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IKEA Marketing Analysis

Paper Type: Free Essay Subject: Marketing
Wordcount: 5096 words Published: 26th May 2017

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The purpose of marketing is making sure that the effort of separate parts of the company, such as research, selling, sales promotion, and after sale service are working as closely together as possible. To understand such dual rule successfully their need to be a clean understanding of organisational responsibility and a clear program showing deters timing. In my academic session, I wish to analyse the market research of IEKA which is one of the largest and superior furniture store in the UK. The IKEA concept builds on a relationship with the consumer. Nine key messages are used within the IKEA marketing communication to build this relationship and give an understanding of how we can fulfil our customers’ needs. They have managed to make their products and services more popular based not only on price but by creating a unique shopping experience for the customers. The purpose of this study is to provide a better understanding of the “IKEA experience.

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Definition of marketing:

Marketing is a complex series of process by which demand for goods and services is identified, supplied, anticipated or manipulated by a producer. While new often regarded as part of the responsibility of every aspect of the business and indeed every employee it realize heavily on such functions as advertising, marketing, research and new product development. There are huge number of definitions are provided by different persons and institutes such as.

*According to Philip Kotler ‘satisfying needs and wants through an exchange process’

*The Chartered Institute of Marketing define marketing as ‘The management process responsible for identifying, anticipating and satisfying customer requirements profitably’

Compare between the definitions:

The given definitions by Chartered Institute of Marketing (CIM) and Philip Kokler are not same. They provide their Meaning of marketing in the different way. If we analyse their speech we can fine the compare of the definition. There are some comparisons in my point of view:

a. The main differences between the definitions are changing of the customer need and want which are mentioned in the Philip definition CIM did not give any idea about it.

b. On the other hand, Chartered Institute of Marketing Definition with benefit process but Philip Kotler did not focus any theory of benefit.

c. Besides that Kotler ignore the identification and anticipating what customer will need in the future but CIM was effort that will be happened in the customer view.

In fine, it is clear from the above discussion that, CIM provides its definition is more elaborately then the Philip Kotler proved. But both of the definitions are depend on marketing approach.

Characteristics of marketing oriented organisation:

The main structure of marketing oriented organisation is the always deal to the customer and try to bit their competitors. They try to attract and empress the customer to improve their sale. There are various types of characteristics is appear in the market oriented organisation. But five important feathers are mentioned bellow:

The organisation consider to the customer first. What product customer wants and how product should developed for customer satisfaction.

The needs of the customer have got a great importance in the market oriented business. A market oriented business identifies the needs of the customer and will start the process of production of that service or goods which will fulfil the customer needs. In today’s business environment, the company gives much importance to the consumer and will try to identify the needs and wants of the customer.

Another feather, structure and culture of these organisations are easy and flexible because they can change this structure according to the situation.

One most important issue is long-term process. This is a valuable process because any business sometime passes critical moment and then it automatically overcome crisis so if they got long-term target they may not be affected by this way.

Last but not least character is stockholder. They give priority to stockholder before making decision because they bear profit and loss of the company.

IEKA is a market oriented organisation because all of the above mentioned character are found in the IKEA. They always try to the keep satisfied customer by the providing good product and service.

Element of marketing concept:

The marketing concept is “The achievement of corporate goals through meeting and exceeding customer needs better than the competition”. There are three types of marketing concept such as:

Customer orientation.

Integrated effort and

Goal achievement.

Customer orientation:

Customer orientation means supply best customer service for gaining their satisfaction. It is less important to provide customer convenience then the customer satisfaction. The selling theory is based on the belief that customer’s need to be persuaded to buy through aggressive selling and promotions.

Integrated effort:

Company have to improve both internal and external capacity which is important element of marketing. External means customer need, staff motivation, and production. Many individuals within the organisation have a responsibility for creating value not just staff and a marketing orientation requires that an organisation draws upon and integrate its human and physical resources effectively and adapt them to meet customer needs.

Goal achievement:

Every company must be believed the universal truth role is customer satisfaction for gaining supreme success. Communicating successfully with customers is about supporting the product you are trying to sell. In the market, high levels of promotional support are required for the product to be recognised.

