MARK 1800 Marketing Essentials

Introduction:

Marketing is stated to be one of the important tools in the modern business organizations taking in the understanding of the market area, consumers’ demands, market strategies that are consumer driven along with offering quality among the customers. The business organizations have recognized the significance of the relationship of customers, trying to get an innovative advancement towards the strategy of marketing in business (Mandal 2017). The alertness related to the essentials of the market are too high in the present market situation across the globe.

IKEA has been known for its modern yet reasonable furniture with their founder, Kampard generating an inimitable culture that was formed on respect for an innovative attitude and money (Jobber and Ellis-Chadwick 2016).  It was Kampard’s belief and attitude that made IKEA come up with products that have been aesthetically premeditated valuing them at affordable rates. This aspect hugely improved IKEA’s brand image that was being perceived as a company having belief in social equality.

Task 1:

a) Key responsibilities and roles of functions of marketing:

The function of marketing can be stated as the role of the organizations of business which would help in identifying and sourcing of the probable successful products of the market along with helping in the promotional activities. These functions are stated to be common within the business organizations taking in the factors of market research, plan of products, process of development, sales and customer service. The function of marketing takes in several responsibilities of the organizations, such functions has been responsible for the growth of the company (Huang and Sarigöllü 2014). The functions of marketing takes in the strategy management, system of sales support, distribution system and human resource department. These functions of marketing have various roles in promoting expansion within the business organization. The marketing functions have an important role, establishing a closer association among the functions of marketing with other organizational functions.

Marketing plays an important role in promoting of the business along with mission of the organization. It generally serves as the face of one’s organization, synchronizing and generating all the materials that represent the business. It is the role of the marketing department in reaching out to the prospects, investors along with the customers and generating an overarching representation representing the company in a positive light (Armstrong, et al. 2015).

Depending on the company, the marketing Department might take in factors like defining and managing of one’s brand, constructing marketing and promotional materials, generating the internal communications, conducting of the market and consumer research along with administration of the outside vendors and agencies.

One of the vital roles of marketing is to know the exact position of the company as regards to the market along with the competition. This is the reason for marketing department to watch the competition from close quarter’s and understanding and learn from the mistakes for avoiding falling to them (Weinstein 2013). Around the marketing of the business there are many contributors like the designers, suppliers and consultants. The work of such contributors needs to be aligned with the company objectives and it is upto the marketing department for controlling the same.

The marketing also has the responsibility of surprising the customers, given the advanced offer where they are more demanding with the same. The department of marketing should work on fresh promotions, techniques of customer retention and developments in the version of the actions and messages (Pomering, Kyriazis and Johnson 2014). Moreover, it has been stated that even if the production or commercial department is doing an immaculate job, if the marketing department fails, the overall company would fail and the efforts put in by other departments would be in vain. This is why it is significant for the marketing department in ensuring that their actions united with the general objectives of the company and that they would be reporting the work they are performing (Janssen et al. 2013). It is significant on the part of the marketing department in knowing the users and mainly the feelings of the customers.

b) Marketing concept, inclusive of present and future trends, overview of marketing process:

The concepts of marketing are being segregated into five key concepts that depicts the core of marketing in IKEA. This notion of marketing takes in the present along with the future trends for a successful preparation of the marketing concept (Huang and Sarigöllü 2014). The concepts take in the factor of product, production, marketing, selling and societal respectively.

Product Concept:

The consumers have been relating and selecting the products that have enough value for their money, approach of innovativeness and quality. This perception derives the fact that the consumers can be maintained through the services and products that are valuable for consumers. IKEA has been stepping up its efforts for improving the products quality and streamlining the manufacturing costs.

Production Concept:

This concept is primarily based on the consumer’s perception depicting that the consumers are disposed towards the products that are available easily in good amount within the market at inexpensive prices. Thus the operational aptitude of the organization should be focusing on the augmentation of the rate of production. IKEA’s production concept is based on ‘Furniture for the Masses’.IKEA required having one operating model that has the ability in keeping their costs low- starting from the sourcing to the transportation and manufacturing to the selling of finished goods to customers.

