IKEA Marketing Strategy: A Case Study 2023

“IKEA,” this name has become synonymous with “affordable furniture,” throughout the world. It is one of the companies, that has a top-class marketing strategy which continues to drive customers towards them.

IKEA is a multinational company known for its furniture and their affordable prices. They produce ready-to-assemble furniture, kitchenware, and home accessories. They have been successful in creating a powerful brand image in the minds of their customers, by being consistently competent throughout the years.

It is a perfect example for the companies that want to improve their marketing campaigns. Let us have a look at how do they do it. 

What is Ikea Marketing Strategy?

 IKEA's marketing strategy is a multifaceted approach meticulously designed to promote its products and services effectively. It encompasses a wide range of activities, from product development and pricing to promotion and distribution. IKEA's marketing approach is renowned for its emphasis on affordability, sustainability, and the unique blend of Scandinavian design principles.

At its core, IKEA's marketing strategy aims to offer customers not just furniture but solutions for comfortable and sustainable living. This customer-centric focus sets the stage for our exploration of how IKEA manages to keep its customers at the heart of everything it does.

History of IKEA

IKEA was started by a 17-year-old carpenter Ingvar Kamprad in 1943, Sweden. It is an organization that is known for its cheap products and unique designs.

It started off as a company that sold pens, wallets, and jewelleries with the concept of meeting consumers demands at the most affordable prices.

After five years into the business, IKEA brought in the furniture. Since then, furniture has been their primary focus for the business.

IKEA has always tried to better the lives of people. It is a furniture company that produces ready-to-assemble furniture that gives the customers a novel experience of building their furniture by themselves.

IKEA’s Growth in Market

- From recent studies IKEA retail sales reached 44.6 billion euros last year.

IKEA benefited after pandemic, as the inflation and supply chain issues impacted the market and it led to rising costs of products.

Though sales grew in money, but the sales quantity was not nearly enough.

- 38 new IKEA sales locations opened around the world in 2022.

Overall, IKEA welcomed 822 million visitors in 2022 compared to 775 million in 2021. Store sales grew mainly in Europe, where 2021 lockdowns were most severe. At the same time, online sales were 10% lower compared to 2021. IKEA online channels hosted 4.3 billion visitors, down from 5 billion the previous year.

Ikea Marketing Channels

IKEA's marketing strategy encompasses a diverse range of channels to reach its target audience. From traditional advertising methods like television and print media to digital marketing through social media platforms and e-commerce, and even experiential marketing within its retail stores, IKEA leverages multiple channels to engage with consumers effectively.

The company has mastered the art of blending these channels seamlessly, creating a cohesive brand presence that spans both the physical and digital realms. By exploring these channels, we gain insights into how IKEA manages to maintain a consistent and engaging brand identity across various touchpoints

IKEA Marketing Strategy: Goals and Strategies

IKEA's marketing goals align closely with its mission of providing affordable and sustainable home furnishings. Its strategies include a relentless focus on product innovation, pricing transparency, and community engagement. By understanding these goals and strategies, we can gain insights into how IKEA stays competitive in a rapidly changing marketplace.

One of IKEA's primary goals is to make well-designed, functional products accessible to as many people as possible. This commitment to affordability is a cornerstone of its strategy, and we'll explore how it achieves this while maintaining product quality and sustainability.

The 7 P's of IKEA Marketing

The IKEA marketing mix including the 7 P's (Product, Price, Place, Promotion, People, Process, Physical Evidence), plays an integral role in IKEA's marketing success. We'll dissect each of these elements to understand how IKEA manages its product offerings, pricing strategies, distribution channels, and promotional efforts, among other factors.

1) Product: IKEA's product strategy revolves around providing well-designed, functional, and affordable furniture and home accessories. They emphasize simplicity, durability, and ease of assembly, catering to the needs of a wide customer base.

2) Price: IKEA is renowned for its competitive pricing strategy. They offer a wide range of products at various price points, making quality home furnishings accessible to consumers with varying budgets. This pricing transparency is a core aspect of their marketing.

3) Place: The placement strategy is a crucial element of IKEA's marketing. They strategically locate their stores in high-traffic areas, often in suburban locations near major cities. The layout of their stores is designed to guide customers through a well-thought-out shopping journey.

4) Promotion: IKEA employs a mix of IKEA promotion strategy techniques. They use both traditional advertising, such as television and print media, and digital marketing channels like social media and email marketing. Their promotions often focus on special offers, seasonal themes, and sustainability initiatives.

5) People: IKEA's marketing strategy acknowledges the importance of the people element. Their staff is trained to provide excellent customer service, guiding shoppers through the store and assisting with any questions or concerns. IKEA also highlights the people-centric aspect in their advertising, showcasing real families and individuals in their homes.

6) Process: IKEA's unique shopping experience, with its self-service model, flat-pack furniture, and in-store restaurants, is part of their process-oriented marketing strategy. They emphasize efficiency and convenience, making the shopping process enjoyable and memorable.

