IKEA is a Swedish multinational group situated in the Netherlands that

designs and sells ready-to-assemble furniture, kitchen appliances and home

accessories, along with other useful goods and occasionally home services.
Founded in Sweden in 1943 by 17-year-old Ingvar Kamprad, IKEA has been the
world's largest furniture retailer since 2008. The company's name is an acronym
that consists of the founder's initials (Ingvar Kamprad), and those of Elmtaryd, the
family farm where he was born, and the nearby village Agunnaryd (his hometown
in Småland, southern Sweden).

The 7Ps model was originally devised by E. Jerome McCarthy and

published in 1960 in his book Basic Marketing. It helps companies to review and
define key issues that affect the marketing of its products and services and is often
now referred to as the 7Ps framework for the digital marketing mix.

Product
The company is known for its modernist designs for various types of
appliances and furniture and its interior design work is often associated with eco-
friendly simplicity. It offers a wide range of home furnishings with good aesthetic
design and functionality at lower prices than the traditional furniture retailers. The
company’s website contains about 12,000 products. Moreover, IKEA takes a
unique approach, focusing on convincing customers to buy furniture “to improve
their environment”.

Rather than being sold pre-assembled, much of the IKEA’s furniture is

designed to be assembled by the customer. The company claims that this helps to
reduce costs and use of packaging. Additionally, customers can request furniture
delivery, assembly and/or installation at the store and pay for the service in advance
at the checkout. The company also partners with TaskRabbit to connect customers
with a network of independent “Taskers”, who can provide assembly services.

IKEA’s products are identified by one-word (rarely two-word) names. Most

of the names are Scandinavian in origin and based on a special naming system
developed by IKEA, although there are some exceptions,

Place
As of June 2019, there are 433 IKEA stores operating in 52 countries. The
IKEA website contains about 12,000 products and its main business relates to its
retail stores. Many of these stores are in out-of-town locations and do not benefit
from the footfall of primary and secondary locations. The stores themselves are
very large and some of them even have restaurants, food shops, Swedish markets
and play areas.IKEA maintains a simple, modern look in all of the stores with
ample showroom space to view furniture as it might look in a home or home office.
Stores tend to have very large parking space, modern display technologies and baby
handling areas for mothers. There are also specific path layouts and guide arrows,
which assist you to reach your desired shopping section. Some of the stores have an
area, where used, returned or damaged products are sold under huge discounts or
are equipped with restaurants. The largest stores are located in Sydney and
Montreal.

Additionally, IKEA has a global distribution network. It’s imperative that

their supply chain operations and inventory management work together as closely
as possible, so that they can reduce transport costs. Using more of ocean transport
than road transport are some of the strategies adopted by IKEA. Products are
transferred from suppliers to IKEA stores directly, which lowers the carbon
footprint. Moreover, warehouses are attached to retail stores.

Price
The basis of pricing for IKEA is value i.e. low prices or no-frills pricing.
Products are designed, raw materials sourced, products are manufactured, and they
are distributed and sold by retail, within this no-frills low-cost framework. In
addition, the company offers price guarantees in every market. Prices listed in their
catalogue are guaranteed to be no higher for one year from the publishing date.
IKEA offers exclusive discounts for IKEA Family members as well. They're on all
kinds of products, from mattresses to kitchens, candles, etc.

At IKEA stores customers can pay the way that suits them best. Cash, credit
cards (VISA, Master Card, CMI, JCB, and Discover) are accepted. Interest-free
credits and interest-bearing loans are offered as well. When shopping online,
customers can pay by invoice, credit cards (Mastercard, VISA, American Express),
PayPal or by an IKEA Gift Card.

Promotion
Over its history, IKEA has mastered successful promotions in building a
globally recognized brand. Some of them are the IKEA websites, publications,
brochures, advertising, internal communication and public relations. IKEA’s
numerous websites are tailored to the consumer's home country, giving potential
customers access to on-demand pricing and product specifications.

The most well-known promotion is the IKEA Catalogue. Every year, IKEA
prints and mass mails catalogues to consumers near its locations, introducing the
latest products. It is considered to be the main marketing tool of the company,
consuming 70% of its annual marketing budget and it is a pure example of direct
marketing.

