Week-5 IKEA Case Study Khanjanben Patel King graduate school, Monroe college MG 660 Strategic marketingOctober 14, 2018 Abstract Marketers must have a through knowledge of consumer behavior. Consumer behavior is the study of how consumer as an individual and as a group select, think, feel, buy, use and act to goods or products to satisfy their needs and wants.
Certain factors influence consumer behavior like cultural, social and personal. Doing research into these factors can provide clues to marketers to reach and serves consumers more effectively. Serving consumers as per their buying behavior makes company successful.
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IKEA is a good example for this. It is the largest furniture retailer in the world, with approximately 360 stores in 43 countries. IKEA makes and design their product as per market need. This feature makes IKEA more powerful than its competitors in the furniture retail market. IKEA Case StudyWhat are some of the things IKEA is doing well to reach consumers in different markets? What else could it be doing?Whenever IKEA expands its stores in a new country, it studies that country’s market, consumer need and behavior first before design any product.
When IKEA expanded its stores in China, it gave importance to the local taste of China. IKEA placed plastic placements with “year of the rooster” themes, which sold quickly. When IKEA realized that U.S shoppers were buying vases as drinking glasses because they considered IKEA’s glasses too small. So, IKEA changed their glass design and size as per U.
S market need. IKEA changed its showroom design as per U.S consumer perspective.
IKEA realized that U.S consumers think that IKEA sold only European size beds. So, IKEA quickly changed its U.S showroom design which featuring king size bed and a wide range of styles. Some of the great things IKEA is doing to reach consumers are as below- Provide stylist and customized products.
– Provide products according to the need of consumers of the country- Low price furniture stores- Product adaptation according to the need of different market- Flat packaging concept which makes easier for customers to transport furniture. It makes storage and transportation easier and cheaper for the store.What else it could be doing? IKEA can expand its market in South Asia and African countries.
IKEA has not more stores in South Asian countries. In South Asia, some countries like Pakistan, India, Bangladesh, Sri Lanka, Philippines have huge market for furniture, so IKEA should expand its market in these countries. – Start online retail business- Make use of social media to get customer feedback and to increase awareness of products worldwide. – IKEA can go for environment friendly products and technology- IKEA can use catalogues for easy look out of products and customers convenience. IKEA has essentially changed the way people shop for furniture.
Discuss the pros and cons of this strategy, especially as the company plans to continue to expand in places like Asia and India. There are some pros and cons of strategy which IKEA changed as per consumer buying behavior. Pros:Peculiar marketing campaigns which produce excitement and awareness of its product.IKEA’s low-cost concept keeps it on top position compared to its competitors in furniture retail market. IKEA provides low cost with good quality.Provide products as per market and consumer needs.Family oriented place.IKEA provides its products using unconventional names, so customers can easily recognize its products.
Displaying wide variety of products and the layout of shop designed in a one-way format, so customers can easily see everything at one place. Provide flat packaging system, so it makes transportation easy for consumers. Its products are affordable to everyone. Cons: Lack of product innovation. Designing of the shop can be immense for the customers because they may not decide from where to start.Lack of proper technology available for marketing and advertising, so consumers may go to another place. Changing social trend can inhibit the growth of sales of IKEA.
These all are some pros and cons of strategy which IKEA used specially when it plans to expand in Country like India. To expand its market in India IKEA should do proper market research and try to do innovation in its product as per Indian market needs. Indian consumers are used to with mall type showroom designs.
In that situation one stop shop design will not be successful in Indian retail market. Pollution is one of the biggest problems in Indian market. So, IKEA must apply some environment friendly procedures in its product design and manufacturing process. Indian furniture market is dominated by small local shoppers. So, entry of the global played like IKEA will be more challenging. In India IKEA would apply specific strategy as per Indian consumer behavior.
India has abundant rubber wood supply, so IKEA can use this local raw material for manufacturing of its products that would save raw material and transportation cost. Indian consumers are amongst the most perceptive consumers in the world, so IKEA must apply different strategy from its ordinary one. India is culturally diversified country, so IKEA must apply certain marketing strategy as per local Indian consumer buying behavior. Indian consumer always take advice from architecture to design home furniture. So, IKEA should do promotion and marketing campaigns specially for architectures who influences Indian consumer behavior for buying furniture products. ReferencesKotler, P. ; Keller, K.L.
(2015) Marketing management, 15th editionhttp://indianonlineseller.com/ 2017/01/5- furniture-retailers-making-A-Mark-in-the-Indian-market