Marketing Essentials Report: IKEA's Marketing Plan and Analysis

This report delves into the marketing strategies of IKEA, a multinational furniture and home goods retailer. It begins by outlining the key roles and responsibilities of the marketing function within IKEA, including its organizational structure, culture, and various marketing functions like information management, distribution channel management, product/service management, pricing, promotion, and selling. The report then examines the relationship between the marketing function and other departments, such as finance, human resources, production, R&D, and sales. Furthermore, it applies the marketing mix to IKEA's marketing planning process, comparing it with rival firms. Finally, the report culminates in the development and evaluation of a basic marketing plan for IKEA, focusing on the accomplishment of business goals and objectives. The analysis provides a comprehensive overview of IKEA's marketing approach.

Marketing Essentials

Table of Contents
INTRODUCTION ..........................................................................................................................1
P1 Key roles and responsibilities of marketing function........................................................1
P2 Roles and responsibilities of marketing relation to organisation context........................5
TASK 2............................................................................................................................................7
P3 Apply marketing mix to marketing planning process to achieve business objectives......7
TASK 3..........................................................................................................................................10
P4 Produce and evaluate a basic marketing plan for IKEA.................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Marketing is an essential process by which organisation promote business to establish
reputation and competitive position in marketplace. This is tactic which includes set of activities
which are creation, communication, delivery and exchange information about offerings to public.
It is essential for management to design system and strategies in according to market conditions
so that there are higher chances of success. Marketing department duty is to frame 7 P's that are
product/ service, prices, place, promotion, process, people and physical evidence in respect to
competitors (Hugos, 2018). These are elements which helps top personnel to attract customers by
informing them about offerings, thereby enhance sales volume and profitability. Present report
is based on IKEA which is multinational firm that sell ready to assemble furniture, home
accessories and kitchen appliances. This assignment specifies key roles and responsibilities of
marketing function and its relation with other units. Besides this, elements of marketing mix is
compared with rival firm. This aid management to make changes in P's to enhance market
reputation and brand value. Marketing plan development and evaluation by management for
accomplishment of business goals and objectives is also mentioned in report.
TASK 1
P1 Key roles and responsibilities of marketing function
Marketing is process by which firms company promote its business and create value for
customers to attract them and make profit. Developing, promoting and distributing products and
services are various activities which helps firms to create and sustain its brand value and market
position.
IKEA is retail sector company which was founded in 1943 and is headquarter in Leiden,
Netherlands. It is a global firm which has 411 outlets which are spread in different countries.
Company has around 194, 000 workers which helps management to provide ready to assemble
furniture and home ware to people (Rowley, 2016).
Organisation structure: This is technique which help management to allocate tasks and
distribute people in different department for accomplishment of business objectives and aims. In
IKEA, divisional and matrix structure are used by executive to manage resources and defining
role and responsibilities to employees. Divisional structure aid company in global business that is
large market reach and customer base to enhance sales volume and profitability. Besides this,
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matrix structure helps business person to complete orders of clients by collaborating staff
members from different units. Thus, they are able to satisfy demands of people which benefits
firm in maintaining goodwill and strong brand image.
Culture: Organisation culture is concept which includes assumption, values, belief and
interaction pattern which determine psychological and social environment in firm. It is essential
that management consider this tactic to maintain connection with stakeholders. Along this,
employees are made to work in coordination for achievement of business objectives and goals.
Thus, Charles handy model is framework which define four types of culture is described below: Power culture: This tactic is used by companies in which authority remain in few hands
that is top personnel and superiors which make decisions and changes in system.
Employees are provided duties and activities which require to be conducted by them for
delivery of products and services to buyers (Baker and Magnini, 2016). Besides this, they
are also given instructions and targets which need to followed by them while working. Role culture: It is another part in which subordinates are provided roles and
responsibilities in respect to their knowledge, interests and skills. This helps management
to make employees carry out work in best manner. Along this, staff members are also
given accountability of tasks assigned. Person culture: This is tactic followed in organisation where subordinates feel more
important than firm. Individuals engage themselves in firm for completion of their
personal goals and didn't focus on business objectives. This impact on functioning of
organisation in a negative manner, as employees doesn't make innovation in system. In
this, management responsibility is to inspire and make workers dedicated towards job.
Along this, staff members are made loyal and influence them to give value to firm.
 Task Culture: It is another concept which define that teams are formulated in firms for
accomplishment of objectives. Management provide tasks to staff in according to their
specialization, which help them in execution of activities effectively (Cleverley and
Cleverley, 2017). This also help them to utilise resources and overcome critical issues
with support of team members.
In IKEA, marketing manager uses role culture to provide duties and roles to subordinates
in respect to their capabilities. It is a multinational firm which has branches worldwide, so
management require to have sufficient workforce which help them to provide products and
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services to buyers. Besides this, management provide tasks to employees in respect to their
specialization. This help them to provide furniture and home ware to buyers in according to their
demands and requirements.
