IKEA Marketing Strategy and practices: A Case study
IKEA Marketing Strategy
Building a global brand is not an easy task. While excellent product quality and affordable prices can be good for penetrating new markets, the way a brand is marketed decides its fortune in the long term. In the global environment, success rests especially on marketing. IKEA is a well-known global brand of home furnishing products. Behind its global presence and excellent performance is an excellent marketing strategy. However, IKEA has not achieved its success without being through its fair share of troubles. It too has experimented and been through ordeals before being successful in the foreign markets.
Cultural sensitivity has grown important in the 21st century. The one size fits all strategy will not work any more. IKEA too had to face cultural hurdles while trying to penetrate new markets. Today, it is a highly recognized brand and behind it is the power of marketing. The Swedish brand of furniture sells a wide range of home furnishing products. Its affordably priced but good quality products have grown popular in several countries globally. This is an analysis of the marketing strategies and techniques IKEA utilized to achieve global success.
Store design and location:
IKEA sells more than 9500 products from its stores. For such a large range of products, a brand must also have excellent store design. This does not just increase shopping convenience for the customers, but provides a pleasant experience and helps create a great brand image. If shopping from a store is an exclusive experience in itself then more and more customers would like to visit and revisit. Traditionally, the IKEA stores have been like warehouses located outside the town where customers can shop in peace. However, rising urbanization and e-commerce have made IKEA experiment with new formats. It introduced pick up points, small stores and inside the town stores. The pick-up points are for the online customers from where they can pick-up the products they ordered online. The smaller stores are built in towns where a full size store may not be necessary. These stores showcase a limited range of products. The third type, full size inside the town stores with transporter bikes are being opened at city centers in the large towns. However, IKEA has designed its stores in a manner to provide its customers with an unforgettable experience.
Their maze like design provides a unique experience. There are maps to guide you through the labyrinthine stores so no customer feels lost. Its stores' design is a primary attraction and apart from customer convenience it helps at customer engagement. Both these factors have grown important to marketing a retail brand successfully in the 21st century. Inside the stores there are tiny model homes so the customers can borrow ideas for interior decoration. They can grab ideas from the models at IKEA store. There is also space for you to drop your kids or have lunch if you are feeling hungry. The IKEA cafeteria serves cheap yet good quality food. In this way, IKEA has designed an entire experience inside its stores that maximizes shopping pleasure. The purpose is to engage the customers and attract and retain them in larger numbers. Such an experience also creates a lot of favorable buzz for IKEA.
The target market of IKEA is mainly the global middle class. It sells good quality and durable but affordable home furnishing products. The middle class consumers generally look for products that are good in terms of design and quality and come for low prices. It is also a reason behind the increasing presence and popularity of IKEA globally. The consumer demographics are also changing globally and the focus is now on the millennials. However, IKEA sells contemporary and stylish designs that are a big favorite among the millennial customers. Through its affordably priced and good quality products, the brand has been able to attract the millennial and middle class consumers in large hoards. It complements its products with a great customer friendly shopping experience.
IKEA uses a variety of promotional techniques to promote its brand. Most unique and most successful among the tools used by IKEA to promote its brand are the promotional catalogs. It is also the most used and most effective of all its marketing communication channels. These catalogs of IKEA products are printed in several languages and different catalogs are served in different markets. Apart from unique home furnishing ideas, there are real life stories and a wide range of products showcased through the hundreds of pages of the catalog. The catalog is available both in print and online. Apart from that an extended version of the catalog is available in the IKEA app. The IKEA websites, publications, brochure, advertising and public relation campaigns are also used for the promotion of the brand.
IKEA uses both traditional and digital channels to advertise and promote its brand. It has used social media to attract and engage customers. Separate country pages are used to engage customers on Facebook. Pinterest, Twitter, Google plus and other social media channels are also used by the brand to promote itself. From time to time, it also uses well designed outdoor campaigns for promotion. Now, IKEA is using augmented reality to help customers get a better experience of how well IKEA products fit into their homes and lives. Another key area where IKEA has focused to build a better reputation is sustainability. People and environment are an important focus area at IKEA. This has helped it build a stronger brand image.
When IKEA started expanding to overseas markets, it did not outright see the kind of success it expected. It researched to find out the reason. The reason was that people’s taste, style and preferences varied from market to market and culture to culture. It was not essential that the furniture or the glasses popular in Sweden were going to be loved in US or UK too. So, IKEA decided to bring changes to its products and marketing techniques and adapt them to the local markets. It studied local cultures and their preferred styles before introducing products in new markets following which its products started selling and growing popular. From product designs to its catalogs all are developed keeping local culture and tastes at the center. Brand localization has helped IKEA find quicker success in the overseas markets.
CSR and Sustainability:
Apart from everything IKEA invests in CSR and sustainability to improve its image and reputation in the society and among its customers. While investing in CSR and sustainability is good for the planet and for the future of the communities, it is also good investment in a brand's reputation and helps engage the customer audience better. It is in vesting in healthy and sustainable living, energy and resources as well as people and communities and governance and ethics. It starts with making more sustainable and affordable product range. Sustainability is one of the five dimensions of democratic design at IKEA. By investing in more sustainable products the brand is investing in a greener future for the brand. Apart from these things, IKEA is working to improve the condition of migrant workers as well as that of social entrepreneurs and children in disadvantaged communities. Its publishes its efforts .and investments in CSR every year in the for of an annual publication in its annual CSR report. The brand has also partnered with Save The Children for the protection of the children's rights and to prevent child labor and promote the welfare of children globally. The two organizations are working together to address the root causes of child labor in several parts of the world including India and Pakistan. IKEA also raises money to provide quality education to children from disadvantaged classes. Over the several years along with Save the Children and UNICEF, IKEA has reached out to more than 11 million children in 46 countries providing them quality education and saving them from utter poverty. Involvement in such programs globally has helped the brand grow a strong reputation and create a better image among its customers and the community.
All has not been so easy for IKEA and it faced several big challenges on the way. Primarily, the challenge of culture and adapting to suit local cultures has been the biggest one. In 1994, IKEA had to face significant protests and criticism for using ads casting gay couples. Again, it has faced severe criticism for not casting women in its Israeli catalog. “The male-only catalog featured ultra-Orthodox models (wearing sidelocks and kippah hats) and highlighted items in demand among ultra-Orthodox families, such as bookshelves carrying extensive collections of books on Jewish law, and folding tables and beds meant to accommodate visitors during big family gatherings on Jewish holidays”. (DW, 2017) The cultural challenges abound and one or another challenge always troubles the international brands like IKEA. While designing and printing its catalogs, IKEA has to ensure that they rhyme with the local culture and flavor. It is not just IKEA, several other brands too have born the ire for using culturally offensive material for advertising.
Today, IKEA is a successful brand. However, the power of marketing is evident behind its success. One key thing that is important to focus when operating in a global environment is cultural sensitivity. IKEA has responded to the cultural challenges by using product designs and marketing techniques that suit the local markets. Most important things to be successful in any market are product quality and pricing strategy . IKEA has managed these two factors very well. Its products are not just affordable but also of great quality. Apart from that, IKEA has complemented it all with great customer convenience and tried to engage shoppers in the best possible manner. Its catalogs are its main medium of marketing communication. Print and digital channels also play an important role in the marketing of its products and promote its brand. It has also released an app and is using augmented reality to provide customers with a better experience. IKEA’s case suggests that marketing in the international environment requires intense focus and apart from advertising you must engage your customers better.