IKEA Marketing Strategies: Target Market, Segmentation & Marketing Mix

This report provides a detailed analysis of IKEA's marketing strategies, focusing on the target market, segmentation, and marketing mix. It begins with a recap of IKEA's business operations and vision, emphasizing its commitment to providing affordable home furnishings. The report then delves into IKEA's segmentation strategy, considering geographic, psychographic, and demographic factors to identify potential customers in the Australian market. It highlights IKEA's differentiated targeting strategy, focusing on individuals aged 22-27, youngsters, students, professionals, and middle-class individuals in urban areas. The report examines IKEA's positioning as an international leader in the home ware and furnishing retail chain, emphasizing its value-based positioning strategy. Furthermore, it analyzes IKEA's marketing mix, including product offerings, pricing strategies, distribution channels, and promotional activities. Recommendations are made to enhance IKEA's marketing efforts, such as focusing on online channels, print media, seminars, and campaigns to strengthen its brand image internationally. The report concludes by emphasizing the importance of people management, process optimization, and physical evidence in achieving business success in the Australian market. Desklib provides access to similar solved assignments and past papers for students.

Running head: Principles of marketing
IKEA
Principles of marketing

Principles of marketing
Table of Contents
Executive summary.....................................................................................................................................3
Recap of IKEA...............................................................................................................................................3
Marketing strategies (Current and recommended).......................................................................................4
Target market, segmentation and positioning strategy.............................................................................4
Marketing mix.........................................................................................................................................5
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8
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Principles of marketing
Executive summary
Marketing plan is a vital and most significant part of each and every company to augment
profitability and flourish the business operations in the international market. It is a continuation
part of assignment. In assignment 1, SWOT analysis, pestle analysis, porter five forces analysis
and competitive factors had been considered that are needed to initiate or implement the
functions and operations in the global market. The business operations and activities of IKEA
had been discussed in assignment 1. In this part, target market, segmentation and positioning
strategy will be considered because STP strategy helps in achieving desired long term objectives
and targets. In second phase, the emphasize will be given on the marketing mix that are essential
and significant part of effective and unique marketing plan. Without marketing mix, the
company cannot implement business activities and operations successfully. IKEA is one of the
leading groups that is well known and famous for its home ware and furniture products. The
paper further depicts that how IKEA makes innovative marketing plan to expand and flourish the
business internationally.
Recap of IKEA
IKEA is a home furnishings corporation which is formed in Swedan in 1943, by Ingvar
Kamprad (Ikeafoundation, 2018). IKEA believes that home is a significant and effective place in
the world and kids its most vital and dynamic people. The main vision of the firm is to create a
better regular life for many people by rendering ample of home ware and furniture products to
the customers at lower price as much as possible. Recently, the company is seeking two
outstanding and effective individuals to join climate action portfolio that are committed to
generate a lasting change. It is analyzed that the company has a team of subordinates who engage
and work closely and effectively with partners to build, handle and communicate company’s
sessions and seminars. The subordinates are based in offices in the Indian and Netherlands
(Ikeafoundation, 2018).
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Principles of marketing
The good and effective cause programs and campaigns in IKEA stores and centers give
subordinates and consumers a good opportunity to work and engage with partners work
effectively and directly. In today’s globalization world, the company is a biggest and leading
furniture retailer, recognized and famous for its Scandinavian style. The company carries approx
9500 products including accessories and home furniture. These several products are available in
all the company’s stores and key target audience can order online through IKEA’s website. In
UK, the company has approx 18 stores who provide innovative and attractive products to the
customers around the world. In today’s modern world, by producing innovative furniture and
home ware products, the firm has been able to compete with rivals in the international market
(Ikeafoundation, 2018).
Marketing strategies (Current and recommended)
Marketing strategies are integral part of IKEA to cater products and services in the
international market. If the company wants to increase and enhance the sale in Australia then it
marketing strategies need to be considered effectively. Without marketing strategies, it is quite
difficult to attain competitive edge in such market. The marketing strategies for IKEA are
presented below.
Target market, segmentation and positioning strategy
Segmentation is one of the leading and effective approaches that used by IKEA while
initiating the business in Australia. Segmentation is done by IKEA after considering various
areas such as geographic, psychographic and demographic (Bowonder, Dambal, Kumar &
Shirodkar, 2010). These segmentations can be used by the company to divide the market for
catering the furniture and home ware products to the customers in all over the world. By using
segmentation strategy, the company could able to identify and analyze the preferences, choices
and needs of the customers for selling the products (Dudovskiy, 2017).