(Source: Marketing Function, 2018)
Marketing functions: These are different activities which are performed by marketing
unit to promote and advertise information about company are stated beneath: Marketing information management (MIS): It is management information system
which is used by marketing unit for making decision making for organisation. For this
people, equipment, procedures and different types of data are coordinated together by
superiors. This help management to obtain better outcomes in business through
appropriate decision making. In IKEA, this activity helps marketing team to gather
information about demands and requirements of people. After this, decision are made in
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Illustration 1: Marketing Function

respect to development of system and products for maintaining firm's market position.
Thus, judgements are made by seniors which are beneficial for functionality of firm.
Distribution Channel management: This is another function of marketing team which is to use
intermediaries for delivery of products and services to buyers. Wholesaler, retailer, distributor
and internet are various chain which help firms to pass items in marketplace. IKEA is retail firm
which provide ready to assemble furniture and home ware products to people. Marketing team
uses internet to inform and take orders from buyers, thereby provide them items in respect to
their requirements. Besides this, in-store facility is also available which helps customers to
purchase products directly from store (Zolkifly and Baharom, 2016). Product/ service management: It is activity which is performed by marketing team is to
utilise opportunities which are present in market. For this, market research is conducted
by management of IKEA to obtain information about demands and needs of people. After
this, development of system to maintain and improve products and services is conducted
by them. Pricing: This is marketing function in which rates of products and services are set in
according to cost of production, along with consideration of pricing strategies by rival
firms and market conditions. It is essential that management determine and select
appropriate pricing strategy that is penetration or skimming. IKEA provide ready to
assemble furniture so skimming pricing tactic is used to create good brand image in
market. Besides this, different rates are set in respect to product which help firm to attract
people to purchase quality items. Promotion: It is activity which is conducted by marketing unit to advertise and promote
information in marketplace and public about company and its offerings. Advertising,
sales promotion, personal selling, online marketing, publicity, etc. are various forms of
promotion tools which are used by management to promote and aware people about
existing and new products and services. Marketing manager of IKEA uses online
advertising that are social media and company's website (Rancati, Gordini and Capatina,
2016). This help them to inform and aware public about variety of furniture and home
ware, thereby attract them to purchase in according to their demands and needs. Selling: This is function which is performed by marketing team to build connection with
distributors to persuade them to carry items to market. It is essential that firm have
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relation with wholesaler and retailer which help them to deliver products and services to
end consumer. Marketing manager of IKEA uses dealers to sell furniture and home ware
to buyers. Company provide e- commerce facility to customers through which they can
get information about products and place order according to their demand.
 Financing: It is another activity which is conducted by marketing department is to frame
budget in respect to promotion activities. Besides this, management set prices through
which they are able to grab attention of large number of people. In IKEA, marketing team
helps in identifying sources where company can raise sufficient amount of funds for
conducting business operations.
P2 Roles and responsibilities of marketing relation to organisation context
In organisation different departments that are finance, production, marketing, sales,
R&D, IT, etc. are formulated by top personnel for achievement of business goals and objectives.
These are units which helps them to execution of tasks in systematic manner. IKEA which is
retail store in which ready to assemble furniture and home ware to people. Management divide
employees in different units in according to their skills and knowledge. This helps them to make
business successful by coordinating work of all teams (Pappas, 2017). Thus, these are different
organisation functional areas and their interrelation with marketing function which is stated
below:
Finance: This department duty is to manage funds for implementation of machinery,
equipments and other assets in system. Planning, organising, auditing, accounting and
controlling are various activities which are performed by management to utilise money. Finance
people and marketing team work together to formulate marketing budget in which money is
divided into different promotional tools. For this, cost and profit in respect to product are
examined for making appropriate decisions in respect to allocation of funds in marketing
activities.
Human resource: It is department whose responsibility is to have sufficient manpower
for execution of business operations effectively. Recruitment, staffing, compensation,
motivation, training and development are various activities which are performed by HR manager
of IKEA to have skilled and competent people (Purvis, 2016). Their duty is to divide employees
in other unit that are production, marketing, R&D, etc. for systematic functioning of system. It is
necessary that marketing team have talented members which promote and advertise products and
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services. For this, human resource duty is to employ new candidates and train employees to
enhance their capabilities to carry activities in innovative manner.
Production: This is department which converts raw material into goods as per
requirement and demands of people. It is essential that organisation provide items and services to
buyers for making profit. In this, marketing unit assist them to have information about
preferences and choices of customers. Besides this, rival offerings are also analysed production
team to make changes and modification in products to target and influence new consumers.
Thus, production and marketing department are interrelated which lead firm in enhancing
performance and functionality of system.
Research and development (R&D): This department responsibility is to develop
innovative and creative business ideas in respect to market conditions. Management conduct
market survey which helps them to gain information about requirements and demands of people.
