This report discusses the marketing management aspect of IKEA Company, including the marketing environment, marketing mix, and recommendations for improvement.
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MARKETING MANAGEMENT
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TABLE OF CONTENT TABLE OF CONTENT.....................................................................................................................2 INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Marketing environment................................................................................................................3 Marketing mix..............................................................................................................................8 Segmentation, targeting and positioning...................................................................................12 Recommendations to the company for improving its use of marketing management...............14 CONCLUSION..............................................................................................................................16 REFERENCES..............................................................................................................................17
INTRODUCTION Marketing management is very necessary task to a company or organisation for gaining attracting large number of customers in market place. Most of companies and businesses are putting their huge efforts for making their marketing functions very effective, because ineffective marketing functions are not favourable for a company to gain positive outcomes in market place. Currently ventures have hired different strategy makers also in their workplace for developing various productive strategies of marketing. Strategy makers have skills of developing new, exclusive and productive strategies for an organisation. On other side, top-level management within most companies tries to recruit and select such people within their marketing teams who really have extra-ordinary capabilities of marketing. Basically, only such ventures are able to gain huge profit margins and competitive advantage in market place which really has a marketing team of different effective marketers. This report discusses the marketing management aspect of IKEA Company. IKEA is a Swedish multinational company, Headquartered in Delft, Netherlands. The company mainly offers home accessories, kitchen appliances, furniture to different customers in many of countries (Tao, 2018). Currently IKEA serves in whole Europe, North America, East Asia etc. so that it has very large scope. This is report discusses marketing environment of company. Different major strategies of marketing also have been included in this report, like; marketing mix, STP model etc. At the ending of report, some appropriate recommendations have been given to the organisation. MAIN BODY Marketing environment It is important for the organization to analyse internal and external factors of organization which is going to make planning and decision making of organization effective. SWOT and PESTLE are two frameworks which are used to analyse these factors and would be discussed in the further report. PESTLE
This framework is used in the organization to understand external environment of the organization so that they can be controlled and right measures can be taken in organization. Political factors There have to be low cost trading which the organization must take full attention so that there is going to be higher profit margins in market. Government is also going to support so that the unemployment rate of the country are also going to improve which is a great factor for the company as well because they will be able to price their products accordingly (Wagner and Eggert, 2016). Unemployment rate are going to improve which means there are going to be more customers which would want to take products which is value for money and IKEA is going to have further sales. There is a stable government power in UK which is why there are not many changes which are taking place and standards of the organization are well maintained. Whatever changes do come by the government have to be implemented in organization effectively only then the business will be able to operate effectively in market. Economic factors There are going to be a lot many created job opportunities for the people of the country by IKEA and that is going to improve the lifestyle of the people in the country. There is going to be higher economic factor because of this reason in firm and they would be able to invest further in developing countries for expansion (FESENMAIER and et.al., 2016). GDP of the country is going to improve which means that the clients will be able to pay more for the products and services which are of high quality. This would result in higher profitability of the organization and the productivity and operations of the organization is also going to improve for a better future. Social factors To have an effective functioning, IKEA will have to first understand the customers so that there is going to be improvements in the products and services accordingly so that the business will be able to grow and standards well maintained. The demands and
