Marketing mix of Ikea and 4Ps (Updated 2023)

The Marketing mix of IKEA analyses the 4Ps of IKEA, including the Product, Price, Place, and Promotions. The IKEA marketing mix (7Ps) framework has been a stepping stone in aligning the brand’s appeal with the customer’s vision in such a way that it will lead to an impressively broad customer base, clear value proposition, and repeat business.

The marketing strategies adopted by the Swedish furniture supply chain focus on product innovation, the latest technology, physical evidence, new ideas like mixed and matched products, market research, cutting-edge experiences, mass market affordability, content marketing strategy, and augmented reality to boost brand identity and visibility in the target market.

Introduction of Swedish Furniture Chain IKEA

#IKEA

• Origin Country: Sweden
• Founder: Ingvar Kamprad
• Founded: 1943
• Headquarters: Delft, Netherlands
• Employees in 2023: 231,000
• Annual Revenue in 2023: 41.9 billion EUR
• Net Income in 2023: 7.1 billion EUR
• Brand Value in 2023: 17.4 billion USD

IKEA is a Swedish furniture chain that sells and designs ready-to-assemble furniture, as well as how-to-assemble own furniture, decoration, kitchen appliances, home accessories, home services, and several other goods. The conglomerate is a favored furniture brand, recognized as the “World’s Largest Furniture Retailer” since 2008.

IKEA Group is a favored furniture retailer with Swedish national colors that believes in quality items and products. The furniture giant uses 1% of the total available commercial wood to create its products with 99.5% recycled wood, so it has become the “World’s Largest User of Wood in the Retail Sector.”

IKEA Product Strategy

The product strategy in the IKEA marketing mix ensures a vast product range, includes a strong value proposition, and that the customer understands that IKEA’s products are made from the latest technology and have their unique style for reusable durability.

Innovative products are the demand of the hour, which is what the furniture company’s vast product range and portfolio focuses on. The furniture retailer is known for using its wood to make the company’s products, democratic design for different types of furniture and appliances, innumerable furniture options, and furniture product demos to the customers to boost brand identity amongst the target audience in the target market.

The new Product Mix of IKEA in 2023 is as follows (Source).

1. Furniture: This includes both outdoor and indoor furniture, as well as storage solutions.
2. Baby & Children’s Products: Catering to the needs of younger family members.
3. Bathroom and Kitchen Appliances: Essential appliances for modern homes.
4. Technological Products: Keeping up with the digital age.
5. Tools, Hardware, and Safety Products: For home maintenance and safety.
6. Home Decor: Items to enhance the aesthetics of living spaces.
7. Textiles & Rugs: Various fabrics and rugs for different home areas.
8. Cooking Essentials: Products for kitchen use.
9. Decoration and Lighting Products: To add ambiance and functionality to spaces.

IKEA Place Strategy

The place strategies in the IKEA marketing mix focus on global expansion and new demographics through IKEA Stores worldwide. IKEA products are available in 445 IKEA Stores in 50 countries. The stores are located outside of city centers to avoid traffic hassles.

The company designs the products in Sweden, but the manufacturing process occurs in developing countries where the raw materials and labor are cheap to keep the company stores and costs down. As most of the products are styled as DIY, the end user assembles.

The company uses the hardwood alternative known as particle board as raw material to assemble furniture products. The distribution strategy in IKEA’s marketing mix is based on flexibility and efficiency. The company has implemented an omnichannel fulfillment model with a robotic automated warehouse system.

The following key points characterize IKEA’s place strategy:

1. Global Brand with Wide Reach: IKEA has a significant global presence, operating stores in over 30 countries, which allows it to cater to a diverse international customer base.
2. Outskirts Location: Traditionally, IKEA stores are situated on the outskirts of cities to provide ample space and hassle-free parking.
3. New Urban Store Model: Recently, IKEA has been adapting its strategy by opening smaller stores in urban areas to reach more customers in busy city centers.
4. E-Commerce Growth: The company has been enhancing its online sales capabilities, providing customers with more convenient shopping options.
5. Design of Stores: IKEA stores are designed to offer a unique and immersive shopping experience, encouraging customers to spend more time and explore various sections.

IKEA Pricing Strategy

The price strategy in the IKEA marketing mix and marketing strategy focuses on operational details, continuous innovation and development, and cost control for mass-market affordability. The company’s products are of good quality with many customer options. From a price point perspective, the customers understand that the brand’s appeal is in good quality food and IKEA reusable, durable products, which is also its main USP.

Eliminating intermediaries has also helped the furniture retailer cut shipping costs without compromising product quality and ensure low prices for IKEA products.

IKEA’s pricing strategy can be summarized in the following points:

1. Value-Based Pricing: Aligns prices with the perceived value of products, ensuring customer satisfaction.
2. Affordable Quality: Balances product quality and affordability, making it accessible to a broad customer base.
3. Cost-Effective Methods: Implements cost-cutting measures like flat packing to reduce shipping and storage costs.
4. Competitive Pricing: Maintains competitive prices with market rivals, offering good value for money.
5. Dynamic Pricing Approach: Regularly adjusts prices based on market trends, customer demand, and economic conditions.

IKEA Promotion Strategy

The company’s promotion strategy is distinctive and original, and the credit goes no doubt to the comprehensive marketing mix strategy. The brand uses most of the advertisement tools like traditional media, iconic logos, and content marketing strategies to boost brand image and increase brand visibility amongst the customers in the market.

The promotion strategy that the brand uses includes.

Traditional Media

IKEA has used traditional tools like electronic and print media for promotional activities. The ad campaigns are shown via television, radio, magazines, newspapers, billboards, hoardings, etc.

Online Advertisements

The company focuses on content marketing strategy, online advertisements, and innovative ideas. It has created content that has gained maximum visibility and posted it on social media platforms to maintain customer contact.

IKEA Place App

The IKEA Place App is an augmented reality app where consumers can visualize desired IKEA products in a real environment.

Environmental Initiatives

IKEA has taken numerous environmental measures as part of its environmental awareness program. It has replaced PVC usage from packaging with recyclable materials, minimized chromium use, and eliminated acid-curing lacquers.

Collaborations and Sponsorships

The company partnered with The Sims 2 to make IKEA Home Stuff featuring several brand products. IKEA also held the title sponsorship of Philadelphia’s Thanksgiving Day Parade as part of its promotional activities

Loyalty Card IKEA Family

IKEA has launched the “IKEA Family” in collaboration with other retailers. It is a free loyalty card with which consumers can avail themselves of discounts on specific products.

The INGKA Foundation

The INGKA Foundation is involved in several charitable causes and promotes interior design and architectural innovations.

IKEA Social Initiative

IKEA Social Initiative was formed in 2005 to manage the brand’s social initiatives on the global platform. The main partners of the initiative are Save the Children and UNICEF, and the brand often distributes product items and donations through this program.

Some Recent Video ads and Print ads for IKEA are:

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