IKEA Marketing Case Study
With companies that have many more locations and convenient “one-stop- shopping” such as Target and Walter; KEA must develop a competitive market advantage (that spans beyond simply cost and “modern” product). Furthermore, KEA must overcome the stigma of being a “do-it-yourself” retailer in order to compete with companies with whom have reputations and a long history of success such as Home Depot. Background of the Situation: KEA has multiple strengths including: A modern image. A green image.
A highly efficient operation that is 51 percent self-sufficient. A 7 percent annual growth rate An “anti-bureaucratic image that is promulgated by upper management working in hands on” Jobs (cashiers, loaders, etc. ) Ahead of the game with a daycare and restaurants to keep customers in the store longer KEA also has several weaknesses: Marketing in primary countries that is not conducive to the U. G’s “conservative ways”. Average U.
S consumer not being the best target for the “do-it-yourself” approach.
Elemental custom-addle TTY (many u s consumers Like pitons sun as color) I Sea’s set In their ways as far as how they market (word of mouth) Kike’s sub-par website forces consumers to shop at the nearest location. Not a well trusted name for products such as mattresses Opportunities: Although there are many elderly individuals who do not like the DID approach there are a vast number of young adults, who can be targeted to become lifelong customers.
Threats: Losing market-share to larger retailers. More trusted companies following Kike’s trend and stealing from the market share Metric to Test Success: KEA targets market segments based on the following: age, lifestyle, the benefit the buyer is seeking, and the income level.
For my solution, I believe the iatric for success is simply; do over 66% of my college aged students return every 2 to 4 years. Furthermore, does this happen at least twice?
An example is when a young adult completes his or her undergrad, do they return to purchase “starter furniture”(for a first rented apartment or first purchased home) ? Key Issues: High cost of simply adding more brick and mortar locations Even with 9500 different products, customization is still important Solution 1 . ) Simply adding several brick and mortar locations on top of the existing 38 current U. S actions is both costly and a long fix to a problem that may hold a quicker solution.
Positives: More locations to operate means larger market to serve (potentially) Would be easier to ship to more places Negatives: High cost of building Time spent is money spent solution 2 ) Removing K All orders would ‘s operations Trot ten us Ana only selling Trot catalogs. Be shipped from on central distribution center in the Midwest (cost would be the deciding factor of the final location.
More focus on countries with a larger market. Easy distribution from a single point Giving away potential buyers and potential customers.
Furthermore, some customers you have already acquired and could be life long customers. Solution 3. ) Creating electronic kiosks supplemented by a rep that can travel to large college campuses within a sixty mile radius of college campuses. These Kiosks can feature the same AD benefits of the existing app, such as dimensions and multiple angles.
This furniture would be customizable with University specific covers that would not effect that packaging of Kike’s already well efficiently packaged, shipped, stored, and distributed products.
Orders of a certain cost would then be delivered and assembled free of charge. Can test to see how much customization would really impact U. S consumers. Much more cost effective than building new locations. Targeting customers that may otherwise not purchase furniture due to the extraneous amount of travel Shifting away from the “do it yourself” stigma by having products assembled on site Potentially creating lifelong customers.
Cost of delivery and assembly Liability of delivery and assembly Additional cost of University specific colors and covers may not outweigh the
