Report on International Marketing Strategy of IKEA


Contents
Introduction: 3
Discussion about the Marketing Strategy 4
A Comparison of marketing Strategies: 8
Explaining the comparison between IKEA UAE v/s IKEA UK promotional strategies: 9
Bibliography 10

Introduction:

IKEA is a Sweden based company, and has its registration done in the Netherlands, basically dealing in the Retailing business of Home Furnishing. It was founded in 1943, by Ingvar Kamprad, a 17 year-old boy. The name of the company is an Acronym that consist of its founder’s initials, Elmtaryd (his childhood farm), Agunnaryd (his home town) owned by the Non-profit Foundation. Well-designed, less expensive functional furniture are the major characteristics of the Furniture of IKEA. It is regarded as one of the world’s largest retailer and designer. Also, in 2013, Ingvar Kamprad was included in the list of the world’s richest person IKIA has globally established its business. At present, it has been established in around 29 countries with 140 stores across the globe. It has been designing around 11,000 products in its product line and its production is carried on at both i.e. the Production facilities of IKEA and its suppliers. (Company Information, 2014)
Ingvar Kamprad started a small sales business, mostly mail ordered sales. Five years later, he began to sell furniture.Amlhult Smaland, was the first place where the first ever Model IKEA store was opened, in 1958. Apart from home country, the first global country in which IKEA store was opened was Norway and Sweden, in 1963 and 1969 respectively. The current countries covered by IKEA are Europe, Asia Pacific, North America and Middle East countries. The main Principle of IKEA is “We Earn our Money, Before We Spent It”
Its vision is,
• To create a good life for the people.
• To provide quality at reasonable prices, so that everyone can afford its products.
• Its vision is to give best furniture to people and make their daily life better, because according to IKEA the most important place for an individual, is its home.

Discussion about the Marketing Strategy:

IKEA is established worldwide. In UAE, Al-Futtaim’s retail is a branch of IKEA in UAE, founded in 1990. It was launched in UAE due to the increasing popularity of IKEA’s top brand Marks and Spencer and IKEA’s ACE franchises in UAE.
The Marketing strategy of IKEA is based on the marketing Mix. IKEA is an internationally recognized brand and offers a wide variety of products to different countries, at different prices using a different distribution channel in each country and different promotional strategy in each country of its establishment. However, in the coming analysis, the “Promotion Strategy” of the Marketing Mix has been used to discuss and compare the Marketing strategy of IKEA in UAE with IKEA in UK.
Laws for Promotion Activities in UAE:
The Advertisement laws of UAE are quite strict. It includes in it political and religious respect, Prohibition of advertisement of prohibited goods, services and contents, privacy, the consumer protection Act, fair and true disclosure of information about the product and many more. All the company needs to abide to these Advertisement rules.
IKEA and its Promotional strategies in UAE:
IKEA has organized its promotional strategies on the basis of marketing trends and conditions and cultural sensitiveness. IKEA has worked on its advertisement strategies in order to capture its customer’s attention. Also, Advertisements contains certain laws and regulation which guides a company in the way they can advertise in any particular country. For example, in The US ads related to health are more seriously regulated.
IKEA has been known as a standardized retailer. The business Concept and the main Idea behind the Establishment of IKEA in UAE was to provide a low-priced product to the customers with better quality and well-designed functions. Thus, “low pricing” is a competitive edge of IKEA, after all IKEA aim is to provide a better life to everyone. Key promotional Strategies of IKIA are, (Foss & Jonsson, 2011)
Low Pricing:
There are many competitors of IKEA in Dubai Local markets like PAN Emirates, which is regarded as the market leader of furniture in UAE and ID Design, which offers modern furniture sets and products with unique design and styles. Due to this growing competition in the furniture industry IKEA had to tremendously increase its promotional strategies in order to cater to its target audience. The basic “promotional strategy” of IKEA includes “Advertising its product as low priced”. (Jabnoun & Khalifa, 2006)

Selling Automatically:
IKEA believes in customer satisfaction and self-sufficiency. Due to this it has minimum staff in its store. This can automatically lower the cost of training and maintenance the
Employees. In the above picture, we can see that IKEA has a minimum number of employees in its stores. This is because they want their customers to individually experience the product and its uses.
IKEA self-made Designs:
IKEA designs its product on its own. IN UAE, different range of products from children’s IKEA products to IKEA Chairs, Mirrors, Wardrobes and Lounging and relaxing furnitures.it has created a trend setting designs. The pricing strategy of IKEA has been a key success factor in UAE. The company has offered many huge discounts, free-bees and price cuts as a promotional strategy for the company.
Monthly offers:
In order to attract the customers IKEA has come up with a scheme called” monthly offers” in UAE. Here, the company gives special discounts every month on few furniture items to UAE customers and few vouchers and free bees over and above a particular purchase limit. The monthly offer can be seen by the customers on the website of IKEA, UAE.
IKEA Family Card:
This is one of the pricing benefits offered to the UAE customers of IKEA wherein, the “IKEA Family Card” holder is offered discounts on the card and free family meals at IKEA restaurants.
IKEA Newsletters:
This is another type of pricing strategy to attract the customers, which is initiated by IKEA, UAE. With this newsletter, the customers of IKEA will receive discount coupons, ideas on home furnishing, updates relating to store events and contents.