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expectations of the customers in the market are also increasing which is why it is important for the organization to be able to compete in the market. There is a value and standard which the organization gets after years of experience in this market which IKEA will have to maintain so that the competitors in the market do not take this place (Cegliński, 2016). There is high investment which IKEA is making in the market so that there would be more sales and the company would be able to benefit from it. Technological factors The raw material which are coming in IKEA are being tracked so that there is going to be the right production level in the organization which would be present. Technology has really helped IKEA to maintain their inventory and other major functions which are taking place in the organization. There are advanced technology which is being used in the organization so that there is going to be higher performance and IKEA would be able to compete with the competitors effectively (Seth and Seth, 2016). Manual working is time consuming and errors can take place which is not good for the brand image and reputation of the organization which the firm has gained over years. Organization must get right technology like information technology so that the errors in the organization is going to be lower. Legal factors Organization will have to implement laws and regulations like rights of the customers and employees which have to be followed in organization for example the return policies for the products and services which are coming online so that there is going to be higher satisfaction level of the customers in organization. Employees also need to get right wages and treatment in the organization so that there is going to be satisfaction of them as well in company and productivity level of company can be improved (Sharp, 2017). There is no discrimination which is taking place in IKEA and being such a reputed organization in the market this factor is well maintained by the management. Employees
are backbone of the firm which is why it is very essential for the organization to have right skills and measurement for them to be taken on time. Environment factors Climate makes a huge impact on the transportation in the company and with the right policies and measures which are put by government the organization will be able to improve this factor for the business. The delivery of online services has to be on time so that satisfaction and loyal of the customers can be higher in organization which is going to be good for the profitability of the organization. There are measures which IKEA has taken so that they can become zero carbon footprints which are also good for the reputation of organization (Fitzpatrick, 2017). The products also have to be improved and IKEA is having re-useable products as well in organization which is eco-friendly products and services which are present. SWOT This is a very strong tool which is used by IKEA to be able to have a strong planning for them in the future. Strengths Market experience-There is competitors in this industry like Tesco, Sainsbury and more which the company needs to maintain and get in changes on time so that organization will be able to operate effectively. IKEA is having strong base in market because they have experience which gives firm a competitive advantage (Yang and et.al., 2020). Online-IKEA has shifted to serving their products and services online since the customers have shifted to using of social media and other sites for shopping. This is a cost saving process and sales also improve. Trends-To make sure that the trends are being followed in the organization there are a lot of implementation of technologies which is going to make the demands and quality be maintained in the organization. Changes in technology like automatic process, digital payment facilities and many more are coming in IKEA.
Brand recognition-The pricing of the products is low but the quality of products is present which is making company have unique feature in market. There are more customers which get attracted due to this factor which the company focuses upon from time to time. Weaknesses Supply chain-This makes the company not be able to achieve their demands and needs withthecustomersandlimitsthesales(HasanpoorandMashayekh,2017).The reputation and brand image of the organization is also getting affected. Manual cost-IKEA is using old methods to manufacture the products and services of the organization which makes the demands of the customers not be matched on time. Sales decline-Due to having lack of experience of online stores the organization has had to face this issue which is not good for a long run and competitive image as well. It is important that the organization matches the expectations and needs of the customers which was lacking by IKEA. Opportunities Demands-There is a high demand which is present in Asia which IKEA can take advantage of and expand by having more stores in the country. The tradition of the country is going to be different for which the organization will have to redesign their products and services for the customers (Frue, 2018). Online opportunities-There are a lot of promotions strategies which the company can make so that there would be more opportunities with the organization. The customers can make the organizationhave high profit marginsso that the organizationwill get competitive advantage which is going to make the online presences of the business effective. International expansion-the company will have to get in new targets and aims for themselves in which the organization will be able to expand themselves and planning are
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going to be better. The company can expand in Russia, Indonesia, etc so that there are going to be more sales and the organization will be able to have a successful base as well. Threats Competition-Company is having a lot of competition in the market and it is increasing also rapidly with time which is why the organization will need to have a strong base and portfolio for the organization (Zhabin and et.al., 2016). The organization has been in this market for more than 77 years which is why the company knows the right changes which has to be done in the organization which can be a great advantage for the organization to have in the market. Marketing mix To be able to have particular assignments like products and services of the organization are able to reach their targets and aims this model is very essential for organization be analysed. There are 7P’s which are included in this model which are people, place, price, promotions, physical evidence, process and product. IKEA has been in market for over 77 years which is why organization understands the importance of this factor and the decisions are going to be right for organization with this model being used in the business. The further report would be consisting of the marketing mix of IKEA in detail so that there is going to be better understanding of this factor. Price IKEA is competing with local supermarkets as well as global retailing chains which are a great factor for the organization and a large market to lead in. The company is having a concept of having comparatively lower price constitute so that company’s vision and objectives are going to be matched. The company is focusing on cost control so that they will be able to provide the customers with low priced products like company is producing furniture for household and offices at a very low rate which is making the sales of the organization be maintained. The company is not just providing products at low cost but freebies on Monday to Saturday in IKEA restaurant which is making more customers get attracted. Company has priced their products
