Introduction to the Company Mr. Ingvar Kamprad was the person who founded IKEA.

His business grew by years a nd by 1947 he began stocking-up furniture's produce by local manufacturers. It w as not possible for him to make individual sales call; therefore he started cata logues in which items he sold were listed. He used to promote the catalogues thr ough mail orders and it soon became popular among the customers. Furniture was i ntroduced in IKEA's product catalogue in 1947. After that his sales just shoot u p and then he decided to terminate all other products and sell only furniture wh ich was low price and modish. In the year 1953, IKEA opened its first furniture shop at Almhult in Sweden. As time passed his speed of expanding the business gr ew. From 1973, he started expanding his business to rest of the Europe and the w orldwide market. He started opening new store every year from 1974 to 1989. By 1 990's IKEA had reached out to the Main land China, all over the Europe and Middl e East. In the year 2000, the group's first store was opened in Russia. The IKEA group began their first rail service in the year 2001. The IKEA group commenced its first website in June 2007. IKEA planned to expand its operations in Tusaca ny in November 2008. At present IKEA group has approximately 292 stores all over in 36 countries and IKEA owns 258 stores in about 24 countries. The other 34 stores of the IKEA grou p are owned and run by the franchisees outside the IKEA group in about 16 countr ies. IKEA has approximately 9,500 varieties of home furnishing product. IKEA eve n have in-built restaurant in which they serve typical Swedish and local dishes. They have around 160 ranges of different food varieties in their food court. IK EA comprise of 41 trading service offices in about 30 countries. They have aroun d 1,380 suppliers from about 54 countries. Kampards frugal habits encouraged the ir co-workers to minimize waste and cut costs at every level. This helped IKEA t o come up with artistic products that were designed and available at affordable prices, which helped IKEA to enhance their brand image. IKEA is a biggest furnit ure store in the world but its products accounts only five to ten percent of the furnishing market in a particular country where it operates. IKEA's furniture comes in a range of styles and colors but it is usually known f or its sleek design. IKEA has planned to decorate a hotel chain with its own fur niture, this would target all the customers who would go to these hotels and it will also benefit the hotel chain with low priced furniture with good quality. I KEA' store are huge and once the customers enters the IKEA's store they wouldn't go without seeing all the furniture available. Average IKEA stores are as big a s 30,000 m and the store are designed in a way that it is impossible for the custo mers to go directly to the exit. This marketing strategy provokes customers to b uy and they often buy furniture than their actual requirement which benefits IKE A. IKEA's operation of marketing is base on countries communal and educational d eep feeling which varies significantly across markets, for example, advertisemen ts in the UK were more straight forward compare to those humorous once in North America. Marketing As a method of promotion, IKEA renovated the bedrooms of four kids in Singapore which looked similar to TV studios, from which they hosted their own TV specials on the cable channel. ("Our vision is to create a better everyday vision for th e many, but to try not to be like the many,". "We try to be different. We have f ormulated this way of thinking in our internal manuals. It is a way of making an umbrella that secures a similar way of thinking globally"). (Source: - said by Mr. Larsson) Wednesday is the slowest day in Netherland for IKEA. Amsterdam-based agency Stra wberry Frog for furniture manufacturer IKEA recognized that the Dutch word for W ednesday, Woonsdag, also means living day and this festival was started by IKEA. IKEA markets buy printing its covers on the Metro newspaper on every Wednesday

with articles about Woonsdag. On every Wednesday of 2004, IKEA promoted Woonsdag which is now marked as a new national day, by printing its articles in the news papers and magazines, and also promoting by radio, viral campaigns and through i nternet. On this particular day, IKEA hand over discount vouchers, woonsdag bags and T-shirts and on the streets crowed even sings woonsdag song. In one of IKEA 's recent guerrilla campaigns, it promoted the campaign by redesigning the Berli n train station, by painting the walls with dazzling fabrics and also did the li ghting through lampshades which changed the whole environment to look attractive . IKEA introduced a "guerrilla" advertising campaign called Any Place can be Bea utiful to promote the new publication of their catalogue. The television spot sh ows an unmarked cardboard box sitting on a sidewalk. After a moment, hundreds of pieces of yellow paper, which look like post it notes, erupt from the box and f rom a square on the ground around it. At the bottom of the TV screen appears a U RL. All though there is no indication of its purpose, from the URL link people c an upload the photos of the room they would like to renovate. The photos which t he people give