Marketing Principles Report: IKEA's Marketing Strategies and Analysis

This report provides a comprehensive analysis of IKEA's marketing principles. It begins with an introduction to marketing fundamentals and then delves into IKEA's specific strategies. The report examines the marketing process, including situational analysis, strategy formulation, tactics, and implementation. It explores micro and macro factors influencing IKEA's marketing decisions, such as political, economic, social, and technological factors, as well as suppliers, competitors, and consumers. The report also discusses market segmentation, including demographic and psychographic approaches, and IKEA's use of differentiated and undifferentiated strategies. Furthermore, it analyzes consumer buying behavior, cultural, social, personal, and psychological factors. The report concludes with an examination of IKEA's positioning strategy, product development, competitive advantages, and distribution strategies, including both direct and online channels. The report provides a detailed overview of IKEA's approach to marketing and its application of marketing principles.

Marketing Principles

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1...........................................................................................................................................3
1.2...........................................................................................................................................4
2.1...........................................................................................................................................5
2.2...........................................................................................................................................5
2.3...........................................................................................................................................6
2.4...........................................................................................................................................6
2.5...........................................................................................................................................6
3.1...........................................................................................................................................7
3.2...........................................................................................................................................7
3.3...........................................................................................................................................8
3.4...........................................................................................................................................8
3.5...........................................................................................................................................9
TASK 2..........................................................................................................................................10
4.1.........................................................................................................................................10
4.2.........................................................................................................................................10
4.3.........................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Marketing principles are those ideas on which company can do the promotions of the
products and by using these principles of marketing entity can measure the performance of
market of existing products and by that they can launch new product in new market. This
concept introduce the key principles of marketing essentials, marketing functions and also
practices of marketing so that they can enhance the growth with the impact of marketing on
profitability and growth of business (Jobber and Ellis-Chadwick, 2012). The present report is
based on IKEA is a multinational company that expertise in designing and selling ready to
assemble all furniture, appliances and home accessories along with the vision that they have to
create the better life for many people and strategy “To offer a wide range of well designed, home
and furnishing products at prices so low that many people to afford hem”. In present scenario,
the report contains the various elements of marketing process. Along with this micro and macro
factors which influence the decisions of marketing. A product has to be developed so that they
can sustain and attain the advantage of competition.
TASK 1
1.1
Marketing is very important for every business to attain success and growth in
competitive market. Marketing can be defined as the process for creating, communicating,
delivering and exchanging so that they can offer and also attain the value for consumers, society.
The marketing process of IKEA is divided into four steps:-

 Situational strategy – IKA has to do market research first for launching the new product
in new market and by that they can find the situation of market. This analysis will also
help the entity to find the new trends and also wants and demands of consumer so that
they can make the product according to them and also attain the increment in sales
(Kotler and Armstrong, 2010).
 Formulating strategy – Then the entity has to formulate the strategy and they have to
develop the team by providing the training so that they can do the proper research
according to aims and objectives which are predetermined by the management of IKEA.
 Designing tactics – IKEA needs to create a plan which contains the strategy for
promotion so that they can improve products and services according to demand of
consumer.
 Implementation and control – IKEA having a team of experts so that they creating a plan
with different procedures which can control the errors by employees in process of
marketing (Sheth and Sisodia, 2015).
1.2
Business organisation have to develop the product according to the needs and wants of
consumers by using the different approaches which includes product and market approach of
orientation so that IKEA can attain the success and growth in competitive market. The company
wants to take the decisions for the betterment it is based on consumer demand and preferences.
Advantages of market orientation are:-
 The first benefit is consumer centric which gives the important to the needs and demands
of consumers.
 IKEA has to address the demand of the consumers so that they can make the products on
the basis of demand and by that they can increase the sales (French, 2010).
 They have to make the products so that the customer can purchase the goods and also
attain the services by which IKEA can increase the satisfaction level of consumers. Along
with this they can increase the consumer loyalty and also they can do the frequent
shopping.
 The company developing products which is based on demands and wants of consumers
so that they can do the full use of products that gives increase in competition from
different competitors (Henley, Raffin and Caemmerer, 2011).

