Forming Effective Marketing Plans for IKEA

The marketing plans for an organisation, such as IKEA, are only effective for a limited period and must be reviewed and changed if the business does not prosper. The three elements of segmentation, targeting, and positioning are crucial for the growth of an organisation. Segmentation involves identifying specific segments or sectors of customers who are interested in buying the products, targeting involves fulfilling the demands of these customers, and positioning provides an idea about where to find the products easily. Controlling is also important, as it involves monitoring the process through customer feedback and evaluating the success of marketing plans through profit metrics.

UNIT 2. MARKETING ESSENTIALS

Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
LO 1: Explaining the role of marketing and the way it interrelates with other functional units of
an organisation.................................................................................................................................4
P1 Explaining the key roles and responsibilities of the marketing functions for IKEA..................4
P2 Explaining how the roles and the responsibilities of marketing relate to the wider
organisational context for IKEA......................................................................................................7
Task 2...............................................................................................................................................9
LO2 Comparing ways in which organisations use elements of the marketing mix (7Ps) to achieve
overall business objectives..............................................................................................................9
P3 Comparing ways in which IKEA applies the marketing mix to the marketing planning process
to achieve the objectives of their business and the way it differs from other organisations or
could do better compared to other organisations.............................................................................9
Task 3.............................................................................................................................................19
LO3: Developing and evaluating a basic marketing plan..............................................................19
P4 Producing and evaluating basic marketing plan for the chosen organisation..........................19
Conclusion.....................................................................................................................................24
Reference List................................................................................................................................25

Introduction
The modern era is an age of tremendous competition. The business-oriented organisations
are bounded in this modern era, thus they are unable to separate themselves from this ever-
growing competition. The business organisation utilises various innovative techniques for
increasing their marketing or business so that they can form their separate superior identity in
this competitive world.
Marketing essentials refer to those essential and beneficial practices, which are followed
by the business organisation for the growth of their business. Marketing is the basic necessary
activity, which is performed by the business organisation for the development of the
organisation. Marketing involves promoting the image of a company, as well as, promoting the
products, which are produced by the company.
This process will help the organisation to attract the customers and the other stakeholders
towards their company, for the profit of the company. Marketing can also be termed as a process
to analyse the present market in which the organisation will perform its marketing functions.
Therefore, marketing turns out to be a very crucial activity, which is performed by the business
organisations. In this assignment, the currently appointed assistant manager of IKEA performs
marketing analysis of IKEA.
Figure 1: Logo of IKEA
(Source: IKEA, 2017)

Task 1
LO 1: Explaining the role of marketing and the way it interrelates with other functional
units of an organisation
P1 Explaining the key roles and responsibilities of the marketing functions for IKEA
In the opinion of Kotler (2012, p.45), a business organisation undertakes a huge number
of functions and activities to shape itself into a successful and a prosperous business
organisation. Every organisation is shaped by the certain roles, as well as, responsibilities that
they undertake. In the perspective of Koku (2014, p.75), the business organisations do function
per their fixed goals or objectives.
The objectives that are fixed by a business-oriented organisation, provides the
organisation with a clear path on which the organisation may travel and can reach the zenith of
popularity and success. Different types of organisations are bound to follow different paths for
the fulfilment of their business objectives or aims. The private sector organisations, the public-
sector organisation, as well as, the voluntary sector organisations are the different types of
business organisation, have different objectives and to fulfil their objectives they must follow
necessary and beneficial paths.
In this assignment, the Company IKEA is selected to explain the various roles and even
the responsibilities, which are undertaken by the organisations. IKEA is a private sector
organisation. However, different organisations are functioned to follow their specific objectives,
but for following their specific goals, certain roles are to be followed, and certain specific
responsibilities are also to be undertaken. The role of marketing is important in the organization
as it starts from the analysis and ends when the products reach its customers. In the whole
process, all the functions are involved in marketing.
In the opinion of Alon and Eugene (2012, p.55), the first and the foremost necessary role,
which a business organisation must follow, is the accumulation or the collection of all the
necessary information, which will be beneficial for the business organisation. A business

