In accordance with IKEA’s buying process, furniture is shipped in flat boxes and customers have to assemble it, when they return at home. This enabled the Company to cut cost on manufacturing and distribution so as to provide customers with lower prices at retail. In addition, IKEA’s strategic choice to locate its stores on the outskirts of the cities allowed the company to save money on building expenses lowering its prices even further. Moreover, the company’s capability to identify its suppliers on its own has resulted in minimizing all intermediate agent costs. This, in turn, led to a further reduction of the final retail price. The company’s low-pricing policy has consistently responded to those surveys indicating that IKEA’s customers are much more price sensitive than other groups of …show more content…
From the moment customers walk in an IKEA store taking a pencil to write down the list of the products they desire until the time of the assembly at home, they feel that this is not just an ordinary purchasing process, but an original way of identification with IKEA’s Swedish tradition and culture. Innovation, openness, care and authenticity are perceived as common Swedish values enhancing the image of IKEA in any country it does business. Moreover, by engaging customers in the purchasing procedure, IKEA has achieved to create genuine long term relationships with them creating value in several ways. Customers’ input before buying IKEA’s products and when assembling them at home generates an emotion of fulfillment and pride.
The company’s strong belief has always been that customers’ satisfaction leads to loyalty. Actually, IKEA has regularly measured its customer’s satisfaction analyzing the latter’s lifestyles and what benefits consumers seek from the Company. To respond to any possible concern or anxiety of its visitors, the company has even proceeded to the creation of children’s areas and restaurants located in the stores, so as to make their customers consider shopping at IKEA as a family event.