IKEA also include the different operating cost which can be considered as disadvantage.
They are:-
Promotional cost – Advertisement cost as well as promotional cost is high for the
appropriate process and do effective communication process which help the employees of IKEA
in attaining targets.
Market survey cost – Research and development cost is relatively high which helps the
company in making the products according to trend.
2.1
There are different micro and macro factors which can be influence. Different macro
factors are:-
Political – These factors have a great challenge because they denotes the stability of the entity
and in this foreign policy may vary (Parker and et.al., 2011).
Economic – IKEA has always to think about the profitability, growth and expansion so that they
can achieve the targets and goals. It considers the demand and supply of the product which helps
the entity to get successful in the competitive market.
Social – The Company contains the cultural, religious and traditional factors of the nation which
is to be operated.
Technological – IKEA has to make the different products with the new innovation (Deshpande
and Rundle-Thiele, 2011).
Micro factors are Suppliers, competitors, consumer and substitutions. Suppliers are those who
influence the different character as they play a great role. Competitors are to be considered as
they are liable for attaining the success of the entity so that they can increase the selling price and
profits. Consumers are responsible for attain the demand which is based on component. These
are the factors which affect the decisions so that IKEA reap the targets.
2.2
The importance of segmentation process for IKEA includes differentiation strategy of the
products which helps the entity in attaining the advantage. They increase the efficiency by
making the different efforts to determine the segments (Armstrong and et.al., 2014).
Demographic segmentation – It helps in dividing the market on the basis of age, gender
as well as family life cycle. The company has to make the products on the basis of age or for

every income group so that they can fulfil the esteem needs of the consumers. On the basis of
income they have to make the brand image on high group of income.
Psychographic segmentation – It is based on personality, motives and social class of people. The
firm care about their consumers and get all the things about their customers who are attaining the
products. On the basis of social class and lifestyle company can segment the products and
services so that they attain the targets easily.
2.3
There are different strategies which includes differentiated and undifferentiated so that
they can easily target the market.
Differentiated strategy – This strategy used by IKEA which helps in deciding the promotional
message so that they can send to consumers will be aware of the products and services and
company can attain the benefits as per the message to be conveyed (Allyson Dooley, Jones and
Iverson, 2012).
Undifferentiated strategy – In this company targets to each and every consumer so that they can
attain the knowledge about the product and issues which is related to the benefits of the same.
Focused strategy – This strategy is the promotional message so that they communicate the
benefits which are desired by single segment which is specific for the consumers in future.
Undifferentiated strategy is followed by IKEA which having the various models. It
includes the different strategy having the target the public along with this they have to do the
promotion of products.
2.4
This is the study by which they can easily determined by the buying habit of consumer
which helps in the buying behaviour of the consumer. It helps in analysis that they have to make
the products according to needs and wants of consumer so that they can find the satisfaction level
of consumers.
Cultural factors – They have a great impact on the behaviour of buyers. They have a various
influence by which they can increase the demand of the product and IKEA can increase the sales.
Social factors – the behaviour of consumers is influenced by social factors which include group
which belongs to (Wang and Pizam, 2011). These groups are further divided into religious
groups. The factors which are important include reference group and status.

Personal factors – These factors also play a important role in influencing the behaviour of buyer
which includes life style, self concept, age and personality.
Psychological factors – These factors also affect the buyers behaviour which include motivation
as well as perception so that they can do the proper learning which affect behaviour of buyer.
2.5
The company members have to put the efforts in putting the strategy so that they can do
the appropriate changes according to the preference of consumer which is included in positioning
strategy. This technique helps in creating the brand image in the competitive market by the
products. IKEA have to make the products according to consumer and for that they have to target
the market. They have to establish new product in achieving the targets or the goals and
objectives (Rudd and Mills, 2011).
The current positioning strategy of IKEA used to be simple but it is effective that the firm
needs to improve the products and services so that they establish the market in the product. The
company has to maintain the relationship of quality and product also creates a positive impact
that the company provide a good quality product at a reasonable price then it is better for IKEA.
The positioning strategy is used by the firm so that they can attract the consumers and keep them
exclusive. IKEA has to maintain their quality so that the consumers ready for giving high price
for the products and services.
3.1
Company has to apply the different techniques so that they can achieve the advantage in
the competition. The company have different competitors in the market. Product development is
the main key strategies so that they can attain the competitive advantage. IKEA has to develop
the products and services which help the consumers in easily purchasing the product which assist
in increasing the sales. And earn maximum profit. For the development of the product they are
having the process which include they have to do the screening of idea then after that they have
to develop the concept then they have to analyse the business. Then they have to analyse the
market after that the members of the firm have to do all the implementation and
commercialization and then new product pricing (Smith, 2014).
Cost leadership – In this company have to set the goals and for attaining those goals they have to
produce qualitative products in the industry. This included in traditional approach which assist in

