000 $3,183,440 $5,865,130 $8,302,840 $6,080,730 $3,078,200

IKEA 2013: 12 Month Flow Chart

85/7.1 70/8.6 75/8 75/8 80/7.5

NovSep Oct DecMay Jun Jul AugJan Feb Mar Apr

Monthly Total

APPENDIX A

APPENDIX BTelevision: Household Cost Per Point Projections - New York, NY

Daypart 1Q 2Q 3Q 4Q Early Morning $682 $786 $802 $926 Daytime $764 $872 $796 $1,028 Early Fringe $1,068 $1,253 $1,215 $1,418 Early News $781 $920 $889 $1,059 Prime Access $1,475 $1,707 $1,771 $1,904 Prime Time $3,343 $3,727 $3,747 $4,156 Late News $1,278 $1,448 $1,497 $1,679 Late Fringe $1,209 $1,325 $1,341 $1,531 Source: SQAD for Windows - QuickTrend Report Projections for 2012. December 2011 Issue, Level: Average. SQAD, Inc. Copyright © 2012. All rights reserved - For Snapshots

Television: Household Cost Per Point Projections - Los Angeles, CA

Daypart 1Q 2Q 3Q 4Q Early Morning $554 $639 $651 $753 Daytime $575 $657 $600 $774 Early Fringe $1,222 $1,435 $1,390 $1,622 Early News $754 $889 $858 $1,023 Prime Access $1,890 $2,188 $2,270 $2,440 Prime Time $3,938 $4,391 $4,414 $4,896 Late News $1,069 $1,211 $1,252 $1,405 Late Fringe $1,205 $1,321 $1,338 $1,527 Source: SQAD for Windows - QuickTrend Report Projections for 2012. December 2011 Issue, Level: Average. SQAD, Inc. Copyright © 2012. All rights reserved - For Snapshots

Television: Household Cost Per Point Projections - Chicago, IL

Daypart 1Q 2Q 3Q 4Q Early Morning $252 $290 $296 $341 Daytime $312 $358 $326 $421 Early Fringe $325 $382 $370 $432 Early News $426 $503 $485 $579 Prime Access $615 $712 $738 $794 Prime Time $1,479 $1,649 $1,657 $1,839 Late News $727 $823 $850 $954 Late Fringe $403 $440 $446 $509 Source: SQAD for Windows - QuickTrend Report Projections for 2012. December 2011 Issue, Level: Average. SQAD, Inc. Copyright © 2012. All rights reserved - For Snapshots

APPENDIX CTelevision: Household Cost Per Point Projections - San Francisco-Oakland-San Jose, CA


Television: Household Cost Per Point Projections - Washington (Hagerstown), DC-MD


SOURCES

"An IKEA case study: SWOT analysis and Sustainable Busi-ness Planning." The Times 100 Business Case Studies.

Web. <http://businesscasestudies.co.uk/ikea/swot-analysis-and-sustainable-business-planning/swot-analysis.html

"Facts & Figures." Web. <http://www.ikea.com/ms/en_US/about_ikea/facts_

and_figures/index.html>.

Lipson, Alison. "Shopping for Home Decor - US." (2012). Mintel.

Web. <http://academic.mintel.com.erl.lib.byu.edu/display/590324/?highlight=true>.

Lipson, Alison. "Furniture Retailing - US." (2012). Mintel. Web. <http://academic.mintel.com.erl.lib.byu.edu/display/59

0657/?highlight=true>.

Gaebler.com (Magazine Rates)

Documents

Ikea Media Plan