Selling Concept:

The mindset of the contemporary consumers have been attracting through the promotions with the consumers intending to focus on the services and the products that are being aggressively promoted within the marketplace (Datta,Ailawadi and van Heerde 2017). IKEA has been taking in aggressive promotions that include sponsorship, newspaper along with magazine advertising. Though some of the television ads is being considered to be controversial while others have been pretty clean and plain.

Marketing Concept:

The concept of marketing takes into account the prerequisite of focus over the target consumers for their product delivery along with service. Moreover, as per Sarstedt,Neubert, and Barth (2017), for facing the competitive market, the business organizations would be requiring in delivering better value of services and products. The marketing concept takes into account the organization’s brand value requiring enhancement for connecting with the target consumers. IKEA makes use of the marketing concept. This company has been enabling the shoppers in co-designing and co-constructing the fresh concepts for customization of the living spaces. IKEA ahs also launched one of the mobile loyalty programs in building the consumers database who are interested in receiving the discounts from retailers.

Societal Marketing Concept:

This concept displays the key focus over the requirements of the target consumers for them to favor this brand over the other rivals existing in market. The social initiative of IKEA is in delighting their customers. IKEA is one of the furniture companies that simply desires in helping their customers improve their regular life. For IKEA it’s the customers who come first, helping millions of consumers with their everyday lives.

c) Key elements of functions of marketing and interrelation with other organizational functional units

Marketing functions have been enclosing various functions like finance, advertising, system of distribution, but these are the activities that come under the process of marketing. The important elements of marketing are:

a. Research:

In the market of business organization, research plays one of the important roles. It has been considered to be one of the most significant marketing functions, as without the successful research in market business is never possible. Research helps in getting important information related to all the factors that are concerned with the factors concerning the process of business. IKEA is in the business of doing market research on regular basis that is crucial for sound development of business. IKEA has been getting help from Opticom helping in asking IKEA’s existing customers along with the probable ones the correct questions for result analysis.

b. Strategy:

After the successful achievement of the research along with the procedures of strategy, the subsequent main function of marketing is the process of planning. The department of marketing takes in forecasting of the figure of sales, sales figure, distribution and other business factors. The planning department makes use of the detailed timeline in planning the key strategies for converting the goals of the organization into success. IKEA uses the stable reduction of the prices of the products as the strategic tools for the essence of growth. This approach has become a style which made the growth of IKEA desirable. The company has been seeking full knowledge of the cost of production

c. Planning:

After the successful achievement of the procedures of strategy, another important function of marketing is the process of planning. The department of marketing takes in financial planning, sales figure forecasting along with other distribution process. IKEA can benefit itself from an integrated marketing plan that needs to be bold and innovative. IKEA needs to strive more in creating better conditions for the employees of the suppliers.

Task 2:

Ways of using the marketing mix for attaining business objectives:

a. Comparison of function of marketing mix in the process of marketing planning in various organizations:

The marketing mix is being useful in the process of marketing planning for attaining of the goals of organization along with the objectives. The business organization makes use of the several methods for the relevance of the marketing mix among their companies. Generally, it is being based over the demographics of the market, company’s products and services, size of the market and that of the company (Tiwari 2015). Market mix is stated to be tool that helps the marketers in understanding the product. The general appliance of the marketing mix takes in 4P’s of marketing that involves product, price, place and promotion factors. This method was later unmitigated to the 7P’s of marketing with the factors being product, price, place, promotion, people, process and physical evidence.

IKEA is a big company that has been operating globally for years and its customer oriented efforts have been fruitful in evolving and making impression in the market it operates. Various other business organizations like Walmart, ILVA, Tesco and ASDA invests bigger sums of money into the process of marketing, promotion and advertisement, development and research though companies like ILVA and ASDA have not been able to get the same response as IKEA. The primary reason behind IKEA’s success has been its proper understanding of the market and the customer through the indispensable tools of marketing and structuring the goals of the organization and strategies with advancement of customer contentment. The application of the process of marketing mix within the process of marketing planning is being focusing on the dimensions of the product, place of advertising the product, structure of pricing and company’s promotional activities. The extended marketing mix utilizes the significance of the process of delivery, offering physical evidence to the consumers and focusing over the people.

