Marketing Management Assignment Analysing Brand Strategies of IKEA

Question

Task:
Select ONE brand from the following list.
a. Qatar Airlines
b. FC Barcelona
c. Siemens
d. IKEA

You are expected to engage with the relevant strands of academic literature and material from the internet.
Develop a detailed report on marketing management assignment that assesses the current brand strategy and offers recommendations to improve the situation. Your report should identify the main elements that shape the current brand’s current personality and focus on the organisation’s approach to creating a competitive positioning for the product / service brand that enables it to optimise its brand equity.

Answer

Introduction
The concept of brand strategy focused in the present research on marketing management assignment is defined as the long-term plans that help in identification of a brand among its customers. One of the core elements of brand strategy is to analyze the core needs and consumption patterns of customers and designing products and services accordingly. Creating a brand strategy is essential in adding to brand recognition and competitive advantage of a firm. The current research aims to illustrate the brand strategy of IKEA, one of the leading global brands in furniture sector. It was founded in 1943 and is a Swedish brand focusing adequately on quality of products and services. Moreover, IKEA is also targeted towards analyzing market trends efficiently so as to be consistently updated with new market requirements. Since 2008, the brand has been known to be the leading furniture company across the world and this is because of the marketing strategies and branding approaches adopted by the company. Thus, in this research, there is analysis of marketing and branding strategies of IKEA. The factors that have contributed to positive brand image and product/service strategies are also discussed. There are also recommendations provided in order to constitute better branding positioning in global furniture market.

Current Brand Strategy
One of the core factors of branding strategy of IKEA is its colourful themes and logos that helps in easy recognition and identification of the company. As stated by Pykälistö and Fahlstad (2019), similar to what Apple or Coca Cola does with their branding or theme selection, IKEA has ensured to use distinctive colours and images in its brand logo that helps in easy and fast recognition of the brand.

Product related strategies also contribute to the firm's success and competitive advantage in global market. The brand has realized the importance of attracting mass markets in order to be competitive in the global furniture sector. Thus, there are a range of products that target young people, middle aged families as well as comfortable furniture options for aged people. Thus, the brand has refrained from targeting niche customer segments which often confines the customer base of a company. On the other hand, targeting the mass market provides IKEA with an extensive opportunity to have a large segment of customers in the market and to have an adequate customer base (Valerisha and Ahadisuryo, 2020). However, the unique branding strategy that this company has opted for is influencing the experience of the customers and then focusing on repeat purchase behavior. The pricing strategy employed by IKEA is competitive pricing so that an increased number of customers are able to afford the products of IKEA. This provides the brand access to all customer markets. Moreover, according to Trendafilov (2018), the durability and unique design of the brand is also one of the core components of branding. Therefore, in the course of manufacturing the furniture, IKEA ensures to adopt and integrate finest quality materials and designs so that those last for an adequate period. IKEA is known for its durable and unique design products all over the world. Therefore, the quality and longevity of the products automatically contributes to influencing repeat purchase behavior of customers in a positive way. The third branding strategy adopted by IKEA is known as The Human Catalogue. In the year 2017, the company launched its IKEA Human Catalogue campaign which features the famous memory athlete YanjaaWintersoul. The requirement of campaign was that Yanjaa acted like a literal human IKEA catalogue that have memorised all the 328 pages of the catalogue published by IKEA in 2007 in a week before it was released. The campaigned featured in Yanjaa who embarked on world tour by holding events at the largest stores of IKEA and made appearance on the Steven Harvey Show and hosted a Facebook Live.

Moreover, IKEA has hugely played with the perception and psychology of customers in market in order to evoke a sense in them that they need to upgrade their living standards and quality. Therefore, the promotional events or posters of IKEA are showcased in a way where each of the furniture can be utilized most effectively (Urde and Melin, 2021). This encompasses a feeling and willingness among customers to design their interior most tactfully that contributed to their stable standard of living. Therefore, they are more likely to opt for the products of IKEA in the course.

Identify the main elements that shape the current brand’s current personality
Brand purpose is one of the key elements of branding strategy and personality of a firm. When both a business and its customers are aware of the purpose and vision of a brand, they are more likely to connect with that brand. As per Rodrigues and Brandão (2021), the brand purpose that IKEA has identified itself with is to be popular among customers in market so that they primarily think of buying from IKEA when making their purchase decisions. IKEA has established a perception among customers that its business purpose is to improve living standards of people by providing them with reusable and highly durable furniture that are not only of superior quality, but also fairly priced (Ng, 2019). Thus, having this perception of the brand, customers are automatically driven to prioritize this brand when making their purchase decisions. A positive brand purpose always results in enhancing sales and growth of a company and therefore, results in greater return on investment. Thus, as a result of this purpose of the brand, the company has been able to target more customers in market and achieve a higher revenue and profitability in market.

