IKEA is a Swedish multinational enterprise (MNE) that designs and sells ready-to-assemble furniture pieces, home accessories, kitchen appliances, and other household goods with occasional home services. The company was founded in 1943 in Sweden and, by 2008, had become the world’s largest furniture retailer (Husz and Carlsson, 2019). As of 2019, 433 IKEA stores were operating in 52 countries (O’Connell, 2020). The average yearly revenue generated from selling goods is 41.3 billion US dollars or 45 billion euros (O’Connell, 2020).
Today, IKEA is a global phenomenon whose success story has yet to be repeated by other furniture companies. IKEA owes its growth and popularity to the thoughtfully selected marketing communication tools and branding strategy (Khamis, 2016). This paper argues that IKEA is making excellent use of each of the four P’s elements and employing a brand language that does not need localization and appeals to customers across the globe.
Today, the cutthroat market competition is pushing brands to stand out by any means possible – or disappear into the background. Melewar and Alwi (2015) define the main purpose of branding as differentiation from other brands. Branding is what makes a company unique, helps it to find its own voice and identity, and connect with customers (Davis, 2017). Through the process of building its brand image, a company creates a distinguishable personality and signifies its intent, mission, and vision (Liao, Yano and Trivedi, 2020). As a result, customers are more likely to notice a company among hundreds of contenders and make a choice in its favor.
To differentiate themselves, brands put effort into developing their marketing mixes. A marketing mix is defined as a totality of factors that a brand can control to influence consumers’ perception and desire to purchase products and services (Todorova, 2015). Todorova (2015) describes one of the most common approaches to giving structure to a marketing mix – the four Ps. The four P’s stand for product, place, price, and promotion. In other words, retail chains refine their products, maintain price leadership, and choose locations to stay attractive to customers (Yano and Komatsubara, 2018). They also promote their products by disseminating information about them through a variety of channels.
In this day and age, branding is becoming extremely important because customers no longer want just a product. Essentially, through goods and services, they wish to create their dream life. This shift in customer behavior has led to the rise of lifestyle brands. A lifestyle brand is a brand that reflects the needs, wants, values and preferences of a specific group of people (Smilansky, 2017). Such products and services become a part of their lives and a meaningful vehicle of self-expression (Smilansky, 2017). Because of that, today’s companies who are riding the wave of this trend do not promise their customers a better product: they promise them a better experience and a better life.
Alnawas and Altarifi (2016) show that brand identification and brand love are the two most important antecedents of brand loyalty. Brand identification is operationalized by Alnawas and Altarifi (2016) as the degree to which a brand was recognizable to a customer. Brand love is a more complex concept that consists of three key elements: passion, intimacy, and decision/commitment (Alnawas and Altarifi, 2016). Passion is often an irrational feeling of attraction that a person becomes engulfed in relation to a brand. Intimacy is deeper: it denotes the customer’s willingness to remain in touch with a brand and support it (Manthiou et al., 2018; Fennis and Wiebenga, 2017).
Lastly, decision and commitment are the actions that customers take that reflect the stability of their relationship with a brand. The researchers have also found that hotel guests use their brand experiences to build more distinguished personalities. Liu et al. (2018) note that brand loyalty may be contingent on a company’s ability to provide experiences that are tailored and personalized to support the individuality, uniqueness and distinctiveness of guests.
Lerman, Morais and Luna (2017) write that in the process of branding, a business develops a language that reflects customers’ expectations and perceptions. Brand language helps consumers relate themselves to what is being marketed at them by using words, expressions and specific vocabulary (Carnevale, Luna and Lerman, 2017). A subfield of communication and marketing theory that studies how customers decode messages and decompose them into signs and symbols is called semiotics.
Conejo and Wooliscroft (2015) write that semiotic theories and methods can be used to form a better understanding of trends in popular culture and how customers’ behaviors and attitudes change by them. Conejo and Wooliscroft (2015) argue that in the process of analyzing information coming from a brand, customers rely more on emotions rather than logic. They seek to decipher whether brand values are aligned with their own, which will be the basis for the final decision (Oswald, 2015). At that, customers interpret the messages at three levels: verbal, visual, and symbolic.
The Four P’s: Product, Price, Place, and Promotion
Ikea’s marketing mix can be broken down into four basic elements explained in the literature review: product, price, place, and promotion. The range of products sold at Ikea is quite vast: today, the Swedish company offers everything that one would need for their house in one place. The enterprise under analysis calls design with a conscience that seeks innovation, functionality and sustainability its central design principle (Garvey, 2017). Shoulberg (2018) notes that Ikea’s design is country-neutral, and its straightforward, simple aesthetics can work anywhere in the world. Besides, Ikea provides online planning tools for creating unique storage and living room solutions, which puts the customer in the driver’s seat and gives them all the autonomy (“Planning Tools”, n.d.).