b. Various tactics applied by companies in achieving business objectives:

The organizations of business with their various organizational ethnicities pertain the tactics in achieving their respective objectives of business. Companies like IKEA have been making use of the 7 P’s of their marketing mix in their process of marketing planning for achieving the objectives of the organization. IKEA believes in adopting the culture to their products, whereas, companies like TESCO have been adopting their product to the cultures. ASDA has been trying to transfer the concept of ‘fast fashion’ that has been witnessing spectacular reduction in the process of the furniture. The company that is generally being owned by US retail powerhouse Wal-Mart, increasing a direct confrontation with IKEA that have been dominating the living rooms in many countries like UK, Sweden. Denmark’s ILVA is another company that has for long being trying to outwit IKEA on the furniture front. The primary claim of ILVA has been they have been following the strategy of ‘attacking mediocrity’. It has been following IKEA fro close quarters with its mock-ups and displays showing the same style as IKEA.

Comparing IKEA with B&Q:

B&Q has been the biggest competitor of IKEA, both being the leading organization in the industry of home decoration. IKEA is in the habit of targeting younger generation of people as its main target, particularly those who have been in love with the modern accessories and furniture. B&Q is very different from IKEA and it is more specialized in one stop shopping, in which customers get more opportunities to buy decorations and accessories in their own perceived style. The customers also get an opportunity of buying raw materials from B&Q for making any sort of products, whereas for IKEA are products are mainly being displayed as models, limited and fixed.

Marketing Mix Comparison:

In case of product, both the companies, IKEA and B&Q are complementary to each other. They are in the business of providing full range of products along with the professional designs. However, the most important difference between the two companies is that IKEA has been selling only finished products whereas, as stated earlier B&Q offers raw materials as well.

In case of place, both these companies have been selling products mainly in their stores. Both these companies have opened stores in the areas that have bigger population. Furthermore, these two companies have their own websites to offer people the opportunity to shop online. On certain other occasions, one of the major differences is their mode of operations. The stores of IKEA have been classifying scientifically all the products for the consumers to swiftly and easily find the things they require (Steenkamp 2017). Contrast to that, the stores of B&Q is in the mode of ‘General Merchandise Store’.

In matters of price, both IKEA and B&Q have been setting them at reasonable rates along with being of appropriate nature. The products of B&Q are much lower than that of IKEA. However, IKEA consumers do not have to pay any sort of additional charges for support along with transportation, which is stated to be one of the attractive policies. In contrast, B&Q possess more valuable services like installation payment along with discounting measures.

For the factor of promotion, both the companies under discussion have been framing their own websites to sell off their commodities and provide their consumers the opportunity to experience the service of e-shopping (Gummesson, Kuusela and Närvänen 2014). B&Q is in the habit of frequently using the promotional assess that is discount whereas, IKEA generally advertises its products through the free catalogues. For the purpose of fulfilling their social duties, both B&Q and IKEA have been taking actions in making fruitful input to the society. These companies do differ in their measures of promotion though having the same purpose in generating more profit through revenue creation.

7P’s of IKEA:

1. Product:

The service products are at the core of the strategy of service marketing. It takes in the main product that meets the major needs along with the complementary elements along with value added services (Patil and Bach 2017).

While talking about IKEA, the main product is the well-designed functional home endowing products along with the ancillary services that can be recognized as follows. The service would be enhancing the service value offered by IKEA and would be assisting in supplying the core product in successful manner. For instance, the element order taking of IKEA has principally been the online and physical process of order taking. Customers get relevant information about IKEA through this websites. The most important thing is that is has explicit schedule for their orders, customers can arrange through seeing the agenda. It has been created as per the process of delivery of the geographical area (Pomering, Kyriazis and Johnson 2014).

