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