IKEA: An Analysis of Marketing Essentials and Strategies

This report provides a comprehensive analysis of IKEA's marketing essentials. It begins by identifying the key roles and responsibilities of the marketing department, including market identification, product development, brand management, campaign management, social media management, media liaison, market research, and sales supervision. The report then explores the impact of these roles on organizational performance, examining the relationship between marketing and other functional units such as production, finance, and human resources. Furthermore, the report delves into IKEA's marketing mix, detailing the strategies employed in product, price, place, and promotion. Finally, it outlines a basic marketing plan for IKEA, summarizing the company's approach to achieving its organizational objectives. The report concludes with a synthesis of the key findings and their implications for IKEA's marketing success.

MARKETING ESSENTIALS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key roles and responsibilities of the marketing of IKEA......................................................1
P2 Impact of roles and responsibilities of marketing in relation to performance......................3
TASK 2............................................................................................................................................6
P3 Marketing mix as per the marketing plans of IKEA.............................................................6
TASK 3............................................................................................................................................9
P4 Basic marketing plan for IKEA.............................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Marketing is one of the most important part of any business organisation. Its functions
help in boosting the sales of the company. Marketing functions involves various activities such
as promotions and advertisements that takes the product or service to the target market. In this
report the discussion will be on the essentials of marketing. This report will be dealing with the
marketing essentials of IKEA. IKEA is multinational company that deals with designing and
selling ready-to-assemble furniture, headquartered in Netherlands. They are the world's largest
retailer of furniture since 2008 (Campbell and Martin, 2015). This report will help in realising
the role of marketing and its relation with other functional units in the organisation. The project
also deals with the elements of marketing mix that the company have been utilising to achieve
their organisational objectives. Positive and negative influence made on macro environment will
also be demonstrated within the tasks of this report.
TASK 1
P1 Key roles and responsibilities of the marketing of IKEA
There are many responsibilities that are to be carefully fulfilled by the department of
marketing developed by IKEA, to perform all the functions related to marketing. There are
certain mission and vision on which a company operates, and marketing department of a firm
helps in taking the product or service to the customers by performing various functions of
marketing and promotions. For functioning effectively, the department has to develop strategies
and create tactics within it, by performing market researches and developing the products
according to the stakeholders, so that they can be communicated to support sales through various
techniques. Roles and responsibilities of IKEA's marketing department are:
 Identifying new market and customer: The marketing department of the IKEA always
identifies new customers. On the basis of their demands new markets are considered.
This is considered as an vital responsibility of marketing department. It helps in
increasing the growth of company.
 Identifying new products and services that customers needs: According to the
demands of the costumers, marketing department of the company should be present new
product into market. This can be done by identifying new products and services.
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 Developing new products: The department is responsible for launching new items at
regular interval. It helps the organisation for attracting maximum number of the
customers. It helps the organisation in expanding their business.
 Innovative approach: Department of the marketing should be able to implement new
and creative approach effectively. It provides competitive advantage to the company and
also helps to present unique image into market.
 Brand Management: Marketing department functions to portray the positive sides of the
company to define the company in the target market (Dibb and Simkin, 2013). They
also work to communicate the company's mission for which they exist in the market and
serve the customer. This will also help in getting more customers and other stakeholders
to get indulged with IKEA in the market. This is an essential function for the organisation
as it involves the creation of goodwill and image of the company. Conducting and managing campaigns: An ideal marketing department of a company
has to focus on the overall course of sales cycle that is takes place whole year long, so as
to to compare with the production. Then they develop sufficient materials that will help
in the communication to be done in the market accordingly (Raj, Walters and Rashid,
2012). They conduct campaigns that could help in communicating with the target market
about their product and services. The campaigns that involve social motives are mostly
chosen by companies to gain public attention. Managing marketing campaigns: It refers to the process through which companies are
able to develop marketing campaign. To implement this activity effectively, IKEA
considers five steps which include determination of objective, fixing the budget,
analysing and selecting agency, managing and monitoring. This helps the organisation in
achieving effective results in limited budget. Management of Social Media: Social media is emerging to be one of the best platforms
where the youth can be targeted for marketing. Social media sites like Facebook, Twitter
and Instagram are now utilized to the optimum to market the products and services that
IKEA have been providing to the target market. The company has been successful in
establishing their online shopping site which can be accessed by the customers from
home to see their range of furnitures and other home accessories that are availed to their
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door step once they complete the procedure. Therefore, updating social media is an
important duty for the company's marketing department so that the customers must gain
the access to the product and their online shopping site directly from the social platforms. Media Liaison: It is always a person from the marketing department who deals with the
media being a representative of the company. A member from the marketing section with
good communication skills is hold responsible whenever it is necessarily understood to
organise a press conference as to communicate with the media in case if any negative
information has been spread through rumours. The marketing department acts on behalf
on behalf of the company to answer the queries media have and they also provides
guidance to the employees in IKEA on how to respond if they are questioned by the
media.
