Extra: Stolen Idea?

In 2007, Ikea launched a campaign called 'Home is the Most Important Place in the World,' where they put up estate agent style 'For Sale' signs in London with the phrase 'Not For Sale.' These signs seemed very similar to Onis Living's campaign, who also used the 'Not for Sale' signs. Onis Living is a UK home improvement company, and was awarded the Interbuild 2006 Construction Marketing Award for best campaign under £25,000 (euros) for their 'Not for Sale' campaign. After a debate over originality, Ikea agreed to feature Onis Living on their campaign site (notgoinganywhere.co.uk) for one year. Onis was the only company to be advertised by Ikea. In that same year, Onis Living became Onis Homes Limited. Then in 2008, they went under voluntary liquidation only to be restructured as a franchise.

Week Eight: Advertising and Public Relations

Ikea is very creative with their advertisements. It isn't just another flat surfaced advertisement. Just like the reason they first made a store, Ikea likes their advertisements to be touchable. Ikea's biggest advertisement is through their free catalog. For this year's 2011 catalog, Ikea sent previews out to different blogs to hike up interest.

Just like sending sneak peaks of their catalog, Ikea's street advertisements are the same way. In 2008, Ikea was opening a new store in Brooklyn. To let people know, they built a 20ft x 20ft "Apartment in a Box," in Borough Hall Plaza, Brooklyn. The 'studio apartment' was complete with a sofa bed, coffee table, rugs, lamps, pillows, a media center, and bookshelves. The shipping container read, "Studio apartment flat-packed for your convenience. Ready for home delivery." Other advertisements around the word are designed the same way. Ikea spends around $300 million a year worldwide on advertisements.

Ikea's advertisements around the world. 

Last year, in Austria, Ikea used movies to advertise their newest catalog. When their items appeared on the screen, they launched a small projection of the item and it's price. Their product information projections were featured in movies such as Burn After Reading and I am Legend. After each movie, the Ikea catalogs were distributed outside. Five thousand catalogs were handed out, which was five times the amount that was estimated. In the same year, Ikea launched a campaign on Facebook. The company made a facebook page where they would upload a showroom, and the first person to tag an item in that picture would win it. It was a great way to interact with customers. 

In 2002, Ikea launched Unböring, which was a multifaceted, year long campaign that included the Clio Award-winning commercial Lamp, directed by Spike Jonze (who is known for directing Where the Wild Things Are and producing MTV's Jackass). It challenged people to break their attachments over old furniture and bring in new items, preferably from Ikea.

Ikea is a big believer in cause-related marketing. In 2005, Ikea formed it's Social Initiative to manage their social involvements throughout the world. They chose UNICEF and Save the Children as their main partners. One example of their involvement is through their solar powered SUNNAN lamp. Since June 2009, for every lamp that is sold, Ikea donates a lamp to UNICEF and Save the Children for kids who cannot read, write, or draw after sunset. So far, more than 500,000 lamps have been sold.

Extra: New Ikea Living Room Commercial

A new perfect living room made by the Johnsons, Designed by IKEA. 

Extra: New Ikea Mattress Commercial

A perfect night's sleep made by Kim and Adam, designed by IKEA.

Extra: New Ikea Kitchen Commercial

The perfect kitchen made by the Petersens, designed by IKEA.

Week Seven: Retailing

Ikea is the world's largest furniture retailer. There are chain stores around Europe, North America, Australia, and Asia. Ikea brings in it's sales through both in-store retailing and nonstore retailing. Ikea's catalog and online website are it's biggest and only nonstore retailing. Ikea's catalog is free of charge for whom ever wants to order one online. 


When it comes to store placement, Ikea is very careful in choosing where to open a store. They do lots of research on the city to determine whether their store with do well with sales in that location. Ikea's ideal store locations are around collages and metropolitan areas, and areas where people move frequently.


