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• Nimish Jain

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Symbiosis Center for Management & Human Resources Development [Constituent of SYMBIOSIS INTERNATIONAL (DEEMED UNIVERSITY), SI(DU)] (Established u/s 3 of the UGC Act 1956, by notification No.F.9-12/2001 – U.3 of the Government of India)

MBA 2018-20 Semester-3 International Marketing Assignment-Future IKEA’s Marketing Strategy to gain market shares and achieve higher profitability

By Nimish Jain (18020341223)

Under the Guidance of Mr Kapil Gupta

IKEA has to expand its business in two entirely different territory having different culture and taste buds. People in these countries focus prefer local products over foreign one. And customer service is the prime focus of the players in these markets. IKEA need to adopt different strategies for these two different markets for the effective penetration. There is high incoherence between the high income and low- income people making it quite clear for IKEA that its target segment are middle class people as they would appreciate more current trends in these markets. Also, they need to focus on adoption pattern of people. How can IKEA be a part of there regular use inhibiting their culture and tradition. For this, they need regressive advertisement, drawing a mind map in the people’s mind regarding IKEA and create more awareness campaign. And prevent the existing customer being drawn by local competitor Initial stage IKEA should understand the people perception about the foreign companies and understand their tradition and culture. As people have their roots deeply attached to it. Then find ways how they can be a part of their culture without disturbing the balance of their ecosystem. IKEA can also promote itself in sports and other events as these countries are actively involved in the sports and many of the sports being played here does not have international recognition. If IKEA help spread awareness about the sports people will inclined towards IKEA. Also, in order to appeal Chinese and Japanese customers and make them adapt their products, they need to modify more of their Swedish designs by making a balance between with the cost parameter. Number of people visiting the stores have significantly increased but the increase in sales is not in same proportionate. It clearly shows that people are interested in IKEA but they don’t get enough or relevant products. Thus, to increase sales IKEA should introduce more relevant product rather than the international streamlined product in China and Japan. IKEA can tie up with Local competitors and infuse its products in their store so that people who prefer to buy products from local competitor can also felt the presence of IKEA onto local store which will help in gradually increasing the sales and using local competitor as a sales vehicle instead considering them as our competitor. Moreover, today people prefer to buy through online platforms such as e-bay and Amazon and therefore it has become more of a necessity for

IKEA to have a strong digital presence. This strategy can also prove cost-effective for IKEA as no additional cost would be required for setting up an additional physical store. DIY concept is something new in China and Japan, initially IKEA can sell factory made goods to increase customer base and once they reach a point where they can showcase the other factor of DIY where I can help spend precious family time or carry forward there tradition where they believe to do everything on their own. Also, IKEA need to work on Staff attitude where they have the lowest scoring by arranging training for the staff members and train them hwo to behave with this audience. For both China and Japan, they can build relationship with real estate developers which would help IKEA to get referrals from them to new home buyers. IKEA can use this relationship development to also set up mini exhibitions to displaying their products and images at locations where new apartments are yet to be sold. IKEA can also use this opportunity to get relevant information that would enable it to send its catalogues to specific customers who are seeking new homes or those who just moved into a new home. But IKEA should need to make sure that they provide good incentives to these real estate developing partners which would motivate them to promote IKEA in their partnership. These measures can help IKEA to increase their sales in one of the biggest markets in Asia region.