IKEA Marketing Report: Analysis of Marketing Essentials and Strategies

This report provides a comprehensive analysis of IKEA's marketing strategies, focusing on the core marketing essentials and their practical application. The report begins with an introduction to marketing concepts and its importance in the business environment, followed by an examination of the role of marketing and its interrelation with other functional units within an organization, using IKEA as a case study. It delves into the key elements of marketing, such as market segmentation, positioning, targeting, evaluation, monitoring, and promotional strategies. The report also explores the 7Ps of marketing mix (product, price, promotion, place, people, process, and physical evidence) as applied by IKEA. Finally, the report culminates in the development of a basic marketing plan for IKEA, integrating the concepts discussed throughout the analysis to provide a strategic framework for the company's marketing efforts. This assignment provides valuable insights into IKEA's marketing success and offers a practical understanding of marketing principles.

Running Head: IKEA
Marketing Essential
[Name of the writer]
[Name of the Institution]

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Table of Contents
1 Introduction..............................................................................................................3
2 Role of Marketing and Its Interrelation with Other Functional Units.....................4
2.1 Role and Responsibilities of Marketing Department in the Marketing
Environment ………………………………………………………………………………..4
2.2 Role and Responsibilities of Marketing in IKEA.............................................5
2.3 Key Elements of Marketing Function..............................................................7
2.3.1 Market Segmentation..................................................................................7
2.3.2 Positioning and Targeting...........................................................................8
2.3.3 Evaluation and Monitoring.........................................................................8
2.3.4 Promotional Strategies................................................................................8
2.3.5 Market Plan................................................................................................8
3 7P’s of Marketing....................................................................................................9
4 Basic Marketing Plan.............................................................................................10
4.1.1 Marketing Strategies and Objectives........................................................11
4.1.2 Monitoring Marketing Plan......................................................................12
4.1.3 Market Segmentation and Selection of Target Market.............................12
4.1.4 Setting Goals and Objectives....................................................................12
4.1.5 Situational Analysis Tools and Techniques.............................................12
4.1.6 Creation of Marketing Strategy and Resources Allocation......................13
4.1.7 Monitoring and Control Measures............................................................13
5 Conclusion.............................................................................................................13
Bibliography.............................................................................................................................14

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Marketing Essential
1 Introduction
The concept of marketing in business refers to the process of fascinating or
establishing the interest of potential customers towards their merchandises or services
(Perreault, 2018 ). This process involves promoting, researching, selling, delivering and
advertising. There are certain organisations that handles the marketing processes of behalf of
other organisations. This process is considered as significant for every company as without
this organisation are unable to establish relations with other potential companies and clients
(Kotler et al., 2015). Marketing strategies benefits the companies by attracting customers
towards their goods and services. The awareness concerning marketing essentials in the
present market scenario is too high all over the worlds. This assignment is based on the case
study of IKEA and demonstrates about its marketing essentials. Furthermore, it discusses
about the role of marketing and its interrelation with other functional units of marketing. In
addition to this, it highlights the importance of marketing in the present market situation all
over the world. It describes the key elements of marketing function as well as demonstrate the
7P’s of marketing with reference to IKEA. the last part of this assignment will focus on
developing a marketing plan for IKEA.
IKEA is an international furnishing organisation that operates in approximately 42
countries with a total number of employees around 70,000 out of which approximately
60,000 are working in their Europe branch (Baker et al., Saren 2016). IKEA is a Swedish
based company that was created o the idea of offering a broad range and well-designed
furniture as well as home furnishing products to the people at lower rates such that every
individual is able to afford it. Their product are affordable and the quality of their products
are quite good. This organisation has rapidly achieved success in the market. The purpose of

