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Marketing Management - IKEA

University: London School Of Commerce

  • Unit No: 6
  • Level: High school
  • Pages: 18 / Words 4510
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 622
Question :

This assessment will cover the following questions:

  • IKEA multinational company which deals in designing and selling assembled furniture and home appliances. Provide a background of the organisation and provide market positioning and present a unique selling proposition.
  • Explain future marketing strategies and action plans in the context of IEKA organisation.
  • Generate marketing research skills by a systematic approach of searching, collecting, interpreting, and analysing data to support the formation of a suitable market plan.
Answer :
Organization Selected : IKEA


Marketing management is organizational discipline that focus on practical application of the marketing orientation, methods and techniques inside organization and enterprise on management of firm's marketing activities and resources.

IKEA is the multinational company which deals in designing and selling ready to assemble furniture, home accessories and kitchen appliances. Company is situated in over 313 locations globally. The report includes a background statement for outlining the industry, market position along with present unique selling proposition. Report further carried forward with marketing audit which outline overall market attractiveness. The report ends with analysis through 4Ps model while proposing new product which could be helpful for company to capitalize strength and opportunities and managing the weaknesses and threats.


Background statement

Industrial Background

Manufacturing is process of converting component or material into finished good which could be sell in marketplace. Every physical good which have been purchased by individual from shop or online has been manufactured somewhere. Manufacturing industry is the largest sector who had employed over more than 12 million of employees. It can be stated that healthy manufacturing industry is hallmark indicator of thriving and healthy economy. Manufacturing industry refer to the industry that is involved in processing and manufacturing of item and indulged in either creations of the new goods or in the value additions. Manufacturing industry account for important share of industrial sector in the developed countries. Final product could either served as finished good for selling to consumer or as the intermediate good that is used in production process. Manufacturing industry came into with occurrence of the socio- economic and technological transformation in Western countries in 18-19 century (Lindgreen and Di Benedetto, 2018). That is widely known as the industrial revolution. It has been begun in Britain and then replaced labour-intensive textile production with the mechanization and utilization of fuel. Manufacturing industry are chief wealth producing sector of the economy. Manufacturing industry is broadly classified into food manufacturing, beverage and tobacco products manufacturing, textile manufacturing, leather & allied products manufacturing, apparel manufacturing, wood product manufacturing, paper manufacturing, coal and petroleum manufacturing, chemical manufacturing, plastic and rubber manufacturing, metal manufacturing, Fabricated metal, machinery manufacturing, computers & electronic manufacturing, transportation equipments manufacturing and furniture manufacturing. This industry has share in Gross Domestic Product had been stagnant at 17% from last two decade. Total contribution of industry to GDP is 27% in which 10% comes from the quarrying, mining, gas and electricity. Manufacturing sector has steadily growing at rate of the 7% from past decade. Growth rate has been 9 to 10% per year since 2003. Desired growth rate for next decade is 12%. National Manufacturing Competitiveness Council (NMCC) is being set up with objective for enhancing and improving productivity by proper policy intervention through government and renewal of effort by industry (Mullakhmetov and et.al.,2016). Manufacturing industry is responsible for products and goods in the economy, or physical product that has been purchased and used by individual every day. In today's technological advancement, it allows manufacturer to do more within limited time. Thousands of item could be manufactured within few time period. Technology could be used for assembling, tracking and testing productions. Continuous improvement in technology make manufacturing industry increasingly work efficiently, faster and more cost-effective.

Market Position of Company:

IKEA is the European multinational group which sells and design ready-to assemble furniture, home accessories & kitchen appliance among another usable good and occasional home service. Company had revenue of $45.4 billion and has become world's biggest furniture retailer since 2008. All companies aims at positioning themselves at best market position. It can be measured by their quality, service, rating of consumer services and pricing. Somehow nobody could beat up IKEA in this race and thus company had established a huge position in the marketplace among its rivals (Wagner and Eggert, 2016). Company is always known for having the least expensive price in marketplace. IKEA maintains its low cost leaderships through low cost control strategy. Thus, company's product are affordable and renders good quality. It can be explained below-



Tepe Home


Number of stores

There are 433 IKEA store which are operating in across 52 countries.

It had 27 Tepe home store, 12 Tepe kitchens, 10 Tepe Furniture sellers in turkey.

13 stores in Turkey and 8 store in the other counties.

Number of employees

Company has 2000 employees in Turkey stores and 10000 employees are employed in other countries where its store has been located.

It employs approximately 1750 employees.

It had 800 employees currently working with company.

Number of product variety

It offers 120000 type of product variety to its customers.

It renders 40000 kinds of the product.

It offers 25000 various type of product.

Market share

Company had 32.5% of market share (Baker and Saren, 2016).

