Ikea Marketing Strategy Essay

1356 Words May 21st, 2012 6 Pages
IKEA’s Marketing Strategy
IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture. The company is the world’s largest furniture retailer. It was founded in 1943 by 17-year-old Ingvar Kamprad in Southern Sweden. As of October 2011, IKEA has 326 furniture stores, operates in 38 countries and engages 1,500 suppliers of 12.000 products. In fiscal year 2010, it sold $23.1 billion worth of goods, a 7.7 percent increase over 2009 (http://en.wikipedia.org/wiki/IKEA).
In 1995, outside the Milan fair, which is the most prestigious exhibition fair in the world for élite furniture designers, a sign declared: “Il design democratico” [“Democratic Design”]. The sign pointed to a building that
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This was a radically different value proposition from the traditional, full service, expensive, high street furniture store (Kumar, Scheer and Kotler, 2000).
In his article which was published by Harvard Business Review (Nov-Dec’96 edition), Michael E. Porter argues that IKEA targets young furniture buyers who want style at low cost. Instead of having a sales representative accompanies customers around the store, IKEA uses a self-service based model based on clear, in-store displays. Rather than relying on third-party manufacturers, IKEA designs its own low-cost, modular, ready-to-assemble furniture to fit its positioning. In huge stores, IKEA displays every product it sells in room-like settings, so customers do not need a decorator to help them imagine how the put the different pieces together. Next to the furnished showrooms is a warehouse section with the products in boxes on pallets. Customers are then expected to do their own pick-up and delivery.
Although much of its low-cost position comes from having customers “do it themselves”, IKEA offers a number of extra services that its competitors do not such as in-store child care and extended hours. Those services are uniquely aligned with the needs of its customers, who are young, not wealthy,

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