Market positioning
From its early days, IKEA has decided to stand with the "majority" of home furnishing consumers. This means that IKEA caters to people with many different needs, tastes, dreams, aspirations and financial means who want to improve their homes and create a better everyday life. In response to this market positioning, IKEA's products are positioned as "low-price, exquisite, and durable" home furnishings.
In developed countries such as Europe and the United States, IKEA positions itself as a home furnishings provider for the public. Because of its high quality, low price, new style and good service, it is welcomed by the majority of low- and middle-income families.
But after arriving in China, the market positioning has been adjusted to a certain extent, because: although the Chinese market is broad, the general consumption level is low, the competition among the original low-price furniture manufacturers is fierce and close to saturation, and the foreign players in the market High-priced furniture is rarely in demand. So IKEA turned its attention to the relatively wealthy classes in big cities. IKEA's market positioning in China is "white-collar workers who want to buy high-end goods but cannot afford high prices." This kind of positioning is very clever and accurate, and has achieved relatively good results for the following reasons:
As a global brand, IKEA satisfies the psychology of Chinese white-collar workers;
Every corner of the IKEA store Both the furniture and business philosophy are full of foreign cultures;
IKEA furniture has the characteristics of customers assembling it by themselves, free large promotional publications, and free purchase.
The above has attracted the attention of many intellectuals and white-collar workers. Coupled with the excellent product quality, IKEA has not only attracted more new customers, but also stabilized its fixed group of repeat customers
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IKEA's product positioning and brand promotion are so successful in China that many Chinese white-collar workers regard "eating McDonald's, drinking Starbucks coffee, and using IKEA furniture" as a fashion.
In 1997, IKEA began to give prominence to children's needs for household items, because children also have a great demand for household items, and competition in this field is not fierce. In order to design products more suitable for children's needs, IKEA collaborated with two teams of experts to develop products. Child psychologists and professors of children's games help IKEA design and develop products aimed at cultivating children's motor skills and creativity. At the same time, IKEA uses children to help them select winning products.
In the IKEA showroom, a children's play area, a children's model room, and children's food are specially prepared in the restaurant, all of which are loved by children and make them more willing to patronize IKEA.
Unique style
The products sold by IKEA are all independently designed by IKEA, and the product style is unique. IKEA emphasizes the unique style of its products as "simple, natural, fresh and well-designed".
IKEA originated from the Nordic Sweden (forest country), and its product style of "simple, fresh and natural" also adheres to the Nordic style. Nature and home both occupy an important position in people's lives. In fact, Swedish home style is a perfect representation of nature: full of sunshine and freshness, yet unpretentious at the same time.
The style of IKEA home furnishings is the condensed history of Swedish home design culture, and Swedish home design culture has a long history: at the end of the 19th century, artists Carl and Karin Larsson combined classical style with Swedish folk style. They created A model of Swedish home design that has been passed down to this day; in the 1950s, modernism and pragmatism styles developed in Sweden. Today, what we see on IKEA products are: modern but not fashionable, practical but novel, people-oriented, and embodying the ancient tradition of Swedish home furnishings in many aspects.
Go into the IKEA store and taste it carefully. IKEA’s home products, whether they are individual products or displayed as a whole, are simple, natural and ingenious, from Robin beds, Bisk tables to Banger cups. Tools are both well-designed and beautiful and practical. Compared with household products from other manufacturers, the impression given by IKEA is that IKEA is a collection of many of the above-mentioned advantages, and the combination of the above-mentioned advantages is IKEA! And this style of IKEA can indeed touch the hearts of most consumers and arouse people's desire to buy.
This style of IKEA runs through the entire process of product design, production, display and sales.
In order to implement this style and hope that its own brand and its own patented products can eventually cover the world, IKEA has always insisted on designing all products by itself and owning its patents. Every year, more than 100 designers work crazily day and night to ensure that " All products, all patents."
In addition, IKEA’s simple and natural product style also helps form another advantage of IKEA, which is low price, which we analyze in IKEA’s price strategy.
Exquisite and durable
IKEA has always emphasized that its products are exquisitely designed, practical and durable.
Of course, it is not difficult to simply design beautifully, but it is very difficult to achieve exquisiteness, practicality, and high quality at a low price.
IKEA has a large number of excellent designers to ensure the design of IKEA household products. Not only are they experienced and able to work closely with experienced manufacturers to find ways to make the most of raw materials, but they also know how to produce low-cost furniture while still maintaining original design creativity.
IKEA's designs are original and practical. For example, IKEA's "Four Seasons Quilt" is three quilts in one. The first layer is a cool and comfortable summer quilt, and the first layer is a medium-warm spring and autumn quilt. You can also put two layers together and that's a warm winter quilt. This design from IKEA is indeed unique: before seeing this design from IKEA, who would have thought that it could be designed to match a quilt like this?