It' market share is 25%

Market share of company is 11%

Current Revenue

25,17 billion euro

168,3 million TL

120 million TL

From the above table it can be summarized that company is immensely growing and succeeding. Company has been doing well among its competitor and there is huge difference among company's overall growth among its rivals. It offers over 120000 type of product which provides their consumer a wide range of choice and could easily select product as per their needs and demand. IKEA focus on product design that make home better place and which is fit with needs and requirement of an individual's resident. They had established over 433 stores across 48 countries which state that company is immensely working and growing. It's product are reachable to wide range of individuals (Naudé and Sutton-Brady, 2019). The company employ about 172,000 employees who work passionately with company for gaining its objective and goal effectively they always aim to offer product with high value, standard quality at the lowest price so that there customers are well satisfied with their products. IKEA is also well-known for its outstanding level of the customer support as they offer quick and free delivery to their customer this is helpful for company to have huge consumer trust on company's product. This all factors are helpful for company to place themselves different and at top from other competitors.

Unique Selling Proposition of company:

Unique Selling Proposition (USP) is unique slogan or selling point which differentiate good and service from their competitors. USP could include word that can be “low cost”, “high quality” and “first ever” which point consumer what their good or service have that competitor in marketplace doesn't have. It is the great marketing technique which is helpful for positioning and selling product. A company with strong USP renders better foundation for the differentiation in the product and providing huge success in competition. It is helpful for company to promote their product and services in market effectively. IKEA had maintained its USP by providing good furniture, good price and unique purchasing experience to their customers. Company provide superior quality furnitures to their customer at affordable price that can be afforded by any of the economic class in society either rich or medium class. Along with low pricing they always strive hard to deliver the supreme quality furniture and service to their customer so that they could gain huge customer satisfaction. This is helpful for company to place themselves different from other competitors in marketplace. They provide free service to their customer after the purchase if customer wants to carry it by themselves than they can if they want company to deliver the product to their home this facility is given by company to their customer free of cost. This is helpful for company in gaining huge consumer satisfaction (Gummesson, 2017). This is helpful for company to place themselves unique from other companies in marketplace. Company can effectively meet the needs and demands of consumer positively with their Unique selling proposition. This USP of company is helpful for them to gain huge success and growth in market and compete with its rivals effectively. IKEA had gain huge profit and revenue with the help of USP in this product and services which is rendered by company to its customers.

Marketing audit that outline overall market attractiveness and whether there is potential for market growth

Marketing audit includes the internal and external factor which affects the business and business operation all over the world. The internal factor includes factor which is helpful for company to effectively compete with its rivals and place them in market with brand reputation. SWOT analysis is strategic planning tool which is helpful for an organization to identify strength, weaknesses, opportunities and threats that are related to the business competition or planning of project. It can be described below-


IKEA offers wide range of wide variety of well-designed product at affordable price. That is helpful for company to gain huge consumer attraction towards the product of company. The company had gain huge product image in the marketplace. They had great balance among function, design, quality and price. IKEA is the biggest furniture retailer all over world. The revenue of IKEA is €25,17 billion and its financial profit are €14.437 billion. Product of company are cost effective and value their customer's money. High rate of investment is rendered to customer which is spent by them on company's furniture (Chonko and Hunt, 2018). They manufacture DIY type of products that are pretty famous among its consumer and make them first choice for their customers. They always strive hard to provide superior quality to their customer along with different type of product its design and manufacture.


IKEA has its operation in various countries and that's why company face local troubles at some locations. Company had got stuck in consumption due to the expansion problem in the Russia. They also came up in news for issuing all men catalogue in the Israel taunting their ultra-orthodox Jewish community. These steps had a negative impact on the company's brand image among marketplace. IKEA mostly advertise their product in the form of catalogues. Sometimes it becomes difficult for company to maintain low cost along with high standards quality service and high product to their customer (Pasquier and Villeneuve, 2017). Company had its operation in many countries so similar product standard could not be followed by company at every6where. Fundamental rule of company is to keep low cost for its products but with the increased raw material cost it is very hard for company to maintain the standard.


Company had several growing demand for the eco-friendly product for their customer nowadays. This is helpful for company in growth strategy. Consumer are becoming more cost conscious. They can opt for such product as they change their furnishing time to time. Developing countries like China could be targeted by company as this county had a huge population so this requires unique solution for space use problem by individual at their resident. IKEA could establish their business and could target & focus such saturated marketplace. Company can start its online sale as more and more consumer nowadays deal through internet. They can enhance their advertisement strategy effectively so that wide range of consumer can be attracted towards company and its products.


