Ikea Promotional Strategies

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IKEA
Bulgaria

IKEA assignment

Prepared by:

George Georgiev
Evgeniya Mincheva
Zornica Rasheva

Executive Summary

Furniture remains the largest home furnishings and housewares sector.

Bulgaria’s furniture industry is a dynamically developing sector in the past few years. It is well known that most furniture companies in the country are based on strong traditions and good correlation between price and quality, but (as in many other countries), although the major part of the customers on the inner market prefer Bulgarian-made furniture, high prices are seen as a sign of high quality, so most furniture pieces produced by the companies are considered high priced and hardly affordable for the majority of people.

IKEA was founded in 1943 by Ingvar Kamprad. It started as a place where a person can buy pens, picture frames, watches, etc. and with the time turned to be the world’s largest furniture retailer. One of the main aims of the organisation include: keeping costs low and assist customers and products combining good quality, durability and functionality and this replies to the needs of the Bulgarian customer.

Trough analyzing the situation within the country and IKEA the decision to open an IKEA store in Sofia was taken.

A PEST analysis was held to recognize all the factors that might have an effect on the company entering the Bulgarian market. The current situation of the furniture industry was analyzed and trough that the target market and the positioning of IKEA were identified. The competitors’ and customers’ analyzes that were made show what IKEA has to adapt to when entering the market of the country. The Internal and SWOT analysis show why IKEA has the opportunity to enter, develop and gain a market share in the Bulgarian furniture sector. The Market was researched and based on all that the marketing mix strategies were developed. And a PERT analysis was also held to show how the decisions made will be implemented. History of IKEA

IKEA was founded in Älmhult, Sweden, in 1943 by Ingvar Kamprad. He founded the company at the age of 17. IKEA is an acronym incidentally similar to the Greek word οικία [oikia] which means (home) and to the Finnish word oikea (correct, right), but actually was originally an abbreviation for "Ingvar Kamprad Elmtaryd Agunnaryd". Ingvar Kamprad Elmtaryd Agunnaryd comes from the address where Ingvar Kamprad started the company IKEA initially.

Originally, IKEA sold pens, wallets, picture frames, table runners, watches, jewelry and nylon stockings or practically anything Kamprad decided is a needed product on reduced price. Furniture was first added to the IKEA product range in 1948. In 1955, IKEA began to design its own furniture. The company motto is: "Affordable Solutions for Better Living."

At first, Kamprad sold his goods out of his home and by mail order. Later a store was opened in the town of Älmhult. It was also the location for the first IKEA "warehouse" store which came to serve as a model for IKEA establishments elsewhere. On March 23, 1963, the first store outside Sweden was opened in Asker, a Norwegian municipality outside Oslo.

IKEA has grown step by step into the world’s largest furniture retailer. There are 202 Ikea stores in 32 countries. Of these, 180 stores belong to the Ikea Group. The remaining 22 stores are owned and run by franchisees outside the Ikea Group.

Products Available

IKEA’s products are used from the customers for the whole furnishing of a home. Customers may find everything they need and basically furnish their houses “from the forks to the chairs”.

The products available are:
• Storage furniture;
• TV solutions;
• Small storages;
• Sofas and armchairs;
• Tables and desks;
• Chairs and lighting;
• Decoration and mirrors;
• Floors;
• Textiles and rugs;
• Beds and mattresses;
• Cooking and eating;
• Furniture care and hardware;
• Kitchen cabinets and...
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