Analysis of Ikea’s Marketing Strategy
Ingvar Kamprad, a 17-year-old carpenter, founded IKEA in 1943. IKEA is a well-known global brand today. It began with the sales of pens, wallets, and jewelry to satisfy consumer needs at reasonable costs.
Today, IKEA focuses mostly on ready-to-assemble furniture, kitchenware, and home furnishings with the same motto. The introduction of furniture in the business model was done after five years of its inauguration.
IKEA now operates with 422 stores in 50+ markets. IKEA is a well-known furniture brand that has an extensive customer base in Europe with over 70% of its stores. Recently it launched 19 new stores. With recognizable logos, campaigns, and advertisements, Ikea has set a strong brand example with its marketing plan.
IKEA’s success may be attributed in large part to its high-quality goods, reasonable prices, and DIY assembly philosophy. Additionally, the company’s marketing plan is customized to be among the best in the industry, which also helps.
IKEA Target Audience
IKEA Business Model
IKEA Marketing Strategies
IKEA Target Audience
IKEA caters to the specific functional requirements of each target market, with a focus on people between the ages of 16 and 34. It has offerings for bachelors, singles living alone, newly married couples, families with children below 6, Older couples, the labor force, students, professionals, etc.
It caters to the requirements and preferences of a specific client segment that values affordability.
IKEA provides customized options to the client based on their shopping taste and also frequently repositioned the products and services in order to let the customer experience each and every detail of their products. With ongoing popularity, it is not inappropriate to say that IKEA reflects minimalism through its products.
IKEA Business Model
They employ a price-leadership tactic. Low prices serve as the primary pillar of the IKEA vision, business strategy, and philosophy. IKEA products are a spotlight for people looking for deals.
The foundation of its whole business strategy is pricing its product as affordably as feasible. IKEA’s business strategy is centered on its goal of offering a wide selection of well-designed, functional home furnishings at prices that allow as many people as possible to afford them.
IKEA Marketing Strategies
One of the most profitable sellers of home furnishings and accessories in the world is IKEA. The business has established a solid name for its chic, cost-effective products and cutting-edge marketing techniques.
Product innovation, improving the customer experience, digital marketing, and sustainability programs are among IKEA’s primary marketing methods. These tactics aid in ensuring that Ikea can continue to serve customers’ demands ethically while still being competitive in the market for home furnishings.
IKEA maintains its position as a market leader and is well-positioned for expansion in the future by utilizing these basic methods.
1. Brand Identity
The brand employs a consistent and easily recognizable theme. The blue and yellow logo with the bold font was first published in 1967 and it has been consistent over the years.
The product names and colors are also easily recognizable.
It has also remained consistent with its original mission of high quality at affordable prices. IKEA which started as a seller of pens and wallets has grown into a globally acclaimed furniture store but stays strong about its mission. “To create a better everyday life for the many people”.
You must build your brand in a way that makes clients choose you over rivals. IKEA is extremely focused on this. Its goal is to take leadership of every household. IKEA puts the customer and the product first, something that many companies struggle to do.
If you produce what your clients desire, you may establish a strong brand identity. Your brand should be reflected in all of your actions. IKEA uses this tactic in its marketing. You won’t have to think too hard to recognize this as an IKEA advertisement if you’ve been following IKEA for a long time
IKEA boldly displays its cultural history, from the national colors of Sweden painted on its buildings to the delectable meatballs served in its store cafeterias. It’s better to flaunt your heritage!
Delivering a cohesive experience to your audience is made easier by brand consistency. It gives your offerings authenticity, increases customer confidence in your business, and distinguishes you from your rivals.
Because of its strong brand image, IKEA is quickly recognized. It has put in countless hours to create its reputation as one of the biggest furniture manufacturers in the world. Today, before consumers look at the products, it is the name that draws them in.
2. Product Innovation
The key to IKEA’s commercial success is its product design. To produce well-planned, subtle, and useful goods, it draws on the democratic approach and the distinctive Nordic style. Consequently, in addition to being aesthetically pleasing, its homeware is also created to meet the demands and preferences of its target market.
IKEA furniture is well-liked by consumers due to its appealing designs and customization options. They fit into a tiny flat with ease and give your space a trendy, airy appearance.
IKEA supports versatility, individualization, and mix-and-match furniture modules. The secret to this achievement is the union of affordability and sustainability.
Keep in mind that you are essentially expelled into a warehouse after meandering around IKEA’s eye-catching showrooms. The company’s supply chain is streamlined and end-user prices are decreased by outsourcing some of the logistics and assembly to customers.
An excellent product design balances visual appeal and usefulness just perfectly. It ought to live up to your customer’s expectations and provide the value it guarantees.
3. Clever packaging
What do you think helps IKEA provide quality products at much lesser prices than their rivals?
It’s their flat packaging!
It helps the business save on raw material costs of close to $175,000 and transportation costs of $133,000 annually.
Furthermore, by letting consumers assemble the furniture themselves, IKEA is able to deduct a percentage of shipping costs from their prices.
