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Essay: Marketing communications

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Marketing communications is a management process used by an organization to create a relationship with its various audiences. By understanding the audience’s communications environment, organizations seek to create and deliver messages for their identified stakeholder groups, before evaluating and acting upon the responses. By creating messages which hold a of significant value, they encourage audiences to offer attitudinal and behavioral responses.
Aims and Objectives
The aims of this chapter are to present and explain some of the concepts that are associated with marketing communications and to underline the key characteristics of the main tools of the communications mix.
The objectives of this chapter are :
– examination of the concept of exchange in the marketing context;
– underlying the role of promotion in the context of the marketing mix;
– consideration of the range and potential impact of marketing communications;
– identification of the key characteristics of each major tool in the communications mix;
– examination the effectiveness of each communication tool;
– establishing the need for marketing communications;
– compare marketing communications in the consumer and business markets
Firms are engaged with a variety of audiences in order to pursue and achieve their marketing and business objectives. This engagement is related to the form of communication and to whether the nature of the messages and media is essentially intellectual or emotional. In most of the cases companies use a mixture of these two elements in order to communicate their messages, be understood and engage their audiences in dialogue with the scope of developing mutually beneficial relationships.
Effective communication is holds a high importance for every organization, being the reason why variety of promotional tools like advertising, sales promotion, public relations, direct marketing, personal selling and added-value approaches such as sponsorship are used.
In order to deliver their message to the audience organizations use traditional media such as print and broadcast, cinema and radio; but also they increased the utilization digital media, and the Internet in particular, which is used to ‘talk’ to and with their customers, potential customers, suppliers, financiers, distributors, communities and employees, among others.
Marketing communication is an audience-centered activity that is providing the ways by which brands and organizations are presented to their customers. The goal of marketing communication is to create a dialogue that will, ideally, lead to a purchase made by customer and a complete engagement between parts. This interaction represents an exchange between each organization and each customer; by taking into consideration the quality and satisfaction of the exchange process, it will or will not be repeated. It can be concluded , that communication is a very important and integral part of the exchange process, and it is the skill and judgment of management of the marketing process that will determine, in most of the cases, success or failure of communication.
1.Marketing communications
1.1 The Concept of Marketing as an Exchange
The concept of exchange, according to most theories regarding this subject, is central element in understanding of marketing. The conditions that allow an exchange to take place involve at least two or more parties, each of whom can offer valuable to the other and is prepared to enter freely into the exchange process, a transaction. It is possible to identify two main forms of exchange: market (or transactional) exchanges and relational (or collaborative) exchanges.
Market exchanges (Bagozzi, 1978; Houston and Gassenheimer, 1987) are transactions that occur independently of any previous or subsequent exchanges. They have a short-term orientation and are motivated primarily by self-interest. When a consumer buys a product of a brand they do not buy regularly, then a market exchange can be identified.
In contrast to this, relational exchanges (Dwyer et al., 1987) have a longer-term orientation and develop between parties who wish to build long-term supportive relationships. So, when a consumer buys a product on a regular basis, relational exchanges are considered to be taking place.
These two types of exchange represent the extremes from the point of view of exchange transactions. In industrial societies market exchanges have tended to dominate commercial transactions, although recently there has been a substantial movement towards relational exchanges. In other words a mixture of exchanges occurs, and each organization has a portfolio of differing types of exchange that it maintains with different customers, suppliers and other stakeholders. Communication is an essential element that make this type of commercial exchanges to function. However, to enable these different exchanges to function properly, different types of communication are necessary.
Relational exchanges form the basis of the ideas represented in relationship marketing. Many organizations use relationship marketing principles, that are manifested in the form of customer relationship marketing or loyalty marketing programs.
1.2 The Role of Communication in Exchange Transactions
Bowersox and Morash (1989) demonstrated in which way the marketing flows, including the information flow, can be represented as a network whose main purpose is the satisfaction of customer needs and requirements. Communication plays an important role in these exchange networks. At a basic level, communication can have one of the following main roles:
– Communication can inform and make potential customers aware of an organization’s offering
– Communication can attempt to persuade current and potential customers of the desirability of entering into an exchange relationship
-Communication can also be used to reinforce experiences. This role the communication has may take the form of reminding clients of a need they might have, or of reminding them of the benefits of past transactions with the purpose to convince them that they should enter into a similar exchange. In addition, it is possible to provide reassurance or comfort either immediately prior to an exchange, or more , commonly , post purchase. This plays an important role, helping the firm to retain current customers and improve profitability.
1.3 Marketing Communications and the Process of Exchange
The origin of many definitions rests with a promotional outlook, where the purpose was to use communications to convince people to buy products and services. The focus was on products and on one-way communications, and there was a short-term perspective. The expression ‘marketing communications’ started with a wider range of tools and an evolution of media, and as result scope of the tasks that these communications activities were expected to accomplish expanded.. In addition to awareness and persuasion, new goals such as developing understanding and preference, reminding and reassuring customers have been recognized as important aspects of the communications process. Direct marketing activities created a new as one-to-one approach and teh two-way communications began to shift their focus from the mass communication to a personal communications process.
The exchange process is developed and managed by researching consumer/ stakeholder needs, identifying, selecting and targeting particular groups of consumers/ stakeholders who share similar discriminatory characteristics, including needs and wants, and as result developing an offering that satisfies the identified needs at an acceptable price, which is made available through particular sets of distribution channels. The next step in the communication process is to make the target audience aware of the existence of the offering.
All these activities together constitute the marketing mix ‘ the 4Ps, as McCarthy (1960) originally referred to them ‘ and the basic task of marketing is to combine these 4Ps into a marketing program to facilitate the exchange process. The use of the 4Ps approach has been criticized as limiting the scope of the marketing manager. McCarthy’s assumption was that the tools of the marketing mix allow adaptation to the uncontrollable external environment.
