Analysis of IKEA's Marketing Strategies: A Comprehensive Report

This report provides a comprehensive analysis of IKEA's marketing strategies, focusing on its roles, responsibilities, and the application of the 7Ps marketing mix to achieve its business objectives. The introduction highlights IKEA's position as a global furniture retailer and its online business model. Task 1 delves into the critical roles and responsibilities of marketing functions within IKEA, including campaign management, website maintenance, social media monitoring, internal communication, research, and vendor management. It emphasizes the importance of the marketing department in revenue generation, market share growth, and overall company development, with a focus on understanding customer behavior and planning for future activities. Task 2 explores the key roles and responsibilities of marketing related to IKEA, such as strategy, marketing research, product development, communications, sales support, and event organization. The report then presents how IKEA utilizes the 7Ps of marketing – product, price, place, people, physical evidence, promotion, and process – to achieve its business objectives, emphasizing the interconnectedness of these factors in driving the company's growth. The report concludes with an overview of IKEA's marketing plan, showcasing how it differs from other companies due to its planning and innovations.

MARKETING
ESSENTIALS

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Roles and responsibilities of marketing functions in the context of IKEA......................3
P2. Different key roles and responsibilities of marketing related to IKEA............................5
TASK 2............................................................................................................................................7
P.3. Presenting different ways in IKEA using marketing mix (7P's) to achieve business
objectives................................................................................................................................7
P4 Marketing plan for IKEA..................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The marketing world is more focused on direct contact with customers and users and
marketing managers lead the team and help in success of a company. Manager adds more
innovations on the product and helps to promote in the market.
The report is based on the case study of IKEA, which was founded in Sweden and now
has become the world's largest furniture retailer. It also sells kitchen appliances and home
accessories. It is an online business company who sells the entire product online andis always
aware about new technologies. It presented all roles and responsibilities of marketing functions
and helps to take a company on further level of growth and development.
It also focuses on how these responsibilities will help to make an organization wider and
maximizes its sales. The company also conducts many programs and events to let people know
about their brands and products. The report compares different ways of marketing mix that is 7
P's to achieve overall business objectives. It also throws light on the main functions of IKEA and
how it will enhance the performance level of company. The report also shows that IKEA differs
from others because of its planning and innovations. It will also present a basic marketing plan
other than IKEA.
TASK 1
P1. Roles and responsibilities of marketing functions in the context of IKEA
Marketing functions play a vital role in an organization's mission. It helps to promote all
the material of a business and increase the volume of sales. Marketing functions manages the
brand according to the need of users it means what customers need and how they interact with a
company. IKEA is a company who sells all its products online and it includes furniture, kitchen
appliances and home accessories. It is now the world's largest furniture retailer company. In
IKEA, it also conducts campaign management for marketing initiatives. It also promotes
materials and also keeps them up to date as to increase the sales volume. IKEA first identifies
products and services to focus more on selling cycle and then produce those products according
to the needs of customers and communicates and promotes them (Responsibility of Marketing
Departments.2018). IKEA is an online company which sells its product online; this marketing

function helps to keep website content up to date , so that people can quickly searches about the
business and new additions
Marketing department of IKEA monitors and manages the social media, it also carefully
watch what being posted on social sites about a company online (Armstrong and et.al. 2015).
The main role of marketing function in IKEA is to produce internal communication which
means that the employees who work should know their values and goals, aims, objectives so that
they work with more interest. It is often more responsible for employee communication through
newsletter and internet.
When a conference is held, the members who work in marketing department acts as a
spokesperson or guides on behalf of IKEA and they know how to responds to media. Research
also plays a vital role in marketing functions, as it help to define target markets and opportunities
to understand the needs of market and customers, then they apply in a company whether they
fulfill them or not (Martensen and Mouritsen, 2015). In IKEA company, to select a company and
then manage them to produce marketing material to support a market. These include agencies,
print vendors, web providers etc. It is job of the marketing department to reach customers,
investors and community to let them know about products and planning because they are only
help in creating an image which represents a company in positive and negative term.
Next are responsibilities of marketing functions for growing more revenue, increase
market share and contribute to IKEA's growth and development. A company without marketing
department cannot earn and increase its sales. There are many key responsibilities of a company
which should be handled especially by the marketing department.
In a company, there are various types of marketing department i.e. advertising,
publications etc. Each person is liable to its responsibilities and completes it on time. To
establish marketing strategies, it is necessary to come close to customers in order to find their
needs. IKEA also creates surveys and keep information to sales team and customer support
which helps to redirect the marketing strategies in future. They also establish channels and social
networks to understand the needs of user better. It is important to know the position of a
company and about its rivals that is why IKEA always keep its eye on selling that which product
sold more and also identify its mistakes in order to overcome from it.
There are many people who work with an objective of a company and their contribution
towards company makes it stronger and sustain on its own position. IKEA always surprised

