Marketing and IKEA Product
1. What are some of the things IKEA is doing right to reach consumers in different markets? What else could it be doing?
A: IKEA is a global brand with thousands of stores around the world. It is successful because it provides unique value proposition to its customers-sophisticated design at extremely low price. IKEA procures its raw materials from multiple of companies around the world and thus it can save a lot of money and charge low price to the customers. Though IKEA is a Swedish brand, it functions globally and focuses on the local tastes. IKEA gave importance to the local taste in China.
They placed plastic placements with “Year of the Rooster” themes which sold to thousands of people quickly. IKEA’s regular glasses were too small to be used by the US consumers. That is why they customized the size to fit the needs of the US markets. Some of the great things IKEA does to reach consumers are given below:
(1) Products available for different sections of the society
(2) Product adaptation according to the need of different market
(3) Diversify product line product depth (4) Low priced furniture store provides reassemble furniture and casual furniture
(5) Most of IKEA’s product are stylist and
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(6) Concept of flat packaging which makes it easier to consumers to transport the furniture
(7) Wide range of products according to the need of customers IKEA earns a huge amount of revenue because of its low price strategy from consumers around the globe.
However, IKEA does not have stores in South Asian markets. South Asia has a huge market for furniture especially in Bangladesh. Due to its low price strategy, IKEA could bit any competitors in Bangladesh and India. Besides, South Africa, Mexico, Brazil and Chile can be a profitable market for IKEA.
2. IKEA has essentially changed the way people shop for furniture. Discuss the pros and cons of this strategy. A: IKEA’s vision is “To create a better everyday life for the many people”. It is successful today because of its low price strategy. IKEA sources from many companies rather than just one company so it charges low price. People prefer IKEA product to any other products because IKEA offers flat packages and easy to assemble home. Therefore, the transportation cost is low. When customers drive 50 miles to the stores, they experience the interior, visit the warehouse and grab items to their preference. Read about product functionality
Pros and Cons of this strategy are given below:
(1) Customized product suitable to the taste of the customer
(2) Low cost and as a result charge low price to the customers
(3) Low transportation cost and tax
(4) Adopting the way of social business by using energy-saving bulb in the stored (5) High revenue
(1) Long way drive to the stores
(2) Because of self-assembly the customers sometimes may face trouble