very low till 2010 because company was expanding themselves but now the organization is using competitive pricing strategy for them so that the organization can gain higher profit margins (Lambert and Enz, 2017). Customers prefer products which are priced low for them which are why the organization has been able to make this their strength and make more customers visit the stores and online sites as well. The pricing of the products in IKEA are also done on the base of demand for the services and products. As well as, which are present in company so that the organization will be able to gain a product from few products on a larger scale. Competition is increasing therefore IKEA has taken such decisions to be able to operate effectively in market which is a great factor for the organization. Product Across the globe IKEA is one of the leading retailing chain which is present in the market which is a great factor and it is because the organization has expanded them worldwide as well as invested in new products and services. The customers always want something new in the products which need a strong research and development department which IKEA is having. Products of IKEA are desks, mirrors, cooking, chairs, lightning, small storage, sofa’s, hardware and tools, TV and media furniture, clothing storage and many more products, which are a large number of products which the company has been able to expand themselves into. Customers must have better experience and approach IKEA whenever they are in need of any products and services from the market which is going to make the company have more sales. New ideas are always implemented in the organization easily because the employees are well motivated and the portfolio of the business is also getting stronger when they find it easier to get new products and services in the organization (Chin and Mansori, 2018). Promotion IKEA is very much focused on the marketing activities so that they will be able to make the products and sales of the organization be improved. There are advertisement campaigning which the marketing department of IKEA is taking care of and performing for all the products and services of the organization so that the customers can be aware about them. The company is using tools for promotions like TV, print, billboards and modern methods like social media and other online ads so that the company can reach out to a larger audience in the market which is
going to be very beneficial for the company in the market (Bhasin, 2020). There are a lot of sales and discounts which the company is putting on the products and services and for making the customers experience increase the organization also makes sure that the products which are not on sale are marked for the customers to know. A social clutter leads to a lot of conflicts behind a campaign. Which IKEA organizes and those need to be avoided so that the business will be able to make a better impact on the customers. Organization will be able to have more revenues for further expansion in more products and services. The people ordering online are facing problems on the website which needs to be resolved by the organization so that the customers can get comfortable with the use of this organization online which can result in higher sales of the products and services of IKEA. People The customers and employees are the backbone of the organization which needs to be taken care of by the management. There are a lot of ideas which the employees of IKEA get in the company which is making sales of the organization increase. As of 2015 there was a supply of 21,000 with 1, 16,000 employees in the organization which is a great factor for IKEA since the company was able to have higher productivity and operations which would be good for the functioning. The products and services of organization are improved according to the customers as well which is going to make the organization have higher level of trust and loyalty of them as well in the firm. Relationships of company with the customers have to be present so that the understanding is present and the products and services of the organization can be moulded accordingly to them (Mero, Tarkiainen and Tobon, 2020). Employees have to be aware of roles and responsibilities so that the sense of direction is going to be higher in the organization which is going to make the processing and productivity of the organization more effective and efficient. There is no discrimination in any form which makes the working environment also very healthy and increases satisfaction level and retention level of the employees is also going to be present. Place The company is having this marketing mix as their strength since they have a large distribution principle which is being followed in the organization from a long run. There are large manufacturing of flat packages and side which is going to make organization be able to