To attain maximum goals and objectives, it is needed to identify potential and effective
customers in Australian market. Targeting includes selecting specific groups identified and
measured as a result of segmentation consumers for the brand. It shall be analyzed from the
various studies that IKEA uses differentiated targeting strategy to fulfill the needs, wants and
desires of the customers who seek for the value for money furnishing solutions (Burt, Johansson,
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& Thelander, 2011). The people who are between the age group of 22 to 27 years would be
considered the target market of IKEA. Along with this, the company also considers youngsters,
students, professionals, and middle and working class people who buy the products for fulfilling
the needs and requirements (Edvardsson & Enquist, 2011). In addition, the target market for the
company will be urban areas that have an increased population of millennial. By implementing
targeting strategy, the firm has been able to increase and enhance the sales, growth and
development internationally ( Bhasin, 2018).
IKEA is a positioned as the international leader in the home ware and furnishing retail
chain. It has been studies that the strongest and dynamic sales and revenue are coming from
warehouse locations and catalog shoppers. It further states that distributors are limited so there is
more one on one with the customers rendering IKEA a competitive benefit (Edvardsson &
Enquist, 2008). The company is positioned with exporting, direct investment and franchises. The
positioned of the organization adds its competitive benefits and strengths for struggling with
competitors in the global market. To position the products, the organization promotes and
improves diversity and equality throughout the whole firm that gives it an additional layer of
competitive benefits to management of the company and strength in the international market. It
showcases that IKEA uses value based positioning strategy to cater the products in the
Australian market (Bhasin, 2018).
Marketing mix
The current and recommended marketing mix for IKEA has been detailed below.
Product: IKEA is a leading and growing retail chains across the world. The company offers
ample of products such as eating, desks, mirrors, beds, chairs, cooking, clothes baby and children
products, decoration, and safety products. In addition, the company provides storage furniture,
sofas, kitchen cabinets, TV, tables, rugs, and textiles (Chaffey & Smith, 2013). Innovative and
effective product strategy such as brand recognition shall be considered while exploring and
implementing the business in Australia. By initiating this strategy, the organization could able to
struggle and handle the competitors globally. It shall be observed that IKEA products must be
associated and interconnected with no-frills simplicity to maintain its cost leadership business
strategy. Along with this, the Corporation shall promote the idea of democratic design. In this
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Principles of marketing
way, the firm can attract and retain wide range of key target audiences internationally
(Dudovskiy, 2017).
Price: IKEA struggles with rivals and local supermarkets by using pricing strategy. Low prices
constitute the company vision, concept and business opinion. The company makes furniture and
home ware products at reasonable prices to increase and boost the sale and revenue in the new
market. It is recommended that IKEA shall use low cost strategy to manage operational details
and attract various Australians in the international market. Apart from this, psychological pricing
strategy can also provide a great opportunity to the firm to increase and improve the sale in the
foreign market. By using low cost pricing strategy, IKEA could able to sustain its low prices due
to the strong economies of scale. It should offer the products at low cost so that people would be
able to buy them. It is explained that the company shall use price point perspective to sale the
majority of its furniture products and services internationally (MBAskool, 2018).
Place: It is seen that IKEA uses an effective and excellent distribution and place strategy to
handle and overcome the competitors in the global market. It shall be stated that the firm has a
strong and unique distribution network that helps in attracting wide range of people in the new
country. Today’s, the organization has approx 25 distribution centers and it performs business
functions and activities in more than 50 countries around the world. There are approx 9,500
products sold in the market by the company (MBAskool, 2018). It is suggested that IKEA should
transform products from suppliers to company’s stores internationally. This will help in
minimizing the handling costs, reducing carbon footprints and declining transport. As a furniture
retailer, the company should use online channels extensively to sell and promote its products to
the key target audience across the globe (Dudovskiy, 2017).
Promotion: It is analyzed that IKEA uses various promotional tools and methods such as online
ads, TV, print, and billboards to promote and improve the product quality in the competitive
market. The company has introduced a UK wide advertising programs and campaigns to
encourage its furniture and home ware products internationally (Lee & Carter, 2011). The main
idea behind the campaign is that a social cluster leads to a dispute or conflict which could be
ignored according to the company (Hellström & Nilsson, 2011). It is noted that IKEA shall
highly and extensively focus on the online channels, print media, seminars and campaigns to
make a strong position and brand image internationally. Direct selling and online advertisements
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Principles of marketing
must be done by IKEA to offer various solutions and sale ample of furniture products globally
(MBAskool, 2018).
