Marketing Essentials: An In-depth Analysis of IKEA's Strategies

This report provides an in-depth analysis of IKEA's marketing strategies, focusing on the key roles and responsibilities of the marketing function within the organization. It examines how IKEA applies the marketing mix (product, price, place, promotion) to achieve its business objectives and gain a competitive advantage. The report also explores the relationship between marketing and other organizational functions like human resources, finance, customer service, production, and research & development. Furthermore, the report highlights IKEA's marketing plan and how it contributes to the company's overall success. The analysis covers pricing strategies, promotional activities, product management, and the use of management information systems. The report also compares IKEA's marketing approach to that of Walmart, highlighting differences in product offerings, pricing, placement, and promotional strategies. Overall, the report aims to provide a comprehensive understanding of IKEA's marketing practices and their impact on the company's performance.

Marketing Essentials

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key roles and responsibilities of marketing function............................................................1
P2 The Roles and duty of marketing related to organisational context....................................3
TASK 2............................................................................................................................................4
P3 Different ways by which IKEA applies the marketing mix..................................................4
TASK 4............................................................................................................................................7
P4 Marketing plan.......................................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In business world, marketing can be known as actions through which promotion of goods
and services of company can be done in a proper way. This department of organisation plays
vital role where firm can expect high competitive advantages. Some of main role of marketing
section is enhancement of sale of goods and items that has been manufactured by business firm,
increase of goodwill where enterprise can build its goodwill as well in front of the society. In this
assignment, IKEA has been taken in this report which was found in 1943 (Askeland and Wright,
2013). Company's founder was Ingvar Kamprad. Corporation which is continuously delivering
services to customers like ready to assemble furnitures that are related to kitchen along with
home appliances. This report will directly put light on roles and responsibilities of marketing and
its functions. On the other hand, assignment is also going to include some of elements like
marketing mix, plan and relation of marketing with other sub sections.
TASK 1
P1 Key roles and responsibilities of marketing function
Marketing subsection of an organisation should be active in nature. With the help of this,
it has been located that promotion of goods and services can be done in an appropriate manner.
On the other hand, if marketing department of a business firm will not perform all the tasks in an
effective manner then it is may be possible that company may reduce its image at marketplace.
Therefore, it is required for organisation's department to keep on adopting favourable policies so
that employees of this sub section keep on hitting their targets. Some of actions like evaluating
all current trends, locating needs of customers and developing strategies through which
competition advancements can be brought up are part of marketing section through which IKEA
can develop their products and services in order to serve customers in a better way (Blacher-
Wilson, Mense and Richardson, 2011). Through this, IKEA can easily enhance its both
productivity and profitability at the same time. Some of marketing functions carries few roles
and responsibilities which are mentioned below:
Pricing:
Pricing plays most important role in marketing. Pricing strategy must be effective so that
it should not increase the product price too high which will reduce its sales on the other hand
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must not be too low which create doubt about the product quality. IKEA adapts innovative
pricing strategy which are affordable for the customers to purchase.
Promotion:
Promotion is effective way to connect to the world in the best form of representing the
products & services. IKEA is one among the renown retailers of home furniture, this company
majorly focuses on the digital marketing which has made them popular on social media like
Facebook, twitter, google+ etc. (Clow and James, 2013). and promoted their digital catalogue. It
also emphasis on other promotional activities like outdoor campaigns, billboards, Newspaper ads
etc. The marketing department prepare attractive promotions to aware people about services of
company in better way.
Product management:
One of essential function of marketing where firms can expect hike in sales, profit and
revenues. It has been analysed that planning, forecasting and then delivering final products are
some stages that product administration carries. All of these steps can easily be improvised in an
appropriate manner if manager of this department takes initiatives like motivating to employees.
IKEA's marketing section delivers information to operations department of all trends and human
needs. Through this, modifications can be made in products and services.
Selling:
It refers to trade of products & services in terms of money. Selling ratio of the company
reflects the profit & loss situation of the company. IKEA increases their profits by selling more
products in their stores as well as market place, this is done with the help of their manufacturing
& selling team.