Another important element of branding strategy is brand vision. Having a clear and specified brand vision would always drive a business to hire right people and have a clear path to running the business procedure. In compliance with this, the vision of IKEA is to create a better everyday for people in their daily life (Huovinen, 2017). In accordance with this, the brand constantly strives to make best quality furniture that is of international standards and qualitative design. Moreover, there is also maintenance of transparency from the end of this brand. As part of that, it entails to share minute detail about its business procedure with its customers. As such, the sourcing of raw materials, involvement of workers and employees in production process and also other related factors with its customers (Santos, 2019). Third culminates in fostering confidence and value for the customers that form an important strategy of branding of IKEA.

Moreover, target audience of a company is also an important element of branding. As such, the targeted audience connects with a brand and always feels valued to be part of that organization as that concerned firm is able to fulfil their needs. In order to cater to the most value and positive impact on customers, IKEA has ensured to target majority of people in market. For that purpose, the brand manufactures and designs furniture of all categories so that people from all age groups can use that furniture (Fennis and Wiebenga, 2017). In addition to that, the brand also aims at implementing a competitive pricing policy so that more and more customers are able to afford the brand. The primary target market of IKEA is middle aged income groups and family persons (Yiqiong, 2020). Therefore, the products are designed so that family persons could use the products in order to decorate their home. Moreover, the company also targets young people who are inclined towards the latest quality and designed furniture. Henceforth, this has helped in establishing the brand name to a larger number of customers in the market.

The organization’s approach to creating a competitive positioning for the product / service brand that enables it to optimize its brand equity

One of the key factors of marketing that contributes to competitive position of a brand is having a larger customer base. However, in order to target majority of customers in market, it is essential to have a diverse product range. In accordance with that, it can be witnessed that IKEA has a product range consisting of more than 150 products. The product range of IKEA includes outdoor furniture, baby and children’s products, eating, bathroom stage, desks, mirrors, beds and mattresses, chairs, cooking, clothes storage, decoration, leisure and safety products (Gong, Jiang and Liu, 2019). In this regard, it is evident that IKEA has adopted an efficient segmentation and targeting strategy; the primary of which is age-based segmentation. The company segregates the market as per their age in which infants and toddlers, young people, middle aged people and aged people are included. In order to target the children or infants, IKEA manufactures furniture for them such as eating furniture and other baby products. Along with that, the middle aged or young people are targeted with mattresses, chairs, cooking accessories, chairs and dinner tables which are almost required in every household (Yiqiong, 2020).

Moreover, since the primary target market of IKEA includes family individuals and middle aged people, there are a wide range of products for them such as desks, mirrors, clothes storage and leisure and safety products. There are also special chairs and leisure furniture targeted for aged people who can seek comfort by using products of this brand. Therefore, through this strategy, IKEA has catered value to each segment of customers in market as majority of the customers are of the opinion that IKEA favors their needs and demands. This has helped the brand have an adequate customer base as compared to its competitors. According to Sanz-Marcos (2019), the customers of IKEA are also loyal towards the brand coupled with commitment and higher retention rate. Thus, this is one of the major factors adding to competitive position and advantage of IKEA in international market.

Application of Keller’s CBBE model
The Keller model is a pyramid approach often adopted by companies with the purpose of enhancing their brand strategy and image. The first factor of this model is brand salience by means of which awareness is created among customers (Pykälistö and Fahlstad, 2019). Therefore, the way in which IKEA creates awareness among customers is through promotion through different platforms such as social media, public relations and television advertisement.

The second step is to create brand meaning as part of which an entity is expected to perform in market. IKEA ensures that its products are highly durable, superior quality and optimum priced so that the brand is able to meet the needs of its customers (Burtet al. 2021). Additionally, there is also influence on psychology of customers, where the family individuals or young people are in pursuit of having the latest design furniture products. IKEA focuses on using good quality timber, and integration of technology in the manufacturing procedure to ensure good quality.