 Conduction of Market Researches: The markets are to be clearly defined that whom the
services and products produced by IKEA are targeting and how can they utilize the
opportunities offered by the economy are a subject to decision which is done after market
research is being conducted (Garrigos-Simon, Lapiedra Alcamí and Barberá Ribera,
2012). These functions are a part of marketing section's responsibilities and it helps in
focussing on the particular segments within the market, who are actually in the need of
that particular product or range of products, so that it can be easily made available to
them. Market researches supports in deciding the features and specifications that is to be
added in the product, so that the targeted customers can make use of them appropriately.
 Managing distribution and supervising sales: In this step department should be
previously aware with the demands of users. It helps to effectively provide services to the
users. On the basis of total sales of the products company analyses the sales and purchase
products.
P2 Roles and responsibilities of marketing related to wider organisational context.
Marketing is a strategic discipline that can include most of the remaining activities that is
being performed within the business organisation and is considered as one of the most important
part of corporate strategies as per the information are communicated according the corporate
plans. The plans are prepared in such a way that all the needs of the customers will be met, as
they consider the quality of the product or service they provide it to their target market
(Thackeray, Neiger and Keller, 2012). Even after the departments being specially organised
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according to the functions they perform, the ideas of marketing are always kept in mind by every
departmental executives. Marketing plans are developed effectively by the department of
marketing, but every functional areas of IKEA is affected by the decisions that have been
influenced in that particular plan. Therefore, the plans of marketing are necessarily
communicated to other functional departments as they have to operate according to the strategies
and tactics mentioned in the marketing plan developed by the marketing section of the
organisation (Getz, 2012). All the functional departments have to work in coordination to
perform their responsibilities effectively to work as per the specialized marketing plan.
Marketing and production function: The production unit is dependent on the
marketing department as they have to coordinate with them for their functions of production to
make sure that:
 Researches and plans are efficiently performed for developing the products in such a
way that the needs of the customers can be satisfied in the futures. Researches help in
identifying the target customers and their needs that can be supportive in the
development and production of furnitures with added features and specifications, so
that the products can satisfy the ultimate needs of the customers with comfort.
 Items are manufactured in top quality raw materials, so that their quality and designs
shall specifically meet the desires of the target customer. The furnitures shall be
smoothly furnished and must be strong enough for performance. Their designs matter
because furnitures are a part of interiors and the customers prefer to keep their
interiors beautiful. Adding this features will help them successfully make sales of this
product.
 Marketing team also functions to generate the order volumes, so that the demand can
be met by proper amount of supplied products in the market (Gummesson, 2011).
They have to keep a check that whether there are order that are to be delivered, and
keep the production department updated about the demanded quantity in the market,
which has to be supplied by the marketing team with support of the operations
sections.
Marketing department are also seem setting deadlines for stretching the capabilities of
production department to manufacture the products. They expect the department of production to
complete their tasks soon so that they could start their marketing functions sooner to look
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towards the advantages of competition. The department which manufactures must positively
check the quality of products thoroughly so that the requirements of the customers are to be met
effectively.
Marketing and Finance function: Marketing department of IKEA has to be aware of
the finance they have being allotted for their marketing functions. Like all other departments
work with hands in hands, there are certain needs within the organisation due to which marketing
team has to work in coordination with the finance department, because of the following reasons :
 The budget of an organisation is always prepared by the finance department who are
specialized in managing the finance and monetary structure of the organisation. There
is particular amount that is grant for the marketing department for performing their
functions of marketing keeping the allotted money in mind (Jones and Rowley, 2011).
They have to perform their researches, distribution of products and its promotion
effectively, within this budget.
 The marketing team also have to report to the finance team regarding their
expenditures, and mention on what the money have being spent on along with the
details of the dealers and agencies they are consulting for their functions.