organisation will never be able to stand strongly on a land, which does not have a strong base of
profitable information. In this fast changing world, there are constantly emerging current
information, which are extremely relevant for the business organisations, further, these
information are also highly profitable for the business organisations. This is important because
with the changing environment, the products become obsolete easily which further results in
decreasing of the demand. In this case, it is essential to gather information.
The information gathered by the business organisations are of utmost necessity for the
organisation as the collected information will help the members of the organisation to construct
marketing plans for the expansion, as well as, the progress of the business organisation. The
information, which is gathered by the companies are of many types, which may include
feedbacks from the customers, suggestions of the employees of the organisation etc.
The organisations to improve their rates of marketing may incorporate, some relevant and
profitable opinion of the customers, as well as, the employees, in the functioning of the business
organisation, to lead the organisation on the path of growth and development. The information
collected by the organisation may also refer to the knowledge about the marketing strategies
undertaken by the competitor business organisation.
The knowledge about the planning and strategies of the competitors will help the
business organisation to plan accordingly for the growth of their own business organisation.
Therefore, the first most important role that a business organisation must perform in order to start
its journey towards glorious success is to collect all the relevant and the necessary information
for the organisation.
In the opinion of Foxall (2014, p.45), the next important role, which a business
organisation must undertake as a most important role is the formatting of the gathered
information,all the information collected or accumulated by the staffs of a business organisation,
may not be of equal importance or relevance.
Therefore, the organisation IKEA must have the capability to select from this
information, which must be selected and which must be left aside. For performing this role of
formatting of all the important gathered information, the business organisations must undertake
certain necessary responsibilities, such as the organisation IKEA, always recruit eligible and

immensely capable candidates in the post of the researchers for the organisation, performing for
the growth of the organisation.
In the opinion of Dibb and Simkin (2013, p.44), the researchers are the key elements,
those who will judge whether the information collected for the organisation is relevant or of any
importance for the business organisation. The collection, as well as, formatting o the necessary
information cannot be maintained properly if the business organisation does not have a modern
and technologically advanced database to store the accumulated necessary data.
The technologically superior database will help the organisation to protect the beneficial
data and utilise them when needed. IKEA utilises modern database system for the processes of
the organisation. The final and the most important role that is played by a business organisation
is promotion of the products, produced by the company, as well as, promotion of the image of
the organisation so that a huge number of customers and important stakeholders are attracted to
the organisation.
Besides only gathering the information, the role of marketing also includes distribution,
pricing packaging of the products. In case of the distribution, the IKEA is required to adopt the
effective distribution of the product so that it can reach the target customers. Along with this,
pricing is also one of the important tasks, the organization need to set the price by analyzing the
market and according to their target customers. These all marketing functions are interrelated
with the other functional units of organization.
IKEA, for this purpose, utilises television, the internet, social media etc. as the people of
a new generation are quite active on social media, thus by the help of social media the
organisation can stay in direct contact with the customers and even the other necessary
stakeholders of the organisation.

P2 Explaining how the roles and the responsibilities of marketing relate to the wider
organisational context for IKEA
In the perspective of Pike (2015, p.55), the responsibilities and the roles, which are
performed by the business organisations, are extremely high in number and are quite complex.
Therefore, for the perfect functioning of the business organisations, the responsibilities, as well
as, the roles of the business organisations are divided between various useful departments of the
business organisation.
The departments of the business organisation manage the various activities of the
business organisation. Therefore, the departments of the organisation work towards undertaking
the roles and the responsibility of the organisation for the profitability of the business
organisation. In the opinion of Baines et al. (2013, p.44), there are different departments in an
organisation; they are the department of the finance or accounting. This department works
towards maintaining all the relevant and the necessary financial records of the business
organisation.
It is very important for an organisation, as the finance department helps the organisation
to keep a complete record of all the losses, as well as, profits of the company. These recorded
values will help the organisation to record their growth every year, and improve accordingly.
Within the IKEA organisation, the department of account or finance is given utmost priority, as
it structures the financial ground of the business organisation. Besides this, the role of marketing
is huge in the organizational context. Through the effective marketing only, the company can
raise the sales of the product. The revenue generated will be helpful for the organization for
expanding its operations in other countries or cities.
In case of private sector business organisations, the finance is the key element either for
their investment purpose or as their major objective. Moreover, there are other very important
departments in an organisation, working for the profitable development of the organisation. The
Human Resource Management department is another utmost significant department, which
shapes a flourishing organisation.

