Analysis Of Marketing And Servicescape Of Ikea
Introduction
IKEA is the world's largest retailer of home furnishings with a global network of 355 stores in 29 countries, selling a large range of products. IKEA's vision is to ‘create a better everyday life for the many people’. Consumers who shop in the store receive a full interactive experience. This includes hands-on testing of products and getting to see fully furnished rooms first hand to inspire customers. IKEA may as well be known for being a place to go as a family day out and at the end you can enjoy a unique dining experience with quality Swedish food which is very well priced.
7 P’s as they relate to IKEA
Product: There are a total of 12,000 products across the IKEA range and the company renews its product range annually. These products include things from home improvements to furniture to even food/drink goods. They see the needs of consumers straight away and provide them with a large variety of products which leaves the customer satisfied which therefore gains popularity for IKEA. Their products are designed by their in-house, as well as, contracted designers who work with the company directly. IKEA promotes the idea of democratic design. The furniture maker adheres to the following five dimensions of democratic design: form, quality, function, sustainability and low price.
Price: IKEA provides its customers with low prices, good value, and good quality products. Their concept is to ‘provide a range of home furnishing products that are affordable to the many people, not just a few’. IKEA thinks about everyone when it comes to their pricing strategy, whether you are on a budget or have a lot of money to spend on home goods, everyone can shop at their store for their needs and this provides them with a lot of diversification. IKEAs popularity does not change the fact that they stay humble with their low prices knowing that they can attract new customers by giving them high-quality products at the best prices which is the reason consumers have always been retained to IKEA. They even provide their customers with home delivery.
Place: IKEA operates in over 40 countries but as well as this they have a huge online store that can be accessed from your phone, laptop or any sort of device with the touch of a button. The majority of IKEA stores are located outside city centres primarily because of land costs and traffic access. You can choose to go to a store or shop online. Their website attracted over 2 billion visits in 2016 (2017, Dudovskiy). This makes IKEA known worldwide and allows for consumers to just order almost at the press of a button. Even though their website is extremely popular, their store sales still account for 95% of IKEA’s sales which really benefits them because if consumers have a positive experience in a store they may continue to come in store rather than shopping online.
Promotion: When thinking of buying new furniture, most people's first store choice would be IKEA as it’s the world's largest furniture retail brand. IKEA choose to promote their brand and get themselves known by having advertisements on the TV, in newspapers and magazines. They also sometimes get their catalogues posted to houses. IKEA is well known for their slogan ‘The Wonderful Everyday’ as well as their iconic yellow and blue logo that really stands out to the consumer's eye.
People: One of the most important things to IKEA is their customers and the people who purchase from IKEA each day. Their brand is strongly based on substantial relationships with customers and also customer satisfaction. Every day, IKEA ensures to always help their customers to their fullest potential as the opinion and feedback of their customers really matter to them. It also helps them grow better as a company. They are constantly thinking of their customers, putting them first and subsequently impressing them by providing a unique shopping experience which is really appealing.
Physical environment: IKEA as a business compromised sustainability early in their strategy. They ensure to make most their products recyclable and they have invested in very green energy solutions, for example, solar power, to try to be eco-friendly and help the environment which also gives IKEA a good reputation. As well as this, IKEA’s Industry has set a goal to become water positive by 2020. Physical evidence for IKEA is its large stores. They are usually based in the outskirts of a town. The stores provide their customers with a large car park which is free, restaurants, modern display technologies such as touch screen kiosks.
Process: IKEA household products and furniture are designed in Sweden but little production actually takes place here. Products are largely manufactured in developing countries to keep costs as low as possible. They have suppliers in 5 countries, roughly ⅔ of purchasing from Europe with about ⅓ from Asia. A small number of products are also made in North America.
For most of their products, the final assembly is performed by the customer themselves when they are bought in the flat packs.