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satisfy the demands of the customers. The demands and needs of the customers are increasing and it is very essential for the business to be able to match those factors so that the company will be able to operate effectively in the market (Wahab, bin Mohamad Shah and Faisalmein, 2019). The company has gained a lot of experience as well as networks to be able to place themselves and get raw material for production. There are multi- channels which IKEA is having in the market and the company is distributing in 18 countries with 22 pick-up and order points which are present in 11 countries. Currently IKEA is focusing on smaller city store centres so that they can create a base in these places as well so that sales is going to increase delivery is also present in IKEA. Company has taken an advantage of online delivery which has made the company have higher distribution of products and services to the customers and this is on time so that the customers can have a better experience in organization. There are more stores which IKEA is planning to start so that there is going to be an easier access for customers to have for products and services that they require. Process There is customization which is present for the customers with the products and services which they want in a lot of products because the expectations and standards of the customers differ from one another. There is a standard which IKEA is having with their products and services so that the loyalty and trust of the customers is going to be present in the organization for a longer run (Trihatmoko, 2018). There are more stores which will be opened by IKEA so that the customers can come to the store and customize the products according to their standards which the company will be providing them with so that there is going to be higher satisfaction level which would be present. Company is committing to have low prices for the products itself so that the customers can be targeted and also the improvement in the products can be present which make IKEA do better than the other competitors in the market. The company has to be present online and office to be able to operate effectively in the market so that the results are going to be higher in the company. Physical Evidence Many of the products of IKEA are recyclable in nature which is making the organization have competitive advantage in the market and the organization is also investing in green energy
solutions which are good for the portfolio and reputation of the organization. Green energy solution such as solar power and more free carbon footprints for the organization measures and strategies are being planned so that the company will be able to operate effectively in the market. There are large stores of IKEA in the market which is making the customers get attracted on its own and IKEA stores are also outside the towns so that there are there is going to be less crowd and the customers will be able to purchase their products in peace. There is very large car parking as well which is given for the customers and modern technology display so that the customers are going to find it easier to be able to shop without having a pressure. There is proper uniform for the employees and symbols for the customers to be able to get what they want which is going to make. There is information technology which is being used in the company and a lot of facilities as well which are being provided to the customers which adds up to the customer experience as well as the company will be able to have more sales (Peng, 2018). Investment is being done in technological aspect by the organization effectively in the market which is a great factor. Segmentation, targeting and positioning Segmentation, targetingand positioning is a marketing tool which is used by businesses in the market so that there is going to be better decision making and the products and services will be able to penetrate in the market easily which is a very essential factor. Segmentation The organization will have to segment their targets according to demographic, psychographic and geographic segmentation so that there is going to be better sales which the company can have. Different locations have different demands and needs which IKEA will have to provide them so that there is going to be better functioning. Changes are essential in IKEA which is going to help the organization to have better functioning and more customers are going to get attracted in the organization as well which is good for competitive market (Bhasin, 2020). Demographic
IKEA is going to focus on the age group from between 30 to 50 years old so that there is going to be higher performance which is going to be present in the business. The company would have to focus on a specific gender which is going to be women in market since they are easier target. Psycho-graphic Women are going to get attracted when the products and services are going to be maintained so that the performance of the organization is going to be present. Geographic Organization is going to focus on all geographical locations which IKEA is having globally which are going to make the organization have higher sales. Targeting According to the needs organization will have to target right customers in the organization. According to sex, gender, age, religion, etc products and services of the organization can be divided so that there is going to be better functioning which would be present in organization (Gama, 2017). Satisfaction of the customers is important for IKEA which company is focusing upon as well so that there would be higher results which are going to be present. The company is going to target women who want beauty products which are going to make sales of company be improved. The company needs to set their targets right in order to be able to operate effectively in the market which is good for reputation of organization. Positioning IKEA will have to position their products in the organization well which is that the customers want value for money products in the market which is a great factor for the company because the organization has already been focusing upon this factor so that they can have higher sales (Hughes, 2018). The company will have to make sure that they are taking the right measures and strategies for the customers so that they can have better efficiency. Company is positioning themselves online as well as offline due to current situations which are present in market which is going to make profitability better.