The IKEA Company also depends on the Human Resource Management department, for
the process of recruitment of the efficient and eligible candidates for the organisation. The
employees are the roots of an organisation. If the employees work innovatively and productively
for the organisation, then the organisation will turn into a highly successful business
organisation.
Therefore, the organisation must recruit only some selected eligible, skilled, and hard-
working candidates for the business organisation. The organisation’s Human Resource
Management department performs this task of recruiting productive and profitable candidates for
the organisation. Other than the process of recruitment of the most prominent candidates for the
organisation, the Human Resource Management department also performs various other tasks,
which are very necessary for an organisation, such as monitoring the surroundings, which
encapsulates or surrounds the organisation.
If the environment surrounding the business organisation is not hygienic, and even not
health, then the employees working for the organisation will tend to leave working in such a
suffocating and unhealthy environment. IKEA Company manages the environment surrounding
the organisation, as well as, the employees of the organisation by the HRM department.
Similarly, there are other departments within an organisation working for the development of the
organisation.
The Research department of IKEA is one such department. The research department
works towards the assortment of all the applicable and utmost essential information for the
organisation. The information about the marketing strategies and techniques implemented by the
competitor companies can be collected or gathered by the researcher. This information about the
competitors will certainly help the business organisation IKEA, to surpass the competition in the
sectors of business and marketing.
The role of marketing is important for the wider organizational concept because if the
marketing is not done ethically then it can hamper the growth and image of the firm. In case of
IKEA the firm has strong and positive brand image. So if it is not done effectively then in the
future the firm can suffer the loss due to reputation.

Task 2
LO2 Comparing ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives
P3 Comparing ways in which IKEA applies the marketing mix to the marketing planning
process to achieve the objectives of their business and the way it differs from other
organisations or could do better compared to other organisations
In the view of Wasan and Tripathi (2014, p.127), Marketing Mix is a very necessary
strategic tool used by the business organisation for the proper marketing of the products, which
are produced by the business organisation. The customers of an organisation are the major
requirement of the organisation. The customers help the organisation to progress in the field of
business and marketing.
Therefore, the business organisations work towards fulfilling all the needs and the
demands of the customers. For this process, the customers of the organisations must be well
informed about all the new products, which are launched by the organisation. The business
organisations follow the strategy of marketing mix, for the proper advertisement or the
promotion of the products.
This advertisement of the products is possible by undertaking the 7Ps Marketing Mix.
IKEA also utilises the 7Ps Marketing Mix, for the proper selling of the products of the business
organisation, which will simultaneously lead to the development of the business organisation.
The very important element, which is considered while undertaking the process of marketing
mix, is segmentation.
In the opinion of Huang and Sarigollu (2014, p.74), Segmentation is the process of
selecting an important segment of the society as the customers of the organisation. The
organisation can earn huge amount of profit for the organisation if they are able to sell their
products to the selected segment of the business organisation. In this part of the assignment, a
comparison is been done between two companies, which are IKEA, and Sainsbury’s. For the