There are only two Ikea stores in New York, one in Brooklyn and the other in Hicksville. Both are open throughout the day, usually closing around 9pm-10pm. My preference is the store in Hicksville, Long Island. I've always gone there and it's a pleasure going there again for this class. As soon as anyone walks in, there's a self standing advertisement with pencils and pads for you to write down your list of products as you walk through the store. Throughout the store, you follow a pathway that takes you through rooms. It always tempts me to go check out the rooms and it's features. I suppose that is why they designed their stores to be this way. There is staff at each department, who are friendly and willing to help. The price tags are easy to read. And from past experience, in the warehouse, the service is excellent when it comes to locating the furniture you want. It's a really nice atmosphere. And you truly get to test out the products. There is no one yelling at you to get off the sofa.

Week Six: Consumer Decision Making

Ikea always has an eye out for the home decor trends, and makes it affordable for their consumers. The product range is wide in function and style, whether you're a romantic at heart or a minimalist. When you go to buy a product, you usually do the research and make a list of needs that the product should require. When Ikea creates their products, they pay attention to the function of a product, and make sure it's free from any unnecessary add-ons. They respond to the needs, tastes and incomes of people, rather than taking the easy way out and have consumers pay more for useless products that were made for larger incomes.

Ikea uses more of a marketing-controlled, than a nonmarketing-controlled, information source through it's catalogs and advertisements. Although, there is a nonmarketing-controlled information source, though word of mouth, for most businesses. Ikea's stores play a big part when it comes to consumer making because of the same reason they first opened one up: purely for consumers to experience their products. Just like their store, their catalogs are an inspiration for room ideas, aside from featuring their products. 

Week Five: Developing a Global Vision

Ikea opened it's first store in Sweden, and since then has expanded to over 300 stores in 38 countries. Ikea's splash global gateway page shows all the countries that sell it's products.

Ikea was one of the few companies that has done this, back in 2003. Language plays an important role when going global, so Ikea was careful to display each country in it's dominant language first. 


China plays a big part in global business. Ikea had to change their strategies when doing business with China. Ikea's known for their low prices and flat-packaging furniture, but, in China, they had to drop the prices about 10%. It worked out because sales were rising from 25% to 50%. And this was back in 2004. In present time, their stores are very popular now.


One of the countries Ikea has yet to open a store in is India. Ikea's catalog has already made it's way through the country though "magazine hawkers." India is next on Ikea's list. This year Ikea says it will spend about $163 million on grassroots development programs in India, and has been working with UNICEF and Save the Children on Ikea's Social Initiative Project. The Social Initiative Project is to improve the rights and life opportunities of children. Ikea claims that India could be as big and profitable as Europe has been. But the only way Ikea can sell in India is through a joint partnership, where a 49% stake of the venture is held by a local Indian firm, as said by BBC News. But Ikea's chief executive, Mr Ohlsson, says it's not an option. So India is on hold until they can figure out what can be done.

Extra: IKEA uses 100 cats for London catalog campaign

Ikea decided to take a unique approach when it came to London's catalog ad campaign. They set loose a hundred cats around it's store in Wembley as an experiment to test their furniture.


Here's the final product:

Corporate Irresponsibility: H&M's Clothing Trash Scandal

Early January 2010, clear trash bags filled with slashed clothes were found outside of Herald Square's H&M's back entrance on 35th street. According to an article from NY Times, a random man and woman went through the bags and picked apart the clothes to see what could be useful. Apparently H&M has followed suit to Wal-Mart, also mentioned in the NY Times article. A woman named Cynthia Magnus, who has walked by the store several times, said it was common to find destroyed clothing in the H&M trash. And not only clothing was found, but plastic hangers as well.


What is H&M's response to this? Nothing but a promise.

“It will not happen again,” said Nicole Christie, a spokeswoman for H&M in New York. “We are committed 100 percent to make sure this practice is not happening anywhere else, as it is not our standard practice.”

Apparently it is stated that Ms. Nicole Christie had no knowledge of this practice, and said it was H&M's policy to donate unworn clothing.