Marketing approach:


Marketing approach is the process by which companies determine what products and service may by satisfy to consumer, and the strategy to use in sales, communication, and business development. It is also an integrated method which is can build up strong relationship with customer. Every company expense lots of money for marketing purpose. To get success of the business in the competive world company apply different marketing approach for improving sales. There is some of the effective cost and benefit point of marketing approach:


Making a proper marketing structure for attracting customer.

To improve the quality of products those are manufacture by the company.

Develop the service method.

Creating strong relationships with customer, supplier and distributor.


Almost all of the company stand on profit. Without profit any company cannot survive long time, so main marketing approach should be profitable.

One most important point of benefit is gaining customer loyalty. So that customer can realize that the products and service are actually well.

Another valuable benefit is achieving reputation. Only by the customer Satisfaction Company can achieve this benefit.

Micro environmental factor of IKEA:

The word of Micro means small or limited something. But in the business section, micro environmental element means some of the internal factors which are directly control or effect on the business. The micro environmental factors of the company are customer, suppler, and its stockholder those are strongly related each other. So company can directly affected by these element or factors. If the supplier of IEKA do not provide good manner to customer or do not give them proper service customer may divert to another company because it is competitive market as a result the stockholder do not wish to invest capital because company became profitless. But the customer of IEKA are always satisfied because its service and product. The relationship between supplier and stockholder of IKEA excellent that is why they were effort to gain success. Another important factor of IKEA is staff, they are always tried to keep customer happy by providing their best service.

Macro environmental factor of IKEA:

The word of Macro means bigger or unlimited something. But in the Business world, macro environmental factor means some of the external issue which are indirectly leads or control on the company. The macro environmental factors are national and international economy, politics, society, and technology. The factor of macro environment do not affect on the company it first effect to the country and then society and finally company. We know that IKEA is a worldwide company which deal more than 29 countries. In the recent world economic recession destroys most of companies are going to be baseless but IEKA does effecting by this crises. Because IKEA always sales sale worldwide design product which impress to the customer.

Market segmentation:

The analysis of buyer or potential buyer in a given market along various dimensions. These usually include demographers like age, sex, and socio-economic status, buying patterns with respect to price and quality and personality factors like conservatism radicalism, need for achievement or need for affiliation. The objective is to divide a market into segments comprising similar kind of people so that marketing efforts eon be targeted more precisely and the most effectively approach used with each segment for specific form of market segmentation. The concept of IKEA that people are famous for working hard, living on small means and using their heads to make the best possible use of the limited resources they have. This way of doing things is at the heart of the IKEA approach to keeping prices low. But quality is not compromised for the sake of cost. Sweden has an international reputation for safety and quality you can rely on, and IKEA retailers take pride in offering the right quality in all situations. There are two common product of IEKA bellow which is available in market I am going to analyse market segmentation.

DVD &CD furniture: This is very essential product for every person’s daily life that’s way most of the Company want to manufacture this product. We know that before manufacture product IKEA always try to understand which raw materials are environmental healthy and all ages accept it. Starting to the demographical view of the customer, children whose age fewer than 18 they will choose this product for its design & comfort. Young men choose the IKEA’S DVD &CD furniture because the low price then other brand. Some of the large family want to buy this product thinking about its raw materials which make it heavy and sustainable price. In t he geographically views, the urban people will use DVD & CD furniture than the country side people. Another status of customer social-economy, the poor people may not unable to buy DVD or CD so they no need to buy this furniture. In this case rich a & middle class people can effort to buy this product.

Table lamp: The important Product of IKEA which is used people in every category. There is huge colour and shade of table lamp is available in the super market. That is why all generated people chose this product. If we segment this product than we can say the children may be prefer it as a variety of colour. Most of the young people will attract to use it for decorating room with verity of size. In case of old generation they will prefer this product for price because it is low price than other company. Geographically, urban area will be more business proper than the rural area. Another impotent factor for family groups is environmental friendly and sustainable price.