reaping the targets and for that they have to provide the services on large scale which exploit the
scale of economy.
Differentiation – In this type of strategy, IKEA have to differentiate services which assist in
obtain the advantage along with the characteristics from its competitors. The company have to
establish brand identity in market and for that they have to charge the high price from the
consumers which succour company in availing the targets.
3.2
There are so many strategies of distribution of the product which help business entity in
attaining targets. There are two strategies which IKEA can used:-
The company having the different branches n the market and they are considered as
different outlets which assist in making the personal distribution by using different medium so
that entity can sell the products easily. These channels of distribution by which consumers can
easily connected by entity and no middle person involved in process. This channel of distribution
having direct approach and also help in availing the services (Abdullah and Ismail Ahmad,
2010).
Online medium is also the part to the distribution strategies and also using another
channel for that they have to do the different promotion activity online websites as well as
application of mobile phone which is provided by IKEA. In this they have to make the easy
access so that consumers can easily visit online portal of the firm. This is the important form of
distribution of the products and services are beneficial for IKEA and also a cost effective
method.
By these methods company can attain the goals, objectives and targets also to attain the
success in the competitive market they are beneficial so IKEA has to follow this.
3.3
The company have to follow the different strategies of pricing which are having the
different types that include:-
Penetration pricing – IKEA has to keep the low price of the products and services so that they
can easily penetrate the market. They have to raise the awareness regarding the different
products among the consumers so that they can try to attain the different products (Wells and
et.al, 2011).

Price skimming – In this IKEA has to keep the price high of the products. By the law of demand
and supply the price falls.
Premium pricing – In this pricing policy, company members have to produce the qualitative
products and services which will assist in entering into the new market.
Economy Pricing – In this pricing policy company members have to provide the low quality
products to the consumers along with the low price rate of the product.
IKEA has to follow different pricing strategies so that they introduce the new products in
the new market then they follow the premium pricing strategy. In this prices of the products is
high and cost is low which includes the lower competition. IKEA can attain the goals and
objectives by providing the qualitative products along with the reasonable price (BOSE, 2010).
Further, company members have to control the cost which is generated from raw material, labour
etc.
3.4
Promotion is the essential factor of marketing mix and this factor help the company in
reaping the targets. Company have to do different activities of promotion like advertising,
personal selling, sales promotion along with this they have to maintain relations with the
public. If marketing department helps in attaining the objectives then it is to be included in
the promotional activities. Along with this there are different promotional strategies which
are followed by IKEA which includes coordination, consistency, repetition and reach. All
companies will spend lot of money in the activities of marketing (Nowak and et.al., 2015).
In doing the advertisements of the different products and services they spend lots of money
to reach the message to consumers which will help in attaining the targets and by that
consumers purchase the product which are having the high quality so that IKEA can attain
the targets easily. Most common advertising mediums are radio, television, magazine,
newspaper, social media etc. Personal selling is also the tool of promotional activity and it
has common forms that are individual gathering, correspondence and message. The
company members provide the consumers different offers or schemes which succour in
different products and services. The company provide the discounts or different schemes
so that they can achieve the target, goals and objectives in the competitive market.