Finance department is the pillar of the organisation which decides what is their
capabilities of other departments. They ensure whether the operations of each departments are
taking place under the financial abilities of IKEA (Papasolomou and Melanthiou, 2012). They
want all the departments work within the budgets that are being allotted to them in the starting of
financial years. The marketing team of IKEA majorly focuses on making increase in market
share and volume of sales, whilst the finance department concentrates on the flow of cash, cost
coverage and investments to be paid back soon within the time duration.
Marketing and human resource function: This department of IKEA manages the
selection, recruitment and training of employees in the company and therefore, it has an impact
on each and every department within the organisation (Lamb, Hair and McDaniel, 2011). The
marketing department has to coordinate with the HRM team on a regular basis to ensure that the
levels of staffing is effective and proper skills have been adapted in procedures of:
 Development of products and researches, as they need to be innovative and creative
enough to make an effect in the target market. The candidates who are being hired
have to be carefully assessed according to their education and skills that they possess,
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as they are the ones who could run the operations effectively to manufacture products
of top quality (Lipsman and et. al., 2012).
 Targets are to be met regarding production and HRM has to be aware their
performance by regular supervising and by improving their motivational levels. This
is major responsibility of HR team to check the quality of every department's
performance and motivate the employees within the organisation.
 The marketing team also has to update the HR team regarding their human resource
needs that are to be fulfilled by HRM, so that they must avail the best skilful and
talented team for marketing and sales team of the organisation. Thus, it will help in
making more sales by influencing the customers with the skills.
The demands of recruitment and training from all over the organisation is handled by
HRM and they have to balance of these activities by balancing all the department together
inclusive of the marketing department to make sure they are giving their best efforts for the
company's top performance and motivate them to do so (Malhotra, Birks and Wills, 2013).
TASK 2
P3 Way in which different companies apply marketing mix.
IKEA has been focusing on the customers in the target market and their needs, and has
decided to develop marketing strategies inclusive of these elements within their market mix.
Element of
Marketing
Mix
IKEA
Product IKEA has been providing a wide variety of furnitures for all purposes. Their wide
range of products include furnitures for children's room, bedrooms, living room
and kitchens. Their main products include coffee tables, side tables, TV sets or
TV solutions, storage of DVD, shelves for various purpose, book cases, sofas
made of fabric and leather, beds, sideboards, arm chairs and a lot more products.
There are also sub-categories within the products that the company has been
availing to their customers, such as products for children's rooms are divided into
playing accessories, beds, nursing equipments and changing tables. Products
manufactured by IKEA includes more than a number of 10,000 products. They
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also avail minor services of restaurants and play areas.
Price IKEA prices their products according to the value of each products, or it is even
called as no-frills pricing. They doesn't actually aim to target the high class
customers who could purchase the products by giving large amounts of money but
they have the objective to sell their products to the lower and upper middle class
section of the society. Thus they don't act to be one of the premium pricers in the
industry. Therefore, raw materials are sourced for manufacturing the products
which are furnitures designed astonishingly, and later distributed or sold to the
retailers, within the no-frills low cost framework. Home delivery system is also
available for the customers in UK, who couldn't have access to the stores due to
any reason but the service is additionally charged.
Place IKEA involves a strategy of international marketing business, which make sales
of their products (furnitures) within the territories of Europe and other regions of
North America, Asia and Australia. Their main locations to sell their products are
their retail stores that are widely spread in different places around UK and the
above stated countries. Many of these retail stores are located in out-of-town
locations and do not benefit from the disadvantages of being located in primary or
secondary locations. The stores are built in form of large infrastructures and most
of them also provide services of restaurants and Swedish market, and some also
have a play area within its premises. They have a total of more than 300 stores in
the above said continents.
Promotion IKEA is considered to be one of the world's huge furniture retail brands. The
brand has been created with a mission of offering products for home furnishing at
valuable prices to the customers. They take their promotions seriously as they
have a specific target of customers within the market and they are to
communicated via particular forms of media. Their promotion mix utilizes TV
advertising, sponsorships of sports teams and events, newspaper and magazine
advertising , and many other components of media based promotion. There were
also controversies regarding some of their TV commercials whereas the others
where pretty influential positively. Some of their recent advertising campaigns
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include the IKEA kitchen party advert with the tag-line 'Be Happy Inside'.
People IKEA is a brand which believes that strong relationships with customers and
customer satisfaction is the main key of a successful business. They serve the
people and work with them to look forward to fulfil their business philosophy.
