IKEA's Marketing Management: Analysis of Environment and Strategies

This report provides a comprehensive analysis of IKEA's marketing management strategies. It begins by examining the marketing environment using PESTLE and SWOT frameworks, highlighting political, economic, social, technological, legal, and environmental factors, as well as strengths, weaknesses, opportunities, and threats. The report then delves into the marketing mix, focusing on the 7Ps (product, price, place, promotion, people, process, and physical evidence) and how IKEA utilizes them. Furthermore, the report discusses IKEA's segmentation, targeting, and positioning strategies. Finally, the report concludes with recommendations for IKEA to improve its marketing management practices, aiming to enhance its competitive advantage and profitability. This document is a valuable resource for students studying marketing management and seeking insights into a successful multinational company's strategies. Desklib provides access to this and other solved assignments to support student learning.

MARKETING
MANAGEMENT

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

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
with the customers and limits the sales (Hasanpoor and Mashayekh, 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 organization have high profit margins so that the organization will 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

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

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, targeting and 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