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IKEA Marketing Strategy and Planning

University: University of East London

  • Unit No: 2
  • Level: Undergraduate/College
  • Pages: 17 / Words 4191
  • Paper Type: Assignment
  • Course Code: MKT30016
  • Downloads: 50
Organization Selected : IKEA

INTRODUCTION

The idea of marketing is a conviction that any business should investigate consumer inevitably and settle on reasonable actions in order to fulfil those requirements. Numerous organizations have embraced this thought which includes both the process and product specifics concept that helps present the product to the consumer in a positive way. It expresses that quality products are the most favoured by buyers at an available price range.

Presenting the current and future trends which are used in marketing

Establishing lasting connection with customer

It was first created through direct reaction marketing efforts. It stresses on consumer loyalty and maintenance as opposed to the quantity of sales made. This procedure is not the same as others since correspondence is reached out past an occasional messages and go both ways in form of feedbacks guiding development. This marketing identifies with a transient course of action where the two parties, seller and buyer have a need for giving a more attractive offer. An association is made after the exchange, and the buyer feels increased in value, and the buyer gets an incentive for his cash (Cavusgil and Knight, 2015). This perspective has broadly developed with the headway of innovation. Dissensions from clients are additionally acknowledged by means of direct correspondence and later revised to increase satisfaction .

Social marketing

The company's obligation is to recognize the needs, needs, and premiums of an objective market and after that convey fulfilment more effectively and efficiently than others in view of buyer determine their profitability. It's identified with Corporate Social Responsibility since clients' and people in general’s welfare are basic needs that improve and enhance positive image. . Accomplishment of an organization's objectives ought to incorporate the best quality of products that helps to maximize the profit margin of the firm. The companies use the various media to emphasise their action which is part of marketing process that communicates to general public in order to influence more consumers for their products.

Future trend of automated selling

As per the new trend, the marketing concept is completely different such that many big firm uses variety of new and advance technologies into their working place in order to meet out the needs of their customers. This concludes use of the various email bots automated responses and other means of enhancing customer satisfaction.

Impact of global market and differing customer needs

Some other faculty is the enterprising upset Act in the activity sees numerous associations returning to the planning phases and rehashing themselves. Adaptability, flexibility, speed, developments and forcefulness assist organizations with remaining in the diversion. New needs are investigated to guarantee that contenders are kept under control. The tertiary is available in selling (Crane and Matten, 2016). Collusions and unify are extremely apparent in the modern-day neo style. Organizations are concentrating significantly on exchanges, creating new thoughts, aptitudes, and shying far from mass markets.

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Review of the Different Marketing Processes

The steadfast needs to find concealed client inevitably and fulfilling it by a procedure. From the above, there are different marketing process which are as mentioned below:

The Marketing Process

Circumstance Investigation activity→ Selling Scheme→ Merchandising Premix Determination →Execution and Power

Circumstance investigation includes distinguishing the unexploited client inclinations and fulfilling them. The business must comprehend the earth it is in and dissect its ability to fulfill these one of a kind demand.

Outer and inner environmental requirements should broken down to accomplish this. Outside condition involves the economics forces. The factors which prompted these circumstances should be checked and further pattern also keep monitoring so that proper judgement should be done (Dimitratos and et.al., 2016).

Marketing Strategy

The first open door is distinguished, a vital arrangement can be produced. Market division is finished relying upon the market look into completed. The accompanying components apply:

Segmentation- target-positioning, Understanding the market requirements and customer needs, Marketing Mix Decisions determine the strategic choices made by any company operating in specific market.

The after effects of the exertion must be checked firmly aft the ware propelling. It is acclimated to suit alteration. Any issue is wiped out and detailed grievances tended to regularly to retain customers.

Different process of marketing

Design and manufacturing: As IKEA is one of the top leading firm in the world, such that its designing and manufacturing system is quite impressive. Its new furniture style also bring variety of changes and the firm also provide the best quality which attract wider range of public.

Presentation and development: It is foresure that customers will not purchase the products if they did not get any discount prices. Therefore, it is quite necessary for the IKEA to establish such an innovative features into its offered products which helps to attract the wider range of customers. Apart from this, IKEA should also variety of tools and techniques in order to make their products more popular in market.

