The Swedish home furnishing retailer IKEA was founded by Ingvar Kamprad in the region of Smaland in Sweden in 1943 (Hultman, et al., 2011). It is regarded as one of the most respected and reliable companies in Sweden (Gronvius, Lernborg, 2009). Today, IKEA is a global company which has operations in 41 countries around the world for over six decades. It has 29 trading offices located in 25 countries and the remaining 16 countries are 11 customer distribution centers and 26 distribution centers. According to sustainability report in year 2011, it shows that IKEA group have 287 stores worldwide with and it has approximately 16,000 Co-employees and 33 production units in 10 countries. Besides that, IKEA had 1,026 home furnishing suppliers in 53 countries (IKEA, 2011).
2.0 Marketing mix
The definition of standardization is the process of expanding and applying domestic target-market dictated product standards effectively to markets in different environments. Standardization is not only concerned about products, but it is also progressively spread to brand standardization which concerns the brand name, packaging and positioning of a company. In marketing mix, standardization for business means using the same way to promote its products in all countries (Zierfuss, Bergersen, 2004). Levitt has argues that well-managed companies have moved from emphasis on customizing items to offering worldwide standardized products that are advanced, efficient, trustworthy and low priced. Nevertheless, it has limited to being ineffective in some countries (Vrontis, Thrassou, 2009).
According to Medina and Duffy, adaptation is described as the obligatory modification of domestic target market dictated product standards as to make the product suit into different environmental conditions (Heczkov, Stoklasa, n.d.). The essential basis of the adaptation is that the marketer is subject to a set a new position of macro environmental factors, to different constraints such as climate, race, language, taste, and etc. Moreover, multinational companies are necessary to find out, alter, and adjust an entire marketing strategy to sell and distribute the products in order to fit in unique dimensions of each local market (Vrontis, Thrassou, 2009).
According to sustainability report 2011, IKEA range consists of approximately 9,500 products (IKEA, 2011). Through the years of operating experience, IKEA is not only success in build a strong brand image but it is also has standardize their brand name over the world. In term of products, IKEA has a fundamental guiding principle to work and to be perceived in the same way in every country (Burt, Johansson, Thelander, 2008). IKEA has standardized the packaging design into flat-packed so IKEA designs furniture can be packed unassembled for more easily to transport, to reduce labor, shipping and storage costs. Eventually, IKEA are able to offer its products to customers at substantially lower prices (IKEA, 2012). Besides that, IKEA also standardize the products positioning that kept unchanged since it was created. IKEA is targeting who demand for good quality furniture with affordable prices especially for family. IKEA has successful develop methods that are both cost-efficient and innovative (Schuiling, Lambin, 2007).
Although, today IKEA is successful and profitable, and it has standardize its brand name, design on packaging, product quality, and product positioning which are able to save more costs, however IKEA still need to adapt some products according to different requirements of a country of sale. For example, IKEA sells the same furniture but in different sizes for the Western and Asia countries because it found that the body size of these two countries’ customers are different. Besides that, Americans found that IKEA’s standard beds are narrow for them. IKEA always design and introduce new products with creative and high...
Please join StudyMode to read the full document