How was it started?

IKEA was founded in 1943 by a 17 year-old Swede named

Ingvar Kamprad who sold pens, Christmas cards, and seeds

out of shed on his family farm.

The name IKEA derived from Kamprad’s initials IK and first

letters of farm Elmtaryd farm and village of Agunnaryd where

he grew up.

Unconventional Product names

The strange product names makes them unique and easy to

remember the products.

Sofas, coffee tables, bookshelves, media storage and doorknobs

are named after places in Sweden (Klippan, Malmö)

Beds, wardrobes and hall furniture after places in Norway

Carpets after places in Denmark and dining tables and chairs after

places in Finland.

➢ By looking at the problem of waste

and recycling a little differently, the

company has set out on an exciting

journey in sustainability and begun

pioneering ways to turn trash into

treasure

➢ The desk pad contains 50% recycled

materials, and the offcuts can go

right back into production, so

nothing is ever wasted.

WASTE INTO USE

FURNITURE OUT OF PAPER

IKEA REDUCES PRICES 1-3% ANNUALLY. HOW CAN IT DO SO?

IKEA continuously seeks out

new ways to run its business

more efficiently.

People have very thin wallets

and we should take care of

their interests.

➢ IKEA’S designed products are well made and appeal to the

masses.

➢ Replaces approximately one third of its product lines each

year.

WIDE VARIETY OF PRODUCTS

DO IT YOURSELF

Do it yourself (DIY) is the

method of building,

modifying, or repairing things

without the direct aid of

experts or professionals.

This strategy makes storage

and transportation easier and

cheaper for the store.

ENERGY EFFICIENT METHODS

IKEA buys in bulk, controls

the supply chain, uses

lighter packaging materials,

and saves on electricity

through solar panels, low-

wattage light bulbs, and

energy from its own wind

farms in six different

countries.

CUSTOMER EXPERIENCE

Bright and inviting store atmosphere.

Resembles Modern Theme park with

childcare centers.

One stop shopping experience.

Free wireless internet access.

Analyzing consumer markets

Plastic placemats with rooster themes during the

Chinese year.

Larger glasses for the U.S. market.

Designed wardrobes for U.S. markets with deeper

drawers.

IKEA sold king size beds and a wide range of styles to

attract U.S. consumers.

QUIRKY MARKETING CAMPAIGNS

➢ IKEA is known for its quirky

marketing campaigns, which

help generate excitement

and awareness of its store

and brand.

➢ “Ambassadar of Kul”

POSITION

IKEA has evolved into the largest furniture retailer in the world.

IKEA culture center:

The aim is to maintain and transfer knowledge about IKEA values and the IKEA culture to IKEA co-workers.

IKEA Museum

On 30 June 2016, we opened the IKEA Museum in Älmhult which

offers IKEA co-workers and the general public the chance to

discover and be part of the IKEA story in a whole new way.

4 P’s of IKEA

PRICE

Low prices constitute

the IKEA vision,

business idea and

concept. IKEA makes

low cost furniture for

household and

offices. It focusses on

cost control and

efficient operational

details

PLACE

IKEA has got an excellent

place and distribution

strategy. Procuring

materials in proximity with

supply chain to reduce

transport costs and using

more of ocean transport

than road transports are

some strategies adopted

by IKEA

PEOPLE

IKEA uses promotion

tools like TV, print, online

ads, billboards etc. in its

marketing mix. Online

advertisements

promoted IKEA products

demonstrating the

problems faced by

people, and offering

solutions.

PROMOTION

IKEA gives utmost

importance to its

customers and

employees. Employees

at IKEA believe in the

idea that they are

straightforward people

with passion for home

furnishing. The

employee culture is

based on togetherness,

enthusiasm and fun.

Opportunities

Extension of their retail services to Emerging Market Economies

where middle class population is rapidly increasing.

Increase sourcing its supply from emerging markets, which are

characterized by low cost labor to sustain its competitive

advantage.

Q & A

What are some of the things IKEA is doing well to reach consumers in

different markets?

Wide variety of products.

Low prices and good quality.

Marketing campaigns.

Discuss the pros and cons of IKEA’s strategy?

Pros: Catchy names for products, cost savings, cultural

segmentation.

Cons: Size and scale of IKEA, changing social trend.

SUMMARY

Customer ExperienceEnergy efficient Low Cost

Design Do It Yourself Quirky Campaigns

DISCLAIMER

Created by Santhosh Masuna, IIT Bombay, during a

marketing internship under Prof. Sameer Mathur, IIM

Lucknow.