3. INTRODUCTION
• IKEA is an internationally known home furnishing retailer.
It has grown rapidly since it was founded in 1943 by Ingvar
Kamprad at the age of 17.
•Today it is the world's largest furniture retailer,
recognised for its Scandinavian style.
•Started as a small shop to sell pens, jeweler, wallets,
frames, etc.
•Majority of IKEA's furniture is flat-pack, ready to be
assembled by the consumer. This allows a reduction in
costs and packaging.
•A total of 328 stores in 28 countries; 27 Trading Service
Offices in 23 countries; 33 Distribution Centres and 15
Customer Distribution Centres in 17 countries; 43 IKEA
Industry production units in 11 countries
4. BRAND EQUITY MODEL
According to Prof. Kevin Keller, the brand equity plays a wide variety functions
such as:
•Creating perception of the brand and produce different interpretations of
product performance
•Enjoy greater loyalty and be less vulnerable to competitive marketing actions
•Command larger margins and have more inelastic responses to price
increases and elastic responses to price decreases
•Receive greater trade cooperation and
support
•Increase marketing communication
effectiveness
•Yield licensing opportunities
•Support brand extensions
5. SALIENCE DIMENSION
Brand Depth: IKEA’s goal is to be “the
leader of life at home,” so it is critical
IKEA people understand what life at
home is really like. They regularly visit
people’s homes, observing and taking
pictures, and produce a quarterly “Life at
Home” report.
Brand Breadth: IKEA has
created an enjoyable shopping
experience for customers hence
the number keeps increasing
every year
Figure 1. IKEA slogan
Figure 2. Number of visits to IKEA stores
6. PERFORMANCE DIMENSION
• Product Reliability & Durability:
More reliability since consumers
assemble furniture themselves
• Style & Design: Scandinavian style of
furniture built with great simplicity
and elegance. Everyone can relate to
it.
• Service Effectiveness & Efficiency: it
adapts to different regions and
provides them services accordingly.
• Price: Low cost products for
everyone.
7. IMAGERY DIMENSION
• IKEA has created a strong brand image in the market by
taking up serious strategies to cut costs.
• This has made customers believe that the brand actually
cares about them and has created brand loyal customers
• It has taken various initiatives to control its environmental
impact as well and takes its CSR very seriously which has
also helped in building a positive brand image.
8. JUDGEMENT DIMENSION
• Brand Credibility: Doubt of
quality of products by certain
consumers.
• Brand Superiority : The brand
is considered way more
superior than the other
competitive brands in the
market due to its cost
effectiveness and its innovative
styles of furniture and
especially the manner in which
they display their furniture in
the stores
9. FEELINGS DIMENSION
• The store has a
welcoming atmosphere
which makes consumers
as easy as they are at
home.
• The speciality of IKEA is
that it allows the
consumers to do their
things themselves (DIY)
which provides them a
sense of satisfaction.
• IKEA’s unique store
layout is standardized
throughout the store in
the world.
10. RESONANCE DIMENSION
• Membership card called “IKEA Family”
• Gives the consumers a sense of belonging
• Provides them with privileged services &/or pricing.
• IKEA’s customers tend to make the most impulse
purchases.
11. CONCLUSION
IKEA prevails as a major furnishing company all over the world because there
products are altered as per the needs of the customer and somehow provide
an image and standard of modernized furnishings which is available at an
economical price. IKEA's philosophy is as simple as this: we do our bit, you do
your bit, and together we save money. IKEA has been a radical pioneer who
provided a rise in value for the customers by creating new markets and
challenging the industry practices. It even arranges the customer to design on
their own in interaction with a trained sales representative to provide
customized solutions. It has formed a strong brand equity.
12. BIBLIOGRAPHY
• Business.un.org,. "Business.Un.Org". N.p., 2015. Web. 21 Dec. 2015.
• Businesscasestudies.co.uk,. "Introduction - SWOT Analysis And Sustainable Business Planning - IKEA
| IKEA Case Studies And Information | Business Case Studies". N.p., 2015. Web. 21 Dec. 2015.
• Forbes.com,. "Forbes Welcome". N.p., 2015. Web. 21 Dec. 2015.
• Icmrindia.org,. "IKEA's Social And Environmental Responsibility Initiatives|Business Ethics|Case
Study|Case Studies". N.p., 2015. Web. 21 Dec. 2015.
• IKEA /US/EN,. "About The IKEA Group - IKEA". N.p., 2015. Web. 21 Dec. 2015.
• Marketingresearch.org,. "Brand Equity Models And Measurement | Marketing Research
Association". N.p., 2015. Web. 21 Dec. 2015.
• Mindtools.com,. "Keller's Brand Equity Model: Building A Powerful Brand". N.p., 2015. Web. 21 Dec.
2015.
• Molin, Anna. "IKEA Chief Takes Aim At Red Tape". WSJ. N.p., 2015. Web. 21 Dec. 2015.
