Marketing Essentials: An Analysis of IKEA's Marketing Strategies

This report, prepared for a marketing essentials unit, provides a comprehensive analysis of IKEA's marketing strategies. It begins by defining the concept of marketing and its evolution, referencing current and future trends, and then focuses on IKEA as a case study. The report delves into various marketing processes, including the SOSTAC model, and outlines the roles and responsibilities of a marketing manager within IKEA. It examines the interrelation between marketing functions and other functional areas, highlighting the significance of the marketing department to IKEA's success. The report compares IKEA's marketing mix to that of its competitors and concludes with a detailed marketing plan, including suggestions for new products and services to enhance market share and customer base. The report aims to serve as a marketing analysis for IKEA, offering insights into its current strategies and potential future directions.

Student Name/ID
Number:
Unit Number and Title: UNIT 2 – MARKETING ESSENTIALS
Academic Year:
Unit Leader:
Assignment Title:
Issue Date:
Submission start date
Submission deadline:
Internal Verifier Name:
Learners Declaration: I certify that the work submitted for this unit is my own and
the research sources are fully acknowledged.
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1. Concept of marketing with reference to current and future analysis.......................3
2.Brief of different marketing processes...........................................................................5
3. The roles and responsibilities of marketing manager at IKEA.................................7
4.Interrelation among marketing functions and other functional areas.......................8
5.Significance of marketing department at IKEA............................................................9
6.Importance of inter-relationship between IKEA departments and marketing
department..........................................................................................................................10
TASK 2..........................................................................................................................................11
1.Compares the marketing mix of selected organisation with competitor................11
Marketing mix helps achieve business goals of IKEA:..........................................................14
TASK 3..........................................................................................................................................16
Marketing plan......................................................................................................................16
Marketing plan of IKEA:....................................................................................................16
CONCLUSION.............................................................................................................................22
REFERENCES............................................................................................................................23
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INTRODUCTION
Marketing essentials is the platform where individuals and organisations interact
with each other and create value of relationship. The report will discuss the concept of
marketing with reference to correct and future trends of marketing. The study is based
on Ikea which is leading furniture retail firm. Further, the study will focus on value and
importance of marketing role which is a crucial part of business. On the other hand, it
will outline comparison of marketing mix which will provide understanding over
company’s products, pricing, promotion and place strategies. Besides this, marketing
plan will be discussed which will comprise new product and services of IKEA to increase
market share and customer base.
This learner has been chosen to work as assistant marketing manager at IKEA to create
a marketing analysis report.
TASK 1
1. Concept of marketing with reference to current and future analysis
Marketing:
Marketing refers to the set of activities which are associated with shopping for and
selling of a product or services. It consists of advertising, selling and handing over
merchandise to the people in all over the world. Marketing departments attempt to get
the attention of target patrons using slogans, packaging layout and trendy media
publicity (Malhotra, Birks and Wills, 2013). Marketing concept describes the
philosophies through which company satisfy the needs of customers that eventually
benefits the organisation. There are five different concepts upon which company
depends namely:
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 Production Concept: Production concept focus on producing the products in
effective and efficient manner. currently IKEA is producing products through
advanced technology, further in future they are planning to manufacture products
through robotic system that produces goods in huge quantity in a lesser span of
time.
 Product Concept: It focus on production of products according to the customer
tastes and preferences. In present era, IKEA is using door to door survey
methods to evaluate the expectations of customers, in future they may be
planning produces products by conducting online survey regarding the
requirements of patrons (Lamb, Hair and McDaniel, 2011).
 Selling Concept: This concept focusses on increasing the sales volume.
Currently, IKEA is selling the products through online platform though the process
is slow, thus they are planning to reduce the process by delivering the product on
the same day.
 Marketing Concept: This concept focusses more on promoting of product
through different strategies. Presently, IKEA is promoting their products through
social media platforms, moreover they are planning to promote their products
through chat bots and video marketing in future era (Pike, 2015).
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Illustration 1: Marketing concept
(Source: Pike, 2015)

 Societal Concept: This concept focusses on well-being of society as whole.
Currently they are producing products through various environmental practices,
though they are planning to reduce deforestation and carbon footprints by using
organic and user-friendly materials for their production in future time period.
2.Brief of different marketing processes
Marketing planning is a systematic way to formulate advertising and marketing
techniques. Thus, Marketing plans and processes enables the company to evaluate
overall performance, increases the strength, reduce weaknesses and threats and
eventually open up new opportunities (Malhotra, 2015). SOSTAC is a marketing model
introduced in 1990 to frame market plans by PR smith. it is an acronym for Smith's six
fundamental analysis of advertising and marketing: situation, objectives, method,
techniques, movement and control which enables corporations get prepared for
advertising campaigns and permits better choice making and enhanced plans.
 Situational analysis – It refers to ''where are we now? ‘The Ikea has emerged
as an industry leader in the provision of affordable furniture for all the levels of
the society suitable for both office and home usage.
 Objective – The company's objective is to provide good design with variety and
quality furniture for those with limited financial needs. This objective kind of gives
Ikea's employers and employees a growing sense of direction. Further, marketing
objectives of Ikea focuses on targeting global customers with wide range of
product and innovation.
