Marketing Mix and Positioning of IKEA: Reinforcing its Brand Value

This report discusses the marketing mix and positioning of IKEA, a multinational company selling home furniture and other useful products and services worldwide. It covers the promotion, product, price, and people strategy used by IKEA to reinforce its brand value. The report also evaluates the effectiveness of IKEA's marketing efforts and its segmentation bases, targeting, and positioning.

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company: IKEA

CONTENTS
INTRODUCTION......................................................................................................................1
POSITIONING OF IKEA..........................................................................................................1
MARKETING MIX FOR REINFORCING POSITIONING....................................................1
Promotion...............................................................................................................................1
Product....................................................................................................................................4
Price........................................................................................................................................5
People.....................................................................................................................................6
MEASURING THE EFFECTIVNESS OF MARKETING EFFORTS.....................................6
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................8

TABLE OF FIGURES
Figure 1: Ikea "Home can wait" billboard.................................................................................2
Figure 2: Ikea catalogue.............................................................................................................3
Figure 3: Indoor playground for kids in Ikea.............................................................................4

INTRODUCTION
Marketing is the process of advertising, selling, and increasing the profits of the firm
through various methods and techniques (Lawrence and et.al., 2021). Marketing helps in
delivering and exchanging of goods and services to its target customers and it is not a selling
process it is a continuous process even after sale of the product like after sales services. IKEA
is an international company in United Kingdom dealing in products and services worldwide.
This is one of the biggest companies of UK having its branches worldwide and its customers
widespread. In this report we will include the marketing mix elements used by this company
and their segmentation bases, targeting, positioning. Furthermore, the promotion mixes and
activities of IKEA and its promotion, products, price, place, people strategy which it is using
also being discussed and its strategic decisions and relevant theories used in its marketing
efforts. Moreover, Effectiveness of marketing efforts including all the KPI of its business.
POSITIONING OF IKEA
IKEA is a multinational company selling home furniture ready and assemble furniture
and other useful products and services worldwide. This company is providing home furniture
to world at very low prices so that all type salary peoplecan afford its products and services.
IKEA’s large of its fund and amount goes to the marketing activities and it has three main
objectives and that is increasing online sales through marketing, earning more with acquiring
new customers, obtaining 10000 new customers every year for increasing its sells and profits.
Segmentation is dividing people on the basis of their common traits and similarities of
choices are grouped together (Meng and et.al., 2020). IKEA has divided and created different
segments and each segments the needs and preferences of products and services are different.
Targeting involves choosing the most appropriate and main segments of groups in which the
company focuses more to increase the brand value and profits by improving the services and
demands (Minaee, and et.al.,2021). IKEA has targeting those segments which has huge
demands and which gives more revenue and sales for earning more profits. Positioning
involves is using the best or most attractive marketing mix for attracting the target customers
like mono segments, multi segments. IKEA is using mono segment positioning in which its
focuses on the needs and wants of the customers to one single segments that are cost-
conscious and have more profits involve in it (Quezada-Gaibor, 2021). IKEA is also using
adaptive positioning in which the changing and dynamic taste and preferences of the
customers are involved and this company taking in account to innovate or develop new
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products to sustain the existing customers and maintain the cost and profits of the firm
(Othman, and et.al., 2019). IKEA has great position in the market of United Kingdom and has
great number of female buyers for buying the furnishing products with experiencing and
sample testing are also allowed by this company and the customers can buy any products
from any where with same amount.
Figure 1 HOTEL IKEA NEW PRODUCT CONCEPT DECK
MARKETING MIX FOR REINFORCING POSITIONING
Promotion
Articulating in relation with the promotional element of the marketing mix is
significantly illustrates the blend of promotional variables which are being selected by the
management and marketing team of IKEA for the purpose of attaining their targets and
objectives (Craig and Shimp, 2017). The promotional component is an important part of the
marketing mix and it has been observed that there is a superlative procedure related to
allocation of budget for the varied elements within the promotional mix in order to attain the
most effective marketing result. There are different channels for marketing the products and
services are being utilized by IKEA in their UK operations. The marketing strategy of the
company has achieved great success as it is unique, innovative, distinctive and upholds a
clear value preposition.
Each and every idea being used in their promotional strategies and tools are being
curated meticulously for supporting the identity of the brand and offering the best experience
to the clients. Further, the company makes use of promotional tools such as online
advertainment, print, television, billboards, social media and many other promotional tools
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for marketing their products (Kitchen and Proctor, 2015). The company has launched a wide
advertising campaign in UK which was named as “Home is the most important place and
used signs such as “Not for Sale” written on them as a sub-section of the campaign. In
addition to this, there are different advertising tools being used by the company such as
vehicle (wrap) advertising wherein the company turns vehicles into mobile billboards. They
also make use of billboards which is being regarded as the best way of increasing the
exposure and visibility to wide range of people mostly falling in the age group of 16 to 34
years.
