Ikea is a Swedish multinational company that specializes in the design and sale of ready-to-assemble furniture, kitchen appliances and accessories, and home decor items. The company was founded in 1943 by Ingvar Kamprad, who started selling matches at the age of 17 and eventually expanded his business to include furniture. The name “Ikea” is an acronym of Ingvar Kamprad, Elmtaryd (the name of his family’s farm), and Agunnaryd (the village where Kamprad grew up).
Ikea’s mission is to create a better everyday life for many people by offering functional, well-designed, and affordable home furnishing products. The company operates over 460 stores in 62 countries, making it one of the largest furniture retailers in the world. Each year, over 1 billion customers visit Ikea stores, and the company’s online platforms receive over 2.6 billion visits.
One of the unique aspects of Ikea’s business model is its emphasis on sustainability. The company aims to use renewable and recycled materials in its products and packaging, reduce its carbon footprint, and promote sustainable practices throughout its supply chain. Ikea has set ambitious sustainability goals, such as becoming climate positive by 2030, using only renewable and recycled materials by 2030, and becoming circular and climate positive in its entire value chain by 2030.
Ikea’s products are known for their simple and functional design, and the company offers a wide range of furniture and home decor items to suit different styles and needs. The company’s products are sold in self-service warehouses, where customers can pick and choose their items, and then assemble them at home using the provided instructions.
In addition to its products, Ikea offers a range of services to help customers plan and furnish their homes, including home delivery, assembly, and installation services. The company also has a loyalty program, Ikea Family, which offers members discounts, special offers, and access to exclusive events.
Overall, Ikea has become a household name for affordable and functional home furnishings, and its commitment to sustainability has made it a leader in the industry.
Founding History of Ikea
Ikea was founded in 1943 by Ingvar Kamprad, a Swedish entrepreneur who was born in 1926 in the small village of Agunnaryd, in southern Sweden. Kamprad was raised on a farm and developed a strong work ethic at an early age. He began selling matches to his neighbors at the age of five and later expanded his business to include other items, such as pencils and greeting cards.
In 1943, at the age of 17, Kamprad founded Ikea as a mail-order business selling household items, such as pens, wallets, and picture frames. The name “Ikea” is an acronym of Ingvar Kamprad, Elmtaryd (the name of his family’s farm), and Agunnaryd (the village where Kamprad grew up).
Ikea’s early success came from Kamprad’s innovative approach to business. He focused on keeping costs low by sourcing products directly from manufacturers and using simple, functional designs that could be easily shipped and assembled by the customer. Kamprad also introduced flat-pack furniture, which allowed customers to transport and assemble furniture themselves, reducing the cost of shipping and handling.
In the 1950s, Ikea began producing its own furniture, using designs by in-house designers such as Gillis Lundgren and Lars Sjöberg. These designers focused on creating furniture that was both functional and stylish, with a Scandinavian aesthetic that emphasized simplicity and clean lines.
By the 1960s, Ikea had opened several stores across Sweden, and in 1963, the company opened its first store outside of Sweden, in Norway. Ikea continued to expand internationally, opening stores in other European countries, as well as in North America, Asia, and Australia.
Throughout its history, Ikea has remained true to Kamprad’s vision of offering affordable and functional furniture to the masses. The company has also been committed to sustainability, using renewable and recycled materials in its products and packaging, and promoting sustainable practices throughout its supply chain.
Ingvar Kamprad remained involved in Ikea until his death in 2018, and the company is now led by a board of directors and executive management team. Despite its growth and success, Ikea remains a privately-held company, with Kamprad’s family still holding significant ownership in the company.
Marketing Mix of Ikea
The marketing mix, also known as the 4Ps (Product, Price, Place, Promotion), is a framework used to develop a company’s marketing strategy. Here’s how Ikea uses the marketing mix to reach its target market and achieve its business objectives:
Product
Ikea’s product strategy is centered on creating well-designed, functional products that are affordable and sustainable. The company has its own in-house designers who work to create furniture and home decor items that are not only aesthetically pleasing but also meet the needs of customers in terms of functionality and affordability. For example, the company’s modular furniture lines, such as the Kallax shelving unit and the Soderhamn sofa, can be customized to fit a variety of spaces and needs. Ikea also places a strong emphasis on sustainability, using renewable and recycled materials in its products and packaging, and promoting circularity in its value chain.
Price
Ikea’s pricing strategy is designed to appeal to a broad range of customers, with products offered at different price points to suit different budgets. The company uses a cost-efficient approach to manufacturing and distribution, allowing it to keep its prices lower than those of its competitors. Additionally, the company periodically offers discounts and promotions through its loyalty program, Ikea Family, to encourage customer loyalty and repeat business.
Place
Ikea has a strong global presence, with over 454 stores in 62 countries. The company’s stores are typically located in suburban areas with large self-service warehouses that allow customers to browse and pick up products themselves. In addition to its physical stores, Ikea also operates an online store, which provides customers with access to its full range of products and services.
Promotion
Ikea’s promotional strategy is focused on creating a strong brand image and driving sales through a variety of channels. The company uses print and digital advertising, social media, and public relations to reach its target market. Ikea’s advertising campaigns often highlight the affordability and functionality of its products, as well as the company’s commitment to sustainability. Additionally, the company uses experiential marketing, such as pop-up stores and showroom events, to showcase its products and engage with customers. The company also places a strong emphasis on customer reviews and word-of-mouth marketing, with many customers sharing their experiences and product recommendations on social media and other online platforms.