Target Marketing:

Target marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. Target marketing can be the key to a small business’s success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities. There are five target strategy described below:

Identifying competitors:

Once you have identified your target market, then you need to understand who your competitors are. The more knowledge you have about you competitors, the more equipped you will be to market and sell your services effectively to their clients. The knowledge you have about your competitors and how you use that knowledge will be either to your advantage or disadvantage, depending on how you market your services.

Advertising Avenues:

The key to telling your story in the marketplace is to advertise effectively. Conduct necessary research to ascertain where your customers are reading about the latest trends in the marketplace, and ensure your advertising methods meet your customers where they are. Direct mail, email, fax blasts, trade magazine advertising, radio, TV, collateral pieces, and trade shows are some of the many examples that companies can use to advertise themselves effectively.

Marketing Campaign and Strategy

Develop a marketing strategy that will carry your message to the streets and support your sales team’s selling efforts. An effective marketing campaign both brings leads and enables your sales representatives to sell to more qualified leads proactively. Sit down and determine the message that will bring the biggest impact to your target customers, and develop an effective, long-term marketing campaign that will carry that message to the marketplace.

Product Knowledge

Understanding your own products and the value they bring to the marketplace is critical to developing effective marketing practices. Your product line is your best offense when facing your competition, so it is critical that your marketing department positions your products to their best selling advantage. Your marketing department needs to make sure that the key benefits of your product or service line are well-known to the sales department, and that they are the focus of all marketing campaigns.

Industry Knowledge

Understanding your industry is critical to marketing effectively to the marketplace. Staying on top of industry trends will enable you to create newer, fresher products that hit the market more quickly and impact-fully than your competitors. Also, knowing the resources to use such as trade magazines, industry-focused websites, trade forums, and industry experts will help you most effectively keep abreast of all that is going on in the industry.

Behaviour of buyer:

An important part of the marketing process is to understand why a customer or buyer makes a purchase. Without such an understanding, businesses find it hard to respond to the customer’s needs and wants. For a marketing manager, the challenge is to understand how customers might respond to the different elements of the marketing mix that are presented to them. If management can understand these customer responses better than the competition, then it is a potentially significant source of competitive advantage. Research helps find the real reasons why we buy what we buy. This requires time, money and expertise. Surprisingly many other organisations don’t really know exactly why their customers buy or don’t buy from them. Yet understanding customers is at the heart of marketing. Once the reasons why people buy or don’t buy are discovered, the marketing mix can be changed to suit the buyer’s needs and wants.


The psychology of each individual considers the product or service on offer in relation to their own culture, attitude, previous learning, and personal perception. The consumer then decides whether or not to purchase, where to purchase, the brand that he or she prefers, and other choices. A customer’s approach to purchasing a product or service is influenced by their situation – whether they have money and how important, frequent, risky or urgent the purchase is to them in their situation. Imagine the difference between someone with plenty of money who can afford to make a mistake when buying as opposed to someone who has scraped her last few pounds together. They might both be buying the same product but their financial situation suggests that their approach to buying will be very different. Customers make more of an effort, and become more involved, if the purchase is relatively important to them – particularly if they have no previous experience of buying such a product or service.

Product developing:

Before starting this point we should know what is product? Well, if anything able to fulfil customer need with fully satisfying which they buy for specific reason this is called product. The major quality or feather of product is tangibility. Off course, intangible anything not counts as a product such as reputation of company because it is one kind of service. One important way, to make product developed is brand and design. But product and brand is not same thing. A product is made by factory while brand is something which customer buys for consumption. So to develop the product factory should improve the quality and design of brand that people buy. Therefore, the management of product and brand should be aware about marketing process. It is not easy way to achieve customer loyalty and high market sale without product development. It is also not possible if brand and quality of product are not accepted by customer. IEKA got it high market and customer loyalty in the world not only by its quality and brand but also its marketing policy.

Product distribution:

Distribution is an important section of marketing. It can increase sales by providing proper way of distribution with achieving customer satisfaction. There are distributions Factors which make customer comfort:

Market factors.

Producer factors.

Product factors.