The third factor is brand response where quality of products act as one of the crucial factors influencing repeat purchase behavior of customers. As influenced by Valerisha and Ahadisuryo (2020), based on this factor, IKEA aims at continuous improvement and betterment of its relationships with customers. Thus, apart from ensuring high quality of furniture products, IKEA also provides after sales service to customers to identify any of the issues they face in terms of products. The reusability of products also helps in enhancement of relationships with customers. The brand image of IKEA is a factor that provides motivation to employees as IKEA has a positive brand image and recognition all across the world.

The fourth factor is brand resonance as part of which behavioral loyalty, sense of community and attitudinal attachment play key role. As per this factor, the concerned brand aims to ensure that the brand and its products are loved by majority of people in market. The active engagement of customers with the brand is ensured through constant communication and research and development initiatives owing to which IKEA is able to identify the key trends and consumption patterns in market. Owing to the fact that IKEA targets customers from all segments, it employs both traditional and digital marketing. Through traditional marketing, IKEA targets middle and upper aged people with newspaper and television advertisements. On the other hand, social media is used to target and influence behavior of young aged people (Trendafilov, 2018).

Critical insights of IKEA’s brand strategy
In the year 2019, the association made an overall pay outperforming 41 billion Euros. One of the key high grounds IKEA has is its expansive data about the customers. IKEA understands the purchasing factors which sway customers to buy furniture and completes the recommended systems to activate that decision. IKEA offers low expenses and an assortment of things, persistently introducing new things in the market which are popular and eye getting for the customers (Kim and Lee, 2020). IKEA offers an incredibly wide thing reach and positive shopping experience. For the Americans, the brand IKEA was the main organization which came at the top of the priority list at the hour of purchasing furniture. IKEA centers around the promoting and publicizing efforts with a lot of concentration. The brand utilizes show publicizing like hoardings and bulletins and print media, for example, papers, television, online promotions to promote their image. IKEA has thought of a creative publicizing effort in the new year (Dinget al. 2021). The brand feels that the social mess and the sex battles can be settled and kept away from. They have utilized this thought and made notices dependent on this idea. Their item list is available both on paper and on the web. Beside that a sweeping interpretation of the rundown is open in the IKEA site.

Recommendations to improve the situation
Strategies for improving position
IKEA mainly uses mono-segment positioning strategy for market segmentation. With this positioning strategy they can meet the needs of a single customer segment, as it is a type of strategy that caters to individual consumer goods for each customer and is fully aware of their needs. This will allow them to raise the necessary funds for the company and since IKEA applies cost leadership theory they will be able to get value for their costs (Valerisha and Ahadisuryo, 2020). The staff of this company are able to easily transport and assemble their products at the customer's home, which will enable them to increase customer interest and for this integration they can train their staff internally. So that. ordinary employees can calm down the inquiries of consumers. IKEA uses mono-segment positioning to improve its market position in the furniture industry. It focuses on single customer segment that are cost-conscious and have a preference towards value for money products. IKEA also uses adaptive position which helps the business on making periodical repositioning of its product and services that shall reflect upon the changes at par with the customer preference.

With the help of adaptive Evaluation strategy, this company can realize the changes of customer's choice. To conduct this activity, they will be able to develop furniture based on the phased production of products and the restoration of services provided by their staff(Valerisha and Ahadisuryo, 2020). Another great feature of this strategy is that it focuses on the customer's preferences so that they can perceive the dynamic mindset of the customer in order to design products by the Swedish furniture chain. If they want to create a growing popularity of minimalism worldwide, their products will be able to reflect the maximum range.

Strategies for improving differentiation
Using the Co-assembling method for the development of IKEA's products and Hybrid for their suppliers, can save delivery costs for both the producer and the customer. This will allow them to purchase products from skilled manufacturers at the lowest possible cost, which will enable them to reduce costs for customers and deliver the product faster (Pykälistö and Fahlstad, 2019).With IKEA's "Focus Strategy" they will be able to create a huge market in their own market with competitive prices.IKEA uses differentiation strategy that looks for competitive advantage by offering products to its customers that perceives to be different and better products and services than its competitor’s’ offering by customers for its unique characteristics like exceptional quality of the products.

The difference is that the technique is quite unique, allowing them to create different designs of furniture and other household furniture based on the preferences of each customer. IKEA's stores will be a great help in their branding. They want to dominate China, for which they can offer products of traditional Chinese design and satisfy the customer's decoration needs(Pykälistö and Fahlstad, 2019). IKEA follows the "Cost Leadership Strategy".With this and their Hybrid strategy they can differentiate themselves from the competitors.