People: An overwhelming study reveals that IKEA provide favorable and dynamic working
environment and culture to people to improve their performance and effectiveness in the new
market. The worker culture at IKEA is based on the fun, togetherness and enthusiasm. Customer
satisfaction and accountability are main core values of the firm. It is recommended that the
company should deeply focus on the people management to run business successfully and
smoothly. There should not be any discrimination and injustice on the basis of ethnicity, religion
and race (Dudovskiy, 2017).
Process: The Company uses tremendous business processes and approaches to handle and
overcome the rivals internationally. IKEA follows a clean environmental slogan and process to
grow and survive business internationally. The organization shall focus on the process, code of
conducts and ethics to build and improve the effectiveness and efficiency in the Australia
(MBAskool, 2018).
Physical evidence: It has been found that IKEA has approx 350 stores in more than 50 countries
around the globe (MBAskool, 2018). Thus, physical evidence shall be placed or considered by
the company while selling the products. The firm should use effective packaging strategy along
with this, documentation must be done to capture entire key target market segment (Dudovskiy,
2017).
Partnership: It is seen that IKEA Company cooperates and communicates with trade unions,
and companies to develop a dynamic image and to maintain a positive environment. The
company should more emphasize on the partnership to build and improve reputation in the
Australia. Through partnerships, the company can improve and save the rights and interests of
the children and it can also minimize the negative impact of CO2 emissions (IKEA, 2018).
Conclusion
It is concluded that IKEA is a fostering and growing brand in the market that is rendering
innovative furniture products to the key target audience. The above analysis reveals that IKEA
should use differentiated strategy to satisfy the wants and preferences of the customers. At the
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end, marketing mix is suggested to implement the business functions and actions in the new
market.
References
Bhasin.H.,(2018). Marketing strategy of IKEA[Online], Retrieved from
https://www.marketing91.com/marketing-strategy-ikea/
Bowonder, B., Dambal, A., Kumar, S., & Shirodkar, A. (2010). Innovation strategies for creating
competitive advantage. Research-technology management, 53(3), 19-32.
Burt, S., Johansson, U., & Thelander, Å. (2011). Standardized marketing strategies in retailing?
IKEA’s marketing strategies in Sweden, the UK and China. Journal of Retailing and
Consumer Services, 18(3), 183-193.
Chaffey, D., & Smith, P. R. (2013). eMarketing eXcellence: Planning and optimizing your
digital marketing. Routledge.
Dudovskiy.J.,(2017). IKEA segmentation, targeting and positioning cost conscious customers
[Online], Retrieved from https://research-methodology.net/ikea-segmentation-targeting-
positioning-targeting-cost-conscious-customers/
Dudovskiy.J.,(2017).IKEA 7Ps of marketing [Online], Retrieved from https://research-
methodology.net/ikea-7ps-marketing/
Edvardsson, B., & Enquist, B. (2008). Values-based service for sustainable business: Lessons
from IKEA. Routledge.
Edvardsson, B., & Enquist, B. (2011). The service excellence and innovation model: lessons
from IKEA and other service frontiers. Total Quality Management & Business
Excellence, 22(5), 535-551.
Hellström, D., & Nilsson, F. (2011). Logistics-driven packaging innovation: a case study at
IKEA. International Journal of Retail & Distribution Management, 39(9), 638-657.
IKEA.,(2018). Our partnerships[Online], Retrieved from
https://www.ikea.com/ms/en_JP/about_ikea/our_responsibility/partnerships/index.html
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Ikeafoundation.,(2018). About us[Online], Retrieved from
https://www.fastcompany.com/company/ikea
Jonsson, A., & Foss, N. J. (2011). International expansion through flexible replication: Learning
from the internationalization experience of IKEA. Journal of International Business
Studies, 42(9), 1079-1102.
Lee, K., & Carter, S. (2011). Global marketing management. Strategic Direction, 27(1).
MBAskool.,(2018). IKEA Marketing mix (4Ps) strategy [Online], Retrieved from
https://www.mbaskool.com/marketing-mix/services/17066-ikea.html
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