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analysing them is to understand their performance and tactics as well as how they are able to
successfully accomplish their goals.
2 Role of Marketing and Its Interrelation with Other Functional Units
2.1 Role and Responsibilities of Marketing Department in the Marketing Environment
Marketing department is significantly important for every organisation. The role
played by this department helps in the identification of potential sources for the market and
benefits in maintaining brand reputation in the industry through successful promotion and
advertisement (Rowle, 2016). There are various roles and responsibilities of marketing
department in the business environment that helps industries to attract customers and clients
towards their products. Effective marketing requires product planning, customer service,
thorough marketing research, sales, advertising, promotion and development procedures
(Malhotra, 2015). These roles and responsibilities are handled by marketing functions in a
business organisation that helps in the progress and development of the company. The
functions of marketing include sales support system, strategy management, product
development, distribution, selling, promotion, and finance. All these functions have crucial
part in the business environment. There is a close relation among the marketing and other
functions that are existing in the company (Cosmo and Yang 2017). This interrelationship can
be demonstrated as, in a business organisation marketing plans or approaches can be executed
without the help of other functional units. They are related to each other and are vitally
needed for enhancing the performance of an organisation. If a company is required to execute
their marketing plan or advertise their product through different platform, they need help
form the finance department for investment. Similarly, when the sales increases, the
production and sales department are positively affected. On the other hand, the marketing
department if IKEA want to propose sale or offer for their consumers on bulk purchasing, the

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marketing team needs to communicate with the with every department of their organisation
as it will have an impact on all the functional units. These functional units are separate
entities of a business company but interlinked with each other in such a way that they have an
impact on the growth, profitability and performance of an organisation (He and Balmer
2007). The essential function of an organisation is to increase the profitability of the
company. This can be achieved by increasing the sales of the company’s products. The
company’s products high amount of sale cannot be accomplished without the participation of
other functional units. The accounting department takes care of the cash in flow and outflows,
the finance team provides a suitable budget plan for the implementation of marketing
strategies and production department interacts with the logistics to fulfil the demand of
product supply. Whereas, human resource takes care of the policies that are required to be in
accordance with the latest market trends and providing human resource to the company
Consequently, all these functional units are correlated with each other for the purpose of
successfully implementing the marketing plans and helps in the success of the company in the
industry.
Figure 1. Functions of an Organisation

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2.2 Role and Responsibilities of Marketing in IKEA
IKEA is one of the top most retailing company for furnishing products in UK and
their marketing department utilises their roles and responsibilities in a particular manner
(Rowle, 2016). They have introduced a great quality of furnishing and other home decoration
product that contributes towards environmental sustainability. Their focus is people, planet
and the environment. Their roles and responsibilities of marketing function in IKEA is based
on their micro and macro environments (Kotler and Armstrong, 2013). Another major
responsibility is that they develop product that fulfil the needs and requirements of their
consumers. The micro environment of IKEA includes the consumers, competitors, company
and their suppliers. Whereas the macro environment helps in building a strong relationship
with the clients and helps in providing an easy life to their customers through their products
and services. IKEA excels in their performance, achieve their organisational goals and
develop necessary skills with the help of their organisational functional units. The primary
focus of the marketing function in IKEA is to collect the information related to industry and
then evaluate that information for targeting the potential customers and the markets. This
helps in the identification of customers demands as well as their needs concerning the goods,
services and the advertisements. Marketing function of IKEA also helps them in achieving
their set targets as well as organisational aims by formulating appropriate marketing
strategies (Gnizy and Shoham 2018). They have maintained their brand value through quality
products and services that are easily purchased by every individual. Their furnishing products
are quite appealing and the ability to contribute in the environmental sustainability, helps in
attracting more and more customers towards their product. Moreover, the marketing team
makes attractive advertisements to enhance their brand image and value in the eyes of
consumers, as both these factors are essential for the company’s success (Gouldson and
Murphy, 2013).

