Marketing Plan for IKEA's New Outdoor Furniture

This assignment provides a detailed analysis of IKEA's marketing plan for their new outdoor furniture product. It discusses the importance of market influences and how the market is interrelated with other functional departments of the company. The study concludes by identifying key steps in improving production and evaluating the marketing plan, as well as strategies for implementing the marketing mix to achieve IKEA's objectives.

UNIT 2 – MARKETING ESSENTIALS

INTRODUCTION
Marketing deals with creation, promotion and delivery of goods and services to
customers and business. IKEA is a Swedish-founded multinational company. It's headquartered
is in Amsterdam. It is the largest furniture retailer since 2008. It is well-known for its furniture
retailing. This report will highlight on marketing concepts with some current and future
marketing trends.. This will show the overview of different marketing processes (Chernev 2015).
This will show the role and responsibilities of marketing manager in business. This will explain
interrelationship between marketing and other functional units. It will show the marketing plan
of IKEA Company.
TASK
1. Marketing concept and current and future trends
The marketing concept is a principle that use of firm to evaluate the requirements of its
customer, enhance sales and maximise the profit if the company. It decides how to satisfy
customers’ needs and beat the competition. There are five marketing concepts.
Illustration 1: Marketing Concepts
(Source: Marketing Concepts, 2017)

 Marketing concept- It is the concept That focuses on achieving the organisational goal
by offering satisfactory services to consumers.. Each firm pays attention on providing
valuable services to the end users so that profit targets can be obtained. Entity emphases
on using better content to make its consumers aware during promote the products in
market. It aids in raising demand and enhancing profitability of business unit (Bahl and
Chandra, 2018).
 Production concept- Consumers choose the highly affordable and easily available
products. The managers relying on this concept focus on attaining high productive
efficiencies, less cost, mass distribution.
 Product concept- This concept believes that consumers like to buy such items that have
high quality and innovative features. Thus, IKEA continuously make changes in its
products and implement innovative ideas to improve quality of goods.
 Selling concept- This concept pays attention on selling maximum products without
looking upon needs of consumers (Chernev, 2015).
2. Different marketing processes
Marketing process involves the way in which the value for the customers can be created
to fulfil their needs. It helps to analyse the opportunities in market, choosing the target markets.
It’s an endless relation between customers and companies in trying to create its value and fulfil
needs of customer (David, David and David, 2017)
There are some major steps included in this process which are described as below:
Stage 1: situation analyses: This is the first phase, IKEA is required to analyses internal and
external business environment of firm. This would help in making effective plan to market its
products. SWOT, competitive analyses are some tools that aid in analysing position of firm in
the market.
Stage 2: Objective: In the next phase IKEA is required to prepare SMART objectives that it
wants to achieve through this marketing process. By establishing short term and long term goal
entity would be able to make strategies (Hanssens and Pauwels, 2016).
Stage 3: Strategy: This is very important for the organisation that to make a good strategy that
may support in gaining success. It has to make effective strategies related to product, price,
promotion etc. This would be better in gaining attention of mass audience and gaining success in
competitive market.

Strategy 4: Tactics: This includes content planning, etc. so that overall goal of IKEA can be
achieved (Inyang, Agnihotri and Munoz,2018).
3. Roles and Responsibilities of marketing department
Market Research-
Marketing department firstly conduct market research to know the current requirement of
the customers. In IKEA, marketing manager conducts the face to face interview with consumers
in order to know about consumers’ needs (Bahl and Chandra, 2018).
Developing the market strategy
The department is responsible for developing the market strategy of the IKEA. This
clearly define that how the enterprise can promote their product and service in the market
Customer relationship management
The marketing manager of IKEA Company has to collect information about customer
database from consumers in terms of the feedback also identify the customer satisfaction. It aids
in building strong bonding with buyers and enhancing their interest towards firm (Jelinek and
Ahearne, 2015).
Sale forecasting
The most important role of the marketing manager in the IKEA company to forecast the
sale of the product and these processes also enhance the profitability of the enterprise.
In order to forecast sale, manager can specify the channels of distribution for its products.
Identifying new business opportunities
In the IKEA, the marketing manager find out the various new business opportunities
through the analysis of market trends. Identifying the purchasing pattern of the customers helps
in order to know interest of the consumers towards the product (Mora Cortez and Johnston,
2018). Social Marketing believes that companies need to offer valuable services to clients that
may support in improving wellbeing of society and consumers. Use of digital technologies is
another trend. In the recent time most of the companies are taking support of Facebook, Twitter
and many other social networking sites. This helps in attracting more people and knowing more
about their taste and preference. By this way firm becomes able to build strong relationship with
them and making them positive towards firm.