They are also planning switch their energy saving alternatives top conventional
light bulbs as they are care about the future generations (Raj, Walters and Rashid,
2012). They also decided to do this because they have been using the natural
resources of wood and so it is to be compensated somewhere else. They also
introduced a variety of products such as water saving taps and other eco-friendly
appliances that will solve the issues of household waste. The company serves
people without making a negative impact on them and neither on environment.
Process The process of manufacturing the products and other products are initiated within
IKEA, which are mostly wood based furniture and other wooden products. The
company owns a forestry mills where the raw wood are processed to
manufacturable wooden materials. The polishing, designing and all other factors
are all performed within the firm.
The purchasing process that makes the product available to the customers goes
somewhat like this. The customers can drive to the stores to select the product and
orders it. They are delivered to the doorstep by the company itself if they pay
additional costs or else they can drive it home themselves. Now the online
shopping website is also available for the customers based in UK and they can
order the product online and pay too, and the product will be delivered to their
address.
Physical
Evidence
IKEA proves their evidence in the physical environment with their large sized
stores. Even though their stores are located in outer areas of cities but their huge
infrastructure and the huge range of furniture collection that are made available to
the customers for selection make them heavily noticeable. Their stores are highly
well-equipped with car parking facilities, play area for kids, modern display
technologies and and even restaurants where the customers can sit and enjoy their
favourite cuisines.
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Marketing mix IKEA Sainsbury
Product Services like furnitures, appliances
and home accessories are provided by
the organisation.
They are providing services
such as Agro, banking and
financing.
Place Providing services at various part of
glob such as France, Spain, Belgium
and so on.
Mainly provides services in UK.
Price Considers effective pricing
techniques to attract maximum
customers.
Implement attracting pricing to
attract huge number of
customers.
Promotion Considers various promotional
activities including digital and social
media.
Implement digital, social, print,
radio for promoting their
services.
Process Provides effective training and
learning to maintain the supply chain.
Implemented various techniques
to maintain distribution channel.
People Annually publishes report related to
the growth of company.
Yearly provides informations
related to the growth of the
company through report.
Physical evidence In this organisation maintain their
outlets for providing effective
services and clear their doubts.
Company provides evidences
related to their services.
TASK 3
P4 Basic marketing plan for IKEA
A marketing plan includes a lot of stuff that helps an organisation identify its target
customers and their needs that they are supposed to fulfil with the features and specifications in
the product they manufacture. The process of developing a marketing plan starts from realising
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the capabilities of the organisation and its employees, by understanding their strengths and
weaknesses within the organisation's operations and workforce. It may also include the products
they produce and their quality, the post-sale services provided to the customers. They also need
to assess the opportunities and threats that the company can possibly face in the market. The
strategies must involve the optimum utilization of the strengths of their organisation and the
weaknesses analysed shall be rectified and they must working on overcoming it. SWOT analysis
have to be undergone within the organisation for the purpose of analysing the strengths,
weaknesses, opportunities and threats within the organisation (Nguyen and Simkin, 2012). The
success of marketing plan is decided with the involvement of the total workforce in organisation
and their complete support in agreement with the marketing plan. The marketing plan must be in
relation with the entity's organisational objectives, mission and vision, and must necessarily in
support of their business philosophy.
Marketing objective: The marketing objective of the company is consider as increasing sales up
to 5% in coming 1 year and start new outlets of company across the world.
Strengths
 Wide Range of products and styles in
their collection furniture.
 The products are cheap and the
customers can afford it easily.
 All kinds of home appliances available
under the same roof and a lot of
varieties.
 The products are eco-friendly and they
are their manufacturing process
involves recyclable energy.
 The products are designed according to
their functions for which they are
manufacturing. The shopping experience at their stores
are different in experience.
Weaknesses
 The customers have to assemble the
furniture themselves, if they purchase it
online.
 They have not yet explored new
regional markets globally.
 The products are not long lasting, even
though they are recyclable and
reusable.
 Dimensions of their products are not
suiting the needs of the global market.
 Their advertisements are mostly in the
form of catalogues and other ineffective
forms.
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Opportunities
 A lot of markets left untouched, such as
the countries in the middle-wast and in
the Asian continent.
 They can open a huge door to success,
if they choose better options of
advertisements using the modern
sources of media .
 Online sales, that they have just
introduced in the UK market. Such
online markets shall be opened to the
customers in other countries of their
operations. The growing demand of go-green
products and environment friendly
products can be a greater chance for
IKEA.
Threats
 WalMart, office depot and other
organised sectors can emerge as heavy
competitors.