At this moment it is seen that the external environment can be influenced and managed strategically, and the rise and influence of the service sector is not easily accommodated within the original 4Ps. In order to accommodate these factors, additional Ps, such as Processes, Political Power and People, have been suggested. A marketing mix of 20Ps has even been proposed by some, but the essence of the mix remains the same, and this deterministic approach has raised concerns and doubts about its usefulness in a marketing environment that is very different from that in which the 4Ps were created.
Promotion is therefore one of the elements of the marketing mix, and is responsible for the communication of the marketing offer to the target market. It can be noted that there is an implicit and important communication through the other elements of the marketing mix (through a high price, for example, symbolic of high quality), but it is the task of a planned and integrated set of communication activities to communicate effectively with each of an organization’s stakeholder groups.
1.4 The Role of Marketing Communications
From the phrases listed above it is possible to conclude that marketing communications are about the promotion of both the organization and its offer to the current/prospective clients. Marketing communications recognize the increasing role that the organization plays in the marketing process, and the impact that organizational factors can have on the minds of audiences. As the structure, composition and total number of offerings in some markets rises, differences between products diminish, to the point in which it has become much more difficult to differentiate between products. This results in a decrease in the number of available and viable positioning opportunities.
One way to resolve this problem is to use the parent organization as an umbrella, in order to provide greater support and leadership in the promotion of any offerings ‘ hence the earlier reference to the emerging strength of corporate marketing.
A view that is becoming increasingly popular is that corporate strategy should be supported by the organization’s key stakeholders in order to creat e successful strategy. The strategy must be communicated in such a way that the messages remain consistent through time, and are targeted accurately at appropriate stakeholder audiences..
Each organization must constantly pay attention in order to avoid the transmission of confusing messages, whether this be through the way in which the telephone is answered, the navigability of a website, the impact of sales literature, or the way salespersons approach prospective clients. Many organizations have recognized public relations as an useful and very important factor because of its high credibility that is attached to the messages received and the relatively low operational costs. As a result, the use of corporate advertising has grown.
Finally, marketing communications recognize the development of channel or trade marketing . Many organizations have switched their focus from the traditional control of a brand manager to a system that focuses upon the needs of distributors and intermediaries in the channel.. The organisations in the channel work together to satisfy their individual and collective objectives. The degree of conflict and cooperation in the channel network depends upon a number of factors, but some of the most important are the form and quality of the communications between member organisations. It can be concluded that marketing communications have to address to the specific communication needs of members of the distribution network and of those other stakeholders who have an impact or who influence the performance of the network. Indeed, marketing communications recognize the need to contribute to the communications in the channel network, to support and sustain the web of relationships.
1.5 The Marketing Communications Mix
The marketing communications mix consists of a set of tools (disciplines) that can be used in various combinations and different degrees of intensity in order to communicate with a target audience. In addition to these tools or methods of communication, there are the media, or the means by which marketing communications messages are conveyed. Tools and media should not be confused , as they have different characteristics and seek to achieve different goals.
The marketing communication mix is composed of five principal marketing communications tools: advertising, sales promotion, public relations, direct marketing and personal selling. However, there have been some major changes in the environment and in the way organizations communicate with their target audiences. New technology has given rise to a raft of different media, while people have developed a variety of ways to spend their leisure time. This is referred to as media and audience fragmentation, and organizations have developed fresh combinations of the promotional mix in order to reach their audiences effectively. For example, there has been a dramatic rise in the use of direct-response media as direct marketing becomes adopted as part of the marketing plan for many products. The internet and digital technologies have made possible new interactive forms of communication, where the receivers have greater responsibility for their part in the communication process. An increasing number of organizations are using public relations to communicate both messages about themselves (corporate public relations) and also messages about their brands (marketing public relations).
The result of these actions is that the promotional mix has developed in such a way that the original emphasis on heavyweight mass communication (above-the-line) campaigns has changed to more direct and highly targeted promotional activities using direct marketing and the other tools of the mix, as a fact the through-the-line and below-the-line communications are used much more these days. The shift is from an intervention-based approach to marketing communications (one based on seeking the attention of a customer who might not necessarily be interested) towards permission-based communications (where the focus is upon communications with members of an audience who have already expressed an interest in a particular offering). In other words, with permission communications the seedlings for a relationship are established by the audience, not by the brand owner. This has a particular impact on direct marketing, online communications and ‘ to some extent ‘ personal selling.
1.5.1 Advertising
Advertising is a non-personal form of mass communication that offers a high degree of control to those responsible for the design and delivery of advertising messages. The advertising’s ability is to persuade the target audience to think or behave in a particular way. The effect that advertising has on sales is extremely hard to measure. Advertising also suffers from low credibility, in that audiences are less likely to believe messages delivered through advertising than they are messages received through some other tools.
The flexibility of this tool is good because it can be used to communicate with a national audience or a particular specialized segment. The costs of advertising can be extremely large,but it holds the advantage that a vast number of people can be reached with a message, so the cost per contact can be the lowest of all the tools in the mix.
1.5.2 Sales Promotion
Sales promotion is composed of a set of various marketing techniques that are often used tactically to provide added value to an offering with the aim of accelerating and increasing the sales and also it is used to gather marketing information. Like advertising, sales promotion is a non-personal form of communication, but it has a greater capability to be targeted at smaller audiences. It is a controllable activity, and although it has to be paid for, the associated costs can be much lower than those of advertising As a generalization, the degree of credibility of sales promotion is not very high, because the sponsor is or it can be easily identifiable. However, the ability to add value and to bring forward future sales is strong and complements a macroeconomic need that focuses on short-term financial performance.
1.5.3 Personal Selling
Personal selling is traditionally perceived as an communication tool that uses interpersonal interaction and that involves face-to-face activities undertaken by individuals which are representing an organisation, in order to, persuade or remind an individual or group to take appropriate action, as required by the sponsor’s representative. The process of interpersonal communication needs salesperson that engages in a one-to-one communication where instantaneous feedback is possible. The costs associated with personal selling are normally very large.