Week Four: The Marketing Environment

Ikea, known for their flat-packaging products, chose a target market that would be able to assemble furniture themselves. Ikea considers both males and females in Generation Y, those born between 1979 and 1994, and Generation X, those born between 1965 and 1978, as their target market. They also target all ethnic groups, with stores in Asia, Dominican Republic, Europe, and the very diverse United States. Their website and catalog caters to different countries and languages. Ikea is constantly finding ways to lower prices for "the many people". Affordability is key when making their products. The Ikea designers always look at function and price before anything is done. In fact, their prices in the newest 2011 catalog have lowered.


Ikea mainly does applied research, which is attempting to develop new or improve products. As I mentioned in my previous blog post, Ikea has a List called the Never Ending List, where they have improvements on products or projects. The list already has seventy-seven improvements, with it's latest improvement in a project on supporting transport service providers to make the change from fossil fuels to alternative fuel sources.

Extra: Ikea's Sweden Heritage

Ever noticed Ikea's logo colors match that of Sweden's flag colors? Well it's no accident. Read here if you would like to know more about Ikea's Sweden Heritage.

Assignment: Clothing Labels and Origin

Today I wore:

1. H&M Cardigan - Made in Bangladesh
2. Arizona (Target) Top - Made in Vietnam
3. Forever21 Jeans - Made in China
4. Steve Madden Oxford Shoes - Made in China
5. Victoria's Secret Underwear - Made in China
6. Socks - Made in China
7. Tiffany's Ring - Made in China

Week Three: Ethics and Social Responsibility

"Making more from less."

For the last four years, as of 2010, Ikea was named one of the World's Most Ethical Companies by the Ethisphere Institute.  Ethics basically means the moral principles, or values, based on the ideas of right and wrong.  Some of Ikea's values are to be efficient, cost-conscience, respectful, have trust, and simplicity.

 "The Ikea business shall have an overall positive impact on people and the environment."

Ikea is big on helping the environment and green marketing, which is the development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment. From the LACK series to the solar powered SUNNAN Lamp, Ikea keeps thinking up ways to help the environment and efficiently use it's resources, in the smallest amount, to make the best products possible.  For example, Ikea's Never Ending List, which not only includes products, but projects that have to do with the world's resources Ikea uses, such as cotton and wood, and people around the world, including preventing child labor.

Ikea's tries to minimize its use of wood in its furniture, like using hollow legs in furniture and filling it with chipboard, and the same goes with cotton.  Ikea tries their best to find alternatives, or some other way of blending cotton with other materials to reduce cotton use.  Throughout their supply chain they try to promote efficent use of energy and water. 

One of Ikea's biggest partnerships, WWF (World Wildlife Fund) works with Ikea to promote responsible forestry, which began in 2002.  They also work together on efficent and renewable use of energy, and finding better cotton growing methods.  Another big partnership Ikea has is with UNICEF (United States Fund), since 1988.  Together they have a successful soft toy campaign, which follows a long time UNICEF program for children in the developing countries.

"A big blue bag. A little green step."

Another campaign from Ikea, alone, is it's Big Blue Bag.  On October 1st, 2008, Ikea stopped using plastic bags and came up with the Big Blue Bag, which holds as much as five plastic bags hold for only fifty-nine cents.  It's the easiest and least expensive way to reduce your carbon footprint that you can pick up during your visit to Ikea.

And lastly, Ikea's AS-IS Department, which offers you a lower price in exchange for your old product.  The AS-IS Department is located near the cash lines where you will see clearance items, overstocks, discontinued products, and display merchandise with discounts off the original prices.

Week Two: Ikea's Strategic Planning

Strategic Planning is the process in which the organization focuses on it's long-term goals and objectives, and then determining the best approach for achieving them.  Ikea's long-term goal is to be the leader in the home furnishings market.  In achieving this, Ikea offers quality, functional home furnishing products at a low price so that as many people as possible can afford them.  Ikea believes in having a good relationship with their suppliers so they are able to buy good quality, economically produced products that is purchased in bulk to keep the cost down.  Flat-packaging helps in keeping costs down as well by saving on shipping, labor, and assembly costs.  In the functional designs of their products, they like their products to be practical and easy to use.  There's is no use for unnecessary features because it only increases the product's cost.