 Strategy – Its strategy is to design and develop products based on the needs of
its customers. Keeping the prices low and quality high is the key strategy of Ikea.
Sustainability has been the key strategy of Ikea. Further, marketing strategy used
by firm are Marketing mix which helps the business in outlining details about is
products, price, place, promotion, etc (Muralidharan and Raval, 2017). In
addition, the firm uses STP analysis with the help of which marketing team is
able to outline potential buyers of business.
 Tactics – Tactics used by Ikea to sell its product is quite impressive. Marketing
manager of firm targets the right demographics for selling its product in low rates
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with variety of designs and good quality. Ikea also elaborated its stores with
cafeteria which gained the popularity and emerged as a shopping destination for
customers.
 Action – Ikea built a global empire by selling its product at low cost with quality
of product and hence is now expanding its outlets in many other countries. Also,
its aim is to use renewable and recycled items by 2030 which will even motivate
other companies to follow its footsteps.
 Control – The final stage is to layout how Ikea plans to control and monitor the
performance of the objectives set by the company. To make sure Ikea is
continuing to retain its customers it keeps the track of all its customers and make
sure that customers are getting what they want and also to be stable in the
market they keep innovating their furniture to increase its sales and market share
as well.
Figure 2: PR sostac market planning/process model
(Source: Daniel Nilsson SOSTAC marketing model, 2016)
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3. The roles and responsibilities of marketing manager at IKEA
Marketing functions are way or path which we have to apply in our marketing to
come out with good effective results. Roles and responsibilities of marketing manager
are as follows-
 Market research: Before marketing of products or services, the role of marketing
manager is to perform research about market conditions to come out with a
rough idea regarding target markets. This helps the marketing team in outlining
potential customers of firm and their expectations from business. Gathering
information is a core responsibility of marketing personnel’s as it reduces the risk
of buyer’s acceptance.
 Setting Price: Taking decisions regarding price is a challenging task if marketing
manager decides to keep it low initially to attract customers. In this role of
marketing manager is to convey price preferences of customers to other
department of business in order to ensure implication of effective pricing strategy
(Eletxigerra, Barrutia and Echebarria, 2018). Responsibility of marketing
manager is to assure customers are satisfied with price offering of company.
 Developing plans and policies of marketing: The marketing manager of IKEA
helps in assisting top management regarding the plans and policies of an
organisation, like, market budget, STP analysis etc. Marketing manager of Ikea is
responsible for developing marketing direction in order to create brand
awareness and to reach maximum number of buyers.
 Coordinating business activities: The role of marketing manager is to
coordinating various activities like selling, purchase, warehousing, sales
promotion etc. Thus, its responsibility is to supervise and conduct these activities
in an effective manager.
 Customer service strategy: The role of marketing manager in IKEA is to frame
such strategies that provide new products to customers according to their
desires. Simultaneously its responsibility is to promote products at regular bases
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at reasonable prise to meet customer expectations (Gbadamosi and Yusuf,
2016). The customer strategy of marketing manager is also responsible dealing
with queries of shoppers at the time of marketing.
4.Interrelation among marketing functions and other functional areas
Marketing function of an organisation cannot exist alone. Therefore, it is vital to
describe how marketing connects with other departments inside the business
enterprise. Through interconnection company is able to focus on customer tastes and
preferences and accordingly they manage different departments.
 Marketing with Finance: All marketing plan includes a major financial
dimension. Budgeting and profitability analysis are key aspects of marketing
planning and control. Many of the marketing decisions are viewed as investment
decision (Afifi and Amini, 2019). The marketing department work with finance
department to ensure that there is adequate budget to meet the needs
promotion, distribution, etc.
 Marketing with Production: The relationship between marketing and
production go hand in hand. Where, , production capabilities determine the
number and type of products which can be marketed, and simultaneously a more
accurate prediction of sales forecast for each product and product line is
essential for efficient marketing operations. Based on the production capacity
and type of products ,marketing department targets its customers based on
demographics.
 Marketing with human resource: The marketing department needs to work
closely with human resource to ensure adequacy of skilled employees in team.
Marketing department collaborate with the human resource department in
developing job description, screening candidates and designing training
programs and incentive system specifically for the marketing team.
 Marketing with Information Technology: Marketing and information technology
department have a cordial relation between them. It is so because IT department
plays a crucial role in doing marketing (Dibb, Simoes and Wensley, 2014). Now-
a-days everything is going online so as the marketing system has gone online.
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Marketing of all the products online is possible only with help of IT department
only.
5.Significance of marketing department at IKEA
The Marketing Department plays an essential role in selling and promoting the
products of the business enterprise, thus, it has an immediate effect on profitability,
income and sales of company. further, Marketing helps the company in bringing balance
between customer desires and product offering by properly evaluating market trends.
 Marketing process includes various activities like branding, advertising,
promotion, targeting etc. It is really important aspect of business to maximise its
profit. It helps in increasing the sales and that lead to profit maximisation.