Figure 2: Ikea "Home can wait" billboard
(Campaign, 2021).
Even sales promotions are also being used by the company in their UK stores where
they offer great discounts to the customers visiting their stores and even offer free samples
which belong to the decoration of IKEA. Additionally, different coupons, price discounts,
promotions on festivals and many other marketing gimmicks. With these offers, Ikea makes
sure that the clients get constant benefits from different deals being provided by the large-
scale producer of furniture. The company also make use of direct marketing wherein they
make use of phone calls, brochures, newsletter and emails. The perfect example of direct
marketing is the Ikea catalogue for the UK market.
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Figure 3: Ikea catalogue
(Kelly, 2019).
Other than this, the company also makes use of social media marketing as a part of
their promotional mix such as Facebook, Twitter and Instagram. The main target markets for
such kind of advertising are the people that most use social media. Around 31,620,871poeple
are following the Facebook page of IKEA. The social marketing team of the retailer poses
different questions, post clips on YouTube and links to photo albums for increasing the
engagement of target market. Thus, from the above findings in relation with the promotion
mix it can be said that this is very well supported by the AIDA model in which the acronym
stands for Attention, Interest, Desire and Action. The model specifies the stages that the
individual goes through while purchasing the product. Firstly, the company has used a steady
and easily recognisable themes in their campaigns that covers its product names and colour
schemes which can easily allures the interest of the customers (The AIDA model-the original
sales funnel, 2020).Through effective promotional strategies the company aware the
customers about their products and services. Secondly, the company has realized the most
relevant focus for their UK operations in regards with their products that is comfort and
luxury and has emphasized on this fact in their campaigns and promotional strategies. They
also cerates a need to buy the products of IKEA by offering information through
infomercials. And finally, for getting the consumer to initiate the action, the company makes
use of persuasive text such as “Home is the important place”.
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Product
Ikea is one of the leading home furnishing retail brands and is quite known for their
ready to assemble furniture. The main target group of the company is middle income people.
There are wide range of products are being sold by the company in their UK operations such
as clothes storage, desk, mirrors, bed and mattresses, sofas, almirahs, furniture, table, chair
and many more leisure as well as safety products. The store also offers appliances, lightning,
armchairs and kitchen cabinets. As of 2021, there are around 12000 products being offered by
the company in the markets of UK. In addition to this, IKEA also has restaurants in its stores
which are very famous between the people of the nation (Amine, 2020). The menu of the
store reflects the culture as well as food being preferred by the people of UK, nevertheless the
basic emphasis is mostly on the Swedish food. Other than this, each and every store of the
company has a play zone for the kids popularly known as “Ikea Smaland” for addressing the
requirement of different clients who otherwise might not have visited the store.
Figure 4: Indoor playground for kids in Ikea
(Ikea children`s playground in a shopping center, 2020).
From the above findings, it can be evaluated that from the very starting the company
comprehended the requirements of their customers and their targets prospects. They have also
studied the potential of this segment and offered assortment of options to the clients with a
view to attach and rely them heavily on the name. Further, Ikea also has a detailed list of
product catalogue extending from furniture items and fittings and urbane and complicated
assemblies for organizing their home furniture. With the passage of time, the company
introduces new and innovative design for sustaining their competitive level and sustenance in
the market of UK. This can be supported by the theory of product life cycle which specifies
the length of the time from a product first introduced in the market (Chaffey and Ellis-
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Chadwick, 2019). There are four important stages of the product life cycle that is
introduction, growth, maturity and decline. Considering the analysis of the product marketing
mix of Ikea, it can be said that the products of the company are currently at the maturity stage
of the product life cycle as the company has attained a massive level of growth and is now
stabilized in the market. The company has considered the needs of the customers and
differentiated its products from the other players operating in the market such as Argos, DFS
and John Lewis and carved a niche for themselves in the market. Nonetheless, Ikea is at the
stage where the company has to be very careful to make sure that they do not enter into the
decline stage. In this regard, the company has uninterruptedly kept altering their products
with the alteration in the business environment. The designs of the furniture of Ikea have
always been fresh and this act as a major point of differentiation for the store.
Price
Talking in relation with the price in the marketing mix, it is being referred as the
value being paid by the customers for the product and is being regarded as the most important
component of the marketing mic as it dictates the survival along with the profit of the
company. Price is being regarded as an important discussion in the marketing mix of Ikea.
The company sells majority of their products at low prices making it affordable for the large
group of people. Furthermore, most of the furniture are flatpack, which is the main reason
behind the reasonable pricing strategy of the company (Slater, Hultand Olson, 2020).
