MOD003507 - IKEA's Marketing: Principles, Practices, and Strategies

This report provides an analysis of IKEA's marketing principles and practices, focusing on the company's marketing mix elements in the UK over the past three years, including product, price, place, and promotion. It examines how IKEA reinforces its positioning through these elements, detailing the company's unique pricing strategy, product range, and promotional activities. The report also includes an STP (Segmentation, Targeting, and Positioning) analysis, outlining IKEA's segmentation strategy, target market, and positioning tactics. Furthermore, it discusses strategic decisions and relevant marketing theories applied by IKEA, evaluating the effectiveness of their marketing efforts, and promotional mix including advertising, public relations, sales promotion, personal selling and direct marketing.

Principles and practices
of marketing

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Marketing mix elements in UK operations to reinforce its positioning within the last three
years.............................................................................................................................................3
Marketing Mix of IKEA..............................................................................................................4
STP analysis of IKEA..................................................................................................................9
Strategic decisions and relevant taught theories in marketing efforts of IKEA..........................9
Effectiveness of Marketing Efforts............................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The marketing process is the important operation or function that are used for an
organisation. It is broader concept as it consists of research, design and development of product,
products or services promotion in the market. The marketing principles and practices are
connected and associated with the marketing ideas and thoughts which are used and operated in
business organisation to evolve and develop effective marketing strategies for business.
Principles of marketing are various promotional strategies that are designed for business
(Amoiradis, 2019). Practices and principles of marketing that are used by business for the
introduction of products or services to its customers of the company. Within this report, IKEA is
undertaken into consideration and its discussion is done to demonstrate the various prospects of
this portfolio within this report. This report also explains and discusses critical evaluation on the
use of various elements that are used in marketing mix by the company for business operations.
Moreover, this report also discusses various strategic decisions as well as various theories that
are used in marketing efforts of organisation in this portfolio. This report also does a critical
evaluation on marketing efforts and their effectiveness of IKEA.
MAIN BODY
About the company
IKEA is an organization established in Sweden and headquartered in Dutch as well as
considered as a multinational company involved in the process of designing and selling finished
kitchen appliances, furniture, among other products and home services (Behera and et.al., 2022).
The respective organisation also provides vintage dressing tables to modern kitchens, baby and
children's products, technological products, textiles and rugs, decoration and lighting products
and many more.
Marketing mix elements in UK operations to reinforce its positioning within the last three years
Positioning is known as the marketing concept that creates boundaries stating what the
business organisation is required for products and services for marketing. At the step that
involves positioning, IKEA and its marketing department develops a favourable impact and
influence on their customer-base and target market with their products and services. It consists of
various different elements that are included in marketing mix and it consists of product, place,
price, and promotion in it.

Positioning in products: Main aim of product positioning is completely supported and guided
by the marketing mix. The IKEA positions its products and services in the market according to
the needs and demands and expectations of market of customers. Marketing mix facilitates a
business organisation with making and also in services’ analysis that are given by company
along with the analyses of services that are offered by business organisation are in accordance
with the perceptions of customers or clients or not in the market (Grant, Wong and Trautrims,
2017). Then it uses to position services in same way of company.
Positioning in price: The tool of marketing mix performs and operates research in a large scale
that are connected and associated with pricing of products and services. The IKEA offers its
products and services at higher prices of superior quality. Therefore, they are positioned with
greater values of their services of the brand along with making no compromises in the services
and their quality.
Positioning in place: it is difficult for the business organisation to reach out to their customers in
the target market. The IKEA for this purpose, chooses the most effective and best suited
approach for reaching out in the market of customers. The marketing mix tool helps and also
facilitates the company in analysing and making of the various locations in which the business
organisation offers its services in the market. IKEA operates across United Kingdom for
analysing revenues and profits gets increased and also in the increase profitability within the
company.
Positioning in promotion: The promotional component or element of the marketing mix is
known as the advertisements and also the performance of promotional activities and functions
that are done together with the group of people in business. This marketing mix element helps in
identifying the target market of customers for IKEA and also in introduction of effectiveness and
efficiency within the promotional activities for business (Ike, 2018). IKEA has introduced and
developed a new marketing campaign in past three years, to encourage and empower the
teenagers with the age group of 16 to 18 years old.
Marketing Mix of IKEA
The marketing strategy of IKEA analyses the business by making use of the model of
marketing mix which consists of 4Ps. IKEA is an organisation that is founded in Sweden and is
headquartered in Dutch as well as considered as a multinational company that is engaged in the
process of designing and selling ready-to-assemble kitchen appliances, furniture along with the