This tool of the marketing mix differs from the previous two by the degree of control which is potentially lower and it still lacks relative credibility and control. The low degree of control si caused by the fact the salesperson is free at the point of contact to deliver a different message than the one intended (Lloyd, 1997). Indeed, many different messages can be delivered by a single salesperson. Some of these messages may enhance the prospect of the salesperson’s objectives being reached (making the sale); some may retard the process and so incur more time and hence costs. Whichever way it is viewed, control is lower than with advertising.
1.5.4 Public Relations
Public relations is ‘the art and social science of analyzing trends, predicting their consequences, counseling organisations’ leadership, and implementing planned programmes of action which will serve both the organisation’s and the public interest’ (Mexican Statement, 1978). The increasing use of public relations, and publicity in particular, reflects the high credibility attached to this form of communication. Publicity involves the dissemination of messages through third-party media such as magazines, newspapers internet or news programs. The media space or time involve no costs, but there are costs incurred in the production of the material. A wide range of other tools are used by public relations, such as event management, sponsorship and lobbying. The disadvantage of this tool is the difficulty to control a message once it is placed in the channels, but the impact created by a third party can be very influential and have a far greater influence on the target audience than any of the other tools in the promotional mix.
1.5.5 Direct Marketing
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The growing utilization of direct marketing by organizations over recent years has been significant. The use of direct marketing signals a change in focus from mass to personalized communications. In particular, the use of direct mail, telemarketing and the fast-developing area of interactive communications represents through-the-line communications. By removing the face-to-face aspect of personal selling and replacing it with an email communication, a telephone conversation or a direct mail letter, many facets of the traditional salespersons’ tasks can be removed, freeing them to concentrate on their key skill areas.
Direct marketing has the intention to target individual customers having with the purpose of delivering personalized messages and building a relationship with them based upon their responses to the direct communications. In contrast to conventional approaches, direct marketing attempts to build a one-to-one relationship ‘ a partnership with each customer ‘ by communicating with the customers on a direct and personal basis. when an organization chooses to use direct marketing it needs to incorporate the approach within a marketing plan. This action is needed because distribution is different, and changes in the competitive environment can result in change of the prices charged. For example, charges for packing and delivery need to be incorporated. The product may also need to be altered or adapted to the market. For example, some electrical products are marketed through different countries on home shopping channels and websites. The electrical requirements of each country or region n need to be incorporated within the product specification of each country’s offering. In addition to these changes, the promotion component is also different, simply because communication is required directly with each targeted individual. To do this, direct-response media must be used.
The Internet is a distribution channel and communication medium that enables consumers and organisations to communicate in completely different ways by allowing an interactive communication, and creating is the best environment to enable dialogue. Communication is two-way, interactive and very fast, allowing businesses and individuals to find information and enter exchange transactions in such a way that some traditional communication practices and shopping patterns are being reconfigured.
1.6 Effectiveness of the Promotional Tools
Everyone of the elemenst of the promotions mix has different capacities to communicate and to achieve different objectives. The effectiveness of each tool can be measured by its influence on the purchase decision process. During this prosess consumers are assumed to move from a state of unawareness to a state of product comprehension and purchase Advertising is better for creating awareness; personal selling is more effective at promoting action and purchase behavior.
The elements of the mix can be seen as a set of complementary ingredients each drawing on the potential of the others. The tools are, to a limited extent, partially interchangeable, and in different circumstances different tools are used to meet different objectives. The five elements of the promotional mix are supplemented by one of the most effective forms of marketing communication, word-of-mouth recommendation. Word-of-mouth recommendation is one of the most powerful marketing communications tools, and the more effectively an organization can develop a program to harness and accelerate the use of personal recommendation, the more likely it is that the marketing program will be successful.
1.7 Management of the Promotional Tools
From a traditional point of view, for each of the promotional tools has been attributed particular group that manages them inside the firms:
1. Personal selling is attributed to the sales director, and traditionally uses an internally based and controlled sales force.
2. Public relations is attributed to the chairperson, being often administered by a specialist PR agency.
3. Advertising and sales promotion are the domain of the marketing director or brand manager. Responsibility for the design and transmission of messages for mass communications is often devolved to an external advertising agency.
Many organizations have evolved without marketing being recognised as a key function, let alone as a core philosophy. The explanation for this phenomenon consists in a number of reasons. First, the organisation may have developed with a public relations orientation in an environment without competition, where the main purpose of the organization was to disperse resources according to the needs of their clients.
1.8 Context and Marketing Communications
Organizations can be seen as open social systems (Katz and Kahn, 1978) in which all the components of the unit or system are interactive and interdependent (Goldhaber, 1986). Modify one part of a system and adjustments are made by all the other components to accommodate the change. This effect can be seen at both the micro and macro levels. At the macro level the interdependence of organizations has been noted by several researchers. The marketing communications sustained by organizations inside these systems can be regarded as a series of communication sequences. These sequences can often be created as a dialogue and it is perceived to be a continuous one.
Consequently, contexts are not independent or isolated sets of easily identifiable circumstances, but are interrelated and overlapping circumstances in which it is rare for any one organization to have total knowledge of any single context. Management makes judgments based upon its experience, marketing research and limited knowledge of any one identifiable part-context, and it might be said that each time a marketing communications program is rolled out management takes an educated leap into the unknown
1.9 Communication Differences
After identifying the need of communication with several different audiences, it is appropriate to examine the differences between communications used which target two very different and specific audiences: the organizations (which are commonly referred to as business-to-business) and those aimed at consumer markets. Some writers (Brougaletta, 1985; Gilliland and Johnston, 1997) have documented a variety of differences between consumer and business-to-business markets. The following is intended to set out some of the more salient differences.
-. Message reception. The conditions that create the context in which messages are received and ascribed are very different. In the organizational setting the context is much more formal, and as the funding for the purchase is to be derived from company sources (rather than personal sources for consumer market purchases) there may be a lower orientation to price as a significant variable in the purchase decision.