Market factors: An important market factor is “buyer behaviour” how do buyer’s want to purchase the product? Do they prefer to buy from retailers, locally, via mail order or perhaps over the Internet? Another important factor is buyer needs Information and servicing of product. Intermediaries are often best placed to provide servicing rather than the original producer – for example in the case of motor cars. The willingness of channel intermediaries to market product is also a factor. Retailers in particular invest heavily in properties, shop fitting etc. They may decide not to support a particular product if it requires too much investment (e.g. training, display equipment, warehousing).Another important factor is intermediary cost. Intermediaries typically charge a “mark-up” or “commission” for participating in the channel. This might be deemed unacceptably high for the ultimate producer business.

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Producer Factors: A key question is whether the producer has the resources to perform the functions of the channel? For example a producer may not have the resources to recruit, train and equip a sales team. If so, the only option may be to use agents and/or other distributors. Many channel intermediaries focus heavily on the customer interface as a way of creating competitive advantage and cementing the relationship with their supplying producers. If a manufacturer sells via a retailer, they effective lose control over the final consumer price, since the retailer sets the price and any relevant discounts or promotional offers. Similarly, there is no guarantee for a producer that their products are actually been stocked by the retailer. Direct distribution gives a producer much more control over these issues.

Product factor: Large complex products are often supplied direct to customers (e.g. complex medical equipment sold to hospitals). By contrast perishable products (such as frozen food, meat, bread) require relatively short distribution channels – ideally suited to using intermediaries such as retailers.

Price setting process:

From the ancient time it was controversial section to setting price of the appropriate product. According to Shapiro and Jackson, every company should follow one of the three methods for price setting such as cost oriented, competitors oriented, and marketing oriented. In generally company set price of the considering the cost of product manufacturing and marketing which up to reach consumer hand. These costs depend on quality of product, label, and distribution and so on. For marketers selling through resellers the pricing decision is complicated by resellers’ need to earn a profit and the marketer’s need to have some control over the product’s price to the final customer. In these cases setting price involves more than only worrying about what the direct customer is willing pay since the marketer must also evaluate pricing to indirect customers. Another important way of price setting is competitors oriented which is the faction of the present world. In the Competitors oriented process need to compare with other company and always try to increase sale anyway. But most of the customer does not like these criteria because they think about quality and brand not price. In case of IKEA, It follows the marketing oriented and cost oriented process because it is a renowned and worldwide company. They no need to competition with other because it manufactured its own brand so that they thing about the manufactured cost and increasing sale.

Promotion activity:

One important ‘p’ among the 4p is promotion. In general way, Promotion actually means improving interpersonal capacity. But in the business world, this word used to gaining business prosperity as a reputation company like IEKE, TESCO, TOYOTA, etc. Normally a company can change situation by achieving promotion in various way like sowing public relationship with customer, improving personal selling, advertising and many others way. Personal selling is important way to improve individual customer relationship. Besides sale persons are important rule for the company because all of the action depends on them. IEKA Provide range of promotion activity for improving sales which lead it to gain company rank or promotion. In recent, From 10 to 24 March 2010, IKEA develops an interesting event in four important metro stations in Paris. Furniture collections are currently displayed in high-traffic spots, giving the potential customers a chance to interact with the brand by checking out the products. The subway walls are also filled with prints that showcase IKEA interiors. What a creative way to do advertising! Moreover, this action completely changes the way the Paris subway station look and creates a cool atmosphere.

Marketing mix:

The marketing mix is probably the most important marketing term. It describes the basic, tactical components element of a marketing plan. In generally known, as the Four P’s , the marketing mix elements are price, place product, and promotion.


IKEA’s Price strategy is completely based on cost oriented. Across the markets where it currently has a presence, products are sold at low prices. Prices are 30 to 45% lower than competing products which is a crucial technique of IEKA. Price variations are only a result of fluctuations in exchange rates. This penetration pricing enables IKEA to gain significant market share in the world. Low prices are a result of large-quantity purchasing, low-cost logistics, store location in suburban areas and a DIY approach to marketing. IKEA also benefits from economies of scale and healthy supplier-firm relationships. IKEA enters into long-term contracts, provides leased equipment and technical support in exchange for exclusive, low-cost manufacturing from suppliers. For new markets, IKEA should retain its price-image to maintain the brand’s positioning.


