Question

What is the marketing strategy pursued by Ingvar Kamprad of IKEA in the American market and led to its failure?

What are the factors that encourage the use of such a strategy?

case study Ikea in sweden.

Answer 1

IKEA is a privately-held, international home products retailer that sells flat pack furniture, accessories, and bathroom and kitchen items in their retail stores around the world. The company, which pioneered flat-pack design furniture at affordable prices, is now the world's largest furniture retailer. IKEA was founded in 1943 by 17-year-old Ingvar Kamprad in Sweden and it is owned by a Dutch-registered foundation controlled by the Kamprad family. The company which was originated in Småland, Sweden, distributes its products through its retail outlets. As of August 2009, the chain has301 stores in 37 countries, most of them in Europe, North America, Asia and Australia

The IKEA Concept is based on offering a 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. Rather than selling expensive home furnishings that only a few can buy, the IKEA Concept makes it possible to serve the many by providing low-priced products that contribute to helping more people live a better life at home. The IKEA Concept guides the way IKEA products are designed, manufactured, transported, sold and assembled. All of these factors contribute to transforming the IKEA Concept intoa reality.

The IKEA concept is based on the market positioning statement. "We do our part" focuses on their commitment to product design, consumer value and clever solutions. By using inexpensive materials in a novel way and minimising production, distribution and retail costs, their customers benefit from low prices.

•The IKEA product range is developed to be extensive to have something that appeals to everyone and to cover all functions in the home. The products are modern not trendy so they are practical enough for everyday use. •IKEA is the home furnishing specialist- IKEA products are functional and appealing; they enable people to improve their home life through practical solutions to everyday problems.

•Low price is not appealing unless it represents good value for money. This is where IKEA is able to make a real difference. IKEA is committed to having a good relationship with our suppliers and so we are able to purchase good quaility, economically produced designs that are bought in bulk to keep costs down. By making all their furniture flat packed they cut down on transportation and assembly costs. •Function - IKEA products are based on a functional approach to design. IKEA design means products that are attractive, practical and easy to use. They don't have unnecessary features, they give genuine solutions for specific home furnishing needs and are made of the most suitable materials for their purpose.

•The right quality- IKEA products are subjected to rigorous tests to make sure that they meet national and international safety standards. •Convenient shopping- TheIKEA store offers "everything under one roof", most of it available for immediate take-away. IKEA offers service where they need it, but allows customers to make most of the decisions themselves. This means that they need to make it easy to choose the right products by displaying them correctly, describing them accurately and having a simple returns policy.

•A day out for the whole family- IKEA aim to look after thier customers by planning for their needs. Not only do they provide inspiration and ideas, but they also encourage people to touch, feel and use the products on display to see how they would fit into their own home. They have new products arriving all the time, seasonal themes, play areas for children, special events and a great value family restaurant. •Swedish IKEA, - The key IKEA messages all have their roots in the Swedish origin of IKEA. Swedish furniture is light and fresh yet unpretentious. The warm welcoming Swedish style has become a model of simplicity, practicality, and informality that is now world renown

In 2006, Ikea first displayed an interest in the Indian market but back then the Indian laws allowed only 51 per cent foreign ownership.

With the government of India relaxing the norms for foreign direct investment (FDI) in single-brand retail, IKEA announced in October their intention to open stores in India.

IKEA opened its first store in India on Aug 9, 2018.

It took IKEA 12 long years to enter the Indian market.

The first store in India was opened in Hyderabad.

Hyderabad, the southern Indian city gave it a roaring welcome.

So far, more than 3 million customers have visited IKEA Hyderabad store and about 8 million have visited IKEA’s India website

In the year 2016, Ikea purchased land in Mumbai and said that it planned to open stores in Bengaluru and Delhi too.

After Hyderabad, in 2019 IKEA has launched its first online store in Mumbai which is offering more than 7,500 products.

It will provide delivery to most of the locations in Mumbai and will have a delivery time of four to seven days, subject to availability and distance.

In India, IKEA currently has more than 55+ suppliers.

Also, have more than 45,000 direct employees and 400,000 people in the extended supply chain.

The company aims to have 25 outlets across the country by 2025. The next store is slated to open in Mumbai in 2019, followed by Bangalore and Gurgaon, on the outskirts of Delhi.IKEA Case Study has many chapters awaiting to be added