4.Marketing influence and inter-relation with other functional management
There is strong relationship between various departments of company. IKEA is the big
brand that has production, marketing, HR, finance etc. various departments. All these functional
units work together in order to achieve the organisational goal.
Marketing and finance department- Marketing department helps in gathering information
about needs of consumers. Team continuously work to increase sales. That enhances cash inflow
in business (Paley, 2017). Furthermore, finance department allocates funds to marketing unit so
that they can perform their work effectively. This interrelationship assists in accomplishing goal
of the firm.
Marketing with Production department- Production unit is responsible for producing goods
and services. Marketing aids in getting information about needs of consumer and requirements.
By this way production department makes changes in its existing strategies to produce goods as
per their requirements.
5.The value and importance of marketing role in the IKEA Company:
Identify customer needs
In the IKEA, role of marketing is very important in identifying the need of consumer
through market analysis and customer needs survey. It is valuable for the furniture retail firm as
it helps in effective production of products according to the need of the customer ( Chernev,
2015).
Increasing sales
For increasing sales of the IKEA marketing is very important because it improves interest
of consumer towards the product.
Bring innovation
Marketing act as a source of innovative idea in the IKEA Company which help in
understanding the new pattern of demands and provide goods and services accordingly to the
need of customers (7 Ps of Marketing Mix, 2017). It enhances growth and development of
company to large extent.
Effective decision making
With the help of marketing company can make correct decision about IKEA products
development.
.

6. Significance of having effective interrelationships between different functional departments
Marketing plays great role in the success of business unit. IKEA is facing huge
competition, for sustaining in the market for longer duration it is very important to implement
effective marketing tactics. There is relationship between various functional units with
marketing. Through marketing IKEA gather necessary information about consumers buying
behaviours and make changes in its production so that entity can offer satisfactory goods to its
end users. This relationship aids in raising sales of the firm and improving image of entity ( Mora
Cortez and Johnston, 2018). This is another significance of marketing function, through
marketing IKEA can build strong relationship with its users and can make them positive towards
firm. In the modern competitive environment it is very difficult for the firm to retain consumers
for longer duration. Entity can make connection with buyers and can resolve their quarries
timely. This creates good image in the mind of consumers and help in building strong
relationship with them (Marketing Concepts, 2017)
7. Marketing mix process:
The marketing mix is the strategy market uses to boost up the product and brand of the
company in the market. There are several elements of marketing mix that helps business in
attracting new buyers and raising sales of the organisation.
Ps' IKEA Ashley
Product The product section of of IKEA
comprise wide range of products like
Billy, Poang, Malm Bed, , Rens
sheepskin rug and Lack Tables.
Fornimma Power supply cord is power
good of IKEA (Inyang, Agnihotri, and
Munoz 2018). IKEA has warranties on
almost all of its products.
Ashley has other range of Beds, sofas,
Headboards, etc. Power Sofas is power
product of Ashley. There is limited
warranties on some of its products (7 Ps
of Marketing Mix, 2017)
Price IKEA takes support of skimming
strategy. With reasonable price it
provides high quality with better taste.
Company applies premium strategy, some
products of Ashley are very expensive
(Paley, 2017). Prices of some products are

All products are delivered by keeping
its price in mind the potential
customers (Mora Cortez and Johnston
2018). It is in anyone's budget. In this
way it has maintained its price since so
many years.
high to maintain the range to compete in
the market with competitors.
Place It adopts direct distribution method, as
it directly sells its products to end user.
The distribution strategy of IKEA is
very high as its products are available
and famous world-wide (Inyang,
Agnihotri, and Munoz 2018). These
products are available in urban as well
as in rural areas.
It sells its services and goods to whole
seller thus, apply indirect distribution
channel Ashley also has good distribution
strategy as it is also available in most of
the parts of world. But it not easily
available in rural areas.
Promotion Instead of focusing on presenting new
products it focuses on promoting
existing products. Its promotion
strategy is done through social media.
It makes connection with consumers
through social networking sites.
Ashley focuses on inventing new
products instead of focusing on existing
products. The production strategy is done
through television, posters. Newspaper
etc. Most of the time company promotes
its products through traditional medium
such as television (David, David and
David, 2017).
People IKEA provides high incentives to its
workers so that they feel happy and
work well. That is why staff are
working in firm from longer duration
and offer satisfactory services to clients
Ashley offers high salaries to its
employees, that motivate people and make
them loyal
Process Consumers can directly contact to the
customer service team (Chernev, 2015).
Process is not smooth.