Strategies for improving brand equity
Ikea offers low-cost products to enhance their branding strategy, allowing them to use the five-dimensional strategy to develop their own brand personality as they bring it to customers. They use the "sincerity, excitement, efficiency, sophistication, and rigor" strategy with customers to develop their brand value and brand mantra, enabling them to make their branding universal and attractive (Biliska-Reformat and Staczyk, 2018).The marketing mix shows that they can use the "Owner: Sincerity: Honest, Cheerful: Exciting: Enthusiastic, Imaginative, Up-to-Date Ability: Intelligent, Success" strategy to increase their brand recognition, which will help them expand their brand identity. For improving the brand equity, IKEA uses price oriented consumer based strategy. It allows IKEA to follow a low price strategy that helps the business in building a strong image for its customers. It also allows in attracting customer who are price oriented.The customers of IKEA are very conscious with the quality of the product offered by the company about the purchasing prices and are satisfied with the “Good Deal”.

Along with this, in order to establish themselves as one of the most frequently rebranded furniture brands, they can create functional, creative, Swedish and homegrown images, expand and create small and beautiful furniture that will become popular with customers in China, Burma, Laos, Japan and other regions (House and Kádár, 2020). Since IKEA is an innovative brand, they can enhance the design and marketing of their products using Keller's CBBE strategy. As it is well-known as an international brand and has established itself as a Swedish traditional brand that knows the response of local culture depending on their local market, it can analyse their customer preferences and take their brand logo to the top with the help of its eco-friendly behaviour and awareness programmes.

Application of Keller’s CBBE model

Figure 1: Equity pyramid of IKEA
(Source: Stefanska, and Bilinska-Reformat, 2020)

Salience
The salience for IKEA is it clearly furniture retailer. From 2008, the company is the largest furniture retailer in the world.

Imagery
Founded in Sweden, IKEA has a Scandinavian flair that extends beyond its yellow-and-blue emblem. People from all around the globe like Scandinavian design's pared-down simplicity and minimalism (Stefanska, and Bilinska-Reformat, 2020). IKEA focuses on price-conscious clients, families of various sizes, and those with homes ranging in size from a studio apartment to a sprawling mansion.

Figure 2: Consumer model of IKEA
(Source: Englund and Börjesson Hanson, 2021)

Performance
IKEA goods are designed to be both useful and affordable at the same time. For customers, IKEA furniture is a great short-term option because of its inexpensive price, but it does not endure very long (Englund and Börjesson Hanson, 2021). In light of this, IKEA provides a lifetime warranty on its products. DIY (do it yourself) is at the core of IKEA's low pricing approach, and it's almost difficult to avoid this connection.

Judgment
IKEA is a well-known retailer known for providing comprehensive solutions at reasonable pricing. The association between price and quality is inescapable, although it's not always the case. A "Good Deal" at an IKEA is a reward for customers who care about the product's quality, regardless of the price. It is one of IKEA's strongest PODs to combine utility, affordability, and Swedish style into a flatpack.

Feelings
Buying at IKEA isn't the only reason to visit the store. Consumers feel right at home in the pleasant ambiance (Englund and Börjesson Hanson, 2021). Additionally, IKEA offers a cafeteria and a children's playground so that parents may shop for extended periods of time. "FUN" labyrinth shopping is becoming a reality thanks to the one-direction layout and showroom display.

Resonance Price and distance are the primary factors that drive IKEA customer loyalty. Choosing a lower-priced or more affordable product is likely to result in a consumer switching brands (Trendafilov, 2018). Given that most of IKEA's stores are located outside of major cities, rising gasoline costs may deter customers from making the trip to their stores.

Conclusion
Therefore, it can be concluded that IKEA's strategy of growing its store network, especially in developing nations like Russia and China, is projected to counteract the drop-in consumer spending linked with the present bad global economic circumstances over the long run. Its dependence on the US and other developing markets outside the EU makes this corporation particularly vulnerable to worldwide variations in currency exchange rates.. Because of the present low levels of consumer spending and the company's strong brand loyalty and reputation for delivering inexpensive high-quality items, most customers will be interested in the company's offerings. In addition, many morally conscientious customers in key western countries will be drawn to the company's practises of procuring its raw materials from sustainable sources, its desire to reduce its carbon footprint, and its social and welfare commitments.

Reference List
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