3.5
The additional element of marketing mix includes the process, people and physical
evidence.
Process – The Company have to follow the process so that they cannot face any problem in
making the right decisions. IKEA have to follow the process in making the plans for improving
the product and services which will succour in reaping the targets. They have to make process
for doing the delivery and consumption of service. The company members have o do all the
work in proper process so that they cannot face any conflict (Donovan and Henley, 2010).
People – Management and employees are the person who are responsible for activities of
marketing. Management of marketing should concern about the effectiveness and human
resource management have to facilitate the different training, coaching so that the employees can
increase the skills and knowledge.
Physical evidence – Physical evidence is also the important element so that they have the
confirmation that the consumers can purchase the product. It includes the delivery of service,
facilities and also the infrastructure. They have the physical appearance of the stores so that place
should be safe where products to be sell. All the facilities or services which are provided by
IKEA are dynamic (Armstrong and et. al., 2014).
TASK 2
4.1
Marketing mix have the four elements that is price, place, product and promotion and
3P’s also added that is process, people and physical evidence. There are three segments of
market that IKEA has to follow which is based on consumer behaviour, physiographic,
demographic and geographic. The products gave the differences because of the climate and price
(Ballantyne and Varey. 2006). The purpose for segmenting the market is to help the business in
attaining the maximum profit and also making the products which are suitable for the consumer
which increases the satisfaction level. There are different segments in the consumer market but
some are:-
On the basis of age: Products are mostly influenced by the buying habits of consumer and also
the preference of this segment. IKEA has to keep the regular supply of the products according to

the age category of consumers and by this consumer can attain the success in the competitive
market.
On the basis of taste and preferences: IKEA has to keep in mind that the taste and preferences on
the consumer affect the price of products so that the company have to make the products
according to that so that they cannot find any difficulty and also improve the performance and
productivity so that entity attain the leading position (Corrigan. 2011).
4.2
Every company having the different department with the distinct product and company
members have to develop the products according to needs and wants of consumer. They have to
sell the different range of the product and these merchandise divide into different sectors.
Further, all the company do the different activities of marketing are not same in every company.
There are two types of business that is B2B and B2C (Dann. 2010).
Business to business – The products are purchased by business for organisational purpose. They
have to select the mode of payment through the proper channel of logistics so that proper
delivery of the product can be made. They make the proper system for making the payment
online so that company members can not face any difficulty. This is the complex system of
business as compared to business to consumers (Franke. and Park. 2006).
Businesses to consumers – In this concept, consumers are the important because they are those
who purchase the product for the personal use. End users have to make the payments for what
they have to purchase and also it is a simple transaction so that IKEA can attain he success. This
concept uses the E-commerce so that they deliver the products directly to consumers and can
make the online payment (Hills. Hultman and Miles. 2008).
4.3
There are some differences between marketing should be done in international as well as
domestic which includes:-
International Marketing – In this, company have to do appropriate marketing of the products
which assist in setting the limits of the country in the global market (Lees-Marshment. 2009).
This area covered many transactions which are covered between different nations. Regulatory
bodies intervention is high so that IKEA can attain the success in market. In this marketing there
is high profit margin. International marketing has to make the political relations so that company

can attain the high performance. Company have to do different innovations so that they can
improve the performance (Merrilees and Miller. 2008).
Domestic Marketing – This concept of marketing is limited to the geographical limits of the
different countries and different nations it is known as domestic marketing (Papasolomou and
Vrontis. 2006). The areas in which company have to sell the product in the market along with
this they have to prepare the limits of selling the market and these extended within the country.
In this types of marketing there is less interference of government an in this company have to use
the different technologies so that they can create the success. They need not to make political
relations which is helpful in the entity to increase the performance. In this marketing there are
fewer profit margins so that IKEA have to make the different products so that they can attain the
targets (Smith. 2014).
CONCLUSION
From the above analysis it observed that company have to make the different plans for
making the better decisions which succour the entity in reaping the targets. The company
member have to make the product according to the needs and wants of consumer which help the
consumer in purchasing the merchandise and IKEA can attain the maximum profitability. By
providing the products to the consumers they can increase the satisfaction level of customers by
this entity can increase the sales. The company members have to make the public relations in the
international marketing but the entity follow the domestic marketing they IKEA need not to
make the public relations. There are different benefits and costs for marketing orientation which
helps in increasing the performance and also attain the success in competitive market. Every
company have to make the product and do the marketing of that product and it is necessary in
obtaining the goals and objectives. Company has to make the different process so that they can
attain the advantage in competition.