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Recommendations to the company for improving its use of marketing management The marketing management function of Ikea is affected by the turbulent marketing environment. In this dynamic world, many of companies are not able predict things for systematically running their marketing functions, because day to day many new strategies and techniques of marketing comes in turbulent marketing environment. In this situation, the marketing management at IKEA company need to contact its HR department for hiring such people within team which has enough capabilities and skills for enabling company to conduct effective marketing operations in the turbulent marketing environment as well (Schneider and Bermudez,2018).Basically,marketerswhohasproperknowledgeofmodernmarketing strategies, that can support to company in gaining positive outcomes in the current highly competitive market place. The marketing manager of IKEA should improve its operations of marketing, so that it will be gained very appropriate outcomes to this organisation in market place by running different operations of marketing, but it still needs to be more active to properly deal with the impact of turbulent marketing environment. In this environment, marketing things are not fixed, because each morning there is a new way of marketing comes in market place, and then many businesses adopts those ways for promoting their brand at the large scale in market. In this situation, if marketing manager of IKEA become active in its daily operations, then it will be always aware about the new marketing strategies and changes which daily raises in the turbulent marketing environment. Manger have to take quick actions towards deal with the impacts of this environment, because turbulent marketing environment can affect IKEA marketing functions in positive way as well as negative way. This is the main reason that, the marketing at IKEA have to systematically deal with the impacts of environment. On the other side, marketing team of company need adopt and implement on modern strategies of marketing, because currently this is the only way to company for gaining excellent outcomes in existing turbulent marketing culture. According to different marketing experts. Currently those ventures gain very profit in market place which uses modern strategies more than traditional strategies of marketing. So that, after adopting and implementing modern technology
modern strategies, Ikea’s function of marketing management will be automatically improved in response to the turbulent marketing environment (Landén and Riltoft, 2018). However, manager of marketing department at this company always need to ensure that, no factors exists in its business environment which can negatively affect to its marketing operations of different market segments. This is really a necessary task to existing marketing manager for day to day improving its management of marketing. Market research also needs to be very effective in IKEA, because after conducting the market research, this company can simply know that which types of strategies are currently providing positive outcomes in market place, and which strategies are time and resources consuming for the company. IKEA’s marketingdepartment have to conduct very strong marketing research for knowing what types of strategies currently uses by its competitors in market place (Yuting, 2019). Knowing different information about market competitors is the mostfavourabledealtocompany,becauseaftercollectingvariousinformationabout competitors, it will gain excellent competitive advantage and profit margins in market place. According to different business expert, market competition will more increase in the near future due to new innovations and new entrants, so that effective market research will enable to company for be up to date with new innovations of market, so that it will enable to develop its products and services accordingly. Company has required to be focused on using new and latest marketing strategies in its workplace for making its various functions of marketing very productive. On the other side, it should believe in using some exclusive marketing techniques also in market place for managing its function of marketing in very proper manner. However, many key competitors of IKEA also have knowledge about all above mentioned techniques, so that that it should always formulate a very productive marketing plan to using these all strategies of marketing strategies in a systematic channel (Larsson, Lennartsson and Olsson, 2018). According to current situation turbulent marketing environment, the concept of social media marketing is highly trending in market place, so that the marketing team of IKEA have to use this strategy for effectively promoting own brand at the large scale in market place. By considering these all factors and techniques, marketing manager can easily improve its use of marketing management under the
turbulent environment of marketing. After improvement, IKEA will be gained very large market share in its industry. These all are major recommendations to company which top-level management at Ikea have to consider in its daily operations for gaining excellent outcomes in market place. CONCLUSION From the above report it can be concluded that there is a need for businesses in market will have to analyse the market effectively so that the further planning and decisions can be made accordingly. The company needs to reduce risks and make sure that the organization has high performance and company is going to have higher results and invest more in future. There are a lot of right decisions and measures which have to be taken by the organization which is going to make company have effective working. Company will have to have strong measures and techniques to be able to operate effectively and smoothly in the market so that results are going to be higher. The company will have to analyse the market effectively so that they can make right decision making so that there is going to be higher performance. Company will have to adapt to the changes and trends which are coming in the organization so that there is going to be higher results and outcomes of the organization which is going to be present. IKEA will need to improve their control on different departments of organization would make company be able to operate and get higher performance in market easily. There are a lot of different strategies for promotions as well which IKEA will have to use to be able to attract and get attention of the customers and make the best performance in market as well.
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