The flat packaging serves two purposes. Firstly, it reduces overhead costs and reduces the price of products. Secondly, its unique packaging makes it easily identifiable.
The company first developed flat packaging to save money and space, but subsequently, it evolved into its hallmark design. It now intends to increase the number of sustainable solutions to further cut costs by 50% while enhancing its brand.
Despite being a minor aspect of your company’s operations, product packaging may significantly affect your earnings and brand reputation. Your packaging style may reduce costs, promote your brand, and boost sales all at once.
4. Vast User Insights
While some companies use chatbots to interact with their audience, IKEA uses them to learn more about its consumers. Instead of publishing dull surveys to acquire data, the research team instead offers engaging questions to make its audience’s experience entertaining.
It makes the most of visuals and user interactions to collect updated information about its target market.
One Shared House 2030 is a survey that is a prime illustration of its insightful market research methodology.
IKEA conducted an interactive study to gauge public interest in shared living space design. Not only did it receive a significant response, but it also discovered that by 2030, about one in three city dwellers will likely choose co-living.
In order to better understand its customers’ demands, IKEA uses digital media, sophisticated technologies, and interpersonal interactions.
Your marketing plan is built on the foundation of your preliminary study. It enables you to develop a data-driven action plan and comprehend your prospect’s demands.
While traditional surveys do yield useful information, IKEA has shown us that there is another, more effective approach to identifying our customers’ problems.
5. Excellent In-store Experience
IKEA excels in product displays and understands how to present products in the best possible way to increase sales.
In order to stimulate decorating ideas and promote impulsive purchases, it carefully arranges the best-matched objects in mock rooms.
It gives guests a memorable experience that entices them to return by having aesthetically pleasing décor and first-rate customer care.
IKEA’s structure, in contrast to typical stores, has a single-route architecture that guides you step-by-step through its full product line. There is a cafeteria to take short breaks while on a shopping spree! The cafeteria has delicious food to make the shopping experience more memorable.
The design purposefully takes the shape of a maze to maximize product exposure and extend visitor stay.
6. The food Court Experience
The IKEA store has lavish Swedish restaurants in all their stores. The IKEA Restaurant offers delicious food at great prices, making it a great place to visit for a quick snack or a leisurely meal.
The food court features an array of Swedish-style dishes, local specials, and a range of healthy, organic, and vegetarian options that cater to the whole family. Whether you’re looking for something tasty on the go or a cozy spot to enjoy some delicious food with friends and family, the IKEA Restaurant is sure to have something for everyone.
This tactic accomplishes two goals at once: it gives consumers a positive shopping experience and lures in new customers who come to the restaurant to check out the store. Additionally, it serves as another source of revenue.
7. Content Marketing
To stand out from other furniture businesses, IKEA has always turned to its content marketing approach.
The attention-grabbing substance of all of its advertisements, whether they appear in print ads, television commercials, or social media posts, stands out. In order to create advertisements that catch people’s attention and motivate them to purchase its products, it combines humor, creativity, and its brand core values.
To boost its brand, IKEA also makes significant investments in direct marketing. It has been successfully employing one of its most popular tactics, the product catalog, for the past 70 years.
One of the most difficult components of marketing is surely regularly producing content, especially hilarious material. But it also produces three times as many replies as other forms of advertising.
8. Adapting to advancements in technology
IKEA has transformed from a modest Swedish retailer to a global brand by keeping up with trends and embracing new technology.
In order to make its products more accessible to its audience, it has revolutionized the retail experience over time by digitizing its processes.
It has always employed newer technology like Augmented reality(AR) and Virtual reality (VR) to provide a better customer experience. These technological advancements help customers check out the products, their functionality, and their use in the customer’s space.
People download its 3D modeling program mostly to visualize their ideal home.IKEA can upsell its low-demand products by inspiring consumers to redecorate the area, one of its most effective marketing strategies.
IKEA’s marketing strategy is multifaceted and effective. They prioritize offering low prices to their customers, while also promoting self-serve shopping, introducing new innovative technology, focusing on the food court experience, providing more accurate packaging, etc.
Additionally, IKEA has made a significant investment in digital marketing to stay relevant and reach a wider audience. All of these elements combine to create a unique brand identity for IKEA that resonates with consumers around the world. Overall, IKEA’s marketing strategy has been successful in establishing them as a global leader in home furnishings and retail.
Who is IKEA’s target market?
IKEA’s target market is the global middle-class group and those falling between the 20-34 age group.
What is IKEA’s unique selling point?
IKEA’s most unique selling point is its low prices on unique and flat-pack furniture that can be easily delivered to different locations.
Who is IKEA’s biggest competitor?
The biggest competitor of IKEA is Walmart.
How does IKEA engage with its customers?
IKEA follows multiple ways to be in touch with its customers. Some of the common ways used by IKEA are to visit them at home, be in touch through an online platform, present them with in-store options, and also through the IKEA family. IKEA also uses AI and virtual reality to make the process more fruitful.