Marketing Objectives And Strategies In IKEA: Environment Analysis (Research Paper Sample)

MARKETING REPORT FOR IKEA NAME INSTITUTION MARKETING STRATEGIES AND CHALLENGES IN IKEA Introduction IKEA is a company that began in 1943 as a furniture producer and today it has risen to a worldwide successful network of supplies of various goods due to its exceptional retailing concept. This essay is going to discuss the serious issues faced by IKEA and the main activities happening inside the company. It is a Swedish based company that has now grown to a multinational seller of not only furniture but also electrical appliances, home accessories and small motor vehicles. It was founded by Ingvar Kamprad an entrepreneur who in the year 2013 was listed among the world’s richest individuals. For many years IKEA has been providing the consumers with high quality as well as cost friendly products globally. According to a case study prepared in Helsingborg, Sweden in 14th of November 2005, the greatest challenge of any fast growing company is the criteria to keep its core founding values alive. Kampard trained and tutored the managers of IKEA on how to run the company. This is a role they have been undertaking excellently as it has been evident through the continuous growth of the company. However, the company’s culture may fade gradually due to disappearance of direct links between kampard the founder and the current managers CITATION Ral10 \l 1033 (Strauss, 2010). The existence of wide range of differences between the United States citizens also poses special challenges for IKEA in the American market. The marketing faults were also noted when IKEA had set-up store displays wrongly in the USA. The day to day emergence of firms that are posing a great competition to IKEA as well as the challenges posed by hybrid strategy are some of the many justifications that this company needs to prioritize on its marketing issues. External Environment Analysis This is a consideration of the relevant essentials which are external to a company. The external environment factors dictate the degree of performance of any organization. For the case of IKEA, this analysis involves opportunities and threats that face this company CITATION Wil13 \l 1033 (William M. Pride, 2013). This analysis enables marketers to take advantage of the external opportunities and hence reduce the effects of possible threats. Marketing objectives The main objectives of IKEA in the marketing field is to maintain and capture more customers in three of the fastest growing furniture markets namely china, Russia and USA. This is achieved by providing many stores in these states as well as maintaining high quality goods at a friendly cost not only in these states but also to other countries that have a good customer base CITATION Joa12 \l 1033 (Joachim Zentes, 2012). The basis of this company’s marketing objectives is to provide a wide range of cost friendly, well designed home furniture, electrical appliances as well as small size vehicles. This will help to attract more buyers. IKEA is a social responsible company, according to the out comers and co-workers since it bears a global vision to “create a better everyday life for the many”. These objectives are specific since they have detailed information that is adequate to pinpoint opportunities and challenges in marketing of IKEA products. They are also measurable, in that there are records of the number of stores in each country and an increase in customer base can be measured by the total sales in each store CITATION Sus10 \l 1033 (Susan Segal-Horn, 2010). This helps the managers decide on the number of stores to be added in each country as well as the most common items. The information acquired should be used to improve the company’s number sales if the objectives are to be actionable. The marketing objectives also should be relevant in that they can be applied to solve specific challenges that a marketer faces. However, these objectives have to be reviewed after a given period of time so as to make them time-bound. IKEA’s marketing objectives have to be reviewed since its objectives some years ago need to be improved to counter the latest challenges. Segmentation, Target Market(s) and Positioning Segmentation is the process of diving up the homogeneous clients in the market, into smaller mixed groups of customers. Very powerful marketing results can be achieved by segmenting the market. Therefore, to influence primary market customers there must be clear strategies. Grouping the clients based on their reaction programs, benefits and services can result in huge growth of sales. IKEA impressively benefits from segmentation CITATION Ral10 \l 1033 (Strauss, 2010). The company targets a certain group of people comprising of young stylish people whenever it develops a new offer to the marketplace. This is a segment that mixes both the psychographic and demographic segmentations. Demographic segmentation involves diving of customers into heterogeneous groups on the basis of characteristics such as income, age, occupation, gender, race, family status, nationality and level of education CITATION Wil08 \l 1033 (William Pride, 2008). Psychographic segmentation is the definition of segments according to activities that the customers carry out as well as their hobbies and interests. IKEA is known for having stylish and innovative furniture, and therefore its marketing strategy should be targeting the segment of individuals that value style. These are people aged 18-35 years CITATION Joa12 \l 1033 (Joachim Zentes, 2012). Research shows that it is the young couples and college students that have made IKEA famous. IKEA’s mission statement states that the company aims at offering “wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them” (http://franchiser.ikea.com). Recent surveys have indicated that target markets yearn for goods that are stylish, reasonably priced, convenient, clever and looking great. In order to maximize the value exchange, IKEA should always ensure that the needs of its target market are fulfilled. IKEA marketing mix PRICE Value is the basis of pricing for IKEA since there are fair prices and no-frills pricing. Products are designed, the company sources the raw materials and manufactures the products which are immediately distributed to the company’s stores and sold by retail. The framework here has no-frills hence low cost on the products. However, home delivery is a service available for customers at an additional cost CITATION Wil13 \l 1033 (William M. Pride, 2013). PRODUCT IKEA produces a variety of furniture for living rooms, children rooms, bedrooms and kitchen. These products include fabric sofas, arm chairs, leather sofas, shelves, sideboards, coffee tables, sofa beds, TV and DVD storage and book cases and many more products. Each product is subdivided again into segments, like in the case of children bedrooms there are beds, play accessories. Nursing equipment and changing tables. IKEA has been changing the scope and quality of its products with change in environment by innovating brands that have been always fresh. This has been aided by the company’s ability to not depen...