Many regional or local companies are copying product of IKEA. So company requires keeping on innovating and updating constantly to their offering so that they could stay ahead from these companies and safeguards their revenues. Fluctuating government law and tax policy could have bad impact on price of company's product and it can't be maintained by company if tax become high. IKEA is losing its primary success factor that is its DIY product. As due to internet there are wide option that are available with customer (Kotabe and Helsen, 2020). There is more competition for company who are entering into market with low pricing furnishing and home market segment. Global financial crisis had result in reduction of disposable income and the spending of customer.

PESTEL Analysis is framework used by company for analyzing and monitoring micro-environment factors which had its effects on organization. These six factor is helpful for company to gain special significance as they could affect brand's profitability and its position in marketplace. It can be described below-

Political Factor

IKEA operate in more than 53 countries. Political force are available in each & every nation and could affect business. From the supply chain activity to sale, all could be affected by political factor. Political stability tends to have economic stability and further it turns into better sale and profit. The attitude of government toward foreign brand and its policy too matter it. It leads to have disruption in supply chain. From past five-year China has acted as low political barriers for foreign brand and companies that enhances presence of brand in this marketplace. IKEA is planning to enter and dominate into emerging Asian marketplace (Shiu, 2017). Supply chain activity would be disrupted by the political instability.

Economic Factor

Economic factor play a very essential role in environment of business. Condition of global economy decide that how much revenue and profit is earned by business. Recession in market leads to have a huge decline in purchasing power of consumer. As people had lost their jobs and further they are forced to cut their living cost. IKEA has effectively managed its product price very well that could be afforded by consumers in marketplace. So economic pressure could be managed and effectively by company (Zimmerman and Blythe, 2017). Still, economic condition had affected the company's profit and revenue. IKEA is also facing major challenge in the marketplace due to the current situation of Brexit in country while conducting their business activity. As purchasing power of consumer in market have been decreased. The labour law, tax & duties also affects company overall.

Social Factor

Social and cultural factor have a deep impact on business and its profit. It is very important for a company to follow cultural and social values of local market. But somehow company is not properly following it and came under fire for photo shopping women out of their catalogues in the Saudi Arabia and also for removing lesbian couples from their Russian magazine. But now company is becoming more and more aware to improve and enhance to share value and culture of country. They ensure that while printing their catalogues world widely they won't print wrong things on it which could harm any culture and values of a nation. Other factor and social trend also have a deep impact on the sales. If this particular style are not in trend then company could focus on them (Olson and et.al.,2018). Changing social trend also affects the company's growth and development. The Swedish lifestyle has been reflected by IKEA on its product range through colour & materials etc., so wide range of consumer could be attracted towards company's product.

Technological Factors

The technological factor had a huge impact on companies overall growth and development. The company implement innovative designing in their product through various technologies so that they could deliver the product to customer which fulfil needs and demand of customer. IKEA also had 3D mobile catalogue so that they consumer easily analyze product and state that this product fulfils their demand or not. Company is also moving towards technological advancement and is being updated on social media with lots of video on you tube so that they could gain huge popularity among its customers and wide rage of new customer are also attracted to purchase company's product. IKEA has also investment in Augmented Reality and VR set to transform sale which is helpful for company to have effective sale (Chernev, 2018). They also use data analytic so that they could let their consumer with an amazing experience while they deal with company.

Environmental Factor

Sustainability is now important that must be focused by most of the business brand. Its helps in reducing cost and also helpful for company to create better brand image. Brand's operational cost could also be enhanced company's image in the marketplace. IKEA has aimed to less carbon footprints in their product manufacturing by which company could have positive impact on their customers. Company could aim at manufacturing recyclable product so that it could not harm environment further and could have gain interest of consumer on company. They are also moving forward with reducing the environmental impacts through CSR. IKEA had aim to contribute into CSR which had positive impact on its customer and competitors as well. This is helpful for company to enhance their profits through huge consumer attraction towards company's product.

Legal Factor

Legal threats are major problem for big business. It is due to the regulation and law are tougher and could have small hassle with law can be costly to the company. Labour could be important concerned that must be followed by IKEA in their business operation, and they need to compliance and could raise operational cost with the help of this. Quality of product is also an essential issue. IKEA could face many laws related challenges as the law and regulation in countries could be different, so they must know and levy rule and regulation in their company while performing their business activities (Haider and et.al.,2017). And its is very tough for IKEA to follow government set of law and regulation so that they could have smooth flow of business operation in several countries.

Following analysis, on the basis of 4Ps model, a new product has been launched by company and thus with the help of that product how strengths and opportunities could be identified and further managing weaknesses and threats

The Kitchenware & appliance is new product that is launched by company. This product is helpful for company to gain huge competitive advantage against its rivals in market. It could be described below with the help of 4Ps model of marketing mix.