other products and home services. The respective company is making use of such kind of tool in
order to combine the strategies and tactics for the purpose of fostering the brand awareness and
increasing volume of sales within the organisation. The marketing mix of IKEA is given as
under:
 Product: It is considered as a heart of marketing mix as all the operations of marketing
mix start with a product or a service. IKEA has a wide variety of products such as kitchen
appliances, furniture and other products and home services (Jobber and Ellis-Chadwick,
2019). The respective organisation also provides vintage dressing tables to modern
kitchens, baby and children's products, technological products, textiles and rugs,
decoration and lighting products and many more. The product range of this organisation
is about 10000 products and 2000 new products are introduced each year. The above
mentioned products of IKEA have further varieties as well as extensions as its product
list at organisation never ends.
 Price: IKEA has got a unique pricing strategy and its market share gets satisfied even
when they have to pay greater prices as the quality of the products of respective
organisation is being provided to them. The quality of product matches with the prices
that are being charged (Kliatchko, 2019). Prices are accurate and if compared to the
competitors then the products of this organisation have more affordable prices. Cost-
cutting approaches like flat packing get used by the company for minimising cost of
shipping. At the organisation, not only the prices are affordable but also freebies are
allowed at IKEA restaurants.

 Place: IKEA is a multinational brand and has its outlets throughout 30 nations and
generally the stores of the company are situated on outskirts of town for offering a hassle-
free environment to market-base for shopping. But in latest years IKEA has changes its
strategy and has adopted a new model for its stores which are located in towns and busy
streets (Malhotra, Nunan and Birks, 2017). Within such stores, a restricted range of
products are displayed. Stores of IKEA are designed in such a way that they will
persuade customers to stay more longer and spend more time there.
 Promotion: The company makes use of multiple channels of promotion in order to
market its products and services. The marketing strategy of IKEA is very successful as it
is original, distinctive and after all, it maintains a very clear value proposition (Palmatier
and Sridhar, 2020). Every idea is curated in a very careful manner for the purpose of
supporting the brand identity of organisation along with offering the best experiences to
its potential customers. Promotional channels that are used by IKEA include social media
platforms and the main tool used for improving its sales volume and brand promotion is
its catalogue. Both offline as well as online methods are used by company to market
brand (Marketing Mix of IKEA, 2022).

Promotional mix and activity
Advertising: It is concerned with the process of simulation of the demand of the products as
well as services within the marketplace with use of various tools and techniques. Advertisement
is one of the most important aspect of the business which helps to attract the customers towards
the company. IKEA is one of the multinational company that is engaged in the process of
designing and offering its products and services continuously (Pop-Micle, Stenczel and Oniga,
2021). This becomes significant for the management of the company to use effective
advertisement tools for promoting its products in the market. There are multiple types of
advertisements which are available in market and can be used by administration of organisation
like television advertising and many others.
Public Relations and Publicity: The respective organisation is considered as one of the growing
business of the world under which the public relations play a crucial part in its success. This is
significant for managers of organisation to develop better relations with customers that will
provide assistance to organisation in increasing its market-base. Publicity is related to unpaid
advertisement of the company which is done due to happening of any controversy by the media
coverage.
Sales Promotion: This is associated with those tool of the marketing under which the company
has provide free gifts and extra benefits on the sale of their product and services in the
organisation. It is one of the successful method of marketing which can be used by the
management of IKEA. The management of company can offer the gifts on first visiting of each
customer. This operation of the organisation increases the loyalty of customers towards the
company and is very crucial for the administrators to publicize their sales promotion scheme in
the marketplace.
Personal selling: It is one of the most important method of marketing whereby the company
employs various types of employees in the organization who reach the customers' homes and
advertise their products and services in front of their customers (Porral and Stanton, 2017). The
management of IKEA may also use this method to advertise their services. It is necessary for
them to hire a large number of employees and enable them to communicate the features of the
product. Proper training is provided to the employees so that different types of skills can be
developed in their personality.

Direct marketing: It relates to the market to which the management of the organization has used
mail services in marketing its product and services. It is very important for IKEA's management
to develop a list of potential buyers and use them in their marketing. These mail addresses may
be used by the Management to advertise the features of its products as well as the services it
provides to its customers.
STP analysis of IKEA
The model of STP stands for segmentation, targeting and positioning that helps the
organisation in the process of identifying the effective and best as well as most attractive target
market in order to satisfy the wants and needs of the prospective custoners. In relation to IKEA,
the three stages of STP model are discussed as below:
 Segmentation: Within this phase, the company divides the market into different
categories and segments that describe the potential growth as well as profitable,
actionable as well as accessible (QADRI, 2020). This includes different market segments
such as age, location, behavior, etc. With respect to IKEA, the company uses a mix of
age group as well as location segmentation strategy to target their potential market share
and meet their needs.
 Targeting: At this stage, the organization targets the best and most lucrative market
segments among the various segments of the segmentation stage. In terms of IKEA, the
company has targeted people in the age group of 18 to 45 years. It diversifies the
segmentation when it comes to customers with different tastes as well as preferences
 Positioning: It is the final stage of the STP model and helps an organization to
differentiate its products and services from its competitors which are available in the
market (ROGERS, 2018). In the context of IKEA, the company should use social media
platforms such as Facebook, Twitter and Instagram, digital marketing, offline marketing
through print media and many other promotional strategies.
Strategic decisions and relevant taught theories in marketing efforts of IKEA
Strategic decisions aim to provide a competitive edge to businesses and attempt to change
the overall direction as well as the scope of the organization. These decisions are important to the
organization as they help in creating a sustainable and healthy business environment. The
process of strategic decision making involves various steps that are taken into account by the
organization concerned to address the problems or issues within the business. In order to develop