• Pycraft, Mike. Operations Management. [Cape Town]: Pearson Education South Africa, 2000. Print.
• Statista,. "Number Of Visits To IKEA Stores Worldwide 2010-2014 | Statistic". N.p., 2015. Web. 21
Dec. 2015.
• the Guardian,. "Ikea - Brand Of The Many". N.p., 2005. Web. 21 Dec. 2015.
• Twitter,. "Yolanda Lippens On Twitter". N.p., 2015. Web. 21 Dec. 2015.
THANK YOU!
Notes de l'éditeur
IKEA is one of the world’s most successful organizations which originated in Sweden with a humble beginning, a small shop that used to sell pens, jewellery, wallets, picture frames, table runners and nylon stockings. It was found by Ingvar Kamprad at the age of 17. The name IKEA is based on the initials of the founder (I.K.) and the initials of Elmtaryd and Agunnaryd, (E.A.) the names of the farm and village where the founder grew up. In the past six decades IKEA has spread from the southern woods of Sweden to 28 different countries around the world.
The graph given shows the progress of IKEA sales by 2012.
The concept behind the Brand Equity Model is simple: in order to build a strong brand, you must shape how customers think and feel about your product. You have to build the right type of experiences around your brand, so that customers have specific, positive thoughts, feelings, beliefs, opinions, and perceptions about it.
When you have strong brand equity, your customers will buy more from you, they'll recommend you to other people, they're more loyal, and you're less likely to lose them to competitors.
IKEA states that its vision is : “IKEA our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.”
Hence when we talk about brand depth, IKEA has positioned itself as a brand for everyone. It ensures to satisfy its customer’s needs by practicing various techniques to cut costs while providing fine quality furniture and accessories.
As for the brand breadth, IKEA is considered as an iconic brand in itself. It has established a standard in the market and customers enjoy visiting the store. Figure 2 shows the increasing number of people that visit an IKEA store every year. This clearly demonstrates that it provides its customers with such a pleasant shopping experience that the consumers enjoy visiting their showrooms. Along with furniture they have their own restaurant and café where the visitors can sit and enjoy a meal as well.
Since IKEA allows its customers to assemble their furniture on their own, it provides them with the satisfaction of the quality and the rely on it more since they can assemble each and every part of it. Especially for those individuals who enjoy building things on their own, it gives them the sense of participation in building their home.
It has a Scandinavian style of furniture which means that it provides simplistic and modern furniture that will appeal to all the general public and enables them to feel like they can relate to them.
IKEA provides various kinds of services depending upon the regions its serving in. For example in the middle east, consumers generally do not prefer to assemble their furniture on their own. Hence they provide the option of a delivery personnel coming and assembling the furniture for such customers. Also it provides online shopping, e-catalogs and mobile apps for the ease of consumers.
It has been efficiently cutting costs through various recycling strategies and is one of a kind in providing flat packed furniture to cut supply chain costs and provide end users with more economic pricing.
IKEA is perceived to be the most famous furniture brand in the world. Hence it’s image in the mind of the consumers is that of a trend setter. The IKEA catalogue alone is published in 28 different languages showing its large demand from different parts of the world. Despite being a Swedish brand, IKEA has been successful in creating a demand for its products all over the world by carefully studying its consumer market and providing products that would be demanded by every household. Its strategic cost cutting methodologies reflect in its pricing which makes customers realize IKEA actually cares about them.
Its CSR initiatives like The largest corporate cash donor to UNICEF, IKEA Social Initiative has committed more than $180 million in cash and in-kind donations to UNICEF’s programmes to save and improve the lives of children and their families.
IKEA often received doubt from certain consumers regarding the quality of products provided as they are often of the perception that cheap costs come with cheap quality as well. This has been a concern to them.
Putting all the advantages of function, affordability and Swedish design in a flat-pack is one of the strongest POD of IKEA. The superiority of flat-pack makes IKEA product an ideal choice for consumers. The flat-pack design is easy to transport for consumers with ordinary transportation (household automobile, public transportation).
IKEA also provides a restaurant and children playground to satisfy all consumer needs and allow parents to shop longer. The fact that consumers can eat, shop and have their kids taken care of at the same place makes it a perfect shopping destination. IKEA also has a very unique store layout which also adds up to the shopping experience.
IKEA has a membership card which allows its customers to become their priviliged customers wherein they can enjoy special offers. This helps in strengthing the bond between the customers and the firm and also increases brand loyalty.
It has also been observed that many of the consumers end up making impulse purchases at IKEA. Impulse purchases are the least complex form of buying behavior but differ in various ways. This can be best understood as an unplanned, spur of the moment action which is brought into motion by product display or the promotion at the point of sale. This is because of the wide variety of products available in suitable price ranges and the unique IKEA store layout that allows the visitor to go through different sections before the finally exit.
