IKEA viva voce Flashcards
(29 cards)
role
What is IKEA’s prime function?
to design, manufacture and sell affordable home furnishings for a wide demographic.
role
What type of market does IKEA primarily operate in?
Consumer mass market – offering funcitonal, low-cost home furnishings to a broad audience.
role - interdependence
How does marketing depend on operations at IKEA?
marketing promotes sustainability and flat-pack convenience; operations ensures efficient sourcing, eco-materials and logistics match this image.
role
How is marketing interdependent with finance?
Marketing needs finance to support pricing and campaigns; finance ensures cost-efficiency to maintain IKEA’s low-price promise.
role
How does IKEA’s marketing rely on HR?
HR recruits staff aligned with IKEA’s brand and trains them to deliver the custommer experience promoted in marketing.
influences
What is one major factor influencing customer choice in IKEA?
Economic- Price sensitivity: IKEA reduced prices on 3000+ products (AUD $125mil FY24) to support affordability during cost-of-living crisis.
- economic influence , particularly the price of products.
- In a time of rising inflation and cost-of-living pressures, consumers are increasingly price-sensitive and look for value-driven purchases that balance quality and affordability.
- IKEA’s low pricing strategy strongly appeals to this shift in consumer behaviour. By keeping prices affordable, IKEA aligns with customers’ economic motivations, particularly among budget-conscious households.
- In FY24, IKEA Australia invested over AUD $125 million to reduce prices on over 3,000 products, helping Australians afford essential home goods. This strategic price reduction not only supports customer needs but also enhances IKEA’s competitive advantage, reinforcing its brand image as a cost-effective and accessible furniture provider.
This demonstrates how businesses can adapt their marketing strategies to respond to economic influences that shape consumer choice.
influences
Two consumer laws influencing marketing in IKEA?
- Truthful advertising (ACL) – no misleading claims
- Consumer guarantees - IKEA provides clear returns policy and product info
influences
Name one consumer law affecting IKEA’s marketing
Truthful advertising — under ACL, IKEA must avoid false/misleading claims (e.g. “sustainable”) and support them with evidence.
What’s another way consumer law affects IKEA’s marketing?
Consumer guarantees — IKEA includes warranties, return policies, and accurate descriptions to meet ACL standards and build trust.
influences
What is one ethical influence on IKEA’s marketing?
Truth and accuracy in ads - IKEA avoids exaggeration, backs claims with sustainability data and avoids breaching ACL.
process
What is IKEA’s key strengths from its SWOT?
Strong brand, deep customer knowledge, sustainability focus, affordability, and product variety.
process
Name two weaknesses IKEA faces.
Supply chain disruptions and perceptions of lower quality due to budget pricing and self-assembly.
process
Whos is IKEA’s primary and seocndary target markets?
Primary: 20-34 y/o urban profrssionals and families
Secondary: Middle-income, 35-69+, eco-conscious adults seeking practical + minimalist home products
process
Identify two opportunities for IKEA.
Growth of budget furniture market and demand for second-hand/circular economy solutions.
proe
What are two threats IKEA must address?
Stricter environmental regulations and rising competition from local online-only furniture brands.
process
What research methods does IKEA use?
Primary Research:
Surveys & In-Store Feedback: Collected via online surveys, iPads, and follow-ups. Topics: product satisfaction, delivery, usability, store layout.
In-Home Visits: Direct observation of how customers use products.
Loyalty Data Analysis: IKEA Family + browsing behaviour reveals popular items and seasonal demand (e.g. outdoor furniture Oct–Mar).
Secondary Research:
Life at Home Report: Annual report based on data from 250,000+ people in 40+ countries. Tracks global trends like multifunctional spaces and sustainability focus.
process
How does IKEA use secondary research?
Through the “Life at Home” report, analysing trends and consumer needs globally.
process
What are IKEA’s four main marketing objectives in Australia?
- Maintain cost leadership
- Increase market share
- Support sustainability goals
- Build brand loyalty
How has IKEA revised its marketing plan in Australia? (2 ways)
Expanded digital services (click & collect, remote advice) due to COVID-era behaviour
Reduced prices on 3,000+ products with a $125M investment to address cost-of-living crisis
strategies
How does IKEA differentiate their products?
Through flat-pack design, sustainability, practical Scandinavian aesthetics and low prices.
strategies
What is IKEA’s brand positioning?
As a value-driven, sustainable lifestyle bbrand offering affordable, stylish and ethical home solutions.
strategies
How does IKEA use product features to enhance marketing?
Through branding (blue/yellow logo), flat-pack packaging, and in-store experience — creating a “total product concept.”
strategies
What pricing method does IKEA use?
Cost-based pricing — pricing based on production costs plus mark-up.
Name IKEA’s three key pricing strategies.
Penetration pricing (e.g. $125M price drop in FY24)
Psychological pricing (e.g. $19.99)
Price-quality interaction (affordable but durable)
