IKEA is a furniture company that bases its business on the general idea of saving whenever and wherever possible. It differentiates itself from every other type of furniture company by the combination of its designs and prices and by the experience it offers to every customer that visits its stores. They do not only offer the services of a general furniture shop, but they also give to their customers a wide range of services that can complement their experience in an IKEA store: restaurants; kids’ playgrounds. Moreover, they have a policy of not offering assembly options to their customers: this means that each product has to be assembled by the customer and not by IKEA.
This is the general model implemented by IKEA all over the world. However, when it first entered the American market, IKEA faced some challenges due to the strangeness of these concepts to the Americans. All of those were well resolved and this furniture company began to have some success in USA.
Every product and service can be categorized into fours levels. These levels are the basic product, the expected product, the augmented product and the potential product. Each of these levels adds more customer value to the product. Product and services, which serve as an augmented product, deliver the most value to the customer and helps company to create brand experiences and brand equity. IKEA, for example, does not only sell furnisher, but it also sells “better living experiences with affordable solutions” and, therefore, they provide new ideas and inspiration, tips and solutions on how to build a dream home. What makes the IKEA products’ augmented, for example, can be the fact that they offer each client a 2-year warranty on the goods, a free repair or even that they offer their clients their annual catalogue each year.
This augmented product concept is, however, more and more common among companies and therefore they have to find other ways to differentiate themselves. That is exactly...
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