customers by their innovations and attract more customers. The marketing department of a
company works on new promotions, programs and should improve more to convert the message
and actions of customers.
IKEA is a company which started its business with limited people but now there are
around 150 people engaged, and are always trying to achieve the targeted goals and objectives. It
does not matter that other departments are complete their responibity or not, if marketing
department will fail then the entire system fails. That is why marketing functions have their
importance in every small and big organizations. Marketing department should know the
behaviour of user and customer's feeling and having more contact with them help to improve in
sales process and maximizes the profit. IKEA also plan for next year activities and this
marketing department is able to plan the next year's budget to perform well. As these activities
are one time investment of time, money and efforts.
Every action of IKEA is checked whether they meet the target objective or not. IKEA
also makes strategic plans to increase its sales and to do so it draft a document in every month to
know the actual position of a company, also takes important actions to know strengths,
competition and target markets.
P2. Different key roles and responsibilities of marketing related to IKEA
Roles and responsibilities are generate to increase the scope in an organization. In IKEA,
rules are made to follow and the employees who work there are keep follow rules i as they are
not so tough but it help them to complete the need and target of a company. The role of each
department is unique and has its own importance and also helps to sustain in growing world.
These roles and responsibilities may affect the performance of IKEA such as:
Strategy: being a senior manager of IKEA, the main responsibility for setting marketing
strategy with overall company strategy and objectives. It may help in maximizing profit and
increase the volume of sales and share in specific market sector. For example, to enter a new
sector and opens new channel then marketing team consults with management before planning.
These strategies help to widen the organization and by taking right decision on time will help to
attract customers and increase its sell power. Strategic planning will help to plan for future also
as this may affect the upcoming activities which may influence the performance of IKEA.
Marketing Research: it is a key responsibility of IKEA. As research helps to identify
opportunities and understand customer's needs and priorities (Pike, 2015). Through marketing

research, the manager can know strengths and weaknesses of a company so they can take legal
action in order to widen business and let it towards more profit. Through research process,
company can beat its weaker rivals and add more customers in their business to increase the
volume of sales. The manager of IKEA can read out all industry reports, survey, market data on
websites or by contacting more customers and get to know the market and customer's need and
adopt many new technologies to their business in order to gain more profit and take business into
further level of success.
Product Development: the department works with internal and external product
development team to develop new product and replace or improve existing one. This department
of IKEA determine the sales of existing product and identify the gap range in terms of price and
helps to reduce those gaps, this will help to add more new products on the store and creates new
brand image in front of customers (Akbar, Omar and Wadood, 2017). As marketing team
provides information related to new product and this product development department help to
improve their product and add new innovations according to needs of customers. Then marketing
department sets prices and then launch a product into market and collect reviews from users.
Communications: IKEA plans different campaigns and develop communications
material to promote products and services to customers. Remaining budget will help to plan on
advertisement campaigns, develop e- mail marketing programs, promotions on website; these all
plans are done to ensure the safety related to product and gain trust of customers. IKEA is a
trustworthy company and all these programs are done to develop positive image among people.
It also writes press notice related to launching on new product, company brochures, and product
data sheet and customers newsletter (Uksumenko, Kuzmicheva and Vorozhbit, 2017). Overall it
completes all communications level for launching new product. It also designs the promotional
material and if the department may have skills they may appoint advertising agencies or firms to
produce work. For Better communication with employees will help in fast running of product
and maximize sales volume.
Sales Support: there is a link between sales and marketing departments function, if
coordination is good it will help to improve the sales performance and boost up the growth.
Marketing department provide sales team running advertisement such as coupon or telephone
number and also encourages visitors to fill full details in the website in return for a free
newsletter or special report (Pappas, 2017). This idea will definitely help in selling and adding

