Ikea marketing plan Assignment

Ikea marketing plan Assignment Words: 1987

Current Marketing Situation KEA is a furniture store that was founded in 1943 by Angina Kampala in Sweden. Its vision is “to create a better everyday life for the many people”. Initially, KEA only sold some small goods like pens, wallets, picture frames, and tables, but it began to sell large furniture in 1947. In 1955, KEA started to design its own furniture and sell in its store. Now KEA is a famous furniture store around the world, it also has many branches in the US.

KEA got a great sale of $4. 4 billion in the US. In the furniture industry, most industry operators cannot occupy more than 5% marketing shares, so it is extremely fragmented. KEA has grown its market share because of its low price, high quality, and fashion design. Its competitors, which include La-Z-Boy, Raymond & Flanagan Furniture, The Bombay Company, Heavier Furniture Companies and Select Comfort Corporation, are account for 15. 7% of the marketing shares in the industry. Market Description Kike’s target customers are the people whose age is from 18-35.

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It mainly focus the people who Just get married or plan to get married because the Kike’s design can et the demand of young people because most of the young people like the furniture colorful and functional. In addition, this group of people does not have a high income, so they can highly afford to product of ‘KEA. Product Description The new KEA sofa bed is called Backward. Backward has different kind of color, such as Sandbox Blue, Sandbox Brown, Risen Natural, Savant Gray, and Toggle’s beige.

Product dimensions: Width: 79 1/8 ” Depth: 34 5/8 ” Height: 28 ” Back height: 18 1/8 ” Seat height: 17 3/4 ” Bed width: 597/8 ” Bed length: 78 3/4 ” Mattress thickness: 3 1/2 ” Key features kea marketing plan By Tony-Yang converts into a queen size bed for two. Pocket springs adjust to your body and keep your spine straight when you sleep. Storage space under the seat. Competitive Review Sofa beds are more and more popular because people can use it to save money and rooms, and also many companies offer sofa bed to compete with each other.

Not only are the sofa beds of other brands competitors, but the beds and sofas also can be competitions. Kike’s direct competitors include the following: Daphne Supreme Comfort Full Sleep Sofa: It is made by La-Z-Boy, and have plenty of colors to choose. Unlike the products of ‘KEA, most of the furniture that La-Z-Boy sells looks luxury. They are made from high quality material, and have old-fashioned style. Price is $1919 product Dimensions as shown: overall : 39. 00″ H x 73. 50″ W x 39. 50″ D seat : 22. 00″ H x 59. 00″ W x 23. 0″ D Vegas Microfiche Queen Sleeper Sofa: This is a product sold in Raymond & Flanagan Furniture. Whereas KEA sells its own products, Raymond & Flanagan Furniture is like a retail store to sell other brand’s products. This style of sofa bed is made by Design House, and it has the same style as KEA and has three hoicks of color which are oatmeal, brown, and red. The price is $799. Dimensions: L: 89. 5″ x W: 36″ x H: 38″ Benny full sleeper: This is a sofa bed from Heaver’s. Whereas Kike’s Backward looks easy and clean, this style is fashionable and environmentally friendly.

This chic collection features track arms, banded bases, self-welting, Lawson silhouettes, and block legs in an espresso finish. Loose seat cushions in 1. 8-density echo-foam provide lasting comfort. The price is $1199. Wall-Mart: Besides these direct competitions, KEA also face some indirect competition like Wall-Mart. There are also many sofas and deeds sold in Wall-Mart furniture section, and the price is much lower because the discounts always are taken in the store. Channels and Logistics Review Kike’s products are only sold in KEA retail store, and there are lots of KEA store in the US.

KEA use the fastest and cheapest way to deliver the products to its customers from the retail stores or from the warehouse directly. SOOT analysis Strengths: 1. Low price and high quality: KEA knows what its customers want, so they offer the best sofa bed. Although the style is easy, the low price and high quality are enough to attract its customers. 2. Brand reputation and market presents: KEA is very famous in the world and occupy great share of market in the US. More than 600 million customers visit KEA stores every year.

Worldwide market presence and strong brand reputation ensures that customers will often choose KEA over its competitors. 3. Supply chain integration: KEA is committed to long lasting relationships with its suppliers. In this way, the company can order large volumes and benefit from lower prices and greater quality while suppliers are assured of guaranteed orders. Weaknesses 1 . Simple appearance: The main competitive advantage of Kike’s Backward derives room low costs, which in part are achieved due to simple appearance. 2. Single sales channel: The only way to buy the Kike’s products is going to the KEA retail store.

Some customer will not drive such a long distance because it is not convenient. 1 . Expansion to other retail store 2. Growing online sale 3. Get more innovative design on the sofa bed Threats 1 . Growth of average consumer income: With the growth of consumer income, people can afford other expensive and luxury brand. 2. Low price in Wall-Mart Objectives and Issues Objective Because KEA occupy 15% share of the furniture market in the US, its sofa bed at east gets 10% share in the sofa bed market in the first year to get 15 million sales. During the second year, sales should rise 10% from the first year.