in the contest are voted by several visitors and the winner recei ves a $ 15,000 worth of remodeling of their rooms by IKEA. One of the IKEA tagline, "Redecorate your life" has become very popular phrase i n Spain over the last five years, representing that IKEA can help as people make thoughtful changes in their lives. In one the IKEA's campaign, people made real announcements on TV; a secretary told her boss that she wants to quit the job, a young man told his parents that he is a gay. IKEA uses low-priced resources in an innovative way and minimizes production retail cost and distributional cost, so that the customer can get benefits from low price. IKEA has a vast range of products wide enough to have something that appeals to everyone and to cover all the function in the home. IKEAS products are more trendy then being modern, so they are practical enough for everyday use. Marketing oriented companies are illustrated by their focus on the customer; the customer is given the first priority. They work on customer's behaviour and the ir needs and this strategy is adopted by every company in the long run to develo p a sales customer relationship. They try to recognize customer needs by providi ng solutions instead of pushing sales. Constant reading and analysis of the mark etplace helps them to acclimatize, encourages, and distinguish their products an d services. Although one of the latest way of marketing taken by IKEA was online marketing and also IKEA wants to set up an observed marketing Role of marketing and effectiveness IKEA's advertising in the UK was meant to attract more traffic to its store by r aising awareness. Its unique style of retail advertising provokes conversation a nd arguments. Despite few of its advertisement ran into controversies but most o f them were strong enough to raise awareness of the brand and it let people know that its different from other home furnishing companies and it also helped to i ncrease sales. They advertise by means of television, sponsorships to magazines and radio promotions. Its advertisement help sustain many different areas of bus iness including brand awareness, store themes, catalogue drops and store opening . The idea of Live Unlimited has helped IKEA to become more stylish and ambitiou s. In one of its London TV commercial shows that the couple is ignorant about qu ickly changing of the living room and furniture around them. This 30 second comm ercial depicts 3000 separate products of furniture and wall slides. In London it markets by providing free oyster wallets to all tube station and to all retail stores where oyster top-up is done. IKEA spends about 10 Million on media planning and advertisement in UK. Nearly 110 ,000 customers visit IKEA stores a day that comes up to 40 Million customers a y ear. The latest IKEA advertisement aims to illustrate its customers how to make best use of space in the house. It encourages people to glance at their house in a diverse prospective and visualizes how one space can be presented in a differ ent way. 70% of the IKEA's visitors are women therefore its campaigns target wom

en's. It says 20 stores expansion in the coming 5 to 6 years. IKEA's main effectiveness lies in its well-built international brand recognition developed due to its exceptional philosophy and low product prices and together with high sales performance. The firm's major limitation is the actuality that it is especially dependent on continent of Europe, with 82% of its stores locate d in this region, and it faces difficulties like fulfilling customer expectation s of service and price. IKEA is having problems in expansion of its business in establishing markets in the continent like Eastern Europe and Asia. The improvem ent of quality lines, with the existing stores and new high street stores set of f the outskirt stores, and the development of e-commerce sites in countries has helped to increase sales, by improving the customer service. These extra develop ments have increased competition in the market, which has lead to introduce simi lar product ranges at low prices. This is followed by the low demand in miserabl e economic conditions in its European and US the market and it also poses a pote ntial threat to the political and instable economic market of the Chinese and Ru ssian, in which the company plans to invest heavily in the short-midterm, also p resents a potential threat. (Johnson, Scholes and Whittington, 2005) It is a global company therefore it had many competitive advantages in the domes tic and in the international competitive market which gave the company pricing f reedom. With a standardized core product IKEA could have the server of the large st furniture factories producing the same item to supply the world demand. IKEA' s competitors like Furniture Brands International, Stanley Furniture Company, In c and DFS Furniture Company plc who had joined various buying groups has difficu lties co-operating on a much smaller scale, often because they could not agree o n what specific furniture models to order. Only few of them would get economies of scale in purchasing as they are not that large. By strengthening its business into a network IKEAcould achieve economies of scal e. Traditional advertising is a powerful tool which can help to gain strength in