Analyzing Consumer Markets

Analyzing Consumer MarketsIKEA-The quintessential cult brand

Come on aboard, lets start our journey

Was founded in 1943 by 17 year old Ingvar Kamprad.Currently a retail titan in home furnishingsConsidered a one stop sanctuary for coolnessEach year more than 650 million visitors walk through its stores

Scandinavian RootsThe company stays true to its Scandinavian rootsMost products have Swedish names (think HEKTAR, BILLY and LACK)

Some Superb StatisticsOne-tenth of all furniture purchased in UK comes from IKEAIKEA has lowered its prices by an average of 2-3 percent every year since 2000The worlds largest IKEA, in Stockholm, covers 594,000 square feet

What is IKEA doing right?

WELL PLANNED STORE DYNAMICSDesigned in a winding, so consumers can experience the entire store at one glanceIt adopts a one way format, featuring different inspirational room sets

Cheaper storage and transportationConsumers pay for the items, visit the warehouse, and pick up their purchases in flat boxesConsumers load the items in their car, take them home, and completely assemble the product themselvesThis strategy makes storage and transportation easier and cheaper for the store

Low operational costsThe company buys in bulkIt controls the supply chainUses lighter packaging materialsSaves on electricity through low wattage light bulbs All this helps in reducing operational costs for the company

Adaptive AttitudeThe company caters to local and regional tastesShowrooms 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 IKEAs Marketing Strategy

The pricing of IKEA products enables consumers across a range of economic and financial status to buy their productsThey develop localized products for different marketsUnique and memorable in store experience

CONS of IKEAS 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

SUMMARYLargest furniture retailer in the world350 stores in 43 countriesConducts exhaustive study of consumer markets, accordingly develops localized productsCurrently expanding into other countries

DISCLAIMER

This presentation was created by Amitesh Chawla of DTU during a marketing internship under Professor Sameer Mathur