process of fulfilling the objectives of the business organisation, the companies implement 7Ps
Marketing Mix.
7PS MARKETING MIX IKEA SAINSBURY’S
PRODUCT
 The products of the
IKEA organisation are
high-quality products.
 The quality of the
products is very fine
and new-fashioned,
thus the prices of the
products are moderate.
 The main feature of the
product of IKEA is
that they are ready to
assemble products
which is much needed
by the users
 The products of the
Sainsbury’s, are of
high quality and
branded products.
 The high-quality
products are certainly
of high cost.
 The products of
Sainsbury’s are of high
cost and thus they are
able to attract the
attention of the people
or the customers, those
who are earning a huge
amount of money.
 The segment of the
society that comes
under the customer
section of the
Sainsbury’s is the rich
and the prosperous
customers, earning
handsome salary.

 On the other hand, the
middle-class sections
are not the target
audience of the
Sainsbury's, as they are
not capable enough to
purchase the products,
which are formed
under the brand of
Sainsbury’s.
PRICE
 The price of the
products, which are
formed by the IKEA,
organisation is
moderate so that both
the members belonging
to the higher and the
middle class are
capable of buying the
products.
 Further, there are
products which are
costly and they are
made for the high
income group
individuals. But they
follow the penetration
price policy.
 The price of any
product, which is
created by the
organisation, structures
the growth of the
organisation.
 The perspectives of the
customers, as well as,
other important
stakeholders are
strongly influenced by
the price of the
products.
 If the price of the
products is very high
than the expectations
of the customers, then
the sales of that
particular will certainly

fall, as the customers
will not purchase
extremely high priced
products.
 Moreover, if the prices
of the products are too
low than the actual
expectations of the
customers, then also
the sales of the
organisation decreases.
 The products of the
Sainsbury’s Company
are of very high in
comparison to other
retail companies.
 The customers
belonging to
aristocratic or the rich
society tend to buy
products from
Sainsbury’s

PLACE
 IKEA also utilises E-
marketing, thus the
products are found
both in online market,
as well as, in offline
market.
 There are a huge
number of branches,
small stores of the
organisation.
 The IKEA also
undertakes the method
of Cross-Channel
Interaction, to be
regularly be connected
with the customers and
even the beneficial and
profitable stakeholders
of the business
organisation.
 The perspectives of the
customers are also
moulded by the reason
that how easily, the
products of
Sainsbury’s can reach
the customers.
 The customers prefer
to buy the product of
such companies, which
they will be able to
gain without any kind
of hurdle or restriction.
If the customers face a
huge number of
difficulties to reach to
certain places in order
to purchase the
products of the
Sainsbury’s company,
then such customers
will prefer to buy the
products from the
other organisations or
companies, where they
can reach easily. In
this way, the
companies will not be
able to gain
competitive advantage

over the other
companies.
 The Sainsbury’s
Company uses various
possible ways in order
to reduce the vast
distance between the
organisation, and the
customers linked to the
business organisation.
For this reason, the
Sainsbury’s Company
has opened various
store and shops all
over the globe so that
the customers do not
face any difficulty,
rather they can buy the
products of the
organisation in a much
easy manner.
 Moreover, the
problems of the
customers are further
reduced by the
Sainsbury’s business
organisation as the
organisation
incorporates E-

Marketing. This can
also be termed as
online marketing. In
this form of marketing,
the organisation is able
to be in direct contact
with the current
customers of the
organisation, and even
the potential customers
of the business
organisation.
PEOPLE
 The employees of the
organisations are
treated in a very well
manner; this helps the
growth of the
organisation.
 The employees of
IKEA are well trained,
as in this organization
focus is provided on
the employee
development. Due to
this reason only, they
are able to produce
high quality products.
 The employees of an
organisation are very
important for the
profitable expansion of
the company, thus it
becomes the duty of
the company to
properly looks after or
care for the employees,
working for
productivity of the
organisation.
 The Sainsbury’s, lack
in this sector, as there
are a huge number of
conflicts between the
employees of the