Management information system (MIS):
This is a database in which IKEA can keep information which is related to their
customers, finance and other information which are important. This collected information can be
kept for hundreds of years and can be utilised whenever firm is looking forward to make
changes. On the other hand, it has been analysed firm may evaluate previous performance and
can compare it with current position.
Therefore, these are some major marketing roles of marketing functions that may aid
IKEA in developing strategies through which competitive advantages can be gained in much
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effective and in efficient manner. Through this, productivity and profitability can effectually
enhanced right on time whenever it is needed.
P2 The Roles and duty of marketing related to organisational context
The business is composed of different business operations that are beneficial in order to
achieve the set targets in an effectual and planned manner. There are various functions in
business organisation that are to be executed in most appropriate ways (Getnet, Kedir and
Yousuf, 2014). This is beneficial for managers in order to take decisions which are useful for the
growth and success of firms. The firm is mainly based on different types of functional areas in
order to perform more divisions and also assign responsibilities to all the staff members
according to their skill and capabilities. The role and responsibilities related to business context
is evaluated below as:
Human resource management & marketing: There are different department in an
organisation and there functions are also different but they are interlinked with one another in
order to effectively carry out their operations. The marketing manager ensures training and
development activities for employees in order to enhance their current skills and capabilities thus
attracting more customers in order to achieve effective results. This results in providing
competitive benefits to firms. IKEA managers should perform their assigned roles and
responsibilities effective in order to achieve growth and success in their operations.
Finance and marketing- These functions are also interlinked with one another in order to
significantly perform all business operations in planned manner. If there had to be any
promotional campaigns organised then finance department have to arrange funds to IKEA so
they can successfully carry out the business activities (Griffitts, 2016). On the other hand another
major responsibility of finance manager to examine every business activity in proper ways so
that necessary modifications can be made in the products according to the operational activities.
The finance department have to allocate funds in order to launch a new product at market areas
and provide informations to customers so they can purchase them.
Customer service & marketing: The success of leader is always based on the efficiency
and effectiveness by which they complete their business activities. It is the major duty of all the
staff members in order to carry out their operations according to the plans. This helps in
systematic completion of all business activities so firms will achieve success in their ventures.
Along with this there are different divisions which are recognised by firms. The customer service
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division also plays an important role as it helps in solving the difficulties of customers which are
related with the offered goods and services (Jones and Rowley, 2011). This is beneficial for the
marketing department as they can make changes in products thus satisfy needs and wants of all
their potential customer's.
Production and marketing- The marketing team gathers information related to the trends
at market places so that customised products can be offered to customers. This results in
systematic management of all products. The major responsibility of production department is
linked with manufacturing quality products according to customers choice. There should be
innovations made in the offered products and services as it results in attracting large number of
customers so will enhance their overall sales and profitability ratios.
Research and development function & marketing: The main focus of every business
organisation is on innovation and invention of new products as it results in maximising the
overall sales volume thus enhancing their profitability index. On the other hand renovation and
invention is best tool by which marketing department effectively perform all its business
activities (West, 2012). If there is any new product launched then there had to be investigation
carried out in order to analyse needs and wants of customers in order to satisfy them thus
retaining loyal customers who will enhance their sales ratios.
TASK 2
P3 Different ways by which IKEA applies the marketing mix
The main focus of every business is related with achieving their set business goals and
objectives in effective and planned manner. There are different tools and techniques adopted by
business so they can achieve competitive positions at market place which are evaluated below as:
Basis IKEA Walmart
Product IKEA is renown name in retail industry
which offers diversified products. It has
expanded its footprints globally. It
offers more than 9500 products some
of its offering can be classified in
furniture of kitchen, bedroom, living
room, mirror, bathroom stage etc. Its
Walmart is a multinational brand in
retail market which expanded their
business in many countries. It provides
products of all department which are
used in day to day life of the customer's.
