Most of our marketing strategies in Ikea is about planning. An aspect
of this marketing planning is deciding which market segment we are
targeting. An analysis of our marketing strategy would be helpful to
see where we can make improvements on the methods that we use to
increase the demand for our goods here in Ikea. The Marketing Strategy
used by Ikea are as follows:

Undifferentiated Marketing Strategy.

This type of marketing, (also known as mass marketing) is used because
our products are launched at all sectors . This strategy is expensive
and wasteful, but it is successful for us because all the product
suites all our markets segments.

There are several ways of combining the analysis of product and market
policies. Two of the best known are the Boston matrix and the Ansoff
‘s Growth Matrix.

Boston matrix-shows our product/market share

Products are positioned in diagrams according to each ones share of
the relevant market. The market themselves are then analyzed for
growth rates.

1. Rising stars

2. Question Marks

3. cash cows

4. dogs

Question marks – are our slow growing products, with low growing
shares in a growing market

Rising Stars - these are often associated with our products with a
(strong) growth stage of the cycle(hence they are sometimes called
rising stars).The sales of our products here are good with the
potential for market leadership. The market itself is expanding
IKEA’s.

Cash Cows- relate to our products that sell strongly with good market
share, but in a mature market i.e. low growth. These ranges of our
products are associated with the decline stage of the product
lifecycle, and may be discarded if profitability declines further.

Ansoff’s Growth Matrix

Market development

Diversification

Market penetration

Product development

Market penetration is the basic growth area, ie continuing with
existing products to gain a larger share of existing markets.

Product development means coming up with ideas for a new product for
existing markets

Market development means searching for new markets for existing
products

Diversification means developing new products with which to attack
markets that are also new to the organization. This is the most risky
if the competition is well established, but if the product type and
market is new.

Pricing Strategy

Price is an important element of the marketing mix. The price charged
for our products determines weather our consumers would by it, and the
level of sales acheved determines whether Ikea will make a profit.
there are a number of pricing strategies that we have used:

Long term objectives

These depend upon how IKEA positions itself in the marketing place and
how we finance our business. The following are examples:

· making a profit, for the stakeholders and for future investment

· pricing to keep competitors out

· pricing which positions the company

· pricing to maximize sales

After an analysis, we must choose carefully as it is a difficult
choice to change once underway.

Short-term objectives

These are tactical, as in promotion and selling and include:

Penetration pricing - a low price to penetrate an existing market.

Destruction pricing- knocking out competitors by cutting prices, a
process commonly known as “price wars”

Promotion pricing - the special offers of sales pricing.

Advertising Strategy

Advertising is defined by the Institute of Practitioners in
Advertising the IPA as “…:the most persuasive possible selling message
to the right prospects(markets)for the product or service at the
lowest possible cost…”

At IKEA, our advertising campaigns aim to identify the right markets.
We must be aware of which markets, or market segments are being
targeted. This is a straight –forward market segmentation exercise.
With our consumer goods, the choice might be age, sex, social-economic
grouping, occupation, race, religion, or region. The choice is
increasingly associated with lifestyle categorizations.

Identify the right media involves an analysis of:

How are we going to put the message across.?

How would we best attract and influence the chosen target groups given
the type of product and service?

The choice of media is large, and rapidly expanding as more TV
channels and the new technology of the internet add to the choice.
Selection is therefore critical.

Branding Strategy

Branding is the method of identifying one product or service from
another by creating a name, term, design or symbol - logo - which is
unique to our products. Branding creates an image which differentiates
the product in our consumers’ minds from the products of competitors.

Advantages of branding

The establishment of a brand name will save on future advertising
costs. Our product has become known. To our customers, a brand name
represents a known quality, the next one bought being as the same
previous ones. To IKEA branding allows a range of products to be
offered, to different market segments. It allows brand loyalty to be
established, i.e. some consumers always specify and buy the same
“name”. They have a perception of the products which satisfies their
needs.

Publicity strategy

This is gained by being “newsworthy”. As such is never quite under our
control in the marketing team. Publicity depends upon what others say
about our products and organization.

The significant differences between advertising and publicity are:

· Advertising is a known cost for an agreed amount of contact with the
market. Publicity tends to be non-controllable, often unplanned.

· Publicity has a far greater impact in that it appears to come from
the third person, and is thus more believable.

· Publicity catches readers off guard, whereas when they read an
advert they know they are being sold to.

· Advertising allows the repetition of the messages several times.
Whereas publicity has the limited life of a news story.

· Both advertising and publicity can dramatize our products to create
interest.

Public relations (PR) strategy

Public relations (PR) aim to safeguard and promote the image of the
whole organization, as well as our products. It may consist of press
releases about us, our achievements, whether they be new product
concepts, technological breakthroughs or environmental concerns. Other
approaches may involve appearances on radio and TV in relevant
programmes or in the news. Sponsorship is another important area of
PR.

Sales promotion strategy

A sales promotion may be defined as an attempt to create interest in
and stimulate sales of a product and service by a non-standard
activity n a limited period of time, or with a controlled amount of
products. In many ways, a sales promotion is a link between
advertising and direct selling

Consumer Promotions strategy

The object of a consumer promotion I the seller to raise the long term
level of sales by offering some added value to the purchase of a
product.

· Money off this or the next purchase

· Coupons or samples delivered by post

· Competitions, with attention gaining prizes

· Free gifts

· Loyalty incentives e.g. points cards that reward regular customers

Merchandising at the Point of Sale strategy

In our retail outlets we are careful about the presentation of the
products and of the store itself .This involves making the environment
so attractive so that the consumer wants to make a purchase and want
to call again.

Sales Policy strategy

The sales campaign and the marketing strategy are a coordinated part
of the overall marketing plan. The campaign is controlled by our sales
manager, director or marketing director. The campaign needs the
involvement of all sales personnel, and efficient communications with
all outside parties.

The sales force are organised on a simple departmental basis.
Communication is usually via internal memos and regular sales
meetings, often in time before the store opens for the day.

Much communication is face-to-face. Training days ensure that staff
are updated on procedures.

Effective Customer Service strategy

We should all appreciate that since IKEA is profit motivated and
income maximizing, our relationship with our customers must be such
that they keep coming back. Being a customer oriented organization
with the right products in the right place and at the right prices,
with effective customer service strategies in place, we will soon
achieve an increased market share. And these may include:

Point of sale service-staff training

Product knowledge

Good sales administration

After-sales service

After-sales service is n essential element of customer service in any
type of orgnisation. After sales policy may cover faulty goods,
refunds, exchange of goods, complaints about goods. Good after-sales
service can ensure that the customer is not lost, even if temporarily
unhappy.

Distributional Policy-effective logistics strategy

This marketing strategy is all about how our customers will get to
purchase our goods. The issues here may include:

· The number of outlets - should we be exclusive, selective or aim to
saturate the market?

· The area to be covered - should we stay local, or go national or
even international. The internet is increasingly important here.

· Transport - how best should our products be moved? The standard
alternatives are by road, rail, sea, air. But there are choices within
these e.g. should we own our own lorries, or lease them, or simply
call a carrier firm to deliver for us?

Analysis of the place or site policy- the physical environment

· The physical environment – can we be easily reached, by customers,
suppliers and our work force.

· The right part of town - is it fashionable? Is it safe for customer
to come to us, especially after dark?

· The competition – do we want to be close to them or well away.

· Our buildings – are they suitable for our image?

· Accessibility – Can customers park? Is there ample parking space?
Local transport –busses or tubes near by?

The above analyses of our marketing strategy would be helpful for our
section to see where we can make improvements on the methods that we
use to increase the demand for our goods here in Ikea.