The value chain of IKEA has been exceptional in the fact that its customers are also the suppliers and their suppliers are also customers. The dealings among IKEA and its suppliers along with the customer have an importance in adding stage to every policy. Variation in product takes place in the value-added facet. IKEA has been continuously altering with a change in the environment of business. The designs have always been new and fresh which has been the key point of product differentiation of IKEA. The key for IKEA has been in providing the business a broader collection of the administrations and items for satisfying their scrupulous aspirations and defeating the impediments of restricted classes (Starcevic 2013).

2. Price:

Under the present circumstances, the assessment piece of IKEA is a kind of non-sort because of its individual character and supervisory, as it has been into the monopolistic form of business. There are only a team of contenders with a greater part of the pie still showing eagerness in supporting it. Under such situations, much in the similar way as other organizations, IKEA furthermore has gripped the most suited methodology, which is of cutting the costs for stripping its esteem brand. In the meantime, it should never be overpriced for repulsing the strengths of the business sector. Comparatively, IKEA has been much constant and has pursued after the center way for assessing the administrators and this methodology has generated it to exactness. However, IKEA provides incredible products at cheaper rates even being at the helm for years, a primary reason for the customers to associate themselves with IKEA for a longer period of time. IKEA makes use of the bigger volumes and flat packaging for cutting the cost of its products.

3. Place:

IKEA has only been granting rights in becoming a franchisee within a marketplace where the rights have not been offered already, thereby sustaining inimitability. In their process of selection of the franchisees, IKEA evaluates certain following things:

1. Knowledge about the local market and existence (able to exhibit aptitude for establishing and operating stores of IKEA on national basis)
2. Experience
3. Corporate values
4. The financial strength of the company in carrying through the process of investment penetrating a country in whole.

IKEA has been one of those companies that is globally expanded. They have been able to expand their showrooms in North America, Australia, Europe and Asia. The stores of IKEA are generally being positioned in the regions of accommodation. This is one of the issues in the low pricing of IKEA. It might look as one of the weaknesses of IKEA; however this has been fitting well for the company as customers have been showing enough willingness in transporting their entity purchases along with trying fewer supports in caucus.

4. Promotion:

Promotion can be defined as the system for fixing the business of communication with the customer. This would be contributing to the substantiation that supports them in taking decision for purchasing of a product or service. The promotions of IKEA have been grounded on the conditions of selected marketing along with the cultural awareness of the country in which they have been operating. IKEA uses all forms of promotional strategies. However, based on its popularity and structure of pricing, the best promotions that have been bringing in results for the company are the trade promotions along with the sakes promotions (Patil and Bach 2017). Usage of the price discounts, coupons, promotions in festivals, and other marketing gimmicks, IKEA ensures that its customers need to get standard advantage from several deals provided by manufacturer of large scale.

IKEA makes use of ATL mediums like television, newspaper long with the digital media. IKEA’s print ads are stated to be smart and precise that has the ability in grabbing the attention of the customers. IKEA exists in number of countries for which they focus on localized communication in their methods of advertising so that they are able to connect well with the local customers. Over the years, IKEA has been a smart marketer with their product itself speaking volumes.

5. People:

People are stated to be the greatest assets of a company, whether they represent the human resources of the organization or the customers. The front line employees are stated to be the employees who are directly being involved with the customers. IKEA does boasts of talented sales people in its front line position who have been supporting the customers in selecting the best possible furniture products and also offering valuable information about the furniture product. The IKEA brand has been standing strong on the relationships it has built with its customers through the process of customer satisfaction. Helping and working with people has been central to the business philosophy of IKEA (Puligadda,DelVecchio and Gilbreath 2012). IKEA does make use of the eco-friendly solutions that would help in recycling, lessening the influence of the business on the people as well as the environment.

6. Physical Evidence:

Designing of the service escape and offering of tangible service evidence of the service executed acnes determines the physical evidence of the company (Pomering 2017). IKEA is existing on global basis that has number of rooms positioned across the globe. All these rooms have been striking providing environment that is friendly in nature, shaping the house in perfect manner. IKEA also helps in providing safest play areas to the children that is something unique. The company has also been using its own delivery vehicles for delivering the furniture to its customers.