Apart from differentiation through its products and services, Ikea makes cost leadership central to its marketing strategy (Yuan, Wang and Yuan, 2016). For example, when expanding into China in the late 1990s, Ikea opened several factories in this country to manufacture furniture and household utilities locally, which allowed it to decrease the prices and retain customers (‘IKEA in China: big furniture retail adapts to the Chinese market’, 2020). As for the place element of the framework, Ikea stores are mostly located on the fringes of cities. Because of their remote location, people typically take a long time shopping there. The maze-like design of Ikea stores also prevents visitors from leaving too fast. Lastly, Ikea is known for its imaginative promotion strategies that communicate the brand’s values and engage customers.
Social Media and Advertising
In the rising muddle of the digital age, Ikea has been able to harness the power of social media and create some of the finest and imaginative social media campaigns. One of the defining characteristics of Ikea’s social media campaigns was an intersection between entertainment and practical value. For example, Arica (2017) describes Ikea’s “Square Metre Challenge” campaign launched on YouTube as an actual, real-life problem: small living spaces. The Swedish company showed its understanding of the living situation of a good part of its customers and proposed affordable and attractive solutions.
Another notable campaign titled “Sleep Like a Princess” launched by the company’s UK office addressed a relevant problem – poor quality of sleep. Adults in the United Kingdom averaged 6 hours 36 minutes of sleep per night, which is significantly less than what is recommended (‘UK 2018 Sleep Survey & Statistics’, 2018). Ikea prompted social media users to upload funny pictures of themselves and their friends and family sleeping in random places. The winner received a high-end bed worth up to £1,500. Both “Square Metre Challenge” and “Sleep Like a Princess” campaigns had important elements that hooked customers: entertainment, appeal to an actual social problem, and a solution (home planning and high-quality beds respectively).
Apart from country-neutral campaigns such as the “Square Metre Challenge”, Ikea also won customers’ hearts with more localized content. Ikea Taiwan launched a campaign around the ‘hotpot’ tradition – a special dish to bring families and friends together at the dinner table (Ikea Taiwan, 2016). The Taiwanese department designed their hotpot in a way that it could only be switched if there were enough phones put on a special platform (Ikea Taiwan, 2016). This solution addressed the problem of the lack of live interaction between friends and family members because they have grown to be too attached to their devices. The campaign was funny, touching and relatable, and as a result, it attracted a great deal of attention.
Direct Mail/ Catalogues
Interestingly enough, Ikea has not yet fully succumbed to the digital revolution and taken all its marketing communication online. Like many other furniture campaigns, Ikea relies on mailing catalogs (Perrey, Freundt, and Spillecke, 2015). To some, such an approach might appear a bit outdated. After all, starting a website might be more convenient than handling a hefty catalog and flickering through pages in search of desired merchandise. Nevertheless, Ikea continues to successfully harness the power of print: its catalogs are practical, visual, and informative.
Firstly, the company cares enough to properly translate and localize all its written content (House and Kádár, 2020). Visuals, on the other hand, are understandable to anyone, especially the straightforward furniture assembly instructions. Secondly, Ikea knows exactly how to portion its content: it is aware that too much choice often leads to no choice. If a customer is overwhelmed with offers and promotions, they might as well become exhausted and give up on their plans to buy anything altogether. Ikea has both big catalogs where it showcases its full merchandise line and smaller specialized catalogs with only a limited number of items grouped by a theme. By structuring information, the Swedish company shows its care for a customer and helps them navigate its environment.
Interestingly enough, Ikea manages to weave traditional and modern marketing communication tools to make an impact. For example, in 2014, the company launched the “Experience the Power of a Bookbook” campaign on YouTube where it unpacked the new catalog in the same manner as YouTube bloggers unpack the latest gadgets (Buckley, Enderwick and Cross, 2018). The entire video is humorous and ironic: its characters are filled with excitement about receiving something as life-changing as an Ikea catalog. They list its perks: it has an eternal battery use and no need to charge it ever. It becomes apparent that Ikea uses the same formula as in other campaigns: it masterfully combines entertainment with the demonstration of actual value.
IKEA has differentiated itself from other brands in the retail industry by communicating unique values to the customer. Its vision is both distinguished and country-neutral, which allowed the Swedish company to build a presence in 25 countries without too much localization. Apart from that, IKEA is an example of a company that has made exceptional use of its marketing mix with an equal focus on each of the elements: product, price, place, and promotion. The Swedish company’s cost leadership strategy has persisted despite the extreme economic volatility of the last two decades. In some countries like China, the focus on this framework came at the cost of making a radical decision such as moving to manufacture overseas. IKEA’s approach to choosing locations and building maze-like stores has changed the way people see furniture shopping. Essentially, the company turned an exhausting chore into a fun adventure appropriate for all family members.
The analysis of IKEA’s preferred marketing communication tools shows three main values: wide choice, affordability, and innovative design solutions. Through its social media and advertising, IKEA demonstrates its understanding of customers’ pains and offers tools that could help them to resolve their problems. At the same time, the company always keeps its materials entertaining enough to ignite customers’ interest. Some of IKEA’s campaigns address country-specific problems and offer country-specific solutions such as a lack of real human interaction in Asia and a special pot to bring families together. Others, on the other hand, are neutral and appeal to broader audiences. Interestingly enough, IKEA still relies on paper catalogs that have yet to lose their popularity. When it comes to this marketing communication tool, the company carefully structures the content and supports its promotion through social media.
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