– Number of decision-makers. In consumer markets a single person very often makes the decision. In organizational markets decisions are made by many people within the buying centre. This means that the interactions of the individuals need to be considered. In addition, a variety of different individuals need to be reached and influenced, and this may involve the use of different media and message strategies.
– Message content. Generally, there is high-involvement in many business-to- business purchase decisions, so communications tend to be much more rational and information based than in consumer markets
-. Negative communications. The number of people affected by a dissatisfied consumer, and hence negative marketing communication messages, is limited. The implications of a poor purchase decision in an organizational environment may be far reaching, including those associated with the use of the product, the career of participants close to the locus of the decision, and ‘ depending upon the size and spread ‘ perhaps the whole organizations.
1.10 Global communications strategies
Although some would stem the foreign invasion through protective legislation, protectionism in the long run only raises living costs and protects inefficient domestic firms (national controls). The right answer is that companies must learn how to enter foreign markets and increase their global competitiveness. Firms that do venture abroad find the international marketplace far different from the domestic one. Market sizes, buyer behavior and marketing practices all vary, meaning that international marketers must carefully evaluate all market segments in which they expect to compete.
The decision to compete globally is a strategic one (strategic intent) and it will fundamentally affect the firm, its management and its operations. For many companies, the decision to globalize their activity its seen as difficult an an important one (global strategy and action). Typically, there are many issues behind a company`s decision to begin to compete in foreign markets. For some firms, going abroad is the result of a deliberate policy decision (exploiting market potential and growth); for others, it is a reaction to a specific business opportunity (global financial turmoil, etc.) or a competitive challenge (pressuring competitors). But, a decision of this magnitude is always a strategic proactive decision rather than simply a reaction (learning how to business abroad).
Reasons for global expansion:
a) Opportunistic global market development (diversifying markets)
b) Following customers abroad (customer satisfaction)
c) Pursuing geographic diversification (climate, topography, space, etc.)
d) Exploiting different economic growth rates (gaining scale and scope)
e) Exploiting product life cycle differences (technology)
f) Pursuing potential abroad
g) Globalizing for defensive reasons
h) Pursuing a global logic or imperative (new markets and profits)
A global marketing strategy that totally globalizes all marketing activities is not always achievable or desirable (differentiated globalization). In the early phases of development, global marketing strategies were assumed to be of one type only, offering the same marketing strategy across the globe. As marketers gained more experience, many other types of global marketing strategies became apparent. Some of those were much less complicated and exposed a smaller aspect of a marketing strategy to globalization. A
more common approach is for a company to globalize its product strategy (product lines, product designs and brand names) and localize distribution and marketing communication.
Integrated Global Marketing Strategy:
When a company pursues an integrated global marketing strategy, most elements of the marketing strategy have been globalized.
Globalization of a firm includes not only the product but also the communications strategy, its pricing and distribution and also its strategic elements as segmentation and positioning. Such a strategy may be advisable for companies that face completely globalized customers along the lines. It can that be assumed that the way a given industry works is highly similar everywhere, thus allowing a company to unfold its strategy along similar paths in country by country.
Global Product Category Strategy:
The least integrated type of global marketing strategy is the global product category strategy. Leverage is gained from competing in the same category country after country and may come in the form of product technology or development costs. Selecting the form of global product category implies that the company while staying within that category will consider targeting different segments in each category or varying the product, advertising and branding according to local market requirements. Companies competing in the multi-domestic mode are frequently applying the global category strategy and leveraging knowledge across markets without pursuing standardization. That strategy works best if there are significant differences across markets and when few segments are present in market after market.
Global Segment Strategy:
A company that decides to target the same segment in many countries is following a global segment strategy. The company may develop an understanding of its customer base and leverage that experience around the world. In both consumer and industrial industries significant knowledge is accumulated when a company gains in-depth understanding of a niche or segment. A pure global segment strategy will even allow for different products, brands or advertising although some standardization is expected. The choices may consist of competing always in the upper or middle segment of a given consumer market or for a particular technical application in an industrial segment. Segment strategies are relatively new to global marketing. Global Marketing Mix Element Strategies:
These strategies pursue globalization along individual marketing mix elements such as pricing, distribution, place, promotion, communications or product. They are partially globalized strategies that allow a company that customize other aspects of its marketing strategy. Although various types of strategies may apply, the most important ones are global product strategies, global advertising strategies and global branding strategies.
Global Product Strategy:
Pursuing a global product strategy implies that a company has largely globalized its product offering. Although the product may not need to be completely standardized worldwide, key aspects or modules may in fact be globalized. Global product strategies require that product use conditions, expected features and required product functions be largely identical so that few variations or changes are needed.
Companies pursuing a global product strategy are interested in leveraging the fact that all investments for producing and developing a given product have already been made. Global strategies will yield more volume, which will make the original investment easier to justify.
Global Branding Strategies:
Global branding strategies consist of using the same brand name or logo worldwide. Companies want to leverage the creation of such brand names across many markets, because the launching of new brands requires a considerable marketing investment. Global branding strategies tend to be advisable if the target customers travel across country borders and will be exposed to products elsewhere.
Global branding strategies also become important if target customers are exposed to advertising worldwide. This is often the case for industrial marketing customers who may read industry and trade journals from other countries. Increasingly, global branding has
become important also for consumer products where cross-border advertising through
international TV channels has become common.
Global Advertising Strategy:
Globalized advertising is generally associated with the use of the same brand name across the world. However, a company may want to use different brand names partly for historic purposes. Many global firms have made acquisitions in other countries resulting in a number of local brands. These local brands
marketing models give the distinct impression that companies might be using one or the other generic strategy exclusively. Reality shows, however, that few companies consistently adhere to only one single strategy. More often companies adopt several generic global strategies and run them in parallel. A company might for one part of its business follow a global brand strategy while at the same time running local brands in other parts. Many firms are a mixture of different approaches, thus the term composite.