organisation, as well
as, between the
employees and the
employer. This stands
as a risk for the
organisation.
PROCESS
 The IKEA organisation
uses various process
for marketing such as
E- marketing, offline
marketing etc.
 The process of Email
marketing is also
undertaken by IKEA.
 IKEA has huge
machinery and proper
manufacturing plant
which is responsible in
producing the finished
products for the
customers.
 Sainsbury’s being a
popular business
organisation utilises
various methods for
marketing process,
online method, as well
as offline method.
PHYSICAL EVIDENCE
 IKEA is a very
important and popular
business organisation,
which is present both
offline in the form of
shops and stores and
even online.
 The physical evidence
refers to the positions
or the places where the
customers can receive
the products, which are
manufactured by the
organisations.
 Sainsbury's utilises
both online, as well as,
offline modes for the

selling of the products
of the company.

Task 3
LO3: Developing and evaluating a basic marketing plan
P4 Producing and evaluating basic marketing plan for the chosen organisation
In the view of Goi (2015, p.67), Marketing plans are undertaken by the business
organisation for the growth of the business organisations. Marketing plans are of utmost
importance for the proper expansion of the business organisations. However, the marketing plans
must be structured in such a way that it helps the business organisations to reach their major
objectives or goals.
Different types of business organisations have different types of objectives. In order to
fulfil these objectives, the organisation must construct a proper marketing plan for the
organisation. For the proper construction of the important, as well as, relevant marketing plan the
business organisation performs various other functions, such as collection or the gathering of
necessary information, formatting of the information, storage of the beneficial data, as well as,
dissemination. These processes are of utmost necessity, as they encourage the business
organisation to construct profitable strategies, and planning which will help towards the
enlargement of the company.
For the cause of producing profitable and productive marketing plan for the IKEA
organisation, the collection of information or data about the external environment surrounding
the organisation, as well as, the internal environment of the organisation is of extreme necessity.
The tools, which are used for the external analysis of the IKEA organisation, STEEPLE Analysis
is undertaken.
 The Socio- Cultural elements of the factors are the
demographical factor, which affects an organisation. The
greatest problem or the difficulty faced by the IKEA
organisation is that with the change of time, the preferences or
the demands of the customers are changing.

SOCIO-CULTURAL  The arrival of modern advanced technology leads to creation of
new fashions, the customers are attracted by such fashions and
thus they do not prefer to buy the products of the organisation,
following the old fashion trends.
TECHNOLOGICAL
 This refers to the technology, which is utilised in the place
where the business organisation is situated.
 The company lacks to coordinate with the innovative and the
modern technology. The modern world is moving towards
utilisation of innovative and modern technology. However,
IKEA will have to develop in the field of technology.
 The technologically advanced environment surrounding the
business organisation is highly beneficial for the business
organisation, as it will help the organisation to stay connected
with the customers of the organisation on regular basis.
ECOLOGICAL
 IKEA is an organisation situated in Sweden. This country
Sweden is considered as a developed country as it ranks 22 in
the Foreign Direct Investment Index.
 IKEA being an organisation of a developed country, the
organisation gains various benefits, as the other foreign
countries may also be interested in order to invest in the
organisation, leading to the growth of the organisation.
POLITICAL
 Sweden is a country where the government lacks majority, that
too in the parliament. Two basic principles, which are followed
in Sweden, are that during the period of peacetime, not-
alignment comes into existence, whereas, during the time of
war, neutrality comes into existence. These factors strongly
affect the business organisations or the companies, those that
are situated in Sweden, as it affects the development and the
progress of IKEA.
 We must also consider that among all the other countries in the