In 1994, IKEA ran a commercial in the United States which was widely
thought to be the first to feature a homosexual couple; it aired for several weeks
before being pulled after calls for a boycott and a bomb threat directed at IKEA
stores. Other IKEA commercials appeal to the LGBT community, one featuring a
transgender woman.

People
The IKEA brand is based upon strong relationships with customers and
customer satisfaction. Serving and working with people is central to IKEA’s
business philosophy. The company not only concentrates on creating a “partnership
with the customer”, but also pays attention to its employees and business structure.
It keeps its management structure flat, boasting on its website that “there are no
barriers between management and workers”. The store personnel is trained
extensively and given initiative to serve customers.

“IKEA grows when its people grow” is the concept that the company
strongly believes in. It tries to support everybody’s talent and develop it within a
given job description in the form of special smaller projects. IKEA has its own
system of learning and trainings designed for each job position. New workers get
introduction training, which teaches them how the company operates, what the
safety and security rules are, customer friendly principles and its environmental
approach. Beginners also get a mentor - a colleague, who answers all their
questions, shows them their department and introduces them to their colleagues.
Each employee passes more training programs according to his training plan.

Employee benefits include health insurance, employee discount, retirement

plan, dental insurance, paid time off, parental leave, flexible schedule, and tuition
reimbursement.

Process
IKEA has developed the so-called “value chain”. It starts with listening to
customers’ needs and dreams, so that the company understands how it can make a
difference. Typically, it begins with a sketch or a product idea and then discusses
things with suppliers. This often results into changes – all with a view to meeting
the Democratic Design dimensions of form, function, long-lasting quality,
sustainability and low price. Along the way, IKEA tries to improve the product.
This could be a designer fine-tuning a prototype at the factory or a technician
discovering a more sustainable material. The next step is something people might
associate with the IKEA brand: efficient packaging and distribution. Flat packs
keep transport costs down which lowers prices for the customers. They also make it
easier for people to take products home themselves. Once the products are home,
customers can play their part in keeping prices low by assembling them by
themselves or request furniture assembly and/or installation. The chain ends at the
start with learning from customers and co-workers, so that the company knows how
to improve.

Furthermore, IKEA makes its own wood by owning sawmills. It has in

house production facility with highly developed technologies and follows the clean
environment slogan.

Physical evidence
To ensure the long-term growth and development of the IKEA business the
company uses a franchise system. Potential IKEA franchisees are evaluated by Inter
IKEA Systems B.V. If chosen, an agreement is signed that grants the franchisee the
right to operate an IKEA store and/or other sales channels in accordance with the
IKEA franchise systems and methods. IKEA franchisees pay Inter IKEA Group an
annual fee of 3% over their net sales.

Moreover, the blue in IKEA’s logo represents trust and openness, while
yellow depicts happiness, optimism and imagination. IKEA also shares those colors
with the national flag of its home country, Sweden. In fact, the font that the
company used is a specially commissioned variation of Futura known as IKEA
Sans.

IKEA invests in green energy solutions such as solar power and many of its
products are recyclable. It is committed to using water efficiently and supporting
sustainable water management in water-scarce regions to increase people’s access
to clean water.
Additional

IKEA’s vision is “to create a better everyday life for the many people” - a
vision that exists from the very beginning and continues to influence everything
that they do. It guides the products that they develop, their ideas, the raw materials
that they use and the way they act in the world and helps them to become more
accessible and inclusive. The IKEA vision is not just a phrase, it’s the very reason
that they exist. It’s expressed in the efforts of all their co-workers all over the
world.

While the IKEA vision expresses why they exist, the IKEA business idea
says how they realize the vision. They want “to offer 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”. These words capture the very essence of
the IKEA brand. To live up to them, they apply five dimensions: low price,
function, form, quality and sustainability. Together, these dimensions make up
what they call the Democratic Design. This Democratic Design helps them to
create the products that they stand behind.

IKEA basis its strategy on providing low priced home furniture, so that
they can cater to every possible person in the market, by undertaking a time based
strategy. It can reduce costs, improve efficiency and increase customer services.
Sources

https://ww3.ikea.com/
https://about.ikea.com/en

https://www.indeed.com/cmp/Ikea/salaries

https://en.wikipedia.org/wiki/IKEA