This helps IKEA in making development of new products and services in respect to needs of
buyers (Dessain, 2016). In this marketing team role is to get information about preferences of
buyers which helps R&D unit to develop new and unique items. Along this, new technologies
and equipments are implemented in system for delivery of variety of furniture and home ware to
customers.
Sales: It is essential department which link firm's items and services with buyers. People
are given information about products and services, so that they are able to maintain relation with
them. In IKEA, sales unit communicate with buyers to get knowledge about their demands and
needs. This helps firm to provide good quality products and services to customers to enhance
brand image and market value. In this, marketing team helps salespeople to aware and provide
knowledge to public about offerings. Thus, they are easily able to convince people as they have
information about product and services.
Information technology (IT): This department duty is to create, monitor and maintain
technologies for execution of business activities effectively (Cabrera and Williams, 2014). It is
essential that advanced machines are implemented in system for conduction of production
processes effectively. This helps IKEA to provide ready to assemble and different variety of
products to buyers. Besides this, marketing team also require to use appropriate software for
development of good website. They even require that new and innovative technologies are used
for promotion of items.
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TASK 2
P3 Apply marketing mix to marketing planning process to achieve business objectives
Marketing mix is set of tools which are used by marketers to attain objectives and goals
of marketing. It is framework which includes elements that are product, price, place, promotion,
people, process and physical evidence. These are components which management of IKEA
require to formulate in according to rival firms and requirements of people.
Ashley home store is American furniture store which sells different variety of furniture in
market has been considered to establish a comparison amongst the two.
Basis IKEA Ashley Furniture
Product IKEA provides ready to
assemble furniture and home
ware items to people. IKEA
promotes an idea of
democratic design which
contains five dimension: form,
quality, function, sustainability
and low price. IKEA products
are associated with no-frills
simplicity to sustain its cost
business strategy. IKEA also
keeps kitchen cabinets and
appliances, lighting, small
storage, sofas and armchairs,
storage furniture, Swedish
food, table and textiles
(Kennedy and Parsons, 2014).
Ashley furniture products are
mainly categorized into three
division: Case goods,
upholstery and millennium. An
idea behind Ashley furniture
product design is to ensure that
there is sufficient variety in
product range to suits needs
and interest of different
consumer segment in the UK
and other countries. Ashley
furniture maintains a product
strategy which involves
providing a fully integrated
product line for all aspects of
home furnishing including
bedrooms, living rooms and
dining rooms.
Price IKEA uses cost leadership
pricing strategy. Company
offers its products at
Skimming pricing is used by
Ashley furniture because
company's products are
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reasonable prices for attracting
large number of people to
purchase products. It focusses
on cost control and efficient
operational details. Ikea allows
not only lower prices but also
freebies at the IKEA restaurant
from Monday to Saturday .
targeted at budget-minded
customer that looking for best
quality furniture at a best
prices. Ashley furniture is able
to offer products at relatively
affordable prices because of a
number of cost-saving system
implements across their
production process. This helps
company achieve two strategic
marketing objectives: customer
can easily choose products
combinations that suit their
needs in line with their
respective budgets. This cost
cutting system enable company
to transfer some of the cost-
savings to customers in the
form of lower prices.
Place IKEA group is an international
business, which sells furniture
and accessories in Europe,
North American, Asia and
Australia. Company has more
than 300 stores which are
spread in across the world.
IKEA has a global distribution
network i.e. large distribution
network. It has huge volumes
on manufacturing side and flat
packages i.e. it is useful in
Ashley furniture operates in
UK and many countries.
Ashley furniture maintain a
number of store licensees in
UK and other two for a
distribution and sales of
diverse products in its furniture
collections. IKEA operate in
two different markets where
consumers are different,
macroeconomics is different
and market conditions are
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increasing value to weight
ratio. Internet that is e-
commerce facility is provided
to customers to get
information about products
and order online.
different while indeed
consumer preference and
choices are also different.
Promotion IKEA relies heavily on social
media platforms to promote its
products and increase sales in
their market. An idea behind
campaign is that a social cutter
leads to a conflict which can
be avoided according to IKEA.
Ashley furniture focuses a lot
on its marketing activities.
Company uses promotion
tools like TV, print, online ads,
billboards etc. to advertise and
inform people about products.
People IKEA gives great importance
and value to their people i.e.
customers and employees.
Customer satisfaction is a
core of a company. Employee
at IKEA believe in an idea that
they are straightforward
people with passion for home
furnishing (Null and Lobur,
2014).
Ashley furniture believes in
utmost good faith in their
employee, customer and
others. Customer centric
approaches is a main focal
point of Ashley furniture as
they continuously developing
their strategies to acquire more
customer and maintain
employee attrition rate at
lowest.
Process IKEA has several business
processes place. It has 44
production units scattered
across many countries. IKEA
has most unique supply chain
and inventory management
Ashley furniture enjoys benefit
of a strong distribution
network boosted by a fact that
company sources a significant
volume of its manufacturing
inventory nearby China. Large
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