7. Process:

The selling process of IKEA generally depends on the showrooms it has over the places. The furniture is being generally made by IKEA from its own wooden components. IKEA even boasts of its own sawmills. The customer is in the habit of driving to the store, selecting the products, ordering the same and then gathering it. This is mainly of the low pricing pledge that IKEA has for its customers.

Task 3:

Development and evaluation of a basic marketing plan:

SWOT of IKEA:

Strengths:

IKEA has been a global brand that has the ability in attracting important group of customers promising same quality globally. Its strength lies in its offering of wider range of well designed and functional products within affordable ranges.

Weaknesses:

IKEA had to identify its weaknesses for improving of the same along with managing them. This can play an important role in setting the objectives but also improving on new strategies. The scale and size of the global business of IKEA is challenging in standardizing the products. This generally represents a weaker relationship link within the supply chain of IKEA.

Opportunities:

A growing demand for products that are generally priced low and greener in nature. Trends within the present financial environment might result in the consumers trading down for the exclusive stores. IKEA also helps in trimming down of usage of energy, using renewable resources and cutting down on its air transport.

Threats:

If any organization is aware of the probable external threats it might plan in counteracting them. Through generating of the fresh ideas, IKEA can make use of the particular potency against the existing threats in the market.

PESTLE Analysis:

Political:

IKEA can be one of those best examples of a firm that has been successful within both the global and Scandinavian markets. Sweden’s stable political environment along with the environment eases the market condition of many.

Economical:

Global recession has been one of the biggest issues that are being faced by the multinational companies across the globe. IKEA’s timely entrance into the Indian and Chinese market that was least affected by the factor of global recession.

Social:

IKEA contributed into the society as they offer opportunities in people along with the employees are generally entitled to various advantages along with incentives like pensio0ns and insurance. Adding to that is the fact that the company promises in offering elevated quality furniture sticking to the real concept.

IKEA has been building online in guiding customers to a life that is more sustainable, supporting the customers with probable suggestions on its website in reducing the environmental impact. This factor would also save them enough money.

Technological:

IKEA have been using quality technology along with systems in promoting shorter queues along with proper scheduling and patterns of trading and staffing. It aims in being more dynamic and establishing the preferences of employees.

Legal:

IKEA has been a global business signifying the fact that it is being affected by many legislations and laws in various countries. These pretenses a threat, where IKEA would be incapable of controlling the standards within certain jurisdictions where its products are being sold

Environment:

IKEA since its foundation has been sensitive to the environment leading to a better usage of both the raw materials along with energy, keeping the cost factor down and assisting the company in reaching its green targets.

Competitive Analysis of IKEA:

IKEA has been operating within an industry and environment that is highly competitive that is generally been defined by good quality manufacturers of furniture, low-priced like Argos and Euromarket Designs Inc. Given the magnetism of the ‘Do-it-Yourslef’ industry of furniture, IKEA ahs continued in competing and expanding in markets like Japan and China. Nevertheless, global recession had been affecting the furniture industry, one of the hardest hit sectors than the rest. Resulting to this, Dreams, a premium-priced manufacturer of furniture has been augmenting its share of market against IKEA brand, thus spicing up the competition. However, taking in the fact that furniture has now been a low spending priority as per behavior of consumers affected by recession, competitive rivalry would lessen.

Recommendations:

IKEA requires focusing on the wants of the consumers instead of basically focusing on the lowering costs through setting of the tags of prices and designing of the furniture. While operating in US, IKEA faced several issues as it was not aware of the preferences of American buyers. To avoid all these it is important for IKEA to understand the real needs of the employees.

IKEA boasts of a product strategy for having competitive advantage within the market. IKEA ahs the opportunity in becoming more customer focused organization in certain nations. This might assist the company in coming with more attention along with innovative products resulting in higher competitive benefit.

IKEA could also go green and promote certain programs like tree plantation, saving thye environment or other relevant CSR activities. Such kind of activities would certainly be a good initiative for a furniture company like IKEA towards making planet Earth a better living place.

As IKEA has been using a strategy of low cost they might extend their strategy for marketing. IKEA’s main target market is the average middle class families for whom the company can go for drawing paint or graffiti on public transportations or subways, capturing the attention of those availing that transportation.