It’s an Advertisement offer by IKEA which says that by using an Emirates NDB credit card at IKEA stores, then the company provides 0% installment plan for 3,6 or 12 months for the bedroom furniture.
IKEA Catalog:
The company introduced new and well-designed catalogs for people of UAE in order to view IKEA products more properly. IKEA has recently launched a 2014 catalog and distributed in Abu Dhabi, Dubai and Sharjah. This catalog provides a wide variety of goods to its customers with lots of discount offers.
Pinterest:

This is one of the very old and popular promotional tools undertaken by IKEA in UAE. Looking at the comfort level of the people of UAE such pinterest has been made.
These are few of the promotional strategies taken up by IKEA along with its “low priced objective” in UAE.
A Comparison of marketing Strategies:
Promotional and Marketing Laws in UK:
In the UK the marketing and promotional strategy completely differs. Here products are promoted in more straightforward manner. Also, the Advertisement policy in UK contains very strict rules and laws and prohibition of such laws leads to heavy penalty.UK has 2 Advertising codes. The county has some codes related to non-broadcasting and sales promotional activities which say that every country must stick to the honesty and truth while conducting such advertisements. The rules’ enforcement authority is ASA (Advertising Standard Authority).
IKEA in UK has undertaken a lot of marketing technique like,
Digital Catalogs:

IKEA introduced a digital catalog application. It has extensively used social media in promoting its product. IKEA has launched its latest Digital online Catalog, which is filled with many new stories and information about the product thereby providing its customers with a refreshing shopping experience. (Carter & Lee, 2011)

Internet Promotion
Around 1.5 lac fan following has been recorded for IKEA on Facebook. There are a lot of promotional codes available for IKEA if the customers buy online through IKEA website.

Pinterest:
It’s a most important visual discovery tool. This particular is a sample which shows us a way in which we can combine the cabinet, drawers and door. It is one of the pinterest of IKEA to attract UK customers.

Outdoor promotion:
IKEA has undertaken outdoor Champaign. Also, the company has spent almost 70% of its annual marketing in its outdoor promotion. The company has made judicial use of “out of Home” by undertaking outdoor campaigns.
Explaining the comparison between IKEA UAE v/s IKEA UK promotional strategies:
It is believed that the promotional strategies of IKEA in both the countries are standardized. However, all the Advertisements and promotional tools used by IKEA different in certain aspects and parameters like,
• Design Aspect: The pinterest advertisement of IKEA, UK concentrates more on the space utilization and small bathroom designs. However, the pinterest design of IKEA, UAE is designed taking into account the traditional and cultural choices of the people of UAE.
• Priority wise Catalog making: Online catalog for IKEA, UK is more customized and designed to give a freshness feeling to its customers in order to attract more and more customers. However, the Catalog of IKEA, UAE is more prices and offers oriented. This is because, the UK customers are more attracted to design and attractiveness look of the catalog and UAE customers are more attracted towards the pricing factor and promotional vouchers and codes attached to the Catalog. (Martenson, 2006)
From the above information and comparison of IKEA promotional Strategy of UAE and the UK, we can say that IKEA has used the same tools for promotion of its product and the same Promotional strategy. However, IKEA has very wisely and finely structured and molded its similar promotional strategies in different countries by taking into account the culture, lifestyle and the tradition of every different consumer belonging to different countries.
Bibliography
Company Information. (2014). Retrieved March 28, 2015, from IKEA: http://www.ikea.com
Carter, S., & Lee, K. (2011). Strategic Direction . Global Marketing Management.
Foss, N. J., & Jonsson, A. (2011). International expansion through flexible replication: Learning from the internationalization experience of IKEA. Journal of International Business Studies, 1079–1102.
Jabnoun, N., & Khalifa, A. (2006). A customized measure of service quality in the UAE. Managing Service Quality: An International Journal, 374 – 388.
Martenson, R. (2006). IS STANDARDISATION OF MARKETING FEASIBLE IN CULTURE‐BOUND INDUSTRIES? A EUROPEAN CASE STUDY. International Marketing Review, 7 – 17.

Skills

Posted on

March 7, 2018

Submit a Comment

Your email address will not be published.