Ansoff’s Growth Matrix
Market penetration is the basic growth area, ie continuing with existing products to gain a larger share of existing markets.
Product development means coming up with ideas for a new product for existing markets
Market development means searching for new markets for existing products
Diversification means developing new products with which to attack markets that are also new to the organization. This is the most risky if the competition is well established, but if the product type and market is new.
Pricing Strategy
Price is an important element of the marketing mix. The price charged for our products determines weather our consumers would by it, and the level of sales acheved determines whether Ikea will make a profit. there are a number of pricing strategies that we have used:
Long term objectives
These depend upon how IKEA positions itself in the marketing place and how we finance our business. The following are examples:
- making a profit, for the stakeholders and for future investment
- pricing to keep competitors out
- pricing which positions the company
- pricing to maximize sales
After an analysis, we must choose carefully as it is a difficult choice to change once underway.
Short-term objectives
These are tactical, as in promotion and selling and include:
Penetration pricing - a low price to penetrate an existing market.
Destruction pricing- knocking out competitors by cutting prices, a process commonly known as “price wars”
Promotion pricing - the special offers of sales pricing.
Advertising Strategy
Advertising is defined by the Institute of Practitioners in Advertising the IPA as “…:the most persuasive possible selling message to the right prospects(markets)for the product or service at the lowest possible cost…”
At IKEA, our advertising campaigns aim to identify the right markets. We must be aware of which markets, or market segments are being targeted. This is a straight –forward market segmentation exercise. With our consumer goods, the choice might be age, sex, social-economic grouping, occupation, race, religion, or region. The choice is increasingly associated with lifestyle categorizations.
Identify the right media involves an analysis of:
How are we going to put the message across.?
How would we best attract and influence the chosen target groups given the type of product and service?
The choice of media is large, and rapidly expanding as more TV channels and the new technology of the internet add to the choice. Selection is therefore critical.
Branding Strategy
Branding is the method of identifying one product or service from another by creating a name, term, design or symbol - logo - which is unique to our products. Branding creates an image which differentiates the product in our consumers’ minds from the products of competitors.
Advantages of branding
The establishment of a brand name will save on future advertising costs. Our product has become known. To our customers, a brand name represents a known quality, the next one bought being as the same previous ones. To IKEA branding allows a range of products to be offered, to different market segments. It allows brand loyalty to be established, i.e. some consumers always specify and buy the same “name”. They have a perception of the products which satisfies their needs.
Publicity strategy
This is gained by being “newsworthy”. As such is never quite under our control in the marketing team. Publicity depends upon what others say about our products and organization.
The significant differences between advertising and publicity are:
- Advertising is a known cost for an agreed amount of contact with the market. Publicity tends to be non-controllable, often unplanned.
- Publicity has a far greater impact in that it appears to come from the third person, and is thus more believable.
- Publicity catches readers off guard, whereas when they read an advert they know they are being sold to.
- Advertising allows the repetition of the messages several times. Whereas publicity has the limited life of a news story.
- Both advertising and publicity can dramatize our products to create interest.
Public relations (PR) strategy
Public relations (PR) aim to safeguard and promote the image of the whole organization, as well as our products. It may consist of press releases about us, our achievements, whether they be new product concepts, technological breakthroughs or environmental concerns. Other approaches may involve appearances on radio and TV in relevant programmes or in the news. Sponsorship is another important area of PR.
Sales promotion strategy
A sales promotion may be defined as an attempt to create interest in and stimulate sales of a product and service by a non-standard activity n a limited period of time, or with a controlled amount of products. In many ways, a sales promotion is a link between advertising and direct selling
Consumer Promotions strategy
The object of a consumer promotion I the seller to raise the long term level of sales by offering some added value to the purchase of a product.
- Money off this or the next purchase
- Coupons or samples delivered by post
- Competitions, with attention gaining prizes
- Free gifts
- Loyalty incentives e.g. points cards that reward regular customers
Merchandising at the Point of Sale strategy
In our retail outlets we are careful about the presentation of the products and of the store itself .This involves making the environment so attractive so that the consumer wants to make a purchase and want to call again.
Sales Policy strategy
The sales campaign and the marketing strategy are a coordinated part of the overall marketing plan. The campaign is controlled by our sales manager, director or marketing director. The campaign needs the involvement of all sales personnel, and efficient communications with all outside parties.
The sales force are organised on a simple departmental basis. Communication is usually via internal memos and regular sales meetings, often in time before the store opens for the day.
Much communication is face-to-face. Training days ensure that staff are updated on procedures.
Effective Customer Service strategy
We should all appreciate that since IKEA is profit motivated and income maximizing, our relationship with our customers must be such that they keep coming back. Being a customer oriented organization with the right products in the right place and at the right prices, with effective customer service strategies in place, we will soon achieve an increased market share. And these may include:
Point of sale service-staff training
Product knowledge
Good sales administration
After-sales service
After-sales service is n essential element of customer service in any type of orgnisation. After sales policy may cover faulty goods, refunds, exchange of goods, complaints about goods. Good after-sales service can ensure that the customer is not lost, even if temporarily unhappy.
Distributional Policy-effective logistics strategy
This marketing strategy is all about how our customers will get to purchase our goods. The issues here may include:
- The number of outlets - should we be exclusive, selective or aim to saturate the market?
- The area to be covered - should we stay local, or go national or even international. The internet is increasingly important here.
- Transport - how best should our products be moved? The standard alternatives are by road, rail, sea, air. But there are choices within these e.g. should we own our own lorries, or lease them, or simply call a carrier firm to deliver for us?
Analysis of the place or site policy- the physical environment
- The physical environment – can we be easily reached, by customers, suppliers and our work force.
- The right part of town - is it fashionable? Is it safe for customer to come to us, especially after dark?
- The competition – do we want to be close to them or well away.
- Our buildings – are they suitable for our image?
- Accessibility – Can customers park? Is there ample parking space? Local transport –busses or tubes near by?
The above analyses of our marketing strategy would be helpful for our section to see where we can make improvements on the methods that we use to increase the demand for our goods here in Ikea.