Understanding the consumer needs: As the firm have research and development department who helps to keep identifying the needs of their customers and always beating its rival firm through its pricing strategy (Dodds, Ali and Galaski, 2018). IKEA also based upon four basic element which helps to gain high competitive advantages in a market and these are, meet out the needs of their customers, target its market, effective marketing strategies and best customer service. Through this way, the firm also produces those products and maximizes the profit as well.

Key Responsibilities of the Marketing Manager

The key responsibilities include Administration of all marketing for the IKEA and manager is the only person who work with the top management and also helps them to determine the marketing plans and the policies which should be implemented in the firm. Further another important function of the manager is such that they supervise and coordinate all the business activities such as sales, packing and storage and transportation etc. the marketing manager also responsible for launching the new products into market and promote it by using promotional tools. In order to create and increases the demand of the goods and services which are produced by IKEA, only marketing manager is identify the new potential markets and also helps to maintaining the relationship with customers.

Marketing interrelate with other Functional Departments of IKEA

Marketing with Finance department: Marketing department has to closely work with it such that Finance department provides a budget which helps to meet out the needs for research and promotion. Thus, marketing department also wish to overspend only if profitable marketing opportunities emerges. Overall, the marketing department only concentrate on the sales volume while finance department focused on a cash flow.

Production or operations management: Operational department main function is such that through proper research, produce those products which helps to meet out the demands of their customers. In the same manner, marketing department also set deadlines that stretch the abilities of the production department (Epstein, 2018). Thus, it helps to get the product soon in order to make sure to gain high competitive advantages.

Research and Development: Marketing department also needs to work closely with a R&D department. Such that marketing identify the needs of their customers and then directly connect it with research department in order to make more researches. In this way through good collaboration, both the department works produces the best output for the welfare of the company as well as their customers.

Human resource department: As HR main work is to research and develop new product ideas and meet out the production target. Thus, marketing department also work closely HR department to make sure that the company produces exactly those things which are required by the firm only. Thus, in this way IKEA get benefited by closely monitoring all the department.

Importance of the Marketing

Information sharing : To creates success in a market, product of a firm should be prevalent to actual customers. Commerce is utilized to draw in latent purchasers in good mindfulness crusade. By this process, buyers will easily connect with the new offered products.

Increasing Sales figures: Merchandise orientating will helps to maximise the sales of IKEA products. At the point when the client is the best, at that point sales must heighten. Fantastic products are created, correspondence between the organization and clients is improved and grumblings tended to.

Enhancing and keeping up Company Honor: If an organization provide a best quality of merchandise and complete a product, at that point it will build a brand image. Phenomenal agreement built up between the project and its tailored additionally adds to the equivalent.

Competitive advantages: Through better marketing, IKEA can easily gain high competitive advantages in a market. Such that through effective marketing, the business can easily reach many customers and also help to sustain its brand image in market (Hamilton and Webster, 2018).

Advantages of Effective interrelationships :

Effective and exact agreement among important technology constructs quality. Moreover, keeping an eye on reports is wiped out henceforth sparing time. Viable correspondence among offices enhances client benefit. Clients’ needs do not have to be guessed and thus increased guidance can be gained for production.

Internal and external factors IKEA

Customer information: IKEA provide the best quality of products to their customers with low and reasonable rates as compared to others. The company's architects always presents the new plan which helps to meet out the demands of the customers. Such that the firm also offer the amplest product variety and positive range of shopping experience. Thus the innovative material best best customers service helps IKEA to sustain its brand image in market.

Always utilizing developments to drive costs down- Providing the products at low rates is the basic strategy which IKEA used to attract wide range of customers. Further, the firm research and development department always uses variety of approaches in order to lower down the cost of their products (Hanson and et.al., 2016). Thus, the business is also keep incorporating the with innovative ideas, some practical condition, effective marketing strategy in order to make their product more popular in a market.

Demand and production coordination- To maintain good customer base, the quoted firm keep maintaining high stock in its store so that the firm can easily satisfy the needs of their customers. IKEA also keep transporting the material by using local providers in order to decreases the cost of the transportation. Apart form this, IKEA also uses new and advance techniques in order to coordinate the nearby providers through its store. Inventory is also maintained in order to keep the products at lower price.