Nonetheless, there are many people who criticises the company for their high delivery costs.
For illustration, a medium parcel delivery to the home of the UK costs £15 and for large
delivery its costs around £40. The company produces in bulk and thus, they are in a position
keep their process low, which in turn helps them in having more sales at a reasonable price.
Other than this, the profit margins of the store is also very low however the figures of sales is
quite high which results in huge profits in longer period of time for the firm.
Therefore, from this finding it can be stated that the company has incorporated a
methodology which is more appropriate and that is no cutting of cost for stripping the brand
of its esteem and at the same time, not be priced extremely high that might repulse the
business sector strengths. in addition to this, it can also be stated that the company has been
consistent enough and has taken into account a mid-path in analysing its services and this
approach has resulted in development of immaculateness. Nevertheless, it is being regarded
as a point of indebtedness for the organization that even after remaining at the top position,
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Ikea is providing eccentric merchandise at affordable prices and this the main reason behind
the retention of valuable clients of the company (Kotler and et.al., 2019).
Underpinning the discussion further, the price element of the marketing mix of Ikea
clearly reflects their generic strategies. Porter’s generic strategy being developed by Michael
porter helps in describing the manner in which the firm can achieve competitive advantage
throughout its selected scope of market. There are four generic strategies being defined by the
author that is cost leadership, differentiation, focus and differentiation focus. On the basis of
the porter’s generic strategies, Ikea mainly follows the cost leadership strategy. In doing so,
the company looks for the suppliers who can manufacture a well-designed and innovative
sub-assembly at the least or minimum costs. The customer is required to assemble the parts of
the product by themselves. This method has allowed the company to save delivery costs for
both the manufacturer as well as clients. in addition to this, the company is also selling their
products at lowest prices through following the cost-plus pricing model (Nwokah and
Ahiauzu, 2018). In this model, the company just add their small percentage margin on their
cost of producing a single unit. The resultant becomes the selling price of that particular
product. All this method has enabled the Ikea in plummeting their lot of costs. The clients are
paying for the products much lower price and in return getting high quality products.
Moreover, this has also helped the company in gaining and receiving varied segments of
clients. This is also called as the focus strategy of Ikea on low costs.
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People
Figure 5 TEAM OF IKEA
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IKEA is an international company of UK dealing home furnishing products
worldwide with huge number of customers. Due its large production it has large number of
customers which has to be managed and production will have to be done in accordance the
need which is fulfilled efficiently by the employees of IKEA working at every branch. The
Employees of this company is well trained and professional for making its products
completely understand by the customers. The sales and advertising team of IKEA are well
trained and know the special techniques to influence the customers and helping them in
guiding for purchasing its products. IKEA has well established team of suppliers who are
supplying raw materials and products to this company and coming up with new and
innovative ideas for developing the products to increase the sales of the products.
The employment team of IKEA is well advanced and doing its work with full efforts
to increase the sales and profits. The IKEA is using various tools of recruiting and selecting
manpower by using various social media platforms and acquiring right kind of people at right
place with full knowledge and experience in the field they have to work and this company is
using rotational training to all its employees to learn each departmental work for more
knowledge for increasing the efficiency of the work.
IKEA is using various theories of human resource for managing and controlling its
staff in an efficient manner for increasing the productivity and profits of the firm. This
company is suing the theory named human behavioural theory or behavioural theory in which
it states that all behaviours are acquired through the process of conditioning and better
controlling (Aktas, and et.al., 2018). The leaders and managers of this company is
maintaining good industrial relations with the team and staff and knowing their views and
perspective with the help of involving them in the process of decision making process or
arranging an open communication between the staff and the leaders.
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The people in the management of company IKEA is being trained in a way that with
increase knowledge their motivation or satisfaction for doing the work also increases which
leads to more efficiency in the work. The peoples if given proper care and their particular
problems are being listened by the mangers and leaders so that they feel safe and work more
hard due to full satisfaction. The leaders of IKEA is conditioning its employees in a way by
mentally motivating them and helping them facing problems by the employees or
encouraging them by way of recognising and rewarding them for their good performances so
that they work more hard to achieve their dreams. This company is fulfilling and providing
all type of opportunity from lower to higher level needs so that each employee or people
work with full efforts to achieve them.
This company focuses on cost-conscious budget so that people of every salary can
afford the products of this company and the production and production can be increased with
the help of this techniques. The customers are being provided with after sales services so that
so that they feel safe buying this products and services of IKEA. The employees are involved
in making decisions so that they feel involved and the decisions are taken with more
innovative ideas and thoughts
MEASURING THE EFFECTIVNESS OF MARKETING EFFORTS
Ikea can measure the effectiveness of its marketing efforts by adopting different ways.
