IKEA’s strategy is based on cost leadership. Across markets where it currently has a presence, products are sold at low prices. Prices are 30 to 50% lower than competing products. Price variations are only a result of fluctuations in exchange rates. This penetration pricing enables IKEA to gain significant market share. Low prices are a result of large-quantity purchasing, low-cost logistics, store location in suburban areas and a DIY approach to marketing.
IKEA also benefits from economies of scale and healthy supplier-firm relationships. IKEA enters into long-term contracts, provides leased equipment and technical support in exchange for exclusive, low-cost manufacturing from suppliers. For new markets, IKEA should retain its price-image to maintain the brand’s positioning.
( the IKEA advertising, PR and other types of communication are complements to the IKEA range, store and catalogue are used to spearhead the penetration of our target market
the UK marketing department
IKEA advertising in the UK is intended to raise awareness of the IKEA brand and drive traffic to the stores. Some people love our unique style of retail advertising, some hate it, but everyone who sees our advertising has a strong opinion and subsequently it provokes conversation and debate. Despite having some of the most controvertial television advertising campaigns in the UK, we have raised awareness of our brand, let people know we are different to other home furnishing companies and most importantly increased sales. The advertising department includes all aspects of advertising and brand communication from television advertising and sponsorship to magazine and radio promotions. Advertising is used to support many different areas of the business including brand awareness, store themes, catalogue drops and store openings.
To remain at the forefront of a changing market we need as much research on customers, the home...