Question

Question 2: Product offering and targeting (30 marks, 300 words)
A. Discuss the three levels of a product by using the HAMARVIK mattress as an example.
B. Discuss the four targeting strategies. Which targeting strategy does IKEA use for its mattresses. Justify your answer. (Check the mattress section on the IKEA website before answering this question)

Answer 1

Answer A:

The three generic levels of a product using the HAMARVIK mattress example are discussed below:

Level 1 :Core Product

Core Product is not the actual product but the benefits or the purpose for the which the customer is buying the product.It is non tangible.In the case of HAMARVIK mattress it is to ensure that the customer is looking for a good night's sleep an hence is looking for a comfortable mattress for his needs

Level 2: Actual Product

The Actual Product is the product for which the customer pays.This is the tangible version.This includes the product,packaging,materials used and product size.In case of HAMARVIK mattress its available in four different sizes and two different level of firmness and is available at a product size of 200*140*21 cm with a weight of 56lbs.

Level 3:Augmented Product

Augmented Product is the non-physical part of the product however in marketing campaigns this part is what is highlighted in order to standout with respect to its competitors.It is observed that sometimes customers start observing these value additions as benefits itself.In case of HAMARVIK mattress,coming from an extremely reputed IKEA brand being associated with trained professional and high quality is a given which adds to the augmented product.The mattress is ready to bring home as it is roll packed thus saving customer time and money.

Answer B:

The four targeting strategies are:

a) Undifferentiated/Mass Market Targeting:

Mass marketing is a strategy used when there is no customer segmentation and the entire consumer base is treated as a potential customer.The product line is very narrow which helps in cost savings for marketing team in absence of any segmentation.Generally the products which are considered "staple" or consumer goods(cold drinks,toothpaste,soaps etc) use this form of targeting

b) Differentiated Market Targeting: Differentiated marketing is a form of targeting wherein the company makes different marketing strategies for different products.The market segments are differentiated on the basis of Age,Income,Gender and Demographics.

c) Concentrated/Niche Targeting: Concentrated marketing is a form of targeting wherein the company only advertises is product to a certain niche or caters to a specific marketing need post research of its user database.For e.g.American Express only caters to customers with high credit rating

D) Micro marketing Targeting:Micro marketing targeting is a form wherein the filters are even higher than niche marketing.It is developed by a company to match the exact needs of how and when they want it and customize the products accordingly.It includes local and individual marketing

With reference to IKEA, a group renowned for their DIY(Do it Yourself) concept they follow differentiated market targeting since they cater to different individual tastes and showcase their products in both online and offline model.They showcase the furniture in prototype rooms and uses AI(Artificial Intelligence) to understand their needs.As per the Cost Leadership Strategy they look for suppliers who can provide high quality well designed products which the customer can install itself thereby saving humongous costs in delivery.They also have a focus strategy differentiation wherein they use the taste of the local consumer.When it entered the Indian market they started having Prototype of typical Indian rooms to give them a at-the-home feeling.They focus on high quality low cost model which is also a form of differentiation.