IKEA Furniture

Identify the target customers IKEA aims to serve

Families: IKEA's range of home furniture and

accessories, as well as its focus on creating Small space dwellers: Space-saving and multi-
functional and comfortable living spaces, appeals to functional furniture and home accessories is
families who are looking to create a comfortable and particularly appealing to small space
functional home.

Young, urban professionals: On affordable, functional, and stylish furniture and

home decor products appeals to young, urban professionals who are looking to
furnish their homes on a budget

Eco-conscious consumers: Commitment to

Value-conscious: affordability and value for money sustainability and environmental responsibility is
appeals to consumers who are looking for high- also likely to attract eco-conscious consumers who
quality products at a reasonable price consumers are looking for furniture and home decor products
that are made from sustainable materials
What channels are the most effective to reach IKEA’s target consumers?

• A strong presence on digital platforms such as its website, social media, and e-

Digital channels commerce platforms.

• These channels allow the company to reach a wide range of consumers, including
those in rural areas where access to physical retail stores may be limited.

• IKEA has opened several experience centers in India, which allow customers to
interact with and experience the company's products and services.
Experience centers • These centers are particularly effective in allowing customers to get a sense of the
company's product offerings and design concepts, and provide a space to interact
with the brand

• Partnerships and collaborations with local manufacturers, designers, and

Partnerships and organizations.

collaborations • These partnerships allow the company to tap into local expertise and resources,
and also help to raise awareness of the brand among Indian consumers.

Advertising and • IKEA uses a variety of advertising and marketing channels to reach its target
consumers in India, including television, print, and online advertising, as well as
marketing public relations and event marketing.
 What kind of pricing strategies do you think IKEA should focus on in Indian markets?​
Step 1: Selecting the Step 2: Determining Step 4: Analyzing Step 5: Selecting a Pricing
Step 3: Estimating Costs 
Pricing Objective Demand  Competitor’s Costs  Method
• Survival ​ • Price sensitivity Indian • Types of costs ​ • Competitors’ costs ​ • Penetration pricing​
• Maximum current profit ​ market ​ • Accumulated • Competitors’ prices ​ • Skimming pricing​
• Maximum market share ​ • Estimate demand production ​ • Possible price reactions • High-low pricing​
• Maximum market curves: CAGR of 12.91% • Activity-based cost • Competitive pricing​
skimming ​ during the forecast accounting ​ • Economy pricing​
• Product-quality period of 2016-2023 ​ • Target costing
leadership • Price elasticity of
demand: relatively
elastic good

Will sustainable manufacturing saves costs on raw materials for IKEA in India?
Renewable material :- It reduce waste, and improving energy efficiency, can potentially save costs on raw
materials
E.g. Using renewable materials such as bamboo or recycled plastic in manufacturing process can reduce the
need for expensive virgin raw materials, which can help to lower costs. Additionally, reducing waste through
efficient manufacturing processes and recycling of materials can also help to reduce costs.

Reduced demand for Energy:- Improving energy efficiency and reducing the need for fossil fuels.
It's worth noting that sustainable manufacturing can require significant investment, which may offset some of
the cost savings.
 You are the CMO in charge of IKEA’s India launch. How would you work on segmentation, targeting and positioning for
your product?

• Market Segmentation:
• Demographic (Developing Cities, age, gender, income, education and occupation)
• Psychographic (lifestyle, values, and personality)
• Behavioural (purchase behaviour RFM, brand loyalty, and usage rate)
Segmentation • Product Segmentation: Portfolio Analysis (BCG Matrix, GE Matrix, Discriminant Analysis)

• One Product – Many Segments

• Online and offline campaigns, digital marketing, influencer marketing
• Strategic partnerships with other companies and organizations that are aligned with our target
segments, such as sustainable home builders or home decorators, to reach out to our target
Targeting segments in a more effective way

• High-quality, affordable, and functional furniture and home decor items that are designed to fit
the specific needs of Indian customers
• Committed to sustainability and environmentally-friendly practices
Positioning
Will the do-it-yourself approach, cost per touch strategy, and direct shipping to stores save storage costs work in India market?

The DIY market in India is still at a nascent stage and there At each level in value chain touches are optimized hence
are a few distinguishing features which differentiate the reduces the cost.
Indian market from the western markets.  DIY products will
never become sizeable in India till helps are available at
reasonable wages
Will long-term contracts with suppliers leave room for Will warehouse zoning ensure efficient inventory
volume discounts in India? management in India?

Ikea-Long Term Contract

IKEA uses separate high-flow and low-flow warehouse
• Specific product in bulk quantity with long term
facilities. Products stocked in a low-flow facility are not in
commitment helps in getting volume discount.
high demand. Operations there are mostly manual since
• Commitment on both sides enhance the cooperation
workers won’t be moving inventory around too much. For
which results in reducing the cost
items stocked in high-flow facilities, storage and retrieval
• Enhance Trust level & Better Sharing of resources can
operations are more automated.
happen
This inventory strategy also reduces the cost-per-touch aspects
of stock management.
Thank you