4 P's of Marketing

The four Ps of marketing are key factor which are involved in marketing of good and services. They are product, price, place and promotion. It is also known as marketing-mix. The marketing mix of IKEA new product Kitchenware & appliances has been explained below-


Product in marketing refers to goods and services that company provides. These goods can be in form of tangible goods or intangible services. Regarding products marketing mix is considered with quality and quantity that company provides to its customers. These are categorised by their specific features and their differences. Diversification of product is also a part of product in marketing mix. IKEA whose strengths are its global presence and wide range of customer group needs to ensure about their product that they are unique as there are many other companies that are providing similar products. Kitchenware are not something like new and innovative concept and what company can do to ensure its success is that products need to be specific and new by their design (Kucuk, 2017). Design of the company is already its strength which company can use in its product strategy for new products that company is launching in the market. Regarding its kitchenware and appliances company can make these products also DIY type or can engage a different concept which is unique with Kitchenware and appliances so that like its furniture become first choice of customers. Company can also make its products eco-friendly which already present as an opportunity for the company. Company should ensure that its products are diversified for different type of customers with different needs in similar product and price as well.


Price have a significant place in marketing and marketing mix as well. Marketing mix of the price states price that company demands for a product it sales. Differentiation of the price on the basis of quality and quantity of the product also includes in price of marketing mix. IKEA uses low price strategy which is a main factor of its success. Most of the customers are price conscious and need to have product with good quality at law price. IKEA's biggest strength is that it provides products which are of good quality and are of low price. As company try hard to provide its customers good quality of products they also ensure that price of the product does not increase with its quality otherwise company may lose its customers to its competitors. Price of the product which company have decided to keep at low should also be diversified. Because as per general perception products which are of higher prices do have better quality then those which have lower price (Sulaiman and Syahrivar, 2018). This will ensure that people who like to purchase products with higher price will also purchase IKEA's products. Price strategy of IKEA is lower price strategy which does not allow company to demand higher price when company increase its quality or the cost of the company gets increased. This is why company should make a definite price strategy according to its demand, supply and profit margin so that company does not need to change and increase its prices which possess risk of loosing customers.


IKEA is basically the organization which is present across the world in large number of countries. It has its presence in various countries and currently operates in numerous locations. It is present in about 49 countries and thus have a total of around 415 retail stores which are spread across various countries. As the company is launching its new product which is kitchen and appliances thus in order to make it successful, IKEA will have the basic concentration where this product will be launched. While selecting the price, region or country IKEA will evaluate the various aspects like knowledge of the local market, corporate cultures as well as values and many more (Deepak and Jeyakumar, 2019). Thus, this kitchen appliances will be launched in the market of highly concentrated population and thus will mainly target the females between the age group of 25 to 40. The outlet consisting of the kitchen appliances will be highly attractive and will be situated outside the country in less populated area. It will attract the customers through its presence on lavish place on the highway. Besides this, this outlet will be present in the area where people frequently visits in order to capture their attention.


Companies are required to take assistance of correct promotional tool to enhance awareness of products in the market. As competition is too high and enterprise is required to retain the consumers by making them loyal towards the brand. For that it is very important to promote the brand in most effective manner so that people know about the benefit of buying items from that firm. IKEA being a global leader always takes support of traditional methods of promoting the brand. In order to promote its kitchen items enterprise, need to take assistance of Facebook, twitter kind of social platform (Keegan, 2017). In the recent time many people use such sites, and they spend most of the hours on using such social networking sites. Use of this platform will give benefit to business in attracting more potential buyers and making them ready to spend money to buy such kitchen appliances. Use of social media will help the organization in creating opportunity for business because by this way entity will be able to develop relationship with consumers which will help the firm in gaining competitive advantage and mitigating the threat of high competition.

There is very important for the firm to develop trust among the buyers so that they share positive reviews about products of company with others. If these existing customers are not positive towards the brand, then it may affect overall image of business. Social sites help in circulating the views of customers to other consumers that means any person can make decision by viewing the comments or responses of other consumers (Kotler and et.al.,2018). If someone has written good thing about IKEA then it will motivate other people to take interest in its products and buy kitchen appliances of the business. By this way entity will be able to create new opportunities by successfully operating into the global market.


From the above study it can be concluded that marketing management play a major role in the growth and development of company. Company could gain huge success if there is overall marketing management done by them while analyzing the external and internal factor that could affect business operations. They could implement strategies accordingly so that company can effectively compete with its rivals in market. If company had better marketing strategy along with market watch and condition then they could gain huge revenue and success further and sustain in market for long term. Our team of subject-oriented and highly qualified writers promises to deliver well-written and thoroughly researched assignments at affordable prices within the prescribed deadlines. If you want to receive an original document according to your university guidelines, then take our assignment writing service at an affordable budget.

Check Out For More: Organizational Behavior

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