IKEA was founded in lmhult, Sweden, in 1943 by Ingvar Kamprad. The company name is a composite
Question:
IKEA was founded in Älmhult, Sweden, in 1943 by Ingvar Kamprad. The company name is a composite of the first letters in his name, in addition to the first letters of the names of the property and the village in which he grew up: Ingvar Kamprad Elmtaryd Agunnaryd.
The philosophy behind IKEA is to provide well-designed, but practical, home furnishings at a price that’s affordable to the masses. In the late 1940s, the first IKEA advertisements appeared in local newspapers. Demand for IKEA products soared, and Ingvar Kamprad quickly outgrew his ability to make individual sales calls. As a result, he began operating a mail order catalogue and distributed his products via the county milk van.
This resourceful solution to a difficult problem led to the annual IKEA catalogue.
First published in Swedish in 1951, the IKEA catalogue was in 2018 published in 72 region-specific editions, in 30 languages for 50 countries, and is considered to be the main marketing tool of the retail giant. In terms of publishing quantity, the catalogue has surpassed the Bible as the world’s most published work – at an estimated 200 million copies (in 2018) worldwide – triple that of its less materialistic counterpart. However, since the catalogue is free of charge, the Bible continues to be the most purchased non-fiction work.
Prices in the catalogue are guaranteed not to increase while the catalogue is valid. Most of the catalogue is produced by IKEA Catalogue Services AB in IKEA’s home town of Älmhult, Sweden. The total costs of producing, printing and distributing the 200 million copies of the catalogue takes up nearly 70 per cent of IKEA’s annual marketing budget. In 2018 the catalogue attracted 950 million visits to IKEA stores around the world and 2.5 billion IKEA web visits.
At the beginning of 2011, there were 422 IKEA stores in 50 countries operating under a franchise
from Inter IKEA Systems Bv. Total IKEA turnover in 2018 was €39 billion. The number of IKEA co-workers in 2018 (around the world) was 200,000.
IKEA accounts for just 5 to 10 per cent of the furniture market in each country in which it operates.
More important is that the awareness of the IKEA brand is much bigger than the size of the company.
That is because IKEA is far more than a furniture merchant.
It sells a Scandinavian lifestyle that customers around the world embrace.
In May 2017, IKEA introduced an online shopping interactive catalogue, with a shopping virtual-assistant concept.
Cultural difference
There are about 13,000 products in the total IKEA product range. Each store carries a selection of these 13,000 products depending on store size. The core range is the same worldwide but, as shown, there are differences in how the IKEA catalogue displays its products in the different national editions. Below are two different illustrations featuring the same product.
In this case the two illustrations for the same product are taken from the • Danish and the Chinese catalogues.
• Swedish and the Saudi Arabian catalogues
Questions
1. Discuss the advantages and disadvantages of having the same product range shown in all IKEA catalogues around the world.
2. The catalogue is the most important element in IKEA’s global marketing planning. Discuss whether there could be some cultural differences in the effectiveness of the catalogue as a marketing tool.
3. Explain some cultural differences which are illustrated by the two sets of different illustrations of the same product.
Step by Step Answer:
1 Advantages of having the same product range in all IKEA catalogues Uniform Brand Image Consistency in product range helps in maintaining a uniform brand image across all markets Customers worldwide ...View the full answer