Conclusion:

It can be concluded that IKEA, the Swedish company has been playing it safer in going about its business. It faces stiffer competition from many other big companies across the globe but its well thought strategies are keeping it afloat in the industry. The 7 marketing Ps of IKEA have been discussed along with comparing its strategies with that of B&Q. Comparing both the companies gave a scenario where it provided a clear picture of the way things have been panning out within the industry of home furniture. Like any company, IKEA too faces certain issues though it has the capability in making things better and reaching newer heights.

Reference:

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Datta, H., Ailawadi, K.L. and van Heerde, H.J., 2017. How Well Does Consumer-Based Brand Equity Align with Sales-Based Brand Equity and Marketing-Mix Response?. Journal of Marketing, 81(3), pp.1-20.

Donato, R. and Edwards, J., 2014. Marketing concept comprehension and recall through imagery: The case of international students.

Gordon, R. 2012. Re-thinking and re-tooling the social marketing mix. Australasian Marketing Journal (AMJ), 20(2), pp.122-126.

Gummesson, E., Kuusela, H. and Närvänen, E., 2014. Reinventing marketing strategy by recasting supplier/customer roles. Journal of Service Management, 25(2), pp.228-240.

Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.

Janssen, M.M., Mathijssen, J.J., van Bon–Martens, M.J., Van Oers, H.A. and Garretsen, H.F., 2013. Effectiveness of alcohol prevention interventions based on the principles of social marketing: a systematic review. Substance abuse treatment, prevention, and policy, 8(1), p.18.

Jobber, D. and Ellis-Chadwick, F., 2016. Principles and Practice of Marketing. McGraw-Hill Education.

Kim, S. and Kim, J. 2016. Overseas Strategy of Global Furniture Retailer : The Case of ‘IKEA?Korea’. INTERNATIONAL BUSINESS REVIEW, 20(1), p.199.

Mandal, P., 2017. Customer databases and database marketing: roles in relationship marketing. International Journal of Business Forecasting and Marketing Intelligence, 3(3), p.327.

Nufer, G., 2015. Creating an image transfer through event marketing: principles, requirements and consequences. European Journal of Business and Social Sciences, 3(12), pp.01-18.

Patil, D.D. and Bach, C., 2017. Marketing-Mix For Strategy Building. Marketing, 4(4).

Plewa, C., Conduit, J. and Quester, P.G., 2016. Making a Difference Through Marketing. Springer Verlag.

Pomering, A., 2017. Marketing for sustainability: Extending the conceptualisation of the marketing mix to drive value for individuals and society at large. Australasian Marketing Journal (AMJ).

Pomering, A.A., Kyriazis, E. and Johnson, L.W., 2014. Building sustainability into services marketing: expanding decision-making from a mix to a matrix.

Puligadda, S., DelVecchio, D. and Gilbreath, B. 2012. ‘Meaningful marketing’: A process investigation of how consumers reward noninterruptive, nonpersuasive marketing communication. Journal of Marketing Communications, 20(5), pp.325-338.

Saliya, C. 2017. The Seven Phases (7Ps) of Social Research Design. SSRN Electronic Journal.

Sarstedt, M.,Neubert, D. and Barth, K. 2017. The IKEA Effect.A Conceptual Replication. Journal of Marketing Behavior, 2(4), pp.307-312.

Sheth, J.N. and Sisodia, R.S., 2015. Does marketing need reform?: Fresh perspectives on the future. Routledge.

Starcevic, S. 2013. Research of brand personality concept in marketing. Marketing, 44(2), pp.149-172.

Steenkamp, J.B., 2017. Global Marketing Mix Decisions: Global Integration, Not Standardization. In Global Brand Strategy (pp. 75-109). Palgrave Macmillan UK.

Tiwari, S., 2015. Standardized marketing strategies: a solution to the global competition? A case study of IKEA in Norway, Sweden, France and China(Master's thesis, Universitetet i Nordland).

Weinstein, A., 2013. Handbook of Niche Marketing: Principles and Practice. Routledge.