International Marketing Assignment- IKEA Case Study

Kajal Puglia- 18020341075

Question-For each of these (China and Japan) markets, explain and justify what, in your
opinion, should IKEA’s marketing strategy be in the near future to gain market share and
achieve higher profitability.

Marketing Strategy for IKEA in China for the near future-

IKEA should target 23-38 years old, as its consumer group of young middle-class professionals,
who get relatively higher salaries, are better educated and have better understanding of
western cultures and design styles. This major strategy change helps IKEA to build the
impressions of itself as an aspirational western brand and get many customers.

Customers today are changing; and people are much more digital, as well as physical, in the
way that they shop. They want to shop when they want and how they want. IKEA needs to
change with that. The physical store will always be its competitive advantage. A 40,000-square-
metre store, being a fun day out with a food offer and a store to wander around in — with
furniture and accessories, and areas for the kids to play — will always attract people.

But it is important to be more than that. IKEA can have a new web platform — and e-commerce
that they can introduce — to make it so people can shop once they see things on the web as
well. And IKEA need to become closer to its customers, so they can also try out new formats —
even smaller IKEA locations — to order products, have them delivered and picked up closer to
the customers.”

In Shanghai for example, the core customers visit IKEA more often than anywhere in the world.
This means – among other things – that there is a need for many changes in the store as things
become repetitive for regular customers. The Shanghai store could rearrange its room settings
at least seven times a year, for new products or just for different holidays and campaigns, etc.
IKEA’s product catalogue which is working exceptionally well is not the right strategy in Chinese
market.
Digital marketing is the way to go, with that IKEA Group can use digital technologies using the
internet such as Chinese social media and micro-blogging for their marketing campaign to gain
market attractiveness and brand recognition and avoid product catalogues being copied. Also,
women must be targeted more, because women have home-furnishing interests and actually
make the decisions.
IKEA can come up with augmented reality technology, with the help of that consumers can get
a better understanding of how it actually looks and feels to have a certain piece of furniture in
their home. It’s mainly about helping customers in the buying process.
When consumers are panicking a little bit and don't know what to choose, there are digital
tools that help us to interact with people and help them to make better decisions.

IKEA should focus on economies of scale, innovation and local sources in China to do things a
little bit better in terms of quality and a little bit lower cost-wise every year.

Marketing Strategy for IKEA in Japan for the near future-

IKEA should come with a mass marketing campaign on social media which can urge customers
to renew their homes and bring a change in their thought process and perception about homes
being only utilitarian to being an element of pride. IKEA can collaborate with social media
influencers for the same. Some local or regional store-based promotions or advertisements
should be done to be seen as more receptive brand.
IKEA can come up with a loyalty programme which can consist of a loyalty card, a magazine
with several issues a year and a special assortment of products in the store. IKEA family card
holders also get discounts on other products in the store.
Japanese people expect high level of customer service. For the same, free home delivery or
charging a reasonable price is a possible solution. Also, for people coming via public transport a
tailored box can be made which has all the items of their requirement and can be send it to
their homes.
Houses are quite compact in Japan, therefore furniture designs which are versatile, flexible and
multifunctional storage that you can move easily should be designed which are unique to
Japanese lifestyle.
IKEA can sponsor a television show where the viewers are offered lessons in home decorating
and educating users about the same.
IKEA should carefully select the locations for its outlet- which is next to some mode of public
transport as people prefer using them over private transport. This can increase the footfall and
thereby sales.
Alongside, teaching the customers to enjoy the DO IT YOURSELF process, customers should be
given an option where they can order assembly from IKEA experts for an extra charge.
Apart from the above-mentioned strategies, IKEA Japan can follow digital marketing, web
platform and augmented reality which are in detail explained for IKEA CHINA