IKEA the Largest Furniture Retailer in the World
IKEA Company is one of the largest private companies in the world, with more than 300 stores in 37 countries and more than 120,000 employee, with an annual revenue of more than $28 billion. The founder of IKEA is a man named Ingvar Kamprad, was born in 1926 in southern Sweden. The motto of IKEA is: Simplicity, Efficiency, and Beauty. Due to their affordability and good quality, IKEA’s products have world-class standing.
This company is the world’s largest furniture retailer. IKEA was founded in Sweden in 1943 by Ingvar Kampard when he was 17 years old. The name of this brand is made up of 4 English letters, each of which are special: I, the first letter of the word (Ingvar), and the name of the founder, K, the first word of Kamprad, the founder’s last name, E, the first letter of Elmtaryd, name of the ranch the founder was raised and A is the first letter of Agunnaryd is where he was born.
IKEA’s headquarters is located in Delft, Netherlands. The first IKEA store was opened in Sweden in 1958, and the first IKEA Stores outside of Sweden opened in Norway in 1963 and in Denmark in 1969, respectively.
IKEA Pricing Strategy: High Sales Low Profit
A pricing strategy with high profits and low sales may also be effective in some cases, but pricing is more complicated than these issues. The pricing model will lead to an increase in revenue where your market is limited to a region or a country, but the IKEA brand, which deals with millions of customers, is losing half of its customers, losing millions or perhaps billions of dollars. On the other hand, IKEA is known for producing chairs and furniture that occupy the smallest possible space at home. Therefore, most IKEA customers are those that have small homes and do not have high income. In addition to all of the above, low prices at IKEA is not only a sales strategy, it is the idea that the founder a man from south of Sweden (Swedish land, especially in the southern parts of the country is poor and not appropriate for agriculture, therefore people in this area are known for their hard work, being content and making the most of all the least facilities) has been interwoven in the details of this brand.
Reduction in Production Costs
Before designing a product, IKEA designers make sure of price of the product, then us their innovation as much as possible to produce a product that is high performance and requires less raw materials. In the production line, IKEA produces a high volume of each product to lower the prices as much as possible. Its distribution system is completely in line with this strategy, because the design is such that their components are produced separately and after delivering to the customer are put together at his home. This will make the packaging of the product less volume and reduce storage and distribution costs. Therefore, IKEA uses all its capabilities in design, production, and distribution to provide customers with the best and best quality products and not empty their pockets.
Other Marketing Strategies
Customers who are interested in catering to IKEA Officials, can visit the company’s website and register their names there. On our website, we have stressed that “we want to see you in real life and make sure our product have been able to help improve your living conditions. This is a fantastic strategy, and it is such company that could claim to be a customer oriented brand. The results from these visits have also been interesting. IKEA Officials, for example visited more than 500 client homes in the UK last year and found that due to the rising costs of living, children of those families, tend to live with their families after graduating and are not very interested in being independent. As a result, families are looking for products that are appropriate for their children’s age and create a balance between the parents and their children.
You see that this marketing strategy is not only a strategy, it has become a tool for market research and has been able to increase the customer’s satisfaction with the products, because they design the products themselves.
Promotion Strategy
In the late 40’s of the twentieth century, IKEA’s first promotions were released in a local newspaper. Printing of these ads sharply increased the demand for IKEA Products, as Kamprad was no longer able to answer all phone calls alone, so he made a catalog and distributed it to homes in a milk distribution truck. This catalog has gradually grown to its current form. Nowadays, the IKEA catalog is published once a year and is one of the most important marketing tools for the retail giant, with 70% of the marketing budget dedicated to its design and publication. In 2012, more than 200 million households across the globe received the catalog. It is available in 20 languages and distributed in 61 different editions. The distribution is done manually and email. Usually, more than a thousand products and their prices are introduced in the catalog.
Product Naming Specific Strategy:
< Furniture, tea table, wooden tables, book shelf, CD shelf handle: Name of Swedish places
< Bed, lounge, hall furniture, closet: Norwegian place names
< Dining table and chairs: Name of Finish Places
< Library: Job Names
< Toiletries: lakes, rivers, and Scandinavian Gulfs
< Kitchen: Grammar and other Names
< Chairs and study desks: Men Names
< Fabrics and curtains: Women’s names
< Gardening tools: Swedish islands
< Carpet: The Names of Danish Places
< Lamp and lighting equipment: Names related to music, chemistry, seasons, months, and …
< Bed spreads, pillows and cushions: Names of gems, plants and flowers
< Children’s accessories: Names of Mammals and birds
< Curtains accessories: Mathematical and geometric vocabulary
< Kitchen appliances: Foreign Names, medicinal plants, fish, mushroom, and fruits
< Box, wall decorations, frame and wall clocks: old names, also the name of Swedish places
Most IKEA Products are named with the same system, but there are also exceptions that are not named.