the process of strategic decision making, the administration of IKEA is required to follow these
various steps which are given as follows:
 Defining problems: At this step, management of IKEA identifies problems which
occurred within workplace so that they can overcome such problem and gain competitive
advantage also.
 Collecting information: Superiors of company focus on collecting information in
relation to problems through making connections and realtions with stakeholders of
business such as customers, employees, shareholders, etc.
 Developing and evaluating alternative: Superiors of IKEA can develop and evaluate
alternatives to solve problems through taking suggestions from customers, manpower, etc
(Rosenbloom, 2021). After evaluating alternatives, managers of organisation analyse
those alternatives and se;ect the best one that suits their requirements.
 Selecting best operation and its execution: The selection of best operation is important
for excuting the most attractive operation. Superiors of company are needed to get all
members for executing strategic decisions as they can influence business activities.
 Monitoring: At this stage, administrators of IKEA are needed to control and monitor
strategies for verifying whether they are workimg effectively or not in workplace.
Marketing Theories
There are multipple theories of marketing which help in achieving organisational
aspirations and some of them are discussed as under in context to IKEA:
Porter's Generic Theories: Such theory gives competitive advantage to business and
mainly includes three strategies. The description of these three strategies are given as follows:
 Cost leadership: This stragegy allow managers of IKEA in enhancing profitability along
with an aim of minimising entire business cost which will provide competitive edge to
them and opportunity for increasing customers (von der Heidt, 2018).
 Differentiation: With such strategy, the company can differentiate its services from
those of competitors in marketplace. Organisation can adopt new technologies or making
alterations in their offering.
 Focus srategy: This strategy mainly focuses on minimising overall cost along with
differentiating services of IKEA from its competitors. Such strategy can be adopted by
respective organisation in chasing competitive advantages over rivalries in marketplace.

Ansoff matrix helps in analysing various marketing strategies for chaiving the growth of
business and facilitates organisation in decision-making regarding actions which can be taken
acoording to market scenario. The different strategies of this model are described as below in
context to IKEA:
 Market Penetration: In relation to IKEA, company's existing products are introduced in
existing markets for increasing customer-base and for this organisation has to adopt new
strategies such as promotional strategies, minimising products price, etc.for increasing
market share.
 Product Development: As per this strategy, new products of IKEA are introduced in
current markets (Zaveri and Amin, 2019). Organisation's administration must concentrate
on research and development for increasing quality and variety of products and also
assists in knowing customers perceptions and designing innovative solutions.
 Market Development: IKEA can enter into new markets with current products and can
increase market locationally. Through using advanced technologies, company can follow
such strategy for business expansion in new market.
 Diversification: According to this strategy, IKEA can enter with its new products in new
markets but such strategy includes greater risks however, risks can be lessen through
diversifying its products from its competitors that helps company in chasing competitive
advantage (Micheaux and Bosio, 2019).
Effectiveness of Marketing Efforts
IKEA make marketing efforts to enhance products awareness to its prospective customer-
base for enhancing profitability and their effectiveness is given as under in relation to IKEA:
 Marketing reach expansion: Through making such efforts, company can enhance its
buisness in new locations along with customer recoomendations and also can introduce
effective, attractive and beneficial products.
 Sales performance: This marketing effort facilitates in enhancing products that lead to
increment in profits and gives positive indication of organisational marketing efforts and
as such effort, IKEA is needed to consider changes in its sales through price deviations.
 Customer responses: It is reaction given by IKEA to queries and activities of customers.
Managers of company can take responses by customer click and online mode that permit
them in revealing performance of organisation (Firsanova and et.al., 2021). Online efforts

help the managers of company by providing business opportunities through getting
responses from customer-base.
CONCLUSION
From above explanation of report, it has been concluded that principles and practices of
marketing are concerned with various business activities adopted by organisation for enhancing
market share. This report has been included marketing mix along with positioning of its different
elements. Furthermore, there has been an explanation on strategic decisions concept in which
multiple steps of taking such decisions have been given. Moreover, this report has also been
included different marketing models that help organisation in chasing competitive benefit over
competitors. Additionally, marketing efforts effectiveness has been covered in this report that
facilitate in attaining business growth and success.