 Marketing plays an important role in distribution of goods and services to the
consumers to satisfy their wants. It helps in increasing customer base and
increase customer loyalty.
 Marketing plays an important role in increasing creativity and innovative ideas of
marketing managers as they work in dynamic environment where things changes
quickly, marketing helps them to cope up with the situations swiftly.
 Marketing plays an important role in increasing sales of the company. It
decreases the need of selling the product because if marketing is good
customers will demand the product (Holloway and Brown 2016).
 Marketing is valuable as it helps in increasing customer base and that lead to
increase in market share of the company. Marketing attracts the customers to
buy products and help companies to retain them for long run.
 Marketing role in Ikea is valuable as it helps in decision making with reference
changing customer needs. Every small decision affects business firms and that is
when marketing helps the business to take decision at right time and right place.
Further, it increases customer awareness with the help of marketing customers
know about the product and eventually try it.
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6.Importance of inter-relationship between IKEA departments and marketing
department
In any organisation to continue smooth flow of work without any grievances it is
necessary to maintain good relations between functional departments. Importance of
interrelationship between marketing and another functional department play a significant
role. Interrelationship between functional units is important for building trust between
different teams. It helps in managing proper communication and reduce the risk of error.
Departments ensure that information they are conveying to other departments are
reliable to help improve efficiency (Notta and Vlachvei, 2015). Further, Interrelationship
between functional units is important for managing better customer services. The
coordination and cooperation of functional units in organisations helps IKEA in
conveying appropriate information to customers to meet their expectations. Further, it
supports firm in maintaining good relations with buyers.
From the above discussion it can be concluded that Interrelationship between
functional area is significant for Ikea as it promotes coordination and sequential flow of
information among different departments like HR, IT, sale, etc. Therefore, good terms
among functional units supports coordination and proper relationship between different
department. Interrelation is important in Ikea because it reduces unnecessary conflicts
and build good relationship in between functional departments. resulting in smooth and
flexible environment in an organisation this practice by managers of different
departments maintains harmony in an organisation. Hence, communication of marketing
team with other functional unit in organisation assist the firm in outlining base of
marketing activities and its success with reference to changing organisational and
customer needs (Perry and Pyatt, 2015).
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TASK 2
1.Compares the marketing mix of selected organisation with competitor
Marketing mix:
The marketing mix is a set of actions and tactics that is being used by a company
for promoting their product and brand in the market. Marketing mix consist of 4 PS
which are Product, Place, Price and Promotion but nowadays it also includes several
other P's like People, Process and Physical evidence.
Importance of marketing mix for IKEA:
IKEA takes product, price, place and promotion into consideration when they
make plans for services and products to avoid mistakes and risks. IKEA has vast
product range. Its vast product range includes approx everything that a customer needs
to furnish their homes. It is important for them to satisfy their customer needs. Marketing
mix is important for Ike as it helps in defining its product range is also wide in terms of
styles. Further, it is significant because its suggest IKEA outline over its pricing strategy
by giving deep discounts. Elements of marketing mix are important to be analysed by
IKEA a sit helps the firm in determining product portfolio and needs of new product
development.
Elements of
7ps
IKEA TARGET
PRODUCT IKEA offers around 9500 variety of
products throughout the globe and
its products are designed via its in-
house, or interior designers. IKEA
follows the idea of democratic
design which includes: pattern,
quality, characteristic, sustainability
and low price.
Therefore, Ikea deals only in
TARGET is one of the leading
retail manufactures that operates
internationally. It provides all the
products which are crucial for the
everyday existence like
household products, fashion and
add-ons, pet meals etc. at lower
prices throughout the world.
hence, it deals in all the
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wooden furniture. They have an
objective to provide all the furniture
related products which includes
sofa, chairs, storage box rooms,
desks, mirror, kitchen cabinets etc.
merchandise inclusive of wooden
furniture.
other than these it also provides
pharmacy products in their stores
around the world to extend their
existing product line (Holloway
and Brown, 2016).
PRICE IKEA follows cost leadership
strategy through which they supply
the household or office furniture at
lower prices with higher quality.
Thus, they focus on cost control
method of supplying products. IKEA
uses flat packaging strategy which
increases the value of weight ratio
that reduces the shipping cost.
TARGET follows price-
differentiated strategy under
which they aim to keep the price
of product that no other store
would be capable to provide.
Further it provides products at
discounted costs along with
different offers like buy 1 get 1
free. TARGET aims to keep their
prices equal to other online retail
brands. Thus, they follow certain
pricing strategies to set their
prices.
PLACE IKEA has international distribution
network that operates with more
than 300 distribution centres in 50
plus countries. It offers around 9500
merchandise around the globe.
TARGET follows one-shop-stop
strategy under which they offer
diversified range of products
throughout the world with
physical stores or transactional
websites like target.com.
PROMOTION IKEA focuses more on its
advertising and marketing sports.
They make use of different
marketing tools like TV, prints, online
ads etc. (Notta and Vlachvei, 2015).
TARGET uses the phrase i.e
"expect greater, pay less" which
symbolises expect higher quality
products at lower price. They use
many promotional techniques
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