Retail Presentation on:

By:

Mwuaffag BaswaidCarine Medawar

What is IKEA?What is IKEA?• IKEA is a privately-held, international home products retailer .

• It sells low-price products, including furniture, bathrooms and kitchen accessories.

• The customer has to assemble many of the products.

• 313 stores in 38 countries (mostly Europe) only 37 stores are owned and run by franchisees outside of the INGKA Group.

• IKEA website contains about 12000 products & in 2009 there were 470 million visitors to its website

• Employs 1,27,000 people (2010).

Business Idea: To offer a wide range of well designed, functional products at low prices.

Vision: “To create a better everyday life for the many people”.

IKEA wants to create product with minimum impact on environment, so products are manufactured in a socially

responsible way.

IKEA’s products are based on simplicity and cost consciousness.

History and FactsHistory and Facts

Founded : 1943 in Älmhult, Småland, Sweden

Headquarters : Delft, Netherlands

Founder : Ingvar Kamprad, founded at the age of 17. Resigned as CEO in 1986.

Ownership : Stichting INGKA Foundation which is non-profit organization. • Originally, IKEA sold pens, wallets, picture frames, watches, jewellery.

• First store inside Sweden was opened in 1958 and outside Sweden 1963 in Norway.

23.5 billion euro ( 2010 ) Financial year 2010 (1 Sept 2009–31 Aug 2010) 17% average sales increase in each year

IKEA STORES 276 IKEA stores in 25 countries. 15 new openings 2010 37 stores in 13 countries run by franchisees outside the IKEA Group

OUR VISITORS 615 million visitors in year 09-10 1.1 million visitors every day Average customers are Middle class professionals, ages 25 – 44

◦ Enjoy self assembling and saving money Average sale is $ 90 470 million visitors on our web site

•IKEA publishes an annual catalogue.

• First published in Swedish in 1951

•The catalogue is now published in 55 editions, in 27 languages for 36 countries, and is the main marketing tool, consuming 70% of the company's annual marketing budget.

•The catalogue is distributed both in stores and by mail.

•Most of the catalogue is produced by IKEA Catalogue Services AB in IKEA's hometown of Älmhult, Sweden.

•The catalogue itself is printed on chlorine-free paper of 10-15% post-consumer waste.

INITIALLY

• Kamprad sold his goods out of his home and by mail order but eventually a store was opened in the nearby town of Älmhult. It was also the location for the first IKEA "warehouse" store which came to serve as a model for IKEA establishments elsewhere

•Originally, IKEA sold pens, wallets, picture frames, table runners, watches, jewellery and nylon stockings or practically anything Kamprad found a need for that he could fill with a product at a reduced price.

• Furniture was first added to the IKEA product range in 1947 -The furniture was produced by local manufacturers in the forests close to his home.

•In 1951, Ingvar saw the opportunity of becoming a furniture provider on a larger scale. He soon made decision to discontinue all other products and focus directly on low-priced furniture.

In 1955,pressure from competitors caused suppliers to boycott IKEA which responded by beginning to design their own furnitures.

What is so special about IKEA What is so special about IKEA products?products?

Product range is extensive enough

-to have something that appeals to everyone -to cover all functions in the home -the products are modern not trendy so they are practical enough for everyday use.

Cost advantage

-low price and yet good value for money. (excellent relationship with suppliers) -flat packed furniture cuts costs on transportation and assembly.

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Function

-products are based on a functional approach to design. IKEA design means products that are attractive, practical and easy to use.-no fringes attached.-they give genuine solutions for specific home furnishing needs and are made of the most suitable materials for their purpose.

The right quality

-the quality of a product is appropriate for the intended use

• Winter collection Winter collection

•Storage furniture Storage furniture

•TV solutions TV solutions

• Small storage & Small storage & Clothes storageClothes storage

•Sofas & armchairs Sofas & armchairs

• Tables & desks ChairsTables & desks Chairs

• Lighting Decoration & mirrorsLighting Decoration & mirrors

• Floors Floors

•Textiles & rugs & Beds & mattressesTextiles & rugs & Beds & mattresses

•Cooking & eating Cooking & eating

•Furniture care & hardwareFurniture care & hardware

• Kitchen cabinets & appliances Kitchen cabinets & appliances

•Bathroom furnitureBathroom furniture

• For your pets For your pets

•Children's IKEAChildren's IKEA

Product NamesProduct Names•IKEA products are identified by single word names. Most of the names are either Swedish, Danish, Finnish or Norwegian in origin.

•Although there are some notable exceptions, most product names are based on a special naming system developed by IKEA.

•Company founder Ingvar Kamprad, who is dyslexic, found that naming the furniture with proper names and words, rather than a product code, made the names easier to remember •Since IKEA is a world-wide company working in several countries, sometimes the Nordic naming leads to problems where the word means something completely different to the product in different languages.

• Price is defined as the amount of money charged for a product or service.

In addition price is a flexible element since it can be changed quickly.

• Low Price is not appealing unless it represents good value for money. This is where IKEA is able to make a real difference. IKEA is committed to having a good relationship with our suppliers and so we are able to purchase good quality, economically produced designs that are bought in bulk to keep costs down. By making all our furniture flat packed we cut down on transportation and assembly costs.

•The Price a company charges will be somewhere between one that is too low to attain profitability and one that is too high to create any demand.

•The Business Idea of IKEA is “To create good design that works and has a price that everybody can afford to pay”.

Costs, marketing objectives, merchandising and marketing mix strategy are example of internal factors

The nature of the market and demand, competition and other environmental factors represent external factors.

With more than 220 store in 33 countries and 12000 articles the supply chain has to be impeccable to create differential advantage.The IKEA Group has 31 distribution centres in 16 countries, supplying goods to IKEA stores, and 45 trading service offices in 31 countries. This enables them to develop close relationships with their 1,500 suppliers in 50 countries.

China is IKEA's main purchasing market and 15 per cent of all home furniture sold by IKEA is made from materials purchased in China.

Raw materials are secured considering the following things:1 Plantation are identified which are more then 4000 hec.2 FSC is a certification which is must in consumer markets.3 They give active support to farmers.4 They still support supplying from small scale plantations and farmers.

Position IKEA as the leader in the home furnishings market.

Deliver 60,000 visitors to the store during the four-day opening period.

Deliver a very aggressive sales target (the number is confidential).

Provide a strong sense of connection between IKEA and the local community

IKEA wants to create products with a minimum impact on the environment and make sure they are manufactured in a socially responsible way

Every plastic bag at every IKEA store in the U.S. will cost five cents. The proceeds from the campaign will go to American Forests, the nation's oldest nonprofit citizens conservation organization, to plant trees to restore forests and offset CO2 emissions.

As an alternative, and to influence customer habits in an environmentally responsible direction, IKEA is reducing the cost of its reusable 'Big Blue Bag' to 59 cents, from a dollar.

The INGKA Foundation is officially dedicated to promoting “innovations in architecture and interior design". With an estimated net worth of $36 billion, the foundation is unofficially the world’s largest charitable organization, beating out the much better known Bill and Melinda Gates Foundation, which has a net worth of approximately $33 billion.

Thank you Thank you