TABLE OF CONTENT

About IKEA - kanak

India Market Overview - kanak
PEST Analysis - kanak
SWOT kanak/Abhishek
Competition Mapping - Sakshi
Available Competition - Sakshi
IKEAs Strength for India Market - sakshi
Distribution Strategy - Abhishek
Marketing Strategy - Abhishek
Target and Segmentation - Abhishek
Positioning and Brand Personality - Abhishek
Launch Plan x-30,x,x+30 Abhishek/ Pankaj
Pricing Strategy - sakshi

MARKET OVERVIEW
Indian Retail Market:
The Indian retail market stood at USD 396 billion in 2011-12 and is likely to grow further at 12% to
increase to USD 574 billion by 2015
The market is highly fragmented where around Eighty-five to Ninety per cent of national production
comes from regionally small size firms falls into the unorganized sector and remaining comes from
the organized sector comprising of leading manufacturer, importers and dealer/distributors.

Size of Furniture Industry:

Indian furniture and furnishings sector stood at about Rs
66,500 crore in 2010
It estimates the market size to reach Rs 1,12,000 crore by 2015*
Furniture segment compromises of 65 percent of the home
market and 35 percent of institutions.

The furniture sector of India makes a contribution of 0.5 per cent of the total GDP.
According to the World Bank survey, 20 percent of the furniture industry grows per year and this growth is
expected to come from the rapidly growing consumer markets of Asia, which signifies that there will bew
growth in Indian furniture sector.

PEST POLITICAL FACTORS

Political & Legal
1. Economic reforms are slow and inadequate. Political risk
2. FDI
100% FDI in SBRT
Permission from respective State governments would be necessary to open new stores
30% manufactured products should be sourced from small and medium enterprises (SMEs).
FDI is likely to be permitted only in the six big metros(Delhi, Mumbai, Kolkata, Chennai,
Bengaluru and Hyderabad)
3. Growth of Retail Industry Organized Retail
Growth of 10.6% between 2010 and 2012 and is expected to increase to USD 750-850 billion
by 2015.
Organized retail, which constitutes 8 per cent of the total retail market, estimates put the
share of organized retail as 20 per cent by 2020.

Source: India Retail Report 2013, Images Group

Source:Bradstreet retail sector overview,
Indian retail Report 2013, Images Group

Economic Factors

PEST ECONOMIC FACTORS

1.GDP Growth
GDP growth is projected to improve to 6.2 percent in 2014 and then to rise to 6.6 percent in
2015 and 7.1 percent in 2016

Source:http://www.worldbank.org/en/publication/global-economic-prospects/data?
region=SAS

2.Currency Fluctuation:
In the past six months, the dollar/INR exchange rate has fluctuated by approx. 8 per cent. This
may put considerable currency risk on any foreign investment in India.
3. Low 4 wheeler penetration

Social Factors

PEST SOCIAL FACTORS

1.India is not one market:

States in India differ in terms of culture, language, socio-economic development etc. Further,
different spending power results in different customer segment even within a state. This makes it
imperative on the part of the international retailers to customize their offerings to suit regional
Indian tastes.
2.Indian middle class to spend more:

Indias middle class is forecast to outpace growth in

spending over both a 10 year and 20 year horizon
with a projected growth of in 10 year horizon at 25%

Source:OECD, Morgan Stanley Smith Barney as of jan 2010

CONTD

3. Rise in income level

As income rise, spending will shift away from basic necessities like food and apparel and into
other are such as education, recreation, communication, transportation, personal care product
and services.

4.Young Population and Home Ownership

India has a very young population as compared to that of other major countries.
Home ownership rates for India are among the highest in the world

PEST TECHNOLOGICAL FACTOR

Technological Factors
1.Infrastructure Challenge:
Roads, ports, electricity are some of the infrastructure challenges, which increase the operational
cost of the retail chain.
2.Skilled Manpower:
One of the major challenges faced by the existing players is the availability of skilled manpower;
any foreign retailer planning to enter India will have to face similar challenges.

Furniture and Furnishings Category faces stiff competition from small time
traditional retailers as well as individual carpenters
For furniture retail, options for investment in back-end infrastructure lies in
creation of manufacturing facilities/warehouses
Some of the furniture products could be sourced from the SME segment
FDI in furniture retail is not expected to face major political deliberations
Specialty retail outlet is best suited structure for this segment

SWOT ANALYSIS
Strengths

Strong global sourcing capability.

Established Brand Image
Increasing Demand in Modern, clean,
minimalist design

Oppurtunity

100% FDI
Steady GDP growth forecast
Growth of organized retail
Rise in Income level
Increase spending by middle income
group
Young Population and high home
ownership

Weaknesses
Stiff competition from unorganized
retailers
30% local sourcing could affect IKEA
quality standards.
Maintaining price leadership due to high
dollar rate etc

Threats

Falling Rupee value affects imports

Diverse socio-economic culture
Poor Infrastructure
High Real estate value/rent
Threat from other low cost homeware
specialist such as Walmart etc

INDIAN CONSUMPTION PATTERN

FURNITURE
Purchase Decision

Value for money

Durability
High involvement Purchase/family affair
Less or no research before purchase
Purchase decision based on instinct and product feel at the shop
Purchase Occassion