Some of its offering are furniture, home
furnishing, jewellery, apparels, Health
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wide range of products attracts
customer and retain them by adding
new innovative products constantly.
& beauty, electronic items, food,
grocery items.
Price The price strategy which is adopted by
IKEA is economical so that customers
can easily purchase their products. The
firms are manufacturing furnitures at
low cost which results in attaining
growth and success at market areas as
there sales index will be enhanced.
Walmart is one of the known brand of
retail industry. They are offering variety
of products to their customers at low
prices (Kennedy and Parsons, 2014).
There are different pricing policies
adopted by which existing customers
cab be retained by enhance their sales
index. They are always offering their
products at comparative low prices then
their competitors. The tag line reflects
the company which is Save money to
lead better life.
Place IKEA is having various retail outlets
where they are offering products to all
their potential customer's. There are
many retail outlets all around the globe
in which the suppliers distribute the
products. This is beneficial factor in
order to reduce the cost of
transportation and enhance the
profitability index at market place.
Walmart is having their operations
under subdivision such as Walmart
stores U.S, Sam's Club and Walmart
international and these are then
classified under subdivisions which
consist of discounted stores,
neighbouring market s etc. They are
having approximately 11600 retail
stores all around the globe so that
customers will not face any type of
difficulty while purchasing their
products.
Promotion IKEA is promoting their products with
the help of different tools such as
Promotion plays an important role in an
organisation as it helps in enhancing
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online and TV advertising, billboards,
newspaper advertisement etc. in order
to maximise product demand.
Promotion is also an important tool for
firms in order to make the customers
aware about the offered products and
services.
their overall sales volume. promotional
tools of firm consists sales promotion,
websites, newspapers and slogans on
website in order to gain customers
attention thus enhancing their sales
index.
People IKEA believes that employees and
customers are equally important for the
company (Pappas, 2017). Satisfied
customer will increase the sales with
profit ratio. It has more than 183000
employees and they are very loyal
towards their employees as they do not
support discrimination.
Walmart employees are working al over
the world. This organization majorly
focuses on training their staff as they
are only influencing customer and
satisfy them at the time of store visit.
They motivate employees continuously
to resolve customer queries. It has
approx 2 million employees & 200
million customers.
Process IKEA follows modern method of
process, it has captured own sawmills
then they manufacture their own
furniture. After that customer selects
product at store and receive at home.
Their Process has been modified with
the usage of trolleys, style of payment,
multiple counters, proper alignment of
products for the ease of customer as
well as employees.
Physical
Evidence
Physical evidence is the external
reflection of the brand or store. IKEA
has no. of outlets which gives more
than shopping pleasure.
Walmart has various offices globally
which has been proven as increase in
brand value. They offer huge variety in
products.
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TASK 4
P4 Marketing plan
Marketing plan is a document which contains a systematic per-forma through which
products and services can be properly advertise in upcoming future. With the help of this, it has
been examined that performance of business organisation can be easily brought up if firm is
looking forward to expand its business. In present context, it has been located that if IKEA
develops a proper marketing plan, there are many benefits can be brought up like, enhancement
in sales, profit and revenue. Market trends, needs of customers and some other things that plays
an important role when a firm develops a marketing plan. With the help of this, it has been
examined that marketing plan is filled with different actions that may aid IKEA in gaining
competitive advantages (Ryan, 2016). Achievements can easily be done by IKEA if conduction
of marketing plan gets done in an appropriate manner. Some of essential components of
marketing plan are given beneath:
Mission: Mission of IKEA is to deliver quality furnitures to its consumers and deliver
appropriate customer service to them whenever it is needed.
Vision: Quick service with quality furniture based products can be stated as the best
vision of IKEA. They clears their vision in front of employees on a regular basis so that goals
and objectives can get hit in effective manner.
Objectives: Home appliances, kitchen products and other furniture based items can be
stated as the objective which is being carried by IKEA and they always try to deliver appropriate
services to its customers so that benefits can be developed right on time. As this organisation is
doing business in most of the countries it has been located that perception of consumers differs
from country to country. Therefore, IKEA keeps on making alterations under products and
services while manufacturing them in effective and in appropriate manner as per needs of
customers.