Some of them are being elaborated in the subsequent paragraphs:
 Key performance indicators (KPI) – KPI are being considered as the most important
indicator that can be used by Ikeas for measuring the manners in which they are
performing for accomplishing the pre-determine aims and objectives. There are
different key performance indicators that can be established by the firm for their
marketing efforts such as the number of novel customers being acquired, quantity of
products being sold, number of leads generated from a particular advertainment or
promotion strategy etc.
 Social media comments – They are defined as the most important and often used
metrics for measuring the effectiveness of the marketing efforts of the company
(Ramanathan,Subramanianand Parrott, 2017). The comments, likes and shares on the
social media platforms such as Facebook, Twitter, Instagram and YouTube will help
Ikea in determining the level of engagement, reach, conversion rate, time, impression
and referrals
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 Purchase funnel – Another important method for measuring the effectiveness of
marketing efforts that can be used by Ikea is purchase funnel. In this, the company
can make use of google analytics for measuring as well was evaluating the process of
sales for the leads being created by each marketing campaigns. This will support the
company in telling more in regards with the traffic or cycle of sales.
CONCLUSION
Thus, from the above evaluation, it can be concluded that Ikea is one of the biggest
companies of the world which have reached different sectors and offering assortment of
quality products across the world at reasonable price. The marketing mix strategy has helped
the firm in building the brand identity. Furthermore, for seeking help from the continuous
efforts, consistent level of marketing promotion, diversified range of products and unique
pricing strategy has supported the company in reaching more heights and position in the
market.
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REFERENCES
Books and journals
Lawrence and et.al., 2021. IKEA: GROWING THE MARKET IN INDIA–AN
INTERNATIONAL CASE STUDY.
Meng and et.al., 2020. Improving positioning accuracy via map matching algorithm for
visual–inertial odometer. Sensors, 20(2), p.552.
Minaee, and et.al.,2021. Image segmentation using deep learning: A survey. IEEE
transactions on pattern analysis and machine intelligence.
Quezada-Gaibor, D., and et.al., 2021. Cloud platforms for context-adaptive positioning and
localisation in GNSS-denied scenarios—A systematic review. Sensors, 22(1), p.110.
Othman, and et.al., 2019. The influences of service marketing mix on customer loyalty
towards Umrah travel agents: Evidence from Malaysia. Management Science
Letters, 9(6), pp.865-876.
Aktas, and et.al., 2018. A consumer behavioural approach to food waste. Journal of
Enterprise Information Management.
Amine, M., 2020. IKEA’s business and operating models: a match made in heaven. The HBS
Digital Initiative.
Chaffey, D. and Ellis-Chadwick, F., 2019. Digital Marketing Strategy, Implementation and
Practice. 7thed. Harlow, Essex: Pearson.
Craig, A.J. and Shimp, T.A., 2017. Advertising, Promotion, and other aspects of Integrated
Marketing Communications. 10thed. South- Western: Cengage Learning.
Kitchen, P.J. and Proctor, T., 2015. Marketing communications in a post-modern world.
Journal of Business Strategy. 36(5). pp.34-42.
Kotler, P., Kevin Lane Keller, K.L., Brady, M., Goodman, M. and Hansen, T., 2019.
Marketing Management. 4thed. Pearson.
Nwokah, N.G. and Ahiauzu, A.I., 2018. Managerial competencies and marketing
effectiveness in corporate organizations in Nigeria. Journal of Management
Development. 27(8). pp.858-878.
Ramanathan, U., Subramanian, N. and Parrott, G., 2017. Role of social media in retail
network operations and marketing to enhance customer satisfaction. International
Journal of Operations & Production Management.
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Slater, S.F., Hult, G.T.M. and Olson, E.M., 2020. Factors influencing the relative importance
of marketing strategy creativity and marketing strategy implementation effectiveness.
Industrial Marketing Management. 39. pp.551-559.
Online references
Campaign. 2021. [Online]. Available through: <https://www.campaignlive.co.uk/article/ikea-
home-wait-mother-london/1716470>. [Accessed on 24thJune 2022].
Ikea children`s playground in a shopping center. 2020. [Online]. Available
through:<https://www.dreamstime.com/russia-st-petersburg-ikea-children-s-
playground-shopping-center-ikea-children-s-playground-shopping-center-
image170071158>. [Accessed on 24thJune 2022].
Kelly, T., 2019. The new IKEA catalogue 2020 – here’s a sneak peek of what to expect.
[Online]. Available through: <https://www.idealhome.co.uk/news/ikea-catalogue-2020-
233257>. [Accessed on 24thJune 2022].
The AIDA model-the original sales funnel. 2020. [Online]. Available through:
<https://www.marketingcipher.com/the-aida-model/>. [Accessed on 22ndJune 2022].
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