the local areas which can outperform the efficiency of being global. It can hel p in gaining local advantage and wittiness in its advertising. IKEA has been ref erred as an extremely price conscious company. In its catalogue some additional brochure are also provided along with some advertising. IKEA aims at expanding its already developed retail business in the near future, which doesn't mean its expansion into new areas, but instead it aims building a nd developing its old areas. Its recent development in the e-commerce has helped IKEA to gain more revenue and in the long run will help to have a good impact o n its turnover, which shows that the company is preparing well for its future th reat. Customers are well aware of the quality of the IKEAS product, so the custo mers may find internet shopping more preferable, as they do not need to check th e quality of the product in person. It has adopted aggressive expansion strategy , but sales growth in the coming years would remain reserved due to its weakness in the global market. Due to the improved economic condition of the Europe and the US, and its expansi on of its business in the Asia has led stepping up its growth, with its revenue doubling every year than then predicted figures. Shopping with IKEA has become e asier with the development of the e-commerce, which has forced to increase their profit targets. It might fall short of its targets due to its expansion into ex isting and new markets, as the company is facing problem with the high set up co sts and low spending power, and some other hidden issues in the developing marke t. Conclusion Its marketing strategy has gained IKEA its expansion into the Asian and the US. As furniture items are not bought very often, IKEA has emerged as good marketing company to promote its business. It has good understanding of the needs of the

customers and lot of research, time and resources has been used in understanding the needs. Kampard himself has spoken to its customers in person, in one of his rail trip. He has asked customer about what do they feel about the company and what changes should be made in their store. One of the customers suggested intro ducing food court, and therefore he came up with the idea of introducing food co urt, as the company was losing customers in the lunch time. It always comes up w ith innovative ideas to promote its brand, by means of sponsorship, advertisemen t and other campaigns. It spends about 10 million in the UK, about 4.3 million in F rance, and about 1.5 million in The Netherlands, on advertisement which shows that a lot of money is spend on marketing. IKEA is well known in the Europe, but it has recently come up in the UK and the US, so it should spend more effort in marketing in these countries, as these cou ntries have a huge market. Culture plays an important factor in the internationa l market, and there should always be a balance in culture consideration, as too much culture consideration can weaken the company's global strategy and too less consideration can weaken local consumer's loyalty. But IKEA has emerged out to be a better company in balancing the culture consideration in the global market. We think IKEA is a marketing company to a considerable extent, but still its mar keting is falling short against the huge company. Reference Slack, N. Chambers, S. Johnston, R (2001, pp.4-5) Operations Management 3rd edition, Pearson Education. Discovery communication, 1998-2009. How Stuff Works, inc. [online] Available at: http://home.howstuffworks.com/home-improvement/remodeling/ikea5.htm [Access ed 8 December 2009] Bloomberg L.P, 2000. Business Week. [online] Available at: http://www.busine ssweek.com/innovate/conatent/apr2007/id20070420_874748.htm [Accessed 8 December 2009] Grant, Jules, 2002. IKEAtakesaquirkyapproachtohighlight'betterliving'. Marke ting(00253650); 5/30/2002, p19, 1/4p, 1 color [online] Available at: http://sear ch.ebscohost.com/login.aspx?direct=true&db=bth&AN=6854936&site=ehost-live [Acces sed 7 December 2009]. Emma. H, Normandy. M., 2004. IKEA courtsbuyerswithoffbeatideas. Advertising Age; 4/12/2004, Vol. 75 Issue 15, p10-10, 1/2p, 4 color Available at: http://sea rch.ebscohost.com/login.aspx?direct=true&db=bth&AN=12852081&site=ehost-live [Acc essed 7 December 2009]. Sacc-Sandiego, 2009 IKEA logo [print] Available at: http://images.google.co. uk/imgres?imgurl=http://www.sacc-sandiego.org/files/media/IKEA%2520logo.jpg&imgr efurl=http://www.sacc-sandiego.org/%3Fq%3DBoard&usg=__FHykRz1Lw_tubMYGvM6gQTLkwS s=&h=421&w=1179&sz=61&hl=en&start=1&um=1&itbs=1&tbnid=89GqhcOzCYGSZM:&tbnh=54&tb nw=150&prev=/images%3Fq%3Dikea%2Blogo%26hl%3Den%26sa%3DX%26um%3D1 [Accessed 8 De cember 2009] Kaynak, E., 1991. Sociopolitical aspects of international marketing [eBook] Available at: http://books.google.co.uk/books?id=ZDxgIu18_QcC&pg=PP1&dq=Sociopol itical+aspects+of+international+marketing&cd=1#v=onepage&q=&f=false [Accessed 8 December 2009] Business Teacher, 2003. What are the key issues in the external and competit ive environment affecting IKEA? [online] Available at: http://www.businessteache r.org.uk/free-business-essays/strategic-management-free-essay/ [Accessed 9 Decem ber 2009] IKEA systems B.V. 1999-2009. IKEA welcome to IKEA.com Available at: www.ikea .com [Accessed 9 December 2009]