new innovations in their product according to customer’s feedback. Marketing function of IKEA
also prepares presentation for promotion of new products to customers in order to let them know
about new offers and stocks.
Events: organizing events is also key marketing function of IKEA. It organizes
exhibitions, seminars, sales conferences and many more in order to attract more customers.
These events are done to promote their products on wide variety of area and to get success in
marketing field. Through events, a company may know the actual needs as they directly interact
with customers (Holbrook, 2018). Through displays, and presentation, marketing department of a
company easily knows the basic requirement and if the events are successful then the owner of
IKEA can identify the sale of product in future. These events are done to get people aware
related to the product and keep them close to users who continuously buy their product which are
home appliances, kitchen appliances and furniture.
TASK 2
P.3. Presenting different ways in IKEA using marketing mix (7P's) to achieve business
objectives
As IKEA is online retailer company and it provides services to all types of people that is
why it uses 7 P's of marketing that is product, price, place, people, physical evidence, promotion,
and process. These seven factors are interlinked to each other and help in growth of a firm and
achieve its target while other company is only based on product firm so they may use 4 P's only.
IKEA uses all seven factors and it affect the performance of a business such as
Product: there are 9500 products and IKEA launches 2500 new more product in a year.
These product are design in house with well contracted designers. It promotes the idea of
innovative designs will other firm did not. The product can be examine by its five dimension
design: form, quality, functions, sustainability and its low price (Service marketing mix.2018).
These five features are not given by any other company that is why IKEA is differ from all other.
Place: it is multi channel self retailer company who offers online and offline products
with such a low price while Barrel did not. IKEA operates 340 stores in 28 different markets in a
world. It also sell its product online to the target customers while Barrel did not. It has 22 pick-

up points in 11 countries, 41 shopping centres in 15 countries and 38 distribution sites in 18
countries.
Price:it uses it low cost price from other its rivals because its main aim is to make more
contacts with people and provide them product with affordable price. According to survey done
in 2007, it was found that IKEA offer products in such a low price while other companies did not
(Okumus and Cetin, 2018). Its home improvement and furnishing chain is able to maintaining its
low price and it also help to maximizes its sale and at the end help to increases its profit.
Promotion: IKEA brands is based on the concept of home furnishing products at low
price. Its promotion includes advertising, sponsorship, newspaper, magazines etc. recently,
campaign include the IKEA 'Be Happy Inside' which help to promote its kitchen appliances. It
also advertise on social media in order to attract more customers. Some advertisement also affect
negative on the customers but it does not mean IKEA offers wrong, it have trust worthy people
in its list which always help to increases its sale.
People: IKEA is based upon strong relationship with their customers and their
satisfaction. According to annual report 2011, it was found that IKEA launched many energy-
saving alternatives to light bulbs. It also offers smart kitchen appliances and home accessories
with eco- friendly solutions like water saving taps and household waste ready for recycle, while
other companies did not. IKEA also makes
Process: it is a home based furniture industry which makes its own product and it uses all
home products only. The whole process of IKEA is so simple, firstly customers go to store,
select a product, order it and then collect it (Stern and Porr, 2017). This is all part of low pricing
and other companies did not do this. It also offer online business where customer did not go
anywhere and can order its favorite item and get it at home immediately or within a day.
Physical evidence: many product of IKEA are eco- friendly and such as solar power.
Physical evidence of IKEA is very large. They are out of country or town and offer huge amount
of furniture, home accessories and kitchen appliances in bulk. But same things are not offer by
its rivals (Hugos, 2018). These stores must have large space for car parking, well equipped with
restaurant, space to move here and there and should use latest and new technologies in their

product. IKEA uses all its innovation in their product and also take feedback from the customers
in order to improve on its product.
With the help of above seven Marketing P's IKEA is counts one of the largest leading
online retailer but on the other hand Barrel and Crate are also retailer shop but did not use 7 P's.
They use 4 P's to attract the people and did not offer product in such low price as IKEA offer.
They also did not offer many products in same shop that is why not prefer by people and the
market position is also not high as compared to IKEA. This all above features make IKEA differ
from others companies or its rivals.
P4 Marketing plan for IKEA
PESLE Analysis
Political: Existence of political instability in UK have led to affect the overall profitability of
IKEA. Due to increase in the interventions from the side of government on import and export
have also affected the overall profitability of the organization as well. Various potential barrier in
the functioning of the organization has greater impact on its revenue aspects.
Economic: Economy plays an important role in determining that whether adequate amount of
profits will be generated by the company or not. there are various factors that can ultimately
affect the organization (Kim, and Ko, 2012). Some of the factors include, fluctuation in currency
rates, increased barriers in bank, increase or decrease in the interest rates, situation of inflation,
deflation or stagnation in the country. Improved employment aspects in UK have helped in
gathering adequate number of workers for the company being established in the country.
Social: Constant changes in the taste and preference of the customers also helps in deciding that
whether a particular product will actually be preferred by them in the near future or not. it can
also have greater impact on overall production and supplying aspects of IKEA as well. Hence, it
can be stated that social aspects have greater impact on the functioning of the organization.
Legal: Changing dynamics of law in the country also affect the functioning. Brexit is one major
concern that IKEA may be facing in UK.
Environment: Change in weather or atmospheric aspects can have greater impact on overall
delivery aspects of the company. Investing in CSR is an important aspect that has been acting
positively for the organization and there is adequate reduction in operational cost as well.
SWOT Analysis