Another example is the MTP bookcase. This bookcase was designed by IKEA consultant and designer Marian Grabinski in 1963. This bookcase style is both modern and classic, beautiful and practical, and has brought huge profits to IKEA. It can be called a model of IKEA design and has attracted many manufacturers over the years. imitate.
The durability of IKEA household products is also a major feature: for example, sofas can be squeezed hundreds of thousands of times, cabinet doors can be opened and closed continuously for decades, etc.
Of course, making products exquisite and durable requires efforts in many aspects, from product design to material selection to process flow, etc., but IKEA has indeed done it.
Wide range
IKEA has a wide range of products, and IKEA has more than 10,000 products for customers to choose from. Basically, customers with any taste can buy home products they need for their home at IKEA.
The "wide range" of IKEA's product range has the following meanings:
First of all, it is a wide range of functions. Customers no longer need to travel to different specialty stores to purchase homewares. You can find everything from living room furniture, toys, frying pans to cutlery, cutlery, and office furniture to green plants at IKEA. In a word - you can find all practical household items at IKEA, and customers don't have to search between various home furnishing stores. Running west.
Secondly, there is a wide range of styles. People with different tastes can find what they love here. But IKEA's products are not all-encompassing. IKEA does not have products that are too extreme or exaggerated. IKEA provides products needed to create a comfortable home environment.
Also, with proper coordination, a wide range of functionality and style can be achieved simultaneously. No matter which style the customer prefers, there will be an armchair to match the bookcase, a bookcase to match the new folding table, and a new folding table to match the armchair. Therefore, IKEA's "wide range" has many meanings. IKEA's business philosophy is to "provide a wide variety of household products that are beautiful, practical, and affordable for ordinary people." This determines that IKEA must maintain low prices on the basis of pursuing beautiful and practical products. In fact, IKEA does the same: IKEA has always emphasized the low price strategy.
So how does IKEA achieve its low price strategy while maintaining "beautiful and practical, with a wide variety"? In fact, the low price strategy runs through the entire process from product design to (styling, material selection, etc.), OEM selection/management, logistics design, and store management:
The idea of ??low price runs through product design.
IKEA's low price strategy runs through product design. IKEA's R&D system is very unique, able to combine low cost with high efficiency.
1. IKEA’s low-cost design concept and modular design method
IKEA’s design concept is “for products with the same price, compare whose design cost is lower”, so the designer In design, competition often focuses on whether to use one less screw or whether to use an iron rod more economically. This not only has the benefit of reducing costs, but also often produces outstanding ideas.
IKEA invented the "modular" furniture design method (IKEA's furniture is all disassembled and assembled, and the products are divided into different modules and designed in blocks. Different modules can be produced in different regions according to cost; at the same time , some modules can also be used universally between different furniture), which not only reduces the cost of design, but also reduces the total cost of the product.
Determine the cost first and then design the product
There is a saying at IKEA: "The first thing we design is the price tag." That is to say, before the designer designs the product, IKEA has already set a relatively low sales price and cost for the product, and then does everything possible to make it beautiful and practical within this cost. For example: Product developer Pia Eldin Lindsten, the designer of the Banger cup, received the task of designing a new type of cup in 1996. She was also told how much the cup should sell for in a store. As far as Banger mugs go, the price has to be astonishingly low – only 5 SEK. In other words, before designing, IKEA determined that the price of this cup must be able to truly defeat all competitors.
Attach importance to teamwork in the product design process
It is difficult for designers alone to complete difficult and exquisite designs, select materials, and estimate manufacturers within a set very low price. production costs. Behind the designer is a research and development team, which includes designers, product developers, purchasing personnel, etc. These people work closely together to arrive at the optimal solution for various performance variables within a determined cost range. Together they discuss product design, materials used, and select appropriate suppliers. Everyone plays a role in the process with their own expertise - for example, the role of purchasing staff: they have good connections with suppliers around the world and, therefore, have a better understanding of which suppliers can At the right time, at the right price, and guaranteed to be of the highest quality.
Be able to consider everything in order to save costs
Design is a key link, which directly affects the material selection, technology, storage and transportation of the product, and has a great impact on the price. Therefore, IKEA's design team must fully consider all aspects of the product from production to sales.