Overall, Ikea’s marketing mix is designed to appeal to a broad range of customers by offering well-designed, functional, and affordable products that are sustainable and environmentally friendly. The company’s focus on customer experience and engagement, both in its physical stores and online, helps to create a strong brand image and drive customer loyalty.
Marketing Strategies of Ikea
Experimental Marketing
Ikea has been known for its innovative and experimental marketing strategies. The experimental marketing strategy are design to create a unique an engaging experience for customers while also promoting the brand and its products.
The use of pop-up stores to create a unique shopping experience for customers typically located In high traffic areas like shopping malls or city centres, and they offer a limited selection of products. These pop-up stores are designed to attract new customers and create buzz around the IKEA brand.
They also use virtual reality to allow customers to experience its products in a new and immersive way. Ihe companies we are app allows customers to explore virtual rooms and try out different furniture combinations before making a purchase. Augmented reality is also used by the company to create interactive experiences for customers as the AR app allows the customers to see how Ikea furniture would look in their own homes before making a purchase.
Campaigns and Collaboration
IKEA uses social media platforms to launch creative campaigns that engage with customers. For example the company’s “ Where Life Happens” Campaign encourage customers to share photos of their homes on Instagram using the hashtag #IKEAatmine. The social media campaigns are designed to showcase the brand products in creative and engaging ways, while also promoting the IKEA lifestyle and brand values. These campaigns have help IKEA connect with customers establish strong social media presence.
The company has collaborated with artists, designers, and other brands to create limited edition products and collections. These collaborations create buzz around the brand attract customers who might not otherwise shop at IKEA.
Relationship marketing
IKEA’s relationship marketing strategy is focused on building long term relationships with its customers. The company recognises that building customer loyalty is key to success and it has implemented several strategies to achieve this goal. the IKEA family program, is a loyalty program that offers members exclusive discounts, free coffee and tea IKEA restaurant, special events, and more. By offering these benefits to customers, the company encourages them to return towards stores and become regular customers. The company also uses data analytics and customer segmentation to personalise its communication with customers.
For example, the company might send targeted emails to customers who have shown interest in a particular product category or who have made a purchase in the past. They also emphasis on customer feedback and uses this information to improve its products and services. it also offers a range of services to help customers before and after purchase. These services include product assembly, delivery, and installation as well as a generous return policy.
STP Analysis of Ikea
IKEA’s market segmentation and targeting strategy is based on demographic, psychographic, and geographic factors. The company targets young and middle-aged consumers who are looking for affordable yet functional furniture and home accessories. The company’s products are designed to appeal to consumers who value simplicity, functionality, and affordability. IKEA’s target market is also characterized by a preference for modern and minimalist designs. Here are some of the key segments that IKEA targets:
Young Professionals: IKEA targets young professionals who are just starting out in their careers and may be living in smaller apartments or houses. This segment values functionality, affordability, and modern design.
Families: Families are a key segment for IKEA as they tend to have larger homes and need furniture and home accessories that are durable and practical. IKEA offers a range of products that are designed to meet the needs of families, including kid-friendly furniture and storage solutions.
Students: IKEA targets students who are looking for affordable and functional furniture for their dorm rooms or apartments. This segment is also interested in products that can help them organize their space and make the most of their small living areas.
DIY Enthusiasts: IKEA appeals to DIY enthusiasts who enjoy assembling furniture themselves and customizing it to their liking. This segment values affordability and uniqueness.
Green Consumers: IKEA targets environmentally conscious consumers who are looking for sustainable and eco-friendly products. IKEA offers a range of sustainable products, including furniture made from recycled materials and energy-efficient lighting solutions.
Overall, IKEA’s segmentation strategy is designed to target a wide range of customers who are looking for affordable and stylish furniture and home accessories. The company offers a range of products that are designed to meet the needs of different customer segments, while maintaining its focus on affordability and sustainability.
Product Positioning
IKEA’s product positioning at a global level is based on its core values of affordability, functionality, and sustainability. The company’s products are designed to be stylish and modern, yet practical and adaptable to different lifestyles and living spaces. IKEA positions itself as a company that offers good quality furniture and home accessories at affordable prices. The company’s products are designed to be priced competitively, making them accessible to a wide range of customers.
In terms of functionality, IKEA’s products are designed to be versatile and adaptable to different living spaces and needs. The company offers a range of products that can be customized and combined in different ways to create personalized solutions for customers.
Sustainability is also a key part of IKEA’s product positioning. The company is committed to using sustainable materials and production methods in its products and has set ambitious targets for reducing its carbon footprint. At a global level, IKEA’s product positioning is consistent across its different markets. The company offers a range of products that are designed to meet the needs of customers in different countries and cultures, while maintaining its core values of affordability, functionality, and sustainability.
Overall, IKEA’s product positioning at a global level is focused on offering good quality, stylish, and sustainable furniture and home accessories at affordable prices, while also providing customers with customizable solutions that can be adapted to their unique needs and lifestyles.
Also Read: SWOT Analysis and STP Analysis of Unilever Plc
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