Strengths: The biggest strength of IKEA is that it has been able to present clear aim and
objectives of the business which helps the other individual of the organization as well to work for
its achievements. It has clear concept which has appropriately being translated in its array of
products offered by it as well. IKEA is involved in measuring its strengths with the help of
metrics. It uses various key performance indicators that helps in analysing whether the
organization is performing well or not. It helps in building long term relationships with the other
suppliers and investors that can perform together with the aim of generating higher amount of
profits.
Weakness: IKEA has its operations in various countries with high scale output and large scale
set up. It becomes difficult for the company to keep its benchmarking and quality standards
similar at each and every location. Hence, control of quality is the core weakness attached to the
functions of the company. Another weakness is that the organization is quite obsessive regarding
cost leadership which have a major impact on overall quality on the products offered by it. There
are other environmental concerns as well where the organization has to face challenges in the
communication and delivery channels. It ultimately has greater impact on overall profitability
aspects of the company as well (Castronovo and Huang, 2012).
Opportunities: The main opportunity that is available with IKEA is related to expansion. There
are still various countries where IKEA have not been able to develop or expand its set up to those
nations. The rise in ethical consumers can help in ensuring that the services that are offered by
the company will be able to attract maximum number of people towards it. Hence, there are
various untapped market that can then be tapped. It will help in generating effective amount of
profitability out of it. Biggest opportunity available to the organization is related to cost
leadership where the organization can single minded focus on cost rather than focussing on other
factors of the organization so as to attract maximum number of customers towards it.
Threat: Since, IKEA is a low cost business model, it can easily be copied by the other
organizations. It is due to this reason there is high amount of competition available in the market
affecting the overall profitability of the business as well (Berthon, 2012). Hence, it is important
for the company to come up with newer strategies that can help in enhancing the overall
existence of the organization in the market for larger period of time. Another advent threat
available for IKEA is related to increase in internet and online shopping which has led to loose

the significance and profitability of Brick and Mortar stores. The organization must plan to
increase its presence in the online market as well.
Segmentation, targeting and Positioning
 Segmentation: Segmentation refers to dividing the overall population in certain groups
based on various common traits and characteristics. Hence, region for establishment that
has been chosen by IKEA is Europe, America, Asia, Australia and Russia
 Targeting: Males and females belonging to the age group of 20 years to 65 years will be
targeted for the products that are actually offered by it.
 Positioning: Asian citizen tend to require unique, low cost as well as innovative
furniture. Hence they will be targeted wit the products that are offered by IKEA.
Marketing objectives
 To increase the number of customers by 20%.
 To increase the coverage of cities by 15%.
 To enhance overall sales leads by 25% in comparison to that of last year.
 To involve with the customers through direct mails with at least 3 mails in a week.
 To increase promotional activities by 10%
 To increase overall sales of the company by 18%
Financial budget for IKEA
Activity Time Duration Total Cost
Radio Promotion 60 second ads
throughout 1 year
between Monday to
Sunday
£10400
Billboard Publicity 6 months £8750
Magazine promotion 6 months £36720
Newspapers 2 year £32019
Google Marketing 3 year £1060
Email Advertising 1 year £1010

Web Promotion 1 year £1250
500 Direct Mail
Letters
1.5 year £2500
Website Design One Time £2000
Total £97609
Marketing tactics
 Number of cities covered
 Overall congestion in the network
 Increase in overall number of employees
 Availability of network
 Overall increase in sales
 Overall increase in revenues
 Overall service performance
CONCLUSION
From above report, it is concluded that marketing is an essential plan for every
organization because this is the only way to interact with customers directly and contact them.
The above report deals with marketing planning and their impact on IKEA's performance. The
company take many steps and organize activities to create customers value and managing
customers relationship because marketing functions capture the values from people in the form
of sales, profit, and customers loyalty as IKEA is a a trustworthy company who always takes
care of users needs and see the consumption level in order to know the production level.
This report also shows roles and responsibilities that directly affect the performance level
of a company and helps to widen up an organization. It also shows the marketing mix which
enhances the level of growth and development and helps to identify the criteria of people related
to their product.
The report also compares different ways by which it applies on marketing mix to the
marketing planning process to achieve business targets and objectives. It also explains and
evaluates basic marketing plan of an organization.

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Online
Responsibility of Marketing Departments.2018. Available
through:<http://blog.saleslayer.com/10-responsibilities-marketing-departments>.

Service marketing mix.2018. Available through:<https://www.marketing91.com/service-
marketing-mix/>.