7) Physical Evidence: The physical evidence in IKEA's marketing is evident in their stores and products. The stores are designed to create a sensory experience, with room setups, visual displays, and even the smell of Swedish food in the air. The quality and design of their products also serve as tangible evidence of their commitment to excellence.

Understanding how IKEA strategically applies these 7 P's in its marketing mix allows us to appreciate the holistic approach they take in ensuring their products and brand resonate with consumers, creating a unique and successful marketing strategy.

Challenges and Solutions in IKEA's Marketing

Even a giant like IKEA faces challenges in the marketing landscape. We'll explore how the company navigates issues such as changing consumer preferences, intense competition, and environmental concerns. Additionally, we'll discuss the innovative solutions IKEA employs to overcome these challenges, highlighting its agility in adapting to market dynamics.

Challenge

The major challenge for the Swedish company was their limited influence in the world market and the insignificant role of the sales person in their company, people expected the presence of a sales person to be there as the products were ready-to-assemble type and people were not used to assembling their own furniture.

They wanted some guidance and were not ready to accept change.

Solution

The solution for the problem was to improve their marketing strategies and introduce the concept of ready-to-assemble furniture bit by bit and familiarize the audiences with this new concept without being impatient with them. Years later they were successfully able to change their audiences and altered their preferences to liking their product instead of other products in the market.

Understanding IKEA Market Segmentation

IKEA has mastered the art of market segmentation, tailoring its products and marketing messages to various consumer groups. By understanding its market segments, we can appreciate how IKEA resonates with diverse audiences, from budget-conscious shoppers to eco-conscious consumers.

Market segmentation allows IKEA to deliver personalized experiences to its customers. We'll explore how this customization and targeting contribute to its market leadership.

IKEA Digital Marketing Strategy

IKEA social media campaigns consists of making use of social media channels like Facebook, twitter, Instagram, etc. to promote their products. IKEA content marketing strategy involves creating engaging content for the customers. From their banners to their payment methods it has creative elements that draws customers interests.

IKEA Advertising Strategy

Apart from innovative design and cheap price IKEA uses things like “Chat bot” to gain deep insights into their customer’s behavior.

They also have an efficient packaging strategy for their products as well. This strategy helps them save a considerable amount of money and material at the end of the day.

They give their customers a pleasant experience at their stores while they are shopping, be it the food court or designing the store like a maze. They are capable of increasing the shopping time of their customers, which leads to increase in their sales.

IKEA likes to stay in touch with the technological advancements. They like to apply these technologies into IKEA marketing plan for the products. Recently they made use of AR and VR technology in their mobile app. Such usage of innovation is something that other companies can learn from IKEA.

IKEA Brand Strategy

IKEA has remained consistent with their brand style. IKEA brand positioning formed a prominent brand image in the minds of their customers and audiences.

The fact that the name “IKEA” has become synonymous with “furniture” says a lot about their brand strategy.

The main goal of IKEA is to better their customer’s everyday lives through their products. They have come a long way and are nearing their final goal, that too at a global level. IKEA becoming the top furniture brand throughout the world is no longer just a possibility, but is something very close to the reality.

Why is IKEA's Marketing so successful?

IKEA's marketing success can be attributed to a combination of factors, including its unique value proposition, commitment to sustainability, and customer-centric approach. We'll analyze these success factors in detail to uncover why IKEA stands out in the market.

The secret behind IKEA's marketing success lies not in any one aspect but in its ability to integrate multiple strategies and values into a cohesive and compelling brand narrative. We'll unpack this narrative to reveal what truly makes IKEA exceptional.

Reference

The information was taken from

IKEA’s own about page

IKEA Harvard Case Solution & Analysis from thecasesolutions.com

IKEA marketing strategy: 7 tactics and takeaways from brafton.com

Research Details

Our team at Sprintzeal has referred to 2 case studies and the time for research was 9 hours. We tried to make this article as concise as possible. The reader should be able to get an idea of IKEA marketing strategy after reading this article.

Conclusion

Now you have come to the end of this article, which focuses on marketing strategy for IKEA and is relevant to all those who are trying to start their own businesses and also the general populace who can get inspiration from IKEA’s success story.

Our team at Sprintzeal will keep you informed with our blog posts such as this one. Let us be your guide and teacher in your journey to success. Those interested in digital marketing or want to start their careers, can start by enrolling to our Digital marketing program. After learning the basics, you would be able to understand the true genius of IKEA and their marketing strategy. Subscribe to our newsletters with the valuable information and insights directly to your inbox, saving time and keeping you informed.

Frequently Asked Questions

What marketing strategies does IKEA use?

IKEA employs a mix of strategies, including affordability, sustainability, innovative product design, experiential in-store marketing, and a strong online presence to reach and engage its target audience.

What is the marketing concept of IKEA?

The core marketing concept at IKEA centers on offering well-designed, affordable, and sustainable home furnishings while creating a unique shopping experience for customers.

What is the competitive advantage of IKEA?

IKEA's competitive advantage lies in its ability to combine affordability, quality, sustainability, and innovative design, all while providing a unique and customer-centric in-store experience.