STP:
Segmentation: IKEA mostly develops different segments depending upon age, region,
density, income level of customer and many more. With the help of this, firm may develop its
image in front of their customers and long term relationships can also be maintained by them.
Targeting: As IKEA's furniture is being purchased in all over world, therefore firm have
introduced and manufactured furniture depending on the geographical area and on members as
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well at the same time. It has been analysed that this company mostly targets consumers with the
age of 20 to 50.
Positioning: IKEA mostly opens its stores in different areas that are carrying most of
population. On the other hand, products are also being placed in showrooms according to
perception which is being carried by targeted customers.
Marketing mix of IKEA: This sort of tools is consist with various components and
contains ample number of opportunities through which benefits can be gained at marketplace. It
has been analysed that, Marketing mix contains 4 P's and these are: Product, Place, Price and
Promotion. With the help of this, marketing place can be developed in an appropriate manner.
Product: IKEA which is one of leading retails in all over UK, offers different products
like outdoor furniture, baby and children’s products, eating, bathroom stage and many more
(Swenson, Rhoads, and Whitlark, 2014). This wide range is helping them in hitting their targets.
Place: Mostly, this firm deals in different sections and have opened their stores in
geographical areas where they can reach high number of customers easily.
Price: IKEA mostly keeps their prices of products low and this is benefiting them in
maintaining long term relations with customers.
Promotion: Social sites, newspapers and Televisions are some major media which has
been taken under in use by IKEA in order to promote their products.
SWOT Analysis of IKEA:
Strength
 IKEA has a clear vision which helps it
to offer same quality of product in each
location.
 It has build up strong brand image
worldwide and comes in one of the
market leaders in retail industry.
 Its products prices are very affordable
for each category of customer.
 High innovation in product design
which increases sales.
 Products are easily accessible to its
Weakness
 Due to its footprint on worldwide
locations it is difficult for the company
to offer equal standardise products to its
customer.
 Cost of raw materials are increasing
constantly which creates difficulty for
company to maintain low cost products.
 Flexibility is very less because of large
scale industry.
 Fake rumours about the brand has
created negative publicity among its
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customers.
 Digital promotion has covered
maximum era of customer's and created
brand image.
customer's
Opportunities
 Vast scope in developing country
because these country has the low
manufacturing cost.
 It can add premium products to its
portfolio.
 It can also collaborate with other brands
to build their brand name in other
countries.
 It can expand its grocery market to
increase product list & cover maximum
no. of customer's. Company should start involving more
in CSR activities to develop their brand
image.
Threats
 Economical & financial changes which
are emerging globally are becoming
major issue.
 New entrants are starting with the
innovative idea & effective strategies to
lead retail industry (Urbina, 2014).
 Consumer growth is rising with the
increase in their income which is
attracting them towards premium brands.
Marketing budget of IKEA:
Marketing budget
Particulars 1st year 2nd year 3rd year 4th year 5th year
Initial money 50000 13500 15200 22000 17000
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Investment 22500 16900 19000 16400
Total 50000 36000 32100 41000 33400
Marketing
expenditures
Advertisement 9600 6500 6200 6000 6200
Sales promotion 2300 2400 4500 3300 8500
Direct marketing 7000 6300 2400 7200 2300
Total 18900 15200 13100 16500 17000
Available balance 68900 51200 45200 57500 50400
CONCLUSION
From above comprehended report, it has been concluded that marketing department
carried various roles along with responsibilities through which company can enhance its
profitability and productivity both at the same time. Along with this, it has been analysed that if
marketing trends and human needs can only be analysed by marketing department and
information which has been gathered by this subsection is being sent to others. Through this
action, firm can gain many advancements in different things like improvised sales, profit and
revenues. On the other hand, marketing mix is a component through which benefits can be
gained by business firm in an appropriate manner.
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