Competitive Global Marketing Strategies:
Two types of approaches emerge as of particular interest to us. First, there are a number of heated global marketing duels in which two firms compete with each other across the entire global chessboard. The second, game pits a global company versus a local company- a situation frequently faced in many markets. .
Global firms are able to leverage their experience and market position in one market for the benefit of another. Consequently, the global firm is often a more potent competitor for a local company. Although global firms have superior resources, they often become inflexible after several successful market entries and tend to stay with standard approaches when flexibility is called for. In general, the global firms` strongest local competitors are those who watch global firms carefully and learn from their moves in other countries.
2. GLOBAL COMMUNICATION STRATEGY OF IKEA COMPANY
2.1 Overview of the company
IKEA is an international company being one of the most famous home furnishing brands of recognized worldwide. The company has stores in various parts of the world having operations in 42 countries and a total number of 70 000 employees of which 59000 are employed in Europe. The main objective of the company is to ‘offer a wide range of well-designed, functional home furnishing products at prices so low, that as many people as possible will be able to afford them’ (IKEA, 2002). The idea of the company is to produce and sell the highest quality producst for the lowest cost. In IKEA, the customers can find an extensive variety of products that they need to furnish their home (IKEA, 2006).
The IKEA business started in the 1940s known biggest expansion in the late 90s. The first IKEA store opened in Sweden 1958, and the first store opened outside Sweden in 1973 in Switzerland. In 1985 the company opened its first business in the United States, 1998 in China and 2000 in Russia.
The IKEA Concept began with the innovative idea of Ingvar Kamprad, an entrepreneur from the Sm??land province in southern Sweden, starting his furniture business in the late 1940s. Ingvar started the business intending to offer home furnishing products of good function and design at prices much lower than competitors by using simple cost-cutting solutions that did not affect the quality of products. Ingvar used every opportunity to reduce costs, and he scraped and saved in every way possible – except on ideas and quality. The name IKEA comes from the initials of Ingvar Kamprad, I and K, plus the first letters of Elmtaryd and Agunnaryd, which are the names of the farm and village where he grew up.
INGKA Holding is not an independent company being owned full by the Stichting Ingka Foundation, which Kamprad created in 1982 in the Netherlands as a tax-exempt not-for-profit foundation. The Ingka Foundation is controlled by a five-member executive committee that is chaired by Kamprad.
A big part of IKEA stores operate under a direct control of Ingka Holding and the Ingka Foundation, while IKEA trademark and concept is owned by an entirely separate Dutch company, Inter IKEA Systems. Every IKEA store, including those run by Ingka Holding, pays a franchise fee of 3% of the revenue to Inter IKEA Systems. The ownership of Inter IKEA Systems is uncertain and, ultimately complicated,. Inter IKEA Systems is owned by Inter IKEA Holding, a company which is registered in Luxembourg. Inter IKEA Holding, also, belongs to an identically named company in the Netherlands Antilles that is managed by a trust company based in Cura??ao. The owners of this trust company are not known because IKEA refuses to identify them but are assis considered to be members of the Kamprad family.
In Australia, IKEA is operated by two companies with stores located on the East Coast including Queensland, New South Wales, and Victoria, which are owned by INGKA Holding. Stores elsewhere in the country including South Australia and Western Australia are owned by another company called Cebas Pty Ltd. and all stores are operated under franchise agreement with Inter IKEA Systems.
Vision and Mission
The IKEA vision, business idea and market positioning statement provide a framework for all IKEA marketing communication worldwide.
The IKEA vision is “To create a better everyday life for the many people.” To meet this vision IKEA provides many well-designed, functional products for the home. It prices its products low so that as many people as possible can afford to buy them.
However, by charging low prices IKEA is not does not sacrifice its principles. ‘Low price but not at any price’ is what IKEA says. IKEA supplies goods and services to individuals in a way that has an overall beneficial effect on people and the environment. Customers all over the world have responded positively to IKEA’s approach.
The business idea is “To offer a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.”
The market positioning statement is “Your partner in better living. We do our part, you do yours. Together we save money.”
IKEA Range
Fundamental activities such as eating, sleeping, storing items, socializing and so on create a demand for furniture and practical products that solve essential human needs. The IKEA product range meets these needs by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. The IKEA range includes products for every part of the home.
Marketing-Brand Management
The IKEA brand is the sum total of the emotional and rational values that consumers are associating with the IKEA trademark and the reputation of the company. The brand image is the result of more than 50 years work by IKEA co-workers at all levels evrywhere over the world.
2.2 Global expansion
IKEA started to utilize innovative communication technologies and e-business activities as a tool to effectively commune across the globe, approximately in the year 1996. The strategic management of the company is positioning the global communication media in the centre of attention having the main purpose to effectively penetrate the brand worldwide; aiming to obtain maximum benefits from the advanced technological methods. IKEA is focused to improve its brand positioning by taking measures in order to create a good communication strategy as presently the brand’s operations are mainly in EU countries and have not accomplished yet to capture the whole potential of markets like the ones in Asia, having a large base of prospective consumers.
The inventive notion of IKEA to produce and sell the best product for the lowest cost is exceedingly captivating for the c consumer base of asian countries, where the larger segment of population belongs to the middle class, eager to adapt contemporary living style within affordable price. In accordance with their expansion objectives, IKEA must adopt a comprehensive strategy to ensure and to provide the most important characteristics associated with the global expansion of the brand with a particular emphasis on the utilization of media communication contrivance.
The brand positioning of IKEA, worldwide:
Region Turnover per region Purchasing per region Co-workers per region
Europe 80% 66% 59000
North America 17% 4% 9000
Asia/Australia 3% 30% 2000
2.3 Marketing Communication of IKEA
The main task of IKEA marketing communication is to build the IKEA brand and attract people to come to the stores. The IKEA concept starts with the idea of building a relationship with the consumers. Nine key messages are used within the IKEA marketing communication to build this relationship. These are:
‘ The concept is based on the market positioning statement. “We do our part” is focused on the company’s commitment to value the consumer, product design, and smart solutions by using less expensive materials in a innovative way and minimizing the costs of production, distribution and retail and offering a low price to the consumers.
