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Case Study on IKEA

Case Study on IKEA

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Published by Pooja Patnaik

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Published by: Pooja Patnaik on Oct 30, 2012
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08/16/2013

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WELCOME EVERYONE

A CASE STUDY
PRESENTED BY SOMALI DAS  MADHURIMA DAS  PRAJNA PATTNAYAK  LIPIKA PADHY

SUBMITTED TOMISS POOJA PATTNAIK

CASE STUDY ON
HOW IKEA DESIGNS ITS SEXY PRICE TAGS

.ORIGINThe origin of this IKEA is Sweden. • Also conquered North America. without making them cheap. BATTLE PLANKeep making its offerings less expensive. DEVELOPERPia Eldin Lindstén • Dominates markets in about 32 countries.

• Sells household items at cheap rate but not cheapo.ONE FACTOR ACCOUNTS FOR IKEA’S SUCCESS• Good quality at a low price. • Prices runs 30% to 50% below the competitions. • Price of Pöang chair has fallen from $149 in 2000 to $99 in 2001 to $79 today. .

IKEA’S CORPORATE MANTRA- “LOW PRICE WITH MEANING” .

IKEA’S ONE OF THE PRODUCTTROFÉ MUG .

environmental considerations and making sure products. • Our requirements-function. • Also tells about our demand and customers place on IKEA.STORY OF THE MUG• IKEA works from a co-worker’s bright idea through to production and sales. modern design. .

. Purchasers use their contacts with suppliers all over the world via IKEA Trading Services Offices.PICK A PRICEProduct developmentTeam behind each product• Designers • Product developers • Purchasers get together to discuss design.g. materials and suitable suppliers. E.

. • Mug had a read knock-out price. • The Trofé mugs are incredibly low cost. • Also told about its cost in the stores.Development of Trofé Mug• Pia given the task of creating a new mug over 5 years.

How to produce the right mug at right place? Pia and her colleagues had take into account the following things• Materials • Colour • Design E. . blue. such as red.g. If the mug is made on green. or yellow or white as these pigments cost less than other shades.

. warehousing and store display and not least. • Working with suppliers. • IKEA is always keen to banish as much air as possible from its packaging.CHOOSE A MANUFACTURERSuppliers and Purchasing• Task of developing products never ends. the mug was shortened and the handle change so it stacks more efficiently. in the customers cupboards at home. saving space for transport.

• Products are developed in close cooperation with suppliers. .Story about a Romanian Supplier• Worked with IKEA for 15 years. • Long-term relationships help both parties to build up a huge fund of knowledge about demands and expectations.

• Healthy and safety conditions on the workplace.Introduction of code of conduct by IKEA• Governing working condition. • This code is carried out by co-worker in IKEA Trading Services Offices. . • Environmental awareness among suppliers. • Forbids the use of child labour.

Price Tags by IKEA• Low price tags makes it crucial to the vision IKEA of creating a better everyday life for many people. . • IKEA works non-stop to reduce cost. • Low-cost mugs is an example of low environmental considerations can influence the development of products.

Characteristics of New Mug• • • • • Lighter in colour. Cuts costs. Lead and cadmium free. More environment friendly. Use of less pigment. .

• Refines promising designs. • Fabricator’s capabilities. • Send its to IKEA’s designers and freelancers. • Explains the product’s price. • Function.DESIGN THE PRODUCT• Designer begins design process by writing a brief. . • Materials to be used. Designer wants products to be like Swiss Army knives-to get maximum functionality of minimum cost.

Transportation by IKEA also reduces environmental impact. About 2024 mugs are distributed all over the world from Romania by rail. road and sea. Sends goods at right number to right stores at right time.SHIP IT• Distribution and logistics-lifeblood of IKEA • Important pieces of the puzzle on their road • to a low price. Calculate the goods requirements and make sure about deliveries. • • • .

. Flat enough to be sipped into the cargo hatch of a station wagon. IKEA products have been designed to ship disassembled. Items assembled means transport volume will be 6 times of its original volume.Concept of Flat• Establishment of company’s eureka moment in • • • • • • 1956. In case of chair taking more space: remove the legs. Safety tied down an auto’s roof rack. It lowers the shipping cost by maximizing the use of space inside shipping containers.

IKEA’s employees mantra“We don’t want to pay to ship air”. .From design studio to warehousing.

3 Times redesigning of IKEA Mugs- • To maximize the number of mugs that can be stored on a pallet. allowing 2024 mugs to squeeze onto pallet. • A redesign-Added a rim such as in a flowerpot. where each pallet could hold 280 mugs. • Another redesign-a shorter mug with a new handle. .

Mug’s sales price-50% Shipping cost-reduced by 60% • When 25 million cubic metre of goods all over the globe is taken. It shifted more of its buying from Europe to the far East. flat-pack frugality adds up. • Costs have become an even more critical concern. • Last year China tied Sweden atop IKEA’s list of supplier countries. . • Shipping time.

• 30% of IKEA’s products travel directly from supplier to store.Company’s response by• • • • Global network of distribution centers. Near container ports. 18 distribution centers in the world• Handle 70% of IKEA’s total product line. Rail routes. . Major truck.

• Let the customer fall prey to visions of wealth and comfort.SELL ITSells lot of expensive furniture by these processes• Put a piece in a lush setting. . • Offer plenty of easy credit.

• Transportation packaging is collected • • • • from recycling. . Price tags has been placed by the suppliers. Display is to be done in-store. Providing inspiration for smart interior solutions. Contribution of customers to low prices by selecting and collecting the products from the self-serve area.Selling of Trofé Mugs• Mugs are packed on pallet.

IKEA produced catalogues about the products printed in 34 different language versions.• Taking them home. . • Enclosing instructions to assemble them.

. • Information kiosks provide advice on home décor.Scene of IKEA stores• Scene of meticulously constructed virtual Sweden. • Swedish meatballs and lingonberries. • Low-priced products that IKEA calls BTIs (“breathtaking items”) are often perched on risers. framed by huge yellow price tags. • Color-coordinated cards offer plenty of suggestions. • Company sponsoring child care facility.

• Broadcast ethos for living in the modern world.IKEA’s Point of View• Biggest selling point-price tag. • Having plenty of time to consider purchases. • Blatantly manipulation layout. .

IKEA’s Main Mantra for the Customers- “In New year it will be an even cheaper”. .

THANK YOU EVERYONE FOR YOUR PATIENCE TO WATCH THIS .

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