How Ikea Designs Its Sexy Price Tags

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POM Presentation
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Case: How IKEA designs its sexy price tags?
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Group Number: 02
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Members: M.A.Sravani
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Swati Smita Khandualo
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Ghouse Taj Khan
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Vivash Pandey
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Bishnu Priya Prusty
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Introduction:
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The goal of IKEA is to provide “affordable solutions for better living”. * -------------------------------------------------
The company achieves this by offering a wide range of furniture and household goods at a lower price. * -------------------------------------------------
These prices appeal to a wide market, particularly those who starting their own homes and families. * -------------------------------------------------
The company’s focus is “young people of all ages”.
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IKEA has seemingly achieved the impossible, creating a range of products attractive to consumers worldwide and applied a formula for presentation and sale of those products. -------------------------------------------------

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Company background:
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Ingvar Kamprad founded IKEA in Sweden in 1943 as a mail order company. * -------------------------------------------------
He wanted to promote the “democratization of consumption” by offering furniture and household goods at a price everyone could afford. * -------------------------------------------------
The company takes the straight forward approach to the furniture business, by starting with developing furniture with the price tag in mind. * -------------------------------------------------
IKEA way is to maximize the use of raw material in order to fulfill the customer needs and preferences while offering quality products at an affordable price. -------------------------------------------------

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What are IKEA’S competitive priorities?
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The top competitive priority for IKEA is keeping the prices low. * -------------------------------------------------
The company’s mantra is “low prices but trendy with meaning”. * -------------------------------------------------
The company aims to sell products similar to competitors but at prices 30-50% low. * -------------------------------------------------
In addition to low prices IKEA works to ensure that products and materials are adapted to minimize any negative impact to the environment and are safe for customers from health perspective. * -------------------------------------------------

The company insists to use resources wisely when designing new products. * -------------------------------------------------
By using renewable and recyclable materials in the products, the company appeals young buyers and green consumers. -------------------------------------------------

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Describe IKEA’s process for developing new products.
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With the price tag taking centre stage in IKEA’s philosophy, company develops product in a seemingly backward product development process from...
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