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There are various functional units in IKEA organisation that helps in the efficient
running of their business operations. These are finance, HR, sales, production and customer
service. All these functional units are interlinked with the marketing department of IKEA
(Pike, 2015). The finance department keeps the record of sales, profit and loss of the
company. That helps the marketing team to formulate such strategies and approaches,
increasing the sales of their diverse products ad goods. Similarly, a huge impact is created on
the production department due to the rise in the production capability. In contrast to this,
marketing stimuluses the operation of customer services (Balmer and Burghausen 2019). This
is because the feedback of the customers helps the marketing function in understanding the
requirement and needs of the customers. All these unit are interrelated and contributes in the
success of H&M in the market. All these units help in formulating effective plans for the
development of new products. The research and development unit are delivering numerous
research reports to the marketing team such that this unit of IKEA creates plans for the
product development and promotion in the market. This helps in maintaining the lead in the
retaliating industry. These functional units are significantly related to each other and success
of IKEA is the complete contribution of all the departments.
2.3 Key Elements of Marketing Function
There are various key elements that are needed to be considered during the
development of marketing strategy. These are market segmentation, positioning and
targeting, evaluation, monitoring, promotional strategies and marketing plan (Babin et al.,
Zikmund 2015). The first element of market segmentation leads towards developing an
effective strategy for the merchandise marketing.

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2.3.1 Market Segmentation
The potential clients fall into specific sections or groups in accordance to their needs
and requirements. Market segmentation refers to identifying the needs of consumers through
statistical surveying and market reports, that helps in introducing those products or goods that
effectively helps in competing with the rival organisations (Gouldson and Murphy 2013).
This is considered as the key component that leads towards and effective marketing plan.
2.3.2 Positioning and Targeting
Organisations focuses on those the market segments that will help in attracting
numerous customers towards the company’s products (Perreault, 2018). It is essential for an
organisation that that the product they are offering addresses the issues of the targeted market
as well as the consumers. For that, the company must aim to sell their products according to
the market needs.
2.3.3 Evaluation and Monitoring
The next element after the segmentation, positioning of product is monitoring and
evaluation. This refers to asking for customers feedback on their products. it act as a control
element that helps the company to recognise whether their strategies are effective or not.
2.3.4 Promotional Strategies
The organisation must focus on devising effective promoting strategies that will
guarantee the fact that the targeted market thinks about the items or administrations that
company offers (Gnizy and Shoham 2018). This can be achieved through diverse types of
promoting, shows, advertising, computerized showcasing and through offers or schemes.

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2.3.5 Market Plan
After the establishing a marketing strategy the next and the last element is called
marketing plan that helps in executing that system and assess its prosperity. The plan is
thoroughly assessed and, changed according with the client needs and industrial trends.
3 7P’s of Marketing
IKEA is a home décor and a furnishing company that is widely known for its modern
furniture designs, latest appliances and uniquely designed furniture. These products are eco-
friendly and attractive. Moreover, this company is well-known because of its cost control,
continuous product development and operational details that benefits them in keeping the low
prices of their products. This company is situated in the UK and their clients and their
business is spread in various parts of the world. IKEA utilises 7 P's of marketing that helps
them in accomplishing their organisational objectives and aims. The 7 P's of marketing mix
that is being used by IKEA organisation are product, price, promotion, place, people, process
and physical evidence (Kotler et al. 2015). For their products, IKEA need gather the
information by surveying the latest market trends and the customers state of mind.
Ikea has a diverse range of furniture products and home accessories. Their furniture
products are for children as well as bedrooms, living rooms etc. Their products include side
tables, shelves, coffee tables, bookcases, TV solutions, armchairs, DVD storage, sideboards,
and leather sofas and other interior décor products. They also sub divides their products such
as for children bedrooms there will be bunk beds, nursing equipment’s, play accessories etc.
they have more than 10,000 products available in the market (Cosmo and Yang 2017).
The price of IKEA products is quite reasonable easily affordable by every individual.
There are no skimmers or premium prices on their products. lowering the prices does not
affect the quality of their products. Their products are designed and manufactured, the raw