Occasion

Marriage
Child Birth/When they grow up

Once in 10
years or so

Durability over design

Price sensitive
Need based Purchase

Change
Frequently

Trendy and Design conscious

Transferable jobs
Status Symbol

SEGMENTATION
Segmentation of Consumer household
Professional Affluents

Traditional Affluent

Urban Aspirers

Rural Apirers

Large Town next Billion

Small Town next Billion

Strugglers

2% 4% 8%
50%

6%
6%
24%

Note: Total No. of households: 239

millions
Source: Euromonitor, BCG
Analysis

Consumtion Expenditure
120
100

17
80 10
60 20
5
40 25
20 7
15
0

20
10
19
4
25
6
17

31

35

37

6
18
5
21
7
12

35

42

4
16
5
19
9
12

7
19
5
18
5
10

5
17
4
19
7
12

5
17
5
14
5
13

Food

Appparel

Health

Housing and Consumer

Durable

Transportation and

Education Leisure

communication
others

All figures are in percentage

Source: BCG India Consumer Survey 2010
Source: BCG India Consumer Survey 2010

TARGET & POSITIONING

Primary Target
Target

Professional Affluent

Urban Aspirer

Traditional
Affluent

Age Group

27 yr - 40 yrs

27 yr - 40 yrs

27 yr - 40 yrs

Houselhold Income

15Lacs+

5Lacs -14Lacs

15Lacs+

Profile Highlight

Positioning

Secondary Target

Credit Card User, Own a

house,Indulge and Purchase in
Luxury Brands

Invests in gold,
Dreams of owning a
Avoids taking loan,
house, Does online
family own
banking, use durables of
numerous
large brands
consumer durables

TRENDY,
STYLISH AND CONTEMPORARY
YOUNG AND EXPERIMENTAL
INITIAL POSITION COULD BE FOCUSED ON AFFORDABLE PRICE BUT ONLY
FOR A SHORT NOTICE PERIOD

DISTRIBUTION STRATEGY
IKEA

COCO Store

Company Owned
Company Operated
Store
Direct to Retail
Located in Malls or
Stand Alone stores

Distributor/
Franchisee

COFO Store

Company Owned
Franchisee Operated
Store
Franchisee shares
the operating
expenditure of the
store
Located in Malls or
Stand Alone stores

SIS modular
Set up

SIS primarily to have

presence in local
furniture hub. Eg
Panckuian road,
Tilak nagar

PROMOTIONAL PLAN
Objective:
The main objective of the communication plan will be to create news
about the launch of the brand and to create awareness about its presence
in India
Announce the launch of the brand
Highlight and create awareness of IKEAs collection
Long term relationship with our stake holders, distributors/franchisee and
consumers
Launch city Delhi

Attributes

Indulges
in style
and luxury

Affinity
towards
brands
Trend
spotter/
follower

WE NEED TO INFLUENCE PURCHASE

DECISIONS AT EVERY STAGE

Pre Store

Recommendation from friends

and colleagues
Features/articles in the media
Advertising before you go to the
store
Information from
website/internet

Sales Staff

In store

Instore display material

Services offered
Ambience

Influence in making the decision

Showcase of the range and the
possibilities
Understanding of the consumers
needs

MARKETING PLAN
.must communicate at each stage of the brand funnel
Stages of
Brand
Funnel
Awareness

Consideration

Preference

Purchase

Consumer Mindset

Communication Task

Touch Points

To inform consumers about the

origin and heritage of IKEA
range.

Newspaper, DM (acquired base

& existing base), Online,
Launch Event, In-store
merchandising, PR

How good is the IKEA

Furniture?.

To demonstrate quality,
craftsmanship, care for details

Prescriptive Media, Tie up with

Banks and communicate to
their platinum/gold card
holders, In-store
demonstration, catalogue
distribution

Is there any other furniture

better than a piece by IKEA? I
would rather get something
made

To provide customized
coordinated living room as a
brand experience

Advertorials in key
publications, Participation in
consumer and trade fairs

To emotionally engage the

consumers and establish as
the affordable premium brand

Flyers, Tie up with banks (for

EMIs),Price point
communication

What is IKEA?

Is it worth spending?

LAUNCH PLAN
X-5

X+30 and on
Ticket jackets for
PVR and DT
Cinemas-Comin
g Soon
Digital/online
coming soon
teasers
FB page contest
and freebies
Features/articles
in the media

Loyalty program
Privilege to be
the first to know
about the
happenings at
your favourite
living room
brand
After Sales
Service

LAUNCH DAY -360 DEGREE

Digital
Launch of India website and online catalogue
Launch of catalogue App
Banners
Adwords, FB page contest and gift vouchers

Live Outdoor near the store

Jacket for leading TOI and HT
Radio spot announcing the IKEA store launch
BTL
Flash Mob around the store
Create IKEA Waiting Lounges at T3 , Movie theatres and Malls

Celebrity to Launch the Store

Fashion Show inside the store
Followed by Press conference
Strong PR coverage

DM
DM to TG database

COMPETITION

IKEAs Competitive Edge:

Cost leadership
Concept and design based furniture
Almost 85% unorganized sector

PRICING STRATEGY
Objective:
To achieve 10% of Organized furniture market share by 2015E. Aprox
2240 Cr
Penetration Strategy:
Cost leadership
Profit based on volume sales not on value sales Profit
maximization in the long term.
To offer the price sensitive TG the lowest price in the category as
compared to Hometown, Style Spa, Godrej Interio.