IKEA in China

Ulf Johansson, sa Thelander (2009), A Standardised Approach to the World? IKEA

in China, International Journal of Quality and Services, Vol. 1 Iss:2 pp. 199-219

GROUP 2:
M. Anton Eka Sakti
Metta Yunita
Mohamad Taufan Nugroho
Muh. Ali Umar Ismail
Niken Ayu Mardliyah

Introduction

Anders Dahlvig (2004), the

CEO of IKEA, had once said,
"Whether we are in China,
Russia, Manhattan, or
London, people buy the
same things. We don't
adapt to local markets"
IKEA marketing strategy in China

Standardization vs

Conceptual Framework
Globalization

Standardisation and adaptation

[]the offering of identical product lines

at identical prices through identical
distribution systems, supported by
identical promotional programs in several
different countries (Buzzel, 1968, p.103)

Marketing strategies 4Ps (product, price,

place, promotion)

International Retailer
Marketing Strategies
Standardisation of Global Retailer
Salmon and Tordjman, 1989 article
IKEA have centralized management but
adjusted marketing (in dimensions like
assortment, pricing and promotion

Levitt, 1983 driving forces of

globalization :
1. Technology
2. Converging consumer demand
De Mooij, 2004 : that consumer
behaviour is diverging rather than
converging and that companies adapt
their marketing strategies to national
tastes and preferences.
Conceptualization
marketing activities
by retailers
Marketing mix 4Ps; Aspects :
1. Merchandise (attractive assortment of
products, pricing
2. Location (establishing outlets&store) ,
3. Store formats&(general set up of
store;ie levels, placing
departments;layout),
4. Advertising
(print/outdoor;media&content message
for promotion,

IKEAs General Marketing Strategy

IKEAs business mission:
IKEA offers wide range of well designed,
functional home furnising products at prices so
low that as many people as possible can afford
them

Local

Ad
ve
rti
si
ng
IKEA
Familiy

IKEA guiding
principle is to work
in the same way in
every country within
which it operates

To keep price low

and attractive

To create the same

image everywhere

Target: Many People (age, sex, social

class or income)
Act as IKEA loyalty programme
Consist of loyalty card, a magazine with several issues, and spesial
assortement of product in the store

Core of the marketing strategy instrument of IKEA

Global

The Catalog

Standardized layout with same product and same overall information

Advertising is produced in house while some is produced locally

Adjust message and offers to fit local states and local competition

Store format are standardized

The Store

Layout of the store & different department are the same

Selling environment is designed to encourage interaction with cust

Service level staffing also to be the same around the worl

Merchandise supposes to be the same all over the world

Product and Product Range

Product brands are same everywhere

Price is relative and compared to the market in the country

IKEA in China
Entered China in 1998.
Standardization & adaptation applied because China is
fairly different with other countries where IKEA is running.

SEGMENTING
Higher-middle
income people

TARGETING

Females
25-35
Little Emperor
Generation
Well educated
Live in big cities

POSITIONING
Fairly exclusive
western retailer
which also
provide home
designing.
Its store for the
higher-middle
class.

Merchandise

Everything sold in IKEA China is

under private brand IKEA.

All products have Swedish name.
Some products are initiated in
China, such as chopsticks, wok
with lid, and cleaver.
Product price is lower (some said
half of the products are made in
China)
IKEAs products are subject to
copying. Thus, IKEA have to
provide something more than just
affordable furniture. Thus IKEA
also provide home decorating
service which is hard to copy.

IKEA positioned itself as

company with unique
competence in relation to
interior design.

Location & Store Format

China consumers do not

have access to private cars
as European and USA
consumers do.
IKEA stores are located in
city centre.
Customize store format at
IKEA Beijing store.

Advertising & Promotion

Catalogue is only distributed
in the store and in some of
the primary market areas.
Rely on smaller brochures.
Using Chinese Twist theme
campaign and softer line.
Public Relation (PR) activity.

Selling Environment & Service Levels

In China, IKEA tries to implement a staff strategy that
makes everybody co-workers rather than traditional
employees.
What IKEA tries to do is to build the room settings not like
in the USA, not like in the UK or Sweden but in a way that
feels relevant to Chinese customers, with sizes of rooms
and kitchens that are realistic by Chinese standards.
The aim is to make the store in Shanghai look very
different from the one in Malmo by using the set-up of
the rooms.

Selling Environment & Service Levels

Conclusion
There are limits to how far a
business can go in
standardization. It may also
show that a high level of
standardization is possible on
markets similar to the
domestic one but in markets
with different conditions, even
standardized concepts must be
changed in order to be
attractive.
The IKEA concept is a
standardized one but the
strategies and the marketing
activities to realize the

Thank You