Group Members : 1) Shreya Devare –

2) Tejas Kakkad - 86
Introduction :

 Founded in 1943 when 17-year old Ingvar Kamprad decided to start a

local catalog company using some money his father had given him

 Initially, the company sold basic household goods at

discount prices

 Known for it’s modern architectural design and various types of appliances and
furniture

 Today, the IKEA has more than 470 stores in more

than 60+ countries and more than 219000 co-
workers
Pricing Objectives :

 To maintain good quality and design while keeping cost as low as

possible

 To gain competitive advantage in market

 To achieve customer satisfaction and loyalty

Pricing methods :
1 Psychological Pricing
IKEA uses psychological pricing to influence consumer perception and create the illusion of a
lower price.

2 Penetration Pricing
When launching a new product, IKEA often adopts penetration pricing to attract customers and
gain market share.

3 Value-based Pricing Approach

IKEA's pricing strategy is based on the value perceived by the customer, ensuring affordability
and quality.
Psychological pricing

1 Influence of Perception 2 Odd Pricing

By using prices ending in 9, it creates
Psychological pricing aims to influence
the perception of a lower cost.
consumer perceptions of value.

3 Referent pricing
When Ikea sets the new prices, they also
put the previous prices as well so that
customer can see the previous prices and
gains from the purchase
Penetration Pricing

 Market Entry

Penetration pricing involves

setting initially low prices to
enter a competitive market.
 Maximizing Sales

It aims to attract a large

customer base, quickly
gaining market share.
 Long-Term Profit

The focus is on increasing

future profits through high
sales volume.
Value-based Pricing Approach

 Customer-Centric

Value-based pricing focuses on

the perceived value by the
 Quality-Price Balance
customer.
It involves aligning the price
with the quality and benefits of
the product.  Competitive Advantage

By communicating value, it
can create a competitive
advantage in the market.
Future Plans for Pricing
Dynamic Pricing
Implementing dynamic pricing algorithms for real-time demand-based adjustments.

Customer-centric Approach
Enhancing pricing strategies to align with customer preferences and shopping behavior.

Data-driven Decision Making

Utilizing big data and analytics to optimize pricing decisions and improve customer
satisfaction.