The Servicescape of IKEA
Each consumer has certain expectations relating to a store when planning on visiting and purchasing from the store whether they be positive or negative. All of these factors can profoundly affect how people feel think, and respond to a particular service establishment. Overall the expectations for IKEA are positive. IKEA spend a lot of time thinking of how to get their consumers to have a positive and enjoyable in-store experience. Signs, Symbols, and Artefacts: Signs, symbols, and artefacts are important in forming first impressions and for communicating new service concepts (Servicescape: Meaning, Types, Behaviours, Roles & Approaches n. d. ). IKEA is filled with signs and symbols as soon as you walk through the door. The first sign as you walk in shows where the entrance is with a large red sign. When entering the store there is a large ‘Hello’ banner greeting each customer as they walk into the store. This makes the consumer feel welcomed and feel as though they will be helped by each staff member with any doubts they may have throughout their store visit. IKEA project arrows onto their shop floor in order to guide consumers through the large store and to keep the flow of customers moving in one direction. This decreases stress and stops it from becoming an overwhelming environment. It could also be put in place to ensure that their customers do not miss a single product when shopping. They also have signs and maps around to informing customers which section they are in when shopping which can benefit the customer as they may want direction to a certain section when in store. Ambient conditions: IKEA thought well about the ambient conditions such as temperature, lighting, noise, music, and colour. The lighting differs in IKEA, their walkway section is very bright to suggest a value store image (Jacob,2016) whereas the lighting in the showroom differs to give different vibes and to suit the aesthetic of the designed room and to give a more relaxing welcoming feel, implying how homes should feel and look like. There is soothing music playing in the background, nothing too loud but you do not really realise unless you are actually listening out for it. This creates a more relaxing environment, making customers stay longer. Spatial Layout and Functionality: Spatial layout refers to the way in which machinery, equipment, and furnishings are arranged, the size and shape of those items, and the spatial relationships between them. Functionality refers to the ability of the same items to facilitate performance and the accomplishment of the goals. The layout of IKEA is excellent. Everything is visible, easy to find and organised. It is designed so the customer, after entering the store must go through the entire building like a maze. All their showrooms and furniture layout are aesthetically pleasing to fit every kind of consumers’ needs and wants. There is something in there for everybody. They have self-service checkouts and design stations where you are able to design and plan out your chosen room in store. IKEA has Find-it computers to help customers locate products in the self-service warehouse.
IKEA’s Marketing Strategy
IKEA has a range of very clever marketing strategies to get their name and brand out in the world. These strategies attract customers resulting in them purchasing more, therefore improving sales for the company boosting their profits. If you stop and think about it, IKEA has no windows in store also the fake clocks do not help either when it comes to knowing what time it is. It’s a smart trick borrowed from casinos that when you take away every indication of time, you lose all sense of it. This results in customers spending more time wandering around longer than they have planned. In the meantime, walking around slowly filling up their baskets. The loyalty card known as ‘IKEA Family’ was introduced to IKEA customers to encourage them to start saving on their purchases. There are many perks and rewards that come with this loyalty scheme from, regular offers to get-togethers. There are specific products in store that have a discounted offer if you own this IKEA Family loyalty card. Consumers are advised to swipe their IKEA Family card with every purchase they make in store. This entices customers to sign up and take advantage of these exclusive discounts that are offered to the loyalty cardholders thus, more consumers are attracted to the store. There are pencils, measuring tapes and paper within arm’s reach for the consumer to take advantage of while shopping around the store. This tricks consumers, making them make purchases on goods they may not even need. There is an area in IKEA called the market hall which is the last thing consumers walk through before they go to collect and purchase their products. This place is well known for being filled with all little things such as candles, plants, kitchenware etc. , which evidently gets consumers to impulse buy as consumers think that they are great value and they will come in handy but all the little purchases add up in the end. This even sometimes results in consumers coming out with a trolley filled with just products from this area. When we think of IKEA, one of the first things that come to mind is the food. After a long day of shopping in the store, there is no doubt that you will not be hungry. The IKEA restaurant is located towards the end of the shop which attracts these hungry customers. Their food is very cheap which leads to consumers buying from just one ice cream cone to a full roast dinner or both! Consumers are left satisfied and already planning on when the next trip to IKEA is.
Reflection on my experience of the store visitation
I visited the IKEA store in Dublin and had a very positive experience while in store. At first, I was really overwhelmed and not prepared to see so much stuff. The store was filled with families on a day out shopping. As I walked through the store, I got more comfortable with the surroundings and felt more at ease. I have a great interest in interior design and all of the showrooms and exhibitions in IKEA really appealed to me. I thought this was an excellent strategy that IKEA uses as it really inspires consumers and gives them an extremely unique experience. I was very impressed with the number of services the shop offered to the consumers. In addition to this, I was delighted to see how friendly and helpful each employee was. I actually had a meal at the IKEA restaurant as I heard such positive feedback about it. For the price of €8, I got a full meal which included mash, 15 meatballs, gravy, a refillable glass and an apple pie which I thought was such great value. In conclusion, I really enjoyed my visit to IKEA and would recommend people who need interior inspiration to visit the store as it really is an enjoyable experience. This visitation was a real eye-opener to IKEA as a company and made me really sit down and think of their marketing strategy, marketing mix, and their servicescape. This relates to the module of Services Management and helped me complete this assignment. This will also benefit me in other assignments in the future in my course by adapting them to different companies.