In reference to the four P's:

Product: Home furnishings including children's rooms, lighting, textiles, storage, dinnerware and cookware.  Customized rooms and wardrobes are available online.  Also, products now for business areas with Ikea's Business.

Place: Stores located internationally in countries such as China, Japan, Canada, The United States, and Australia.  And all stores include a restaurant, or cafe, inside to provide a place to eat and relax while shopping.  Many Ikea stores are designed in a "one-way" layout which leads the customers though the store "the long natural way."  They can see what the store has to offer in its entirety and make note of the items they want to purchase.  Then the customer takes a shopping cart and goes to an "open shelf" warehouse, which usually shows textiles like art prints, or rugs.  Lastly, it leads into the furniture warehouse where they pick out their choice of items, they noted from before, in flat packaged form and make a payment.

Promotion: The Ikea catalog is the main marketing tool, which is free of charge.  Last year 198 million copies of the catalog were printed in 56 editions and 27 languages.  Also, you can get updates though email and request a catalog.

Pricing: Depending the product, it can go from less than a dollar to over three hundred dollars.


S.W.O.T. Analysis:

Strengths: Low Prices for good quality, Strong brand image, Internationally known brand, Environmently friendly and cost-effective products.

Weaknesses:  Low cost furniture may makes buyers think it's low quality as well, Self assemble furniture is not ideal for the elderly.

Opportunities: International expansion, Moving from international to global status through store openings in Asia and Eastern Europe, E-commerce.

Threats: Direct stores (furniture stores) and indirect stores (Target, Macys), other retail marketers are starting to imitate the low cost flat packaging furniture Ikea's known for.

Week One: Ikea's Brief History and Mission Statement

Ikea was founded by Ingvar Kamprad in 1943.  The name of the brand is actually short for Ingvar Kamprad's initials and the first letters of Elmtaryd and Agunnaryd, which is the farm and village where he grew up in Sweden.  He first started to sell pens, wallets, watches, picture frames, table runners, and jewelry at low prices, until, five years later, he introduced furniture into his business.  After seeing positive feedback, he expanded the line and produced the first Ikea catalog in 1951.  Ikea had it's first showroom in 1953, so that their customers can see and feel the quality of the furniture before they plan on buying it.  The showroom was also an example of what was the right choice when other companies were lowering prices as well.  In the end, Ikea was successful at this, and moved on to designing furniture for flat-pacts.  Flat-packing began when a worker of the company disassembled a table to fit inside of a car to avoid damage to the product.  Self-assembled furniture also stemmed from this action.  Finally, in 1958, the first Ikea store opened in Älmhult, Sweden, which was the largest furniture display in Scandinavia with 6,700 square feet of home furnishings.

 But, of course, Ikea wasn't done there.  After it's first in-store restaurant opens, and three decades worth of store openings around Europe, the United States, and Australia, the official Ikea website is launched in 1997.  Now, as of May 2010, Ikea has 313 stores in 37 different countries.  Ikea's mission statement is "to create a better everyday life for the many," which means they "offer a wide range of home furnishings with good design and function at prices so low that as many people as possible will be able to afford them.  Most of the time, beautifully designed home furnishings are usually created for the few who can afford them. From the beginning, IKEA has taken a different path. We have decided to side with the many. That means responding to the home furnishing needs of people around the world: people with many different needs, tastes, dreams, aspirations and wallet sizes; people who want to improve their homes and their everyday lives.  It's not difficult to manufacture expensive fine furniture: just spend the money and let the customers pay. To manufacture beautiful, durable furniture at low prices is not so easy - it requires a different approach. It is all about finding simple solutions and saving on every method, process or approach adopted - but not on ideas."  (ikea.com/ms/en_AA/about_ikea/the_ikea_way/our_business_idea/a_better_everyday_life.html)