world Sweden, was the one very important country
contributing to United Nations. This fact will certainly help
IKEA, in a positive manner.
LEGAL
 The policy of trade, which is incorporated in Sweden, is free
policy of trade.
 The trade policies, which are undertaken by IKEA, as well as,
other business organisations in Sweden, are very strongly
dependent on the trade with the foreign countries.
 Access to the alien or the foreign market in Sweden is quite
easy. This may encourage the business organisations to grow
prosperously by trading within the home country, as well as, by
trading with the foreign countries.
 The trade policies, which are present in Sweden, are liberal,
giving profitable freedom to the organisations to trade with any
foreign country.
 A very important thing to be noted is that the country joined
hands with the European Union in 1995, allowing the business
organisations situated in Sweden to take the benefits of markets
of European Union.
ETHICAL
 There are certain ethical values, which are followed in the
country Sweden, which in turn influences all the business
organisations situated in Sweden.
 Gender equality is followed in Sweden, which means that all
the males, as well as, the females of the country are treated
equally, thus the IKEA organisation also must incorporate
these ethical values in the functioning of the business

organisation.
ECONOMICAL
 Sweden being an economically strong and developed country,
thus the business organisations situated in Sweden, are
profitable and benefited, as they will rarely face any
economical crisis.
Swot analysis
Strength-
 The firm has huge knowledge about the needs and requirements of the customers.
 It has good brand image in the market
Weakness
 The quality of the products are decreasing due to huge expansion and diversification
 The organization has seen negative publicity by the customers
Opportunities
 IKEA can expand its operations in the developing countries
 Further, they can diversify their operations in the grocery market
Threat
 The competition prevailing in the market is the major threat
Marketing objectives
 To increase the market share by 10% till 2018
 To provide innovation in the marketing strategies
Market research – the survey is carried out through the interview method and the population
size is 20 customers of IKEA.

Budget and Time frame for IKEA
In the opinion of Huang and Sarigollu (2014, p.113), the marketing or the business
strategy of a business organisation can be managed properly if the organisation manages the time
frame, as well as, the budget of the business organisation.
The estimation of the budget is of utmost necessity for a business organisation, as this
will help the business organisation to decide the investment that the business organisation will
undertake for their company. The prices of the products formed by the company are also decided
by the budget estimated by the business organisation, for example, all the products, which are
constructed under the IKEA organisation, are planned according to the budget fixed by the
organisation.
In the opinion of Mintz and Currim (2013, p.40), the time frame is another element which
is undertaken by a business organisation for the proper functioning of the business organisation.
This refers to the period until which the marketing plans formed for the organisation will be
effective or beneficial.
The plans that are formed for the growth of the organisation cannot be implemented for
infinite period, as it will lead to the fall of the business organisation. The marketing plans for a
business organisation must be implemented to a limited period. For the IKEA, the marketing
plans must be implemented for first two years, if the business organisation fails to prosper, in
that time, then the plans must be changed.
Controlling- For monitoring the process, feedback from the customers can be taken and
even the profit of the firm is also the evaluator in identify the success of marketing plan.
Segmentation Targeting Positioning
These three elements are very necessary for the escalation of an organisation. The
business organisations select certain segments or the sectors of the customers, who are interested
in buying the products of the organisation and are capable enough for buying the products. As
the products of IKEA, are of high cost, thus the segment selected for IKEA, are mostly the rich
people.

The next step that the IKEA organisation performs after segmentation is targeting of the
demands of the particular segment, and then fulfilling the demands of the segment of the
customers or even the stakeholders. Positioning is also very important, as this provides the
business organisations, the idea about the proper positioning of the materials of the organisation,
where they can be found easily, and the customers can purchase them.

Conclusion
The business organisations are continuously trapped in a competitive business
environment. The business organisation functions certain essential marketing techniques in order
to form their own strong position among the other competitors on the ground of marketing. In
this assignment, IKEA Company was taken in order to explain all the roles performed by the
organisation and the responsibilities undertaken by the business organisation.
Moreover, a comparison between Marketing Mix of IKEA, and Marketing Mix of
Sainsbury was undertaken here, which are used by the business organisation for the fulfilment of
the goals decided by a business organisation. An innovatively developed marketing plan is
constructed for IKEA, at the end of the assignment.

Reference List
Books
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