Hence, its process is very smooth.
Physical
Environme
nt
Its logo, packaging, outlook of stores is
good
Infrastructure of company is very good.
layout, tagline gain attention of audience
(7 Ps of Marketing Mix, 2017).
8.Produce and evaluate the marketing plan:
The marketing plan is the part of business which outlines the whole efforts that resulting
in marketing strategy used to enhance sales of the company. IKEA wants to market its new
outdoor dining furniture.
Executive Summary
This section includes vision, marketing objective of IKEA. Furthermore, market audit is
done in this marketing plan for the new outdoor furniture product.
Mission
Mission of IKEA is to become market leader in furniture industry.
Vision
Vision of IKEA is to expand its business across the world and make its new outdoor
furniture products worldwide popular.
Firm objective
Corporate objective of business is to raise its profit and increase demand of furniture
product.
Marketing objective
 To raise sales of new outdoor furniture by 30% till the end of 2019
 To increase customers of new outdoor furniture by 15% before 2019
Market audit
The SWOT analysis of IKEA company for promoting new outdoor furniture product:
Strength- IKEA Higher brand Equity. 70k. IKEA has successful advertising and marketing
campaigns. IKEA is the trustful and premium brand.
It offers variety of products (Marketing plan, 2017). It has powerful distribution strategy and
operation in the world.

Weakness- The few disagreements regarding some products, advertising and worms made an
international news ahead. Few cases of recall product obstructed its brand image (Bahl and
Chandra, 2018).
Opportunities- IKEA can increase its selling in Rural areas. It can increase its selling and
entrance in initial markets. It can move production to low cost countries where labour costs are
cheap which could help in maintaining its savings. Obtaining competition can enhance it image
in the market.
Threats- Higher competition in market can directly affect the market share of IKEA. Increment
in raw materials cost
PEST (external analyses)
Entity is required to look upon the political stability before promoting its new outdoor
furniture product in the market (Hanssens and Pauwels, 2016). This will support in gaining
positive results. If economic conditions not favourable then it might create problem in gaining
attention of buyers. If there is high unemployment rate then people will not prefer to buy such
items. Thus, IKEA is required to pay emphases on this element in order to make marketing plan.
Consumers like such new outdoor furniture as it looks so nice in homes. IKEA may attract more
people by implementing effective marketing plan. Technological changes impact positive on the
firm and support in making effective connection with buyers so that this new product can be
promoted effectively.
Segmentation, targeting and position
In order to gain success in the market for the new outdoor furniture IKEA will have to
choose correct segmentation and targeting strategies. It will take support of demographic
segmentation, as this will help in focusing on professionals and young people those who like
some unique and trendy items in their homes. Entity will use differentiated targeting strategy,
this will help in targeting mass audience (Jelinek and Ahearne, 2015). Furthermore, cost position
strategy will be applied in order to promote the new outdoor furniture product.
Marketing program
IKEA will take support of social networking sites for making connection with audience.
By making close interaction with younger people and professionals entity would be able to gain
success in the market and will be able to get attention of audience.
Budget

For promoting this new outdoor furniture, IKEA will have to invest amount in marketing
activity.
Employee salaries $350
Advertisement cost $500
Rent $300
Utility bills $200
Total Expenses $1350
Monitoring and controlling
Monitoring and controlling are two major elements of marketing plan. In order to monitor
the success of new outdoor furniture in the market IKEA will take support of survey technique. It
will take reviews of consumers. Furthermore, marketing manager will continuously monitor the
progress so that issues can be resolved on time. Test marketing will be best suitable in order to
minimise chances of failure (Mora Cortez and Johnston, 2018). Manager of IKEA will promote
the new outdoor furniture in the market for few days, if people give positive response then it will
continue with it otherwise plan will be modified to meet the marketing goal.
7P’s
 Product: This new outdoor furniture will be able to gain attention of consumers. It will
continuously make changes in designing of this new furniture according to feedback
receive by consumers.
 Price: Premium pricing strategy will be implemented by IKEA in order to promote its
new outdoor furniture in the market. This will gain attention of professionals and young
people those who have adequate income sources (7 Ps of Marketing Mix, 2017).
 Place: Direct delivery channel will be used and later on this new product will be placed at
retail stores as well.
 Promotion: IKEA will promote new outdoor furniture products through social networking
sites and marketing campaigns.
 People: Company will provide high incentives to its employees for raising demand.
Workers will resolve issues and complains of buyers immediately.

 Process: Its delivery process will be so smooth and consumers will not have to wait to get
services of IKEA (Chernev, 2015).
 Physical evidence: Firm will use attractive colours and brochures to gain attention of
buyers. Infrastructure will be amazing so that consumer can make their mind to buy this
outdoor furniture.
CONCLUSION
From above study it has been concluded market influences and how market is interrelated
with other functional departments of IKEA Company. It concludes the important steps taken in
improvement of production and evaluation of marketing plan of IKEA company. It concluded
the strategy of marketing mix to marketing planning process for achievement of IKEA
company's objectives.