‘ The product range was developed to be an extensive one and include products for everyone and cover all functions in their homes. The products are modern but not trendy so are considered enough practical for everyday use.
‘ IKEA is the home furnishing specialist- IKEA products are created to be functional; the company enables people to improve their home life by offering practical solutions to everyday problems.
‘ Low price is not appealing for the customers unless it represents good value for money. This is the area where IKEA is making a real difference because is committed to have a good relationship with the suppliers and being able to purchase good quality, with economically produced designs which are bought in bulk to maintain a low cost. By making all their furniture flat packed they cut down the costs with transportation and assembly.
‘ The right quality- IKEA products are tested rigorously in order to make sure that they meet all the national and international safety standards.
‘ Function – IKEA products are based on a functional design. IKEA design offers to customers products that are attractive, practical and easy to use, without having unnecessary features. IKEA gives a genuine solution for all specific home furnishing needs with products that are made of the most suitable materials for their purpose.
‘ A day out for the whole family- IKEA aim to take care of their customers by planning for their need snot only by do providing inspiration and ideas, but also by encouraging people to use, touch, and feel the products put on display and see how they could fit into their own homes. IKEA have new products that arrive constantly with seasonal themes, play areas for children, special events and a good restaurants.
‘ Convenient shopping- The IKEA store offers diversified product range, most of it available to be sold r immediately. IKEA offers service where clients need it, but allows them to make most of the decisions by themselves. This means that IKEA need to make it easy for customers to choose the right products by displaying them in a proper manner, describing them with accuracy and having a accespble returns policy.
‘ Swedish IKEA, – The key messages ofIKEA all have their origins in the Swedish roots of IKEA. Swedish furniture is fresh light and yet unpretentious using a warm welcoming Swedish style that has become a model of informality, simplicity, and practicality, that is now world known.
2.4 The IKEA marketing mix
IKEA has a long tradition in marketing communication which primarily focused on printed media that proved its values and offered a success to the company over the years. Other media now being used to an increasing degree include TV, radio, and internet based communication.
The IKEA marketing mix contains of 4 different areas of focus.
1. The product range of IKEA is the starting point. All other marketing communication is focused to amplify the product range.
2. The store is the IKEA retailer’s main instrument used to present and communicate the range,
its low price and the IKEA concept.
3. The IKEA catalogue is the most important marketing tool with around 70% of of the annual marketing budget being spent on this alone. The catalogue is produced in 38 different editions, in 17 languages for 28 countries. 110 million catalogues were circulated last year – three times higher than that of the Bible, with 13 million of these being available in the UK.
4. The advertising, PR and other types of communication that have the role complement the IKEA range; store and catalogue are used to gain a high share of the target market.
Price
The basis of pricing for IKEA is value concentrated on low prices. IKEA is not a premium pricer. So products are designed, raw materials sourced, the products are manufactured, they are distributed, and they sold by retail, within this no-frills low-cost framework. Home delivery is available although this is at an additional cost to the customer.
Low price is the starting point for the IKEA Concept to realize the IKEA vision – “to create a better everyday life for the many people”. As the IKEA Concept aims to serve “the many people”, the IKEA product range needs extremely low price levels. IKEA designers do their part to keep prices low by using production capabilities from other areas in unique and previously unimagined ways – like having a shirt factory produce furniture upholstery. Or using leftover materials from the production of one product to create an entirely new one. IKEA customers also contribute to keeping prices low. They select and pick up the products themselves, transport them home and then assemble them themselves. And they can enjoy them already later that day.
Place
The IKEA group is an international firm specialized in sells furniture and accessories in Europe, North America, Asia and Australia.
IKEA’s main business activity is related to its retail stores. Many of IKEA stores are located out-of-town and do not benefit from the footfall of primary and secondary locations. The stores themselves are very large and a big part of them include restaurants, food shops and a Swedish market. Some stores have even a bespoke play area. IKEA operates in more than 300 stores across the world.
IKEA stores are usually very large blue buildings with yellow accents and few windows. Newer IKEA stores, make more use of glass, considering the aesthetic and functional reasons.
They are designed around a “one-way” layout which leads customers along “the long natural way.” This layout was created to encourage the customer to see the store in its entirety (as opposed to a traditional retail store, which allows a consumer to go right to the section where the goods and services needed are displayed) although there are often shortcuts to other parts of the showroom.
The first sequence involves going through furniture showrooms making note of selected items. Then the customer can collect a shopping cart and proceed to an open-shelf warehouse for smaller items (Market Hall). The customer can also visit the furniture warehouse (Self Serve) where they collect previously noted showroom products in flat pack form. Sometimes they are directed to collect products from an external warehouse on the same site or at a site nearby. Finally they take their products to the cashier’s station to make payment. Skylights are now common in the Self-serve warehouses because natural light reduces energy costs, gives a better impression of the product and improves the morale of workers.
The original design involved the warehouse on the lower level and the showroom and marketplace on the upper ,but today most stores globally have the Showroom upstairs with the marketplace and warehouse downstairs. Additionally, some stores are single level. Some stores
maintain separate warehouses to allow more stock to be kept on-site at any given time, although this occasionally results in challenges in finding the items, as well as a perception of having to queue in line twice.
Single-level stores are found predominantly in areas where the cost of land is lower than the cost of building a 2-level store ‘ examples include the store in Saarlouis, Germany and Haparanda, Sweden. Some stores also have dual level warehouses with machine controlled silos
which allow large quantities of stock to be accessed during the selling day.
Most IKEA stores offer an “as-is” area at the end of the warehouse just prior to the cashiers.
Returned, damaged or formerly showcased products which are not in new condition or were taken out of the IKEA product range are displayed here, and sold with a big discount, but also have a “no-returns” policy. Most IKEA stores communicate the IKEA policy on environmental issues in the “as-is.” In the United Kingdom, this area is called the “Bargain Corner.”
