IKEA’s Marketing Strategy
IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture. The company is the world’s largest furniture retailer. It was founded in 1943 by 17-year-old Ingvar Kamprad in Southern Sweden. As of October 2011, IKEA has 326 furniture stores, operates in 38 countries and engages 1,500 suppliers of 12.000 products. In fiscal year 2010, it sold $23.1 billion worth of goods, a 7.7 percent increase over 2009 (http://en.wikipedia.org/wiki/IKEA). In 1995, outside the Milan fair, which is the most prestigious exhibition fair in the world for élite furniture designers, a sign declared: “Il design democratico” [“Democratic Design”]. The sign pointed to a building that accommodated IKEA exhibition outside the fair. In developing the notion of “democratic design”, Ingvar Kamprad has asked: “Why must well-designed furniture always be so expensive? Why do the most famous designers always fail to reach the majority of people with their ideas? In his view, well-designed products were only for the rich and privileged; the multitude of people with less money, were excluded. Furniture was no exception. Kamprad’s idea with IKEA is to offer a wide range of home furnishings of good design and functionality at a price low enough to be affordable to most people. The three dimensions of “democratic design” are form, functionality and low price. No other home furniture manufacturer is producing designed home furnishings that featured all three of these elements. With respect to third dimension, low price, IKEA designers are always asked to use design to decrease prices, not increase them. The process begins with a decision on what price the majority of people can afford to pay. A production line is then designed to produce furnishings that satisfied the other two dimensions. To achieve this, designers work on the factory floor with production staff, rather than in a prestigious office in a distant...
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