Strategic Marketing Management for Ikea: Process, Models and Measures

Running Head: STRATEGIC MARKETING MANAGEMENT
STRATEGIC MARKETING MANAGEMENT
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Executive summary
Ikea is the most successful customise furniture manufacturing company across the world. The
company is highly popular for its unique design and customer friendly product ranges and
pricing. Billy bookcase is the most successful product of Ikea and the company now decides to
expand its business in the Asian market with the Billy bookcase. However, there are some
barriers like competitive nature of the market, cultural difference and over-inteference of the
government. In this regard, it is very important for Ikea to choose its marketing strategies
properly. This report guides Ikea to get a clear insights of strategic marketing process and
measures so that it will be a success for Ikea in the international business.

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Table of Contents
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................5
AC 1.1 Role of strategic management in Ikea.............................................................................5
Attaining competitive advantage in the international market..................................................7
Maintaining balance with the external factors.........................................................................8
Harnessing customer satisfaction with the product.................................................................8
Setting better organisational objectives...................................................................................9
AC 1.2 Process involved in strategic marketing..........................................................................9
Analysing the market.............................................................................................................10
Retrieving information regarding the target market..............................................................10
Establishing a strong marketing mix process........................................................................11
Emphasising on customer satisfaction...................................................................................11
1.3 Link between strategic marketing and corporate strategy...................................................11
AC 2.1 Values of the models used in strategic marketing planning..........................................12
PEST model for strategic market planning............................................................................12
Product life cycle model........................................................................................................14
2.2 Link between strategic positioning and marketing tactics...................................................15
2.3 Merits of relationship marketing.........................................................................................15
Task 2.............................................................................................................................................16
3.1 Techniques for growth opportunities in the market.............................................................16
3.2 Marketing strategy options..................................................................................................19
Increase market presence.......................................................................................................21
Set up a brand value in the new market.................................................................................21
Design effective promotional measures.................................................................................21
3.3 Appropriate strategic marketing objectives.........................................................................22
4.1 Impact of changes in the external environment...................................................................23
Technological factor..............................................................................................................23
Social factor...........................................................................................................................23
Legal factor............................................................................................................................24
Globalisation..........................................................................................................................24
4.2 Internal analysis for strengths and weaknesses...................................................................24
4.3 Proposed strategic marketing responses..............................................................................25

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Set a product line as per the consumer needs........................................................................25
Design creative marketing strategy.......................................................................................26
Good relationship with the respective government...............................................................26
Recommendation.......................................................................................................................26
Conclusion.....................................................................................................................................26
Reference.......................................................................................................................................28

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Introduction
Ikea is considered to be one of the popular ready-to-assemble furniture manufacturing
multinational company that offers kitchen appliances, home accessories and other home furniture
services to the customers with a very cheap price. Founded in 1943 by Ingvar Kamprad, Ikea is
currently the largest furniture retailer across the world with 433 locations all over the globe
(Ikea.com 2020). It is important to note that the organisation generates US$ 45.4 billion in the
financial year of 2019. The headquarters of the organisation is located in Netherlands with a total
number of employees of approximately 211,000 (Ikea.com 2020). The values and optimism of
the employees and the management create a strong brand awareness for the organisation and
ensure sustainability in business in near future.
In respect to this, it is highly essential to evaluate the marketing strategies of Ikea and
analyse the corporate business practice that the company practices. It is important to note that the
report does not restrict its discussion to the marketing initiative of Ikea rather trying to foster an
in-depth analysis over the strategic marketing initiatives that the company follows and must
follow in course of establishing a strong competitive approach in the market. Henceforth,
different models and theories have required to understand and design an extensive strategic
marketingexperience that will be relevant and effective enough for the development of the
organisation.

