Question

Question 3: The marketing mix and innovation (40 marks, 500 words) IKEA’s marketing strategy consists of market segmentation, targeting, positioning and the marketing mix. IKEA’s marketing strategy enables the company to be a successful player in the global market. Using your B207A course material, evaluate how the innovation in IKEA’s marketing mix elements are used to position the products within the minds of consumers.

Your answer should contain the following: 1- IKEA’s market segmentation and targeting 2- What is positioning. How is it related to the marketing mix? 3- Examples of IKEA’s marketing mix elements and their contribution to brand positioning.

Answer 1

The marketing mix:-

The marketing mix is a popular marketing strategy that a company uses to advertise its brand or product and traditionally been confined to the core 4Ps i,e Product, Price, Place, and Promotion.

IKEA is a global, Swedish-based company that designs and sells ready-to-assemble furniture kitchen appliances and home accessories. IKEA was founded by Ingvar Kamprad in 1943. By working together with the best designers from all over the world, it delivers high quality and unique designs to the market and its stores at prices so low that as many people as possible will always afford

IKEA’s market segmentation and targeting

In the target market, there are four segmentations: (1) Geographical, (2) Demographic, (3) Psychographic and (4) Behavioral segmentation

Geographic Segmentation:-Most IKEA divided primarily into regional segmentation of the European and Asian markets. Thus, IKEA's target market focused on Europe, the American, and, lastly, the Asian region has been seen.

Demographic Segmentation:- Demographic segmentation consists of the individual age group, gender identity, based on the family life cycle, jobs, single consumer income level, and the engagement level of society. IKEA targets audiences are couples with their own apartment, first-time furniture shoppers and working professionals, Wage-earning

Psychographic Segmentation:- It stresses above all the actions of the client, daily habits, personal well-being, and their beliefs. Like in Europe and North America, consumers would tend to select their items in a clear and natural way, but when the quality of the furniture starts to wear out, the furniture can be replaced at any time according to their own tastes and lifestyle patterns. In Asia, however, customers have chosen to follow the luxury lifestyle of home decoration, especially in the decision to buy bulky furniture.

Behavioral Segmentation:- Those goods are focused on the customers' concrete purchasing behavior. The goal of IKEA is to go for the booming Asian market.

What is positioning. How is it related to the marketing mix?

Positioning is a marketing concept to differentiate between the product and the business or product competitors along with certain measurements, features, or interest of the customer. Under positioning, a company tries to identify ways or strategies for positioning its products and services. The positioning strategy of IKEA is “Differentiation”

Positioning is generated by using marketing mix-promotion, price, place, and product. When you position your brand, by strategically determining which position you can and must gain to have a competitive advantage, the position starts to determine what kind of goods you can produce and market under your brand name, how you price them, how you advertise them, where and how you market them.

An example of IKEA’s marketing mix elements and their contribution to brand positioning.

Price

The first aspect of IKEA's mission is to make the goods affordable. IKEA offers affordable prices and good quality goods by standardizing its product range, pursuing affordable-cost production, and selling high-volume furniture worldwide. It is noted that IKEA chooses its manufacturers solely to ensure that the manufacturing costs and cost of the raw materials are as minimal as possible. To sum up, by making low-cost goods, IKEA is able to sell low price to consumers and make a substantial profit.