 Local manufacturers of furnitures and
carpentry stores can also take away
their customers (SPACE and SPACE,
2015).
 The companies those are choosing
similar or better designs with a
contemporary twist of an additional
feature so as to cater the upper class
section of the society can also give the
company a tough competition.
External environment is another subject to market planning which is necessary to predict
the changes that can possibly occur in relation to the company or the industry they are dealing in.
The outer environment that influences the organisation and its operations to develop a proper
marketing plan includes political, economic, social and technological environment.
Political
 Policies of Foreign Direct Investment
can influence their business.
 Labour laws are some legal aspects that
any organisation has to operate
efficiently under a country's
constitution.
 Taxes and duties are to be paid duly.
Economic
 The company must be aware of the
economic crisis like recession as it
reduces their disposable income to
create a fall in demand, thus giving a
low price advantage.
 Scalable economies that can be taken
advantage of.
 The entity must be aware of the highly
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They are a major responsibility for the
organisation towards the economy they
are serving (William, 2012). Environmental laws to protect the
nature from being exploited are also to
be taken care of.
restricted entry for the competitors as
the consumers are offered with
products on low prices.
Social
 The companies are expected to leave
carbon footprints lesser as possible.
 Economically sustainable products
made available to customers.
 Recyclable products that could reduce
environment pollution due to its
disposal. Corporate Social Responsibilities
including online tips on how to reduce
impact on environment.
Technological
 The modern techniques of flat sized
packaging.
 The innovative designs that are made
out of latest software with the
professionalism of experts.
Environmental
 To promote environmental safety and
security issues they considers paper
bags instead of poly bags.
 Considers recycle process, for reducing
consumption of raw material.
 Implementation process that produces
less carbon into the nature.
Legal
 Consider all the employees are
customers rights.
 Provide details of components
considers for the development of the
products.
7 Ps analysis: Following is the marketing mix for IKEA:
 Products: IKEA is providing huge variety of products like furnitures, appliances and
home accessories are provided by the organisation.
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 Pricing: They are providing their services by implementing effective costing strategies
such as penetration method. It helps the organisation to meet the level of the customers.
 Places: The organisation is providing their services from various parts of the world. Such
as France, Spain, Belgium and so on. Along with this they consider online sources also to
provide their services.
 Promotion: The organisation considers various promotional activities. They considers
various approaches such as digital, print, social media platform. It helps the organisation,
in attracting more number of customers at a time.
 People: The organisation is having various categories of people working into the
organisation such as sale person, storekeeper, manager and so on. To improve their skills
necessary training and learning are provided by the company.
 Process: Provides effective training and learning to maintain the supply chain.
 Physical evidence: Annually publishes report related to the growth of company.
Recommendation: On the basis of above report the recommendation for the company is
implement low pricing strategies to attract maximum customers. Along with this increase use of
social media platform for promotional activities. It helps to attract large amount of customers in
small duration of time.
Conclusion: On the basis of above report, it is inferred that IKEA is providing effective services
to their customers. To attract users organisation is considering various costing strategies. Along
with this they are also increasing use of internet to cover large area.
IKEA has decided to implement the following steps that to start with their marketing
plan. Their plan is to improve their methods to find smarter ways to manufacture better quality of
furnitures as their products were complained to be less long lasting.
1. Establishing a retail price
2. Select appropriate manufacturers for home furnishing products
3. Determination of the materials used in making the furniture
4. The process of efficient designing of the products
They have also decided the strategies of how to promote the products so as to
communicate it to the target customers in the market after assessing all the internal and external
environment and after completing the decision making process of the elements of the marketing
mix (Mihart, 2012). They have decided to take a commitment-free approach to furniture with a
13

tag-line 'unboring' in their advertisements. They have decided to take on the modern media for
promoting their products including a well designed website, social media sites and mobile
applications. As they have admitted their negative, they are pushing forward to get over it with
the law of Candor (Ormrod, 2014). They have also decided to bring in a new range of different
products, as they have been failing in providing the customers top class furnitures.
CONCLUSION
The present report have been very much useful in understanding the role and
responsibilities of marketing function in an organisation. The report has also dealt with in
explaining how these roles and responsibilities influence other functional departments of the
company. The elements of marketing mix of IKEA are also explained in regard of their targeted
market segment, so that it can contribute to their organisational goals in the development of a
proper marketing plan in this project. The report has also presented a basic marketing plan for
IKEA, so that the factors of marketing mix and influencing environments are also made clear to
impact in the marketing plan.
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