Issues The main issue is that in the middle west of the US, there are only a few KEA retail store, and the Wall-Mart sells cheaper and high quality sofas and beds, and its stores spread everywhere. Backward cannot highly attract the customers there. Positioning Backrooms positioning will be based on Kike’s vision “To create a better everyday life for the many people. ” KEA aims to offer this sofa bed to those who will not spend a lot of money on a nice bed or sofa. Our statement is “We try our best to build your own world, and you can spend less money and get a better living”.

Product Strategy We provide two version of Backward, assembled Backward and self-assembled Backer. Research shows that when people use their own labor to construct a particular product, they value it more than if they didn’t put any effort into its creation, even if it is done poorly. However, there are also some people prefer to purchase an assembled one with a little higher price. That’s why we launch both of these versions to our stores. Customers can choose what they need, and their attestation can be met. Pricing Backer sofa bed will follow the cost-based pricing strategy like other KEA products do.

Backer will be sold only in KEA store at a retail price $799 for self-assembled version and $899 for assembled version because, compare with the $1000-2000 that other competitors do, this price is an affordable one that most of the American can accept. KEA tryst to give better lives to every people, and popular brand, high quality, and affordable price can create wonderful home to customers. Distribution Strategy KEA sets global distribution network in many Asian countries to reduce its cost. In the U. S. , KEA will choose the exclusive distribution strategy.

All the KEA products include Backward will be sold in the KEA stores. The products will ship from distribution center to its warehouses, and the KEA stores are also warehouses. Although customers prefer to visit the KEA stores directly, KEA also offer delivery to its customers. Its logistics and distribution operation procedure is very strict. If the sofa bed is sold, the planning department will get the notification immediately, and the product will be packaged and shipped. Finally, a new sofa bed will appear in the store in 3 to 4 days. That is such a rapid good flow that KEA uses to meet the customers’ needs.

Marketing Communication Strategy KEA will use both traditional mass-communication advertising and promotion for its sofa bed. Social Network: KEA is a furniture brand, so the perfect experiences of the customers are the best evidences for other customers. As KEA is a famous brand, the create buzz on the social network, which can attract more and more followers. For example, those who get a new KEA sofa bed may post the photo on the Faceable, and their friend will comment on those posts. Broadcast and Print Advertising: Backward will appear in the advertisement on TV’s and magazines to highlight its affordable price and fantastic design.

In the videos and pictures, Backward will be both a beautiful decoration and functional furniture in the designed room of small idea. Event Promotion: KEA can organize the design campaign that using KEA sofa bed to design the best bedroom and living room, and the Backward can be an award to the winner. This campaign will fully highlight importance of the Backward in a bedroom and living room, which can attract more customers. Marketing Research Before we launch the product, we will do a market research of the percentage of people who own a sofa bed, and who want to own a sofa bed.

After we launch the product, we will also make a market research to our customers about why would they choose KEA sofa bed, brand, design, material, or price? We are doing this because we’d like to find what customers like more, and we will do it better to meet their needs in the future. Action Program The following is the summary of action program that KEA will use to promote its sofa bed: The first month: Post the pictures, value, and price of the Backward on the official site of KEA and social media to make buzz that can improve the awareness of the ewe product and get reviews and comments.

The second month: Post the notice of the campaign that using KEA sofa bed to design the best bedroom and living room on the official site and social media. People can sign up and upload their designs on the official site. In the end of the month, the new product will be given to the winner as a reward. The third month: Launch the sofa bed in people’s expectation. Customers can see it in the KEA retail store, and it also can be purchased online with the banner ” Save Money, Save Space”. Later: After launching the new sofa bed, KEA ill begin to collect information of daily, weekly, and monthly sales.

In addition, market research will be made to the customer to understand why they choose Backward and why they choose ‘KEA. Budget Since KEA has set that the first-year retail sales of the sofa bed should get $1 5 million, and the retail price of each one is $899, 16685 units of sofa bed should be sold in the first year. The cost is about $450 per unit, and the fixed costs for the first year will be 7500000. Base on the assumption, the break-even point is 16667. Therefore, Backward will get the break-even point at the end of the first year.

Controls KEA will start nice control after the Backward are launched to get what customers need from the research, and KEA will be able to give the reflection as soon as it gets useful information from the customers. For example, it can launch addition color if the customers recommend. KEA will also give one-year-and-a-half warranty for the new product. After this period, KEA will also offer repairing service if there are any problem with the Backward. In addition, according to the needs of its customers, KEA will launch Backward II and Backward Ill, which are the update version of Backward, next couple years.

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Ikea marketing plan Assignment. (2018, Aug 31). Retrieved September 26, 2022, from https://anyassignment.com/art/ikea-marketing-plan-assignment-34243/