Promotion
IKEA is one of the world’s largest furniture retail brands. The brand defined by the concept of offering home furnishing products at affordable prices.
The promotions mix includes a series of TV advertising, newspaper and magazine advertising, sponsorship, and other elements of publicity. Some of the company’s TV advertising was considered controversial by some, while others see it as pretty plain. Recent campaigns include the IKEA kitchen party advert ‘Be Happy Inside’ campaign and the kitchen party advert.
The company’s iconic yellow IKEA logo is one of the basic elements which support the brand.
IKEA publishes an annual catalogue that was first published in 1951 in language Swedish, and which is published now in 55 editions, in 27 languages for 36 countries, and is considered to be the main marketing tool of the furniture retailer, having a share of more than 70% of the company’s annual budget of marketing. The catalogue is distributed in stores and also by mail. Most part of the catalogue is produced by IKEA Communications AB in located in the town of ??lmhult, Sweden where IKEA owns the largest photo studio in northern Europe with a size of 8,000 square meters. The catalogue itself is printed on chlorine-free paper of 10-15% post-consumer waste.
One of the main tools of promotion used by IKEA is a loyalty card program called “IKEA Family.” A distinctive orange card that is free of charge can be used to obtain discounts on a special range of products found in each IKEA store. The card offers an advantage to the loyal clients by giving a 25% discount of the price of commissioned ranges of IKEA products on presentation of the card. The card also gives discounts on food purchased in the restaurant and the Swedish Food Market.
Other promotion tool used by IKEA is also a printed quarterly magazine titled IKEA Family Live which supplements the card and catalogue. The magazine is today printed in thirteen languages and an English edition for the United Kingdom was launched in February 2007. It is expected to have a subscription of over 400,000.
Product
IKEA offers wide range of furniture for children’s rooms, kitchens, bedrooms and living rooms. Products include side tables, coffee tables, DVD storage, TV solutions, shelves, sideboards, armchairs, sofa beds, bookcases, leather sofas and fabric sofas, and many other products. Within these segments IKEA uses a subdivision of products. For example in children’s bedrooms there will be play accessories, changing tables, beds, nursing equipment and so on. IKEA has in excess more than 10,000 products. Services include restaurants and play areas.
IKEA products are usually identified by single word. Most of the names used for the products have Swedish in origin.
Most names used for products are based on a special naming system developed by IKEA in conjunction with Colin Edwards (international naming expert and furniture enthusiast) but there are some also exceptions.
‘ Upholstered furniture giving name to rattan furniture, coffee tables, bookshelves, media storage, doorknobs:
Swedish place names (for example: Klippan)
‘ Beds, wardrobes, hall furniture: Norwegian place names
‘ Dining tables and chairs: Finnish place names
‘ Bookcase ranges: Occupationss
‘ Bathroom articles have names of scandinavian lakes, rivers and bays
‘ Kitchens: grammatical terms are used, but sometimes also other names
‘ Chairs, desks: have names men
‘ Materials, curtains: have names of women
‘ Garden furniture: are named after swedish islands
‘ Carpets: have place names for Denmark
‘ Lighting: various names are used by suing terms from chemistry, music, meteorology, weights,measures, seasons, months, boats, days, nautical terms
‘ Bedlinen word is used for bed covers,
‘ pillows/cushions use names of flowers, plants precious stones
‘ Children’s items: are named after mammals, birds, adjectives
‘ Curtain accessories: are named using mathematical and geometrical terms
‘ Kitchen utensils: foreign words, spices, herbs, fish, mushrooms, fruits or berries, functional
descriptions
‘ Boxes, wall decoration, pictures and frames, clocks: colloquial expressions, also Swedish place names
Because IKEA is a worldwide company working in various different countries with different languages and cultures, sometimes the Nordic names leads to problems creating situations where the word means a completely different thing to the product. While exotic-sounding names draw attention, e.g., in English speaking countries, a number of them had to be renamed. For example “Jerker” desk and “Fartfull” workbench. Also, the most recent new product, Lyckhem (which means bliss in Swedish ).
People
The IKEA brand base its activity on a strong relationships with customers and customer satisfaction. So it can be considered that working with people serving their needs is central idea of IKEA’s business philosophy.
Few years ago the IKEA company made a statement related with their annual report which comprises the view on the business and its future. In this view the company would launch many energy-saving alternatives to conventional light bulbs and that their kitchen range would offer many smart, eco-friendly solutions which would include water-saving taps, appliances and a special system that would sort household waste ready for recycling. President of the company made a commitment to reduce the impact of his business on people, as well as the environment. The business would act responsibly, resources would be used efficiently and costs would be reduced. He also wanted sustainability to become more visible to customers and employees.
Process
The company produces by itself products which are sold inside their stores, by making its own wood-based furniture and wooden components, IKEA owning forestry sawmills. The customer drives to the store, selects a product, orders, it, and then collect it, only then to have to drive the product home themselves. This is all part of the low pricing commitment.
Pysicial Evidence
IKEA was a business that adopted the principle of sustainability quite early in its strategy. Many of the products sold are recyclable and IKEA has invested in very green energy solutions such as solar power.
Physical evidence for IKEA is its very large stores that are located outside the of towns and offer a huge selection of furniture products. Stores have very large car parking and include restaurants, they provide a large space to move around and modern display technologies.
2.5 Integrated Marketing Communications Plan of IKEA
Overview
The integrated marketing communication plan is created to promote IKEA’s sustainability efforts and increase the sales and awareness about products of the company in the target demographic. The campaign has also the purpose to convince the customers they get what they want in a budget that fits their life style and shopping at IKEA by utilizing their new online and digital tools will improve their lives, and make the world around them better.
