shares; higher margins. IKEA is one of the leaders in its market place, and therefore
many other brands in that particular sector may be ‘hitchhiker’ brands following us and
other leaders (such as MFI and DFS).
Strategic Advantages are where the brands position is in relation to its competitors.
The Management Advantages include global branding, endorsement and extensions;
Brand extension
Brand extension is when a company is using an existing brand from a ‘parent’ (such as
Nescafe from Nestle).
Extensions are usually introduced as they have more advantages and these can be
transferred to a new product, with the same attributes but in a different form.
For example IKEA may create a substitute product, such as a sofa-bed instead of just a
sofa or a bed. We could also introduce a complementary product to an already
existing one; a water filter to go with the new kettle.
And we can use previous experience and expertise on new products, with the advantage
of lower costs; there is no need of launching the brand name as it is already well known.
Brand extensions involve a very low risk of failure for well established brands, though
new brands are at very high risk of failing, as the consumer is more reachable when
he/she has an opinion of an already existing brand.
Though there is always a risk of extension failure, which will give the brand a
negative image in the consumers mind. But there is also a risk of idea failure, PR failure
and people failure, where the company uses wrong tactics and this will again give the
consumer the unsuitable image of the brand. In some cases the re-branding can lead to
negative opinions, but also culture failure can play a part, as consumers in different
countries have different ethics and religions.
Brand positioning
We want to ensure our customers that their association with the IKEA brand will
bring them particular functional benefits; our simple, yet compelling vision; “to create
a better everyday life for the many people”.
Our business idea is 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.
There are many characteristics to a powerful brand positioning strategy; we do not want
involve too many different attributes as this may confuse the customer.
Brand building blocks; Extrinsic, Intrinsic, Non Distinguished, Distinguished
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The Extrinsic (not part of the product itself) this differentiates IKEA from others
brands such as MFI and DFS.
The brand name which differentiates a product; it is associated with its products; IKEA;
‘function and low price’.
Other extrinsic attributes are; the price of IKEA’s products and packaging etc.
Price - prices are low, for good quality products. The catalogue is free of charge,
though IKEA charge for home delivery.
Competitors - The furniture/carpet retailing industry is today very competitive. IKEA
overtook MFI as the leader in this sector in 2002 with 12.1% of the market shares.
following MFI is DFS, Homestyle and Carpetright.
The difference in brand positioning between IKEA and our competitors is that we have a
very well established name which is associated with ‘fashionable’ products at a low price.
Our message is simple, using quirky and fun advertisements.
Argos is a growing competitor in that they have more conveniently located outlets, in
comparison to IKEA with fewer, out-of town locations.
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The Intrinsic features (within the product itself) of our products:
We are a global brand and in the UK we have stores in different parts of the country.
There is a great availability to our products through our catalogue or our website.
IKEA is a large company known for products being easy, functional, strong with the
‘Scandinavian light and fresh, yet unpretentious design’.
We use intelligent self-assembly ‘flat-pack’ furniture for easier and quicker delivery.
These are the general attributes of IKEA; furniture and house hold goods, these cannot be
changed as this would change the whole concept of the company.
These are the attributes which different IKEA’s products from Argos, MFI and other
competitors, from the same category.
PLC – Product life-cycle
This shows how products live a ‘life’. They go through stages, from introduction to
growth, from growth to maturity, and from maturity to decline.
IKEA has now reached the stage of maturity. Our customers cover the majority,
and there is still the possibility of reaching new audiences.
The sales are growing slowly and the cost per customer is relatively low.
Our objective is to maintain existing product awareness and retain customer and market.
To keep our consumers loyal with product extensions and low prices to match our
competitors, and a maximum in-store service and large catalogue distribution, but also a
constantly updated website and home deliveries.
Segmentation
There are four discrete target segments;
Our products are stylish enough to suit the most discerning taste, while being affordable
enough to fit the tightest budgets.
Therefore our target audience is everyone from students to single professionals, young
families and homeowners. IKEA products are unisex and appeal to a wide demographic
seeking comfort, quality and style.
Our consumers are a wide age group, mainly the 18-44 age group.
From a psychographic point of view the consumer wants an exiting but simple life, with
minimum hassle and maximum comfort. They are fashionable, and enjoy a good social
life, in and outside of the home.
Geographically there may be a larger number of out-of town shoppers, as a majority of
customers visit IKEA by car with easier access. There is the choice of ordering products
from the website;
There are three types of IKEA brand users; Shallow, Convertible or entrenched.
The shallow customer may consider different alternatives, and could easily switch
brands. The convertible type is on the threshold of changing brands, and finally,
the entrenched shopper is very brand loyal, and not likely to change.
There are different types of IKEA furniture/household goods buyers;
- Those who want to give their houses/flats a certain image “; this furniture gives me a trendy image”. (the sociables)
- Another type of shopper is the one who wants comfort to a low price.
(the independents)
Today’s people have an increased ‘nesting’ mentality, which has created a greater interest
in household goods.
Buying conditions, nature of good (first buy or ‘rebuy’). Size of business; do they
want to deal with large or small companies? And journey planning; what is the driving
distance from the factory/store?
- Wholesalers/intermediaries
These are distributors. Though IKEA does not use wholesalers for distributing their
products. Analysing the nature of the Good, overseeing buying conditions such as; self-
product packs need to include the right contents etc.
entities affect the performance of the product. They are the media, company
employees, government/authorities but also providers of wood, administrative goods and
machinery.
Brand components
The name IKEA was created from the founder Ingvar Kamprad’s initials (I.K.) and the
house where he grew up; Elmtaryd coupled with the name of his town Agunnaryd (E.A.)
The name is the most important element of the brand because it identifies the whole
concept. In IKEA’s case the name is not directly associated with our products/services.
Such as Rentokil where the name describes the product.
IKEA is a simple name which can be easily pronounced in different languages, and each
country uses the original name. the target market is also similar in different countries.
Our name is rather neutral and very user friendly. It is accessible and not very technical,
and it is approachable. The name will last and keep its image, because it is comfortable
to use and very efficient.
The IKEA logo is easy recognisable, with its blue and yellow
colours, and the name written across in bold letters.
It is very much a trademark and this same logo has been used from a very early stage.
Conclusion
I hope this will help you understand the importance of branding within IKEA. Our
company has been a worldwide success for so many years, and this has already created
an image in most peoples minds, they associate the name IKEA and the logo with
purchase or from one of the award winning advertising campaigns which have
been run throughout the world.
It is incredibly important to build brand awareness when introducing a new product onto
the market, and our company has already achieved this, but there is still the need to
maintain customer and market.
Bibliography
- Mintel (2002)
- Internet
- San Juan de la Pena website
- Rieboviz, Rik ?????
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De Chernatony, Leslie (2001) From Brand Vision to Brand Evaluation, Butterworth-Heinemann
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Brassington, Frances, Pettitt, Stephen (2000) Principles of Marketing, Prentice Hall
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Butterfield, Leslie (1999) Excellence in Advertising, 2nd edition, Butterworth-Heinemann
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Nilson, Torsten H (1998) Competitive Branding, John Wiley & Sons Ltd.