Marque notoriety and market nearness- IKEA is one of the top and leading firm who provides best kind of furniture to their customers at low rates. As per previous year, the company's sales market always increases such that in every year the firm estimated the 10% increases in its net profit. As the firm operates its unit in more than 300 stores in more than 30 nations and it also increases its million of customers year by year.

Enhanced ware portfolio-In contrast to IKEA's the firm has many rival firm and to compete those in a market, it also uses different pricing strategy. The firm not only deals with furniture but it also work with eateries and houses as well. Apart from this, the firm also adopt all changing market needs in order to raise the firm brand image.

Modular products: IKEA's have a wide range of furniture products with a limited extent in order to attain the standard products. Standard products force in fewer customer fragments. Moreover, the concern failure to offer better quality and products enables its competitor to maximizes the profitability (Cavusgil and Knight, 2015).

Venture into creating economies- The cited firm is also developed as compared to last years such that it also open variety of firm into new nation and thus it helps to creates high competitive advantages in market and also expand its business for the further development.

Developing on the web sales- Online sales shows that 14 percent of the sales in UK as well as in US. Online sales also helps to maximizes the profit and increases the sales of a market such that in this modern world, people only wants to do online shopping. Therefore, IKEA also offer variety of products online only.

Development to processing essential market- As the firm have high customer base and also provide the best quality of products to their customers, that is why the firm also creates its high competitive advantages in a business. Now the firm is also dealt with some sustain outlets and creates variety of opportunities for its further development.

Strengthening rivalry-Many non-specialised selling, such as, Walmart, ASDA or Tesco expert activity where IKEA business. These substantial retailers have comparable specifics as IKEA, including low costs, all around overseen production network.

Comparison of two companies using Marketing mix

IKEA, is a furniture merchant and franchisor, gives a superb contextual analysis in the utilization of the 7 Ps in the extended selling blend. IKEA adopts a one of a kind strategy, concentrating on persuading tailored to purchase furniture to enhance their "condition." it provides an extensive variety of home decorations with great stylish plan and usefulness at lower costs than customary furniture retailers (Crane and Matten, 2016). The marketing mix of IKEA and B&Q is as mentioned below:

Basis of comparison

IKEA

B&Q

Product

While trying to catch a whole, the company offer different variety of furnitures, PC tables, home office seats, home office work areas, authoritative devices, stockpiling boxes and work lights. IKEA offer baby and children products, desk, mirrors, clothes storage and safety products (Dodds, Ali and Galaski, 2018). IKEA work seats have simple tallness modifications and castors.

B&Q is one of the most famous home improvement retailing company and provides gardening supplies plants and DIY home improvement tools.

Price

Not with standing its incorporated product concept, IKEA looks for value administration in each market. The firm also offers its product at low and reasonable rates. Such that it uses variety of pricing strategy at the workplace.

The firm provides cheap rates but somehow the product quality is not better as compared to the IKEA. It uses discount pricing strategy in order to fulfil the demand of their customers.

Promotion

IKEA has aced effective advancements in building an all inclusive perceived brand. The most outstanding advancement is the IKEA Catalog. The firm also uses social media, online advertisement and billboards to attract wide range of customers.

The firm use modern as well as traditional pricing strategy in order to sale their product in a market such that social media, hoarding and brochures.

Place

The company also operates its unit in more than 50 countries and have approx 9000 products at overall state.

The firm operates its unit in more than 30 countries and also have approx 40000 stores physically as well as online stores.

People

It have individuals who take the necessary steps, these individuals are depended upon objectives of a firm. IKEA not just focuses on making an "organization with the customer", yet additionally focuses on its workers and concern artifact. The organization keeps its administration cognition level, gloating on its Web webpage that "there are no boundaries among administration and collaborators"

Firm peoples are their customers, managers, employees and the owner etc who focuses on providing the best quality of products at reasonable rates (Ingram and et.al., 2015).

Process

Service conveyance in these gatherings is generally finished with the nearness of a client, so the buyer pays as per how the administration is conveyed. Next, in the aggregate administration attack utilized by IKEA is an emphasis on activity.

The firm process is quite simple such that it differentiate its entire business at further sub- section so that the people do not confused and easily purchase the desired goods easily.

Physical proof

The company have its physical store at global level. Further the stores are also surrounded by the restaurant and the refreshments. Its physical evidence also includes different advertisement and the website.

The company's physical evidence is its building and the financial report, logos and advertisement etc.