Let’s take Banger cup design as an example: In order to produce a cup that meets the requirements at a low price, designer Pia and her colleagues must fully consider factors such as material, color and design, such as:
The color of the cup is selected as green, blue, yellow or white because these colors are lower in cost compared to colors of other colors (such as red);
In order to facilitate storage and transportation, In order to reduce costs in production and other aspects, designer Pia finally designed the Banger cup into a special cone shape, because this shape allows the Banger cup to pass through the machine in the shortest possible time, thus achieving the cost-saving effect;
The size of Banger cups allows the manufacturer to put the maximum number of cups in the oven at one time, which saves production time and costs;
IKEA’s focus on costs The pursuit is endless - IKEA later redesigned the Banger cup. Compared with the original cup, the height of the new cup is smaller, and the shape of the cup handle has also been improved, allowing it to be stacked more effectively. , thus saving the space occupied by cups in transportation, warehousing, shopping mall display and cupboards at customers’ homes – in a word: further reducing costs.
IKEA continues to innovate to reduce costs
IKEA continues to use new materials and new technologies to improve product performance and reduce prices. Take the Ogra chair as an example -
In the eyes of IKEA, the Ogra (chair) is an almost perfect chair: very beautiful, strong, light weight and very practical.
At first, the Ogla chair was produced from wood. As the market changed, its price became too high, so flat packaging was used to reduce costs. When flat packaging could not meet the low-cost requirements, IKEA designers used composite plastic to replace wood; later , in order to further reduce costs, IKEA introduced a new technology into the furniture industry - by injecting gas into composite plastics, it saves material and reduces weight, and can produce products faster (and can flat-pack products).
From the Ogla chair, you can see IKEA's efforts in cost.
Another well-known example of innovation is the Chubis storage unit: Production of the Chubis storage unit began in 1994. It was one of the first IKEA products to be manufactured using frame panels. IKEA used a technology used to produce doors to make Chubis stronger, lighter and cheaper. The designers were inspired to design the Chubis storage unit by manufacturers who used frame panels to make doors.
In order to reduce costs, we work closely with OEM manufacturers
The full cooperation with OEM manufacturers is reflected in two aspects: one is in the product design process; the other is in product production.
During the product development and design process, the design team works closely with suppliers. With the help of manufacturers, IKEA may be able to find cheaper alternative materials, shapes and sizes that are easier to reduce costs. As far as the Banger cup is concerned, the designer redesigned its shape and size under the advice of the OEM manufacturer, which can make better use of space during the firing process, make production more rational, and reduce certain costs.
After the product design is completed, in order to persuade the OEM manufacturers to invest in the necessary equipment, IKEA promises them a certain number of orders. In this way, manufacturers are willing to purchase equipment to produce IKEA products. In the case of IKEA, investment is saved.
Of course, there are times when you run into trouble. A few years ago, IKEA had to recall and order to stop production of a children's toy - the eyes were in danger of falling off, which was detrimental to children's safety. However, the suspension of production brought another problem: this toy was produced in a factory in India. The factory had 600 employees. For a time, 600 workers were without work. In order to maintain this cooperative relationship with customers and fulfill its commitments, IKEA sent a designer Anna to the factory to check the situation and see what solutions could be found.
Anna looked at the factory and the materials used. She worked with suppliers to develop a new range of products. Two weeks later, she returned to Sweden with the Famni (cushion), a beautiful cushion with arms that was an instant hit with IKEA and its customers.
Famuni cushions were a huge success. What's more worth mentioning is that customer demand for this product is so great that the original 600 employees of the production plant were not enough. Later, the factory recruited many new employees.
IKEA's responsible attitude makes suppliers willing to cooperate with it, allowing IKEA's product strategy of "high quality and low price" to be successfully implemented.
4. IKEA cooperates with customers to create low prices
IKEA regards customers as partners: customers browse product catalogs, visit IKEA stores of their choice, select furniture and store it in their own warehouses Pick up the goods. Since most items are packed flat, customers can easily transport them home and assemble them independently. In this way, customers save part of the cost (picking up, assembly, transportation) and enjoy low prices; IKEA saves costs and maintains the low price advantage of its products.
5. IKEA’s global production management and logistics system is conducive to reducing costs
In terms of product costs, IKEA not only cooperates with OEM suppliers, but also encourages cooperation among suppliers. Competition, IKEA also tends to award orders to manufacturers with lower overall prices - IKEA considers the lowest overall cost when selecting suppliers for its products. That is, the cost of delivering products to each central warehouse is calculated as a benchmark, and then suppliers are selected based on the potential sales volume of each sales area, while taking into account other factors such as quality and production capacity.
In order to further reduce prices, IKEA has adjusted its production layout globally - IKEA has nearly 2,000 suppliers around the world (including IKEA's own factories), and suppliers sell various products from all over the world. The products are shipped from various places to IKEA's central warehouses around the world, and then transported from the central warehouses to various shopping malls for sale.