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Task 1
AC 1.1 Role of strategic management in Ikea
According to Banerjee (2017) strategic marketing is considered to be a process of
planning and development of the marketing initiatives in order to obtain competitive edge in the
chose niche market. In the process of creating a marketing practice it is important for the
company to acknowledge the market situation and survey of the industry so that it will help to set
specific objectives and need for the respective organisation. From the research of Varadarajan
(2019) it can be argued that one of the major organisational objective is associated with
maximising the number of customers and secure high profitability so that the sustainability of
business will be intact. It is pertinent for Ikea to formulate an effective strategic management
practice so that it will generate competitive edge for the organisation in the international market.
Table 1: 4P marketing mix of Ikea
(Create by the author)
Flexibiltyoftheproduct.Highqualityofthproduct.Multi-useandValuebasedpricing.BestComeptitiveofferforthecustomers.Highqual;itywithlowpricing.VerticalintegrationofsupplychaOut-of-townlocations.Warehousetypebigstoresunderoof.Pr omPr odPr icPl ac

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The 4P marketing mix of the company is associated with the product, price, place and
promotional aspects. There are specific strategies and measures that the organisation has been
taken in order to create an effective and extensive organisational practice. As far as the product
of the organisation is concerned, it can be stated that Billy Bookcase of Ikea provides a very
unique design to the product that attracts the customers all over the world. The product has been
offered since 1979 and it is considered to be the most versatile bookcase across the world
(Harford 2017). Gillis Lundgren was the designer of Billy bookcase with the vision of creating
an effective and multitasking design of the bookcases. Flexibility and use of materials are very
important for Ikea to create its unique brand value. Therefore, the Billy bookcase is made of high
quality materials with a unique design that can easily attract the customers.
Moreover, the pricing strategy of the organisation is associated with the value based
pricing strategy. As per the research of Kienzler and Kowalkowski (2017) it can be stated that
the value based pricing strategy creates a great value of the product and able to convince the
customers about the worth of investing money. As a result of that it becomes easier for Ikea to
create a loyal customer base who knows about the value and importance of the products. As a
matter of fact, the value based pricing strategy of Ikea also enables the company to generate an
competitive edge in the market as the rival companies are not in a position to offer products in
such a low price (Hinterhuber and Liozu 2017).
The location of the Ikea is focused on an effective organisational strategy where Ikea is
focused on vertical integration strategy. Sabet, Yazdani and De Leeuw (2017) defined the
vertical integration strategy as a process where the business company is highly willing to control
its suppliers, distributors and retailers. In other words, it can be stated that the vertical integration
strategy allows the business companies to formulate a strategic approach so that it will assist to

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reduce costs and improve efficiency of the organisation (Wan and Sanders). Ikea intricately
emphasises on its supply chain and therefore, the locations are being chosen carefully and mostly
out of town. There are big warehouses where furniture will be displayed and help them to choose
the right product that they a 2017re looking for.
Both traditional and digital promotional strategies are associated with the business of
Ikea where traditional advertising like TV advertisements, sponsorships and newspapers play a
significant role (Ahire and Pekgün 2018). Moreover, the integration of social media marketing
and promotional strategy enables Ikea to enter into the modern business in order to gain
competitive edge with its business rivals. Moreover, the use of the company logo has become
another effective strategy of energising the brand presence in the market (Moon and Kim 2019).
As a leading customise Furniture Company, it becomes important for Ikea to use the logo of the
company as a tool to attract customers.
In this regard, the 4Pmarketin mix is effective enough to highlight some of the key facets
of the strategic measures that Ikea is creating to maximise its customers and increase profitability
to a great extent. Therefore, the significant strategic management facets of Ikea are as follows,
Attaining competitive advantage in the international market
The product description, location and pricing strategy of Ikea are strongly supported the
strategic advantage of the organisation where it is important for the organisation to put enough
stress over the market demands and requirements. The research of Kaleka and Morgan (2017)
advocated that the market demands are generally driven by the demands and expectation of the
customers. Therefore, it becomes a very important aspect for the business organisations to deal
with the customer expectations and gain competitive advantage in the competitive market