Marketing plan for IKEA

Executive summary: The marketing plan basically outlines the marketing which should be achieves in a defined manner. The marketing plan consist of marketing analysis which comprises SWOT and PESTLE analysis, further this included segmentation, targeting and positioning with marketing mix as well as budget.

Company overview: IKEA is one of the top and leading online furniture store and also include kitchen appliance and other useful goods. The company also uses different marketing strategy in order to make their product more profitable. Further, IKEA also offer online products to their customer at reasonable rates.

Objectives: To raise the profit up to 20% in next 3 years.

Marketing analysis: This can be done by using SWOT and PESTLE analysis which is as describe below:

Strength

Weaknesses

  • The company have brand image in market and offered the products at reasonable rates.
  • It also has the excellent store design.
  • The company have lack of differentiation of IKEA products and services.
  • IKEA have strong financial position.
  • The company has weak position in Asian market.

Opportunities

Threats

  • The company also adding the premium quality product.
  • IKEA also increases the presence in developing countries.
  • Faces High competition in the world.
  • Faces threats for increases the cost of raw material.

PESTLE analysis is another strategic tool which is used to identify the external environment factor and this is as mentioned below:

Political Factor

Economical Factor

  • As IKEA operates more than 50 countries, therefore a political stability also leads to economic stability and also helps to expand the business.
  • This also leads to supply the chain disruption and for the firm Red Tape is the major worry to operates in an emerging market.
  • Inflation rate also affect the business performance and IKEA has to manage its products prices in well manner.
  • During the time of inflation the company has to offer the product at low rates.

Social factor

Technological Factor

  • Sudden shift in the attitude of the youth also affect the business in negative way.
  • Therefore, the firm has to keep providing those products by analysing the needs of their customers.
  • As the firm has its online presence, therefore, it always adopt all the new and advance technology into the working area (Dodds, Ali and Galaski, 2018).

Legal factor

Environmental Factor

  • If the firm wants to enter into new market, it is quite essential to comply with all the laws and taxes of the country.
  • The firm has to focus on the sustainability and social responsibility and always produces the product without harming the environment.

Segmentation: IKEA also segment on the basis of gender such as male and female. Further on the basis of geographic, it also pursue a market in metropolitan cities of Indonesia because these segments are more familiar with the brand.

Targeting: The target market for IKEA are the both male and female whose age is in between 20 to 60. It also target the people who live in Jakarta and Suryabaya and those people who live in minimalism style of residential areas.

Positioning: The firm have brand image at global level such that the people who demand functional, unique and low cost furniture for their residence.

Marketing mix:

  • Product: IKEA offer furniture, baby and children products, desk, mirrors, clothes storage and safety products.
  • Price: The firm uses cost leadership strategy under which it offers the products at low and reasonable rates.
  • Promotion: Quoted firm uses both traditional and modern method of promotional tool in order to attract wide range of customers towards them.
  • Place: The firm have its global presence such that it operates its unit at global level i.e. more than 50 countries and also have more than 25 distribution centres.
  • People: IKEA gives th importance to both customers and to the employees. As the firm also believes that they are straightforward people who have a passion for furnishing their homes and through their employees togetherness the creates a core values in a market.
  • Process: The process of IKEA is simple such that it has its 44 units of production and also maintain the inventory system in well manner. It also has differentiated design in the terms of price and variety of supply distribution channel.
  • Physical Evidence: the firm physical existing building, its huge store layout and website are the physical evidence.

Budget:

Particulars

Amount (£)

Advertising

210

Raw material

150

Promotional expenses

200

Miscellaneous expenses

250

Total

810

Monitoring and evaluation: It is the last step in marketing plan under which it helps to improve the performance and also achieve the results. Through proper monitoring, the plan can be attain to its success and the customers gets the best prices of their products.

Read Also: Marketing Function- Roles & Responsibilities | Cadbury

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CONCLUSION

Numerous companies focus on raising the production level and bulk production capacity and down expenses. Consumers get intrigued by low costs and product accessibility, enabling the manufacturers fabricate quality goods proficiently and cut production costs which is inversely proportional to expanding supply and production capacity. It's trusted that buyers support products with high quality and features that meet the needs. Manufacturers focus on making quality products and continuously improve them by either increasing features and usability or reducing price.

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