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material is resourced then the goods are distributed in the market all this happen within the
low-cost framework.
Ikea is a globalised organisation that sells it products in North America, Europe,
Australia and Asia (Larson and Draper 2015). There stores are in out of town locations that
does not assist from the footfall of secondary and primary. There stores are quite large and
even provide other facilities to their customers.
IKEA is one of the huge furniture brands that provide home furnishing products at
low prices. The do the promotion of their goods through TV advertisements, newspapers,
magazines, sponsorship and through other media platforms (Campbell et al., 2018) . The aim
of IKEA is to satisfy their customers and build a strong relationship with their clients. They
have introduced the concept of eco-friendly and energy saving products to grab the attention
of their consumers.
IKEA manufacturing of their furniture goods is done through their own wooden
components and wood-based furniture. Their customers after selecting the product and
ordering it, collect it themselves and drive it themselves to their homes. All of this is a part of
their low-price framework.
The logo is the main physical evidence that serves as brand value and helps them in
achieving their customers attention. Sustainability is their main motive and they have
invested a lot in providing green energy solutions i.e. energy saving, sustainable lightening
products and solar power systems. On the other hand, the large store of IKEA also serves as a
physical evidence.
4 Basic Marketing Plan
The significance of marketing plan for IKEA is to clarify the essential elements of
marketing and identify the directions, aims, objective and activities for their business and

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employees (Balmer, 2013). The basic marketing plan of IKEA focuses on the 7P’s of
marketing mix.
4.1.1 Marketing Strategies and Objectives
The key focus and aim of IKEA company is to maximise the sae of their products,
enhance their brand value and reputation in other parts of the world, increase their
profitability, become the largest furnishing company in the retailing market (He and Balmer
2007). All these objectives will help them in gaining competitive advantage and increasing
the growth of their furnishing business. By enhancing the brand image of their products, they
can sustain the loyalty of their customers and compete with the rival companies (Chikweche
and Fletcher, 2012).
These objectives can be achieved by thoroughly studying the market segment and the
competitor companies present in the market. Distribute their products in almost every
potential market through the help of suppliers and make a stronger channel of distribution.
moreover, by bringing uniqueness and adding innovation in their products they can easily
grab the attention of huge number of customers towards their products. conversely, they can
target famous hotels, restaurant areas and large stores for selling their products in bulk
amount. The through research on the market segments as well as the rival companies will
help IKEA organisation to recognise the main competitors in the industry. Reaching their
product in every market and area will spread out their business. Sustaining a stronger channel
of distribution will help in reaching their products in those areas where basic facilities are
note easily available (Malhotra, 2015). Moreover, the attractive advertisements, e-marketing
and innovation in their products will benefit their company in terms of competing in the retail
market as well as attract more consumers towards their goods. By achieving these goals, they
will be able to maintain a positive reputation in the customers mind.

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4.1.2 Monitoring Marketing Plan
For the monitoring of marketing plan, IKEA need do the evaluation of their sales
report that will help them in judging the former sales and profit of their company (Gnizy and
Shoham 2018). With the help of this information, they can structure or plan a new strategy
that will help them in increasing their profitability and sales in the market. Besides this, it will
also benefit them in understanding their market share as compared to their competitors. All
this gathered data and statistics i.e. the cost profitability analysis and efficiency ratio will aid
IKEA’s marketing team in deliberating the cost and profit from every aspect.
4.1.3 Market Segmentation and Selection of Target Market
The market segmentation must be done with respect to the demographics, customers
needs and requirements, present market trends and penetration in the industry (Chikweche
and Fletcher, 2012). The target market will be selected after gathering the data and
identifying the potential market as well target the possible customers.
4.1.4 Setting Goals and Objectives
The primary goal for IKEA must be to identify and understand the needs of their
targeted consumers and know the present position of the market.
4.1.5 Situational Analysis Tools and Techniques
For the purpose of segmentation of market various tools or frameworks such as BCG
matrix or SWOT analysis are required to be prepared. Along with that, PESTAL and porter’s
five force will be need to identify the potential barriers that can occur while implementing
these strategies (Kotler, 2015).