The value chain of IKEA is unique in that customers are also suppliers and suppliers are also customers. There are valuables transactions between the supplier and IKEA and on to the customer which help them to each stage. One another important criteria of the IKEA, is Product differentiation that exists in the value-added dimension. But sometimes IKEA’s consumers are treated as ‘presumes’ with most of its products requiring assembly after purchase. While this is well accepted in areas where IKEA now operates, it may be a point of consideration when entering new markets. Should IKEA encounter a market where DIY is not favoured, IKEA may include the cost of the service to the product’s price.


The third market mix criteria are place or location. In this case all of the IKEA’s stores are located in suburban areas. This is a factor in the achievement of IKEA’s low pricing. While it may appear as a disadvantage, this fits IKEA’s target market of customers willing to transport their own purchases and requiring less assistance in assembly.


IKEA Have proposed variety of option to providing promoting in the purpose of encouraging people one of them is “Work At Home” promotion aimed at boosting sales of home office-related merchandise. Realizing the potential of our online database, the decision was made to utilize electronic mail as the primary medium of communication with the public, which required that we identify and utilize the optimum e-mail list management solution.

Expended marketing mix:

We already discuss about marketing mix which is consist 4p (Price, Product, Place, and Promotion). But without 4p there are more 3p such as People, process, and Physical evidence. Basically, these 3p used to service related industry or organisation. And these are also intangible product which is not appearing in physically like, reputation of company and achieving promotion. The main target of this marketing to making consumer satisfy by providing best service not quality of product. The consumers of the marketing can be segmented into different way. There are 3p below those are providing service to the consumer:

People: People mean staff of the organisation that helps to the customer directly. Peoples are important factor in the consumer market of organisation for gaining success. The provide service into the different market segmented organisation.

Process: Process is one kind of technique and mechanical strategy of the marketing these are help consumer by given them essential modern facility. For example, more of the cash point provides service to the consumer here people get money instantly.

Physical evidence: another most important element is Physical strength that means help to the consumer in the field label. We know that some of the company’s work in field like, day labour, Driver, and mailing, packaging here need physical strength to achieve customer satisfaction. Consumer in every age and category want to service physically from the organisation.

Different between product and service:

The most important distinguish between the product and service is tangibility. Product is a tangible element in any kind of organisation or industry while service show is fully opposite scenery of the organisation which is intangible and appear less just only evaluate by the consumer satisfaction. Another characteristic of product is fixed measurable but service not measurable at any time. Because if a customer have bought any product yesterday and now today he/she want to buy again, at is possible to get same product but in case of service it is almost impossible to get same service from the organisation he may get better or poor once because it is intellectual habit. On the other hand, in term of consumer every organisation evaluates its consumer in the same eye it does not differ into poor and rich consumer. This is the way of marketing. Although market segmentation divide consumer by the demography and geographically. So consumers are less difference than the difference between product and service.

Different between international and domestic market:

International market means researching market according to the international view of people. While domestic market only analyse the own country’s marketing where it situated. It is sophisticated discussion to find out that why and how international and domestic market is not same. It will be crystal to us if we PEST (Political, Economical, socio-cultural, and technical) analyse in the current world business. In the political factor, one country does not give permeation to enter another country easily for business purpose thinking about it domestic business may lose. We know that the economical status of all country in the world not same that is why the developed country does not wise to business with poor country. Another important factor is culture, religion, and society these are not same in the world so it is main obstacle in the international market. For example, the Bangladeshi people take tea or coffee after meal while British people like drink or alcohol. But now a days, in the technological arena which attract people to involve international business. In case of IKEA how it gain international market, this was only because of IKEA’s worldwide service.


As mentioned in the case study, UK’s furniture market is very brightness. So in the view of increasing share market, IKEA needs to focus on positioning itself as the one stop centre for all home furnishing needs. IKEA should have target their marketing effort on middle-upper, educated segment of UK’s people, as they are the one that will be more open to accept new ideas and concept that has to offer. Also IKEA should different itself, focus on the experience it offers to shopper, not just the low price products.


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