As the sales of different products in various places continue to change, IKEA continues to adjust the distribution of its production orders around the world. For example:
IKEA's central warehouse in the Asia-Pacific region is located in Malaysia. All products destined for Chinese malls must first be shipped to Malaysia. This procurement method reduces IKEA's overall costs. But for China, the cost is relatively high, especially for larger goods such as furniture. The freight will account for 30% of the entire cost, which directly affects the final pricing.
As the proportion of the Asian market, especially the Chinese market, continues to expand, IKEA is producing more and more products or part of its products in Asia, which will greatly reduce freight costs. influence. IKEA is implementing a retail selection plan, in which several varieties are selected by Chinese stores, produced by Chinese suppliers, and then shipped directly to stores. This plan proved to be very successful.
For example, Nick folding chairs were originally produced in Thailand, shipped to Malaysia and then transferred to China. The purchase price is equivalent to RMB 34 per handful, but after arriving in China, the cost has reached RMB 66 per handful. Coupled with the operating costs of the mall, the final price is 99 yuan a piece. Annual sales are just over 10,000 pieces per year. After the implementation of this plan, the purchase price in China was RMB 30 a handful, the cost of delivery to the store increased to RMB 34 a handful, and the retail price in the mall was set at RMB 59 a handful, which is RMB 40 lower than before. The annual sales volume Soared to 120,000.
6. Flat packaging strategy reduces costs
In terms of storage and transportation, IKEA uses flat packaging to reduce the damage rate of furniture during storage and transportation and the space occupied in the warehouse; more importantly , flat packaging greatly reduces the transportation cost of products, making it possible to conduct large-scale production layout around the world. It is said that the inspiration for flat packaging came from an early IKEA employee who suddenly decided to remove the table legs so that it could be loaded into a car and avoid damage during transportation. Since then, IKEA has begun to consider flat packaging issues when designing. Flat packaging further reduces the price of the product. At the same time, IKEA has also begun to form a working model, which is to "turn problems into opportunities."
Of course, it is also flat packaging. During the product design process, IKEA designers still have to consider how to design the product to minimize production, storage and transportation costs.
3. Unique style of “store display” channel strategy (Place)
1. Set up own store control channels
IKEA’s channel strategy is independent in the world Stores are opened in various places to sell products designed and produced by IKEA directly, facing consumers directly and controlling the terminal sales channels of the products. IKEA has more than 180 chain stores around the world, distributed in more than 40 countries.
2. Successfully made the IKEA store a symbol of lifestyle
IKEA is a furniture store brand as well as a furniture brand. Through a series of operations, IKEA stores are no longer just a place to buy home furnishings in people's eyes. They represent a way of life. So when you see fashion-conscious young people carrying shopping bags with the IKEA logo on them, they look very happy. You won't be surprised to walk out of the IKEA store in high spirits - many domestic merchants have tried to do this, but they have not been successful. We believe that IKEA's success lies not only in its integration of business flows and logistics, but also in the core concept it uses to integrate business flows and logistics - lifestyle. As we said before: In people's minds, using IKEA has become a symbol of lifestyle like eating McDonald's or drinking Starbucks coffee.
4. Promotion Strategy (Promotion)
Marketing Strategy of Catalog Display
Catalog display is an important part of IKEA’s promotion strategy, which greatly promotes IKEA’s products. Sale. In 1951, IKEA published its first catalog. Since then, every year in early September, at the beginning of its new fiscal year, IKEA will distribute a beautifully produced catalog to consumers for free.
IKEA has 8 stores in mainland China: Beijing, Shanghai, Chengdu, Guangzhou, Nanjing, Shenzhen, Dalian, and Shenyang. The new Shenyang store opened on May 20, 2010, and Shenyang The store is currently the largest IKEA store in Asia. 1. Unlike the general home furnishing market, IKEA allows consumers to deeply understand the pros and cons of a product through experience. Various furniture such as sofas can be tried out in the store.
In IKEA, we have decorated various model rooms with reasonable designs, which have won unanimous praise from consumers. If the item is not damaged, it can be returned or exchanged unconditionally within 60 days (180 days if you apply for a free IKEA membership). Fabric cutting and local delivery services are also provided. The mall is reasonably designed, combining eating and shopping, and is equipped with a furniture pick-up area, which is fast and convenient to meet the needs of consumers.
2. With the explosive development of virtual reality, more and more VR games have entered the players’ field of vision. Recently, IKEA has also jumped on the trend and launched a VR kitchen game - "IKEA VR Experience". Through this VR game, players are placed in an IKEA-style modern kitchen, and all items in the kitchen can be operated. , such as opening drawers, taking out pots and pans, etc. If you are not satisfied with the decoration style of the kitchen, you can also choose various materials by yourself. For those naughty kids who like to make trouble in the kitchen, this game also provides a child's perspective, allowing you to experience the entire kitchen from a child's perspective.