Integrated Marketing Communications Objectives
‘ Increase the website traffic by 14 percent in 12 months
‘ Increase the foot traffic in-store by 6 percent in 12 months
‘ Increase the awareness about sustainability/philanthropy efforts in the target market by half million people in 12 months
‘ Increase sales by 10 percent 12 months
‘ Increase sales of returning customers by 18 percent in 12 months
‘ Increase the percentage of customers in the target demographic who associate IKEA with low-priced customizable furniture and environmental sustainability by 15 percent in 12 months
Integrated Marketing Communications Strategies
‘ Creation interactive web/digital tools with the purpose of engaging target audience and simplify shopping experience
‘ Participation in community events to generate earned media coverage
‘ Promotion of sustainability and philanthropy actions across all paid media
‘ Develop sales promotions accessible only in stores targeting customers from greater distances
and increase traffic inside stores
‘ Using direct marketing efforts by promoting furniture and non-furniture items to customers
‘ Utilization of social media for a better communication with target market
‘ Utilization of consumer information to encourage return visits
from customers
‘ Develop consistent and integrated creative concepts for paid media, social/digital media, sales promotions and direct marketing tactics
2.5.1 Paid Media
Paid media is an important element for promotion of sustainability efforts and product knowledge to IKEA’s target market. In a period of 12 months, various channels of communication such as: television, social/digital media, radio, and outdoor advertising will be utilized to meet the objectives of the campaign.
Media Objectives:
‘ Use of broadcast media to reach 65 percent of the target market a minimum of 15 times over a 12 month period
‘ Achievement of a minimum reach of 70 percent during the first four months of the year and a minimum reach of 65 percent during the remaining eight months with a minimum frequency
of 15 during all 12 months
‘ Targeting 65 percent of media resources at current customers and 45 percent towards potential
customers
‘ Use of social/digital media to maintain a consistent weekly reach of 200,000 members of the
target audience at a minimum of 5 times per week over 12 months
‘ Utilization of outdoor advertising to target potential customers living between one and three hours away from an IKEA store at a frequency of 4 times per week over a 12 month period
Media Strategies
– Creation of ads to run on cable television which are essential to the campaign because they can reach a large audience in many geographic locations.
– Creation of ads to be used in printed magazines which are a great addition to the campaign because they have pass along readership and are read by many individuals in the target market.
– Generate Social Media/Digital ads to drive traffic to the IKEA web site and stores
– Social Media/Digital ads are important because 97% of individuals 18-29 years old use
the Internet, and 66% of adults use social networking sites (pewinternet.org).
– Development of outdoor ads for use within a 100 km radius of IKEA stores
– Utilization of outdoor to express how it feels to shop at IKEA. The outdoor venue
allows for messages to meet the customers without interrupting their day.
– Development of radio ads for use on satellite radio
Social Media/Digital
‘ using ads on social networks as Facebook
‘ Create ads to increase traffic to/and interaction with IKEA Facebook
‘ using ads on YouTube
‘ Create background and pre-roll ads for use on popular YouTube videos to
drive traffic to IKEA website
‘ Ads will be displayed behind videos searched with the following tags:
-stylish furniture, low-priced furniture, home improvements,
sustainable furniture, better furniture, life improvement,
modern furniture, home goods
‘ IKEA will have to monitor their social networking sites such as their IKEA Facebook page in order to improve relationships with target market by using social networking,
Recommendations are including:
– Creation of a splash page for determining the customers to ‘like’ IKEA page prior to viewing content
– Subitting responses to comments, questions and providing feedback within one hour after the user submitted the content
– Offering exclusive content for Facebook page. Content could include matters of design insight.
A new web page should be developed on the IKEA website allowing users to input their room dimensions and available furnishing options will appear on the right side of the screen. The users will then be able to drag and drop furniture into their virtual room to finalize designs. This has the purpose to create a unique experience for shoppers that live a few hours away from IKEA stores and will also generate positive online reviews. IKEA can utilize their Facebook page to push out news and announcement about the sites.
Outdoor:
‘ Creation of billboards in bus stop benches or train stations: Individuals utilizing these types of transportation typically value sustainability
‘ Ads will feature a collage of photos of IKEA range of products, small product photos
will be arranged in a way that when will be viewed as a large image the photos will create a benefit to the environment.
‘ Example: Small photos of IKEA products create an image of the world
2.5.2 Public Relations
IKEA’s public relations actions will focus on gaining positive media image for IKEA’s sustainability efforts and IKEA’s contributions to local communities. Efforts will also be made for monitoring customer satisfaction among returning customers.
Public Relations Strategy
Out of stores:
‘ Create a weekly electronic newsletter to highlight IKEA product information and worldwide sustainability efforts.
‘ The newsletter will contain information about sustainability, products that will soon be discontinued, recall information, design tips and also a client-designed space. This newsletter has the role to generate interest in IKEA products and keep customers and other stakeholders informed about sustainability efforts and products available in IKEA stores.
Implementation process actions:
‘ The newsletter will be distributed electronically through e-mail in order to align with sustainability requirements
‘ Client-designed spaces that will be featured in the newsletter will be showcased on the IKEA Shared Space web site
‘ Social networking sites will also promote mailing list sign ups
‘ It will be sent as a newsletter to media customers, outlets, community members, other and interested parties that will sign to the mailing list found on IKEA web page
‘ The newsletter will be distributed quarterly
In stores:
‘ Will be created foursquare check-ins in departments around IKEA stores. When customers will check- in they will receive tips and products of interest in each department. A badge will be created for individuals who check in at 70 percent of locations within KEA stores.
‘ Three sustainability conferences will be held and customers can come to any IKEA store and hear updates on IKEA’s sustainability efforts or meet IKEA executives.
– These ‘conferences’ will offer to the attendees the opportunity to learn not only about IKEA’s sustainability efforts, but also how they can contribute to it.
Attendees will receive media kits which include the following.
– News and information about products
– Photos of children IKEA has helped with donations
‘ Pre-event PR initiatives will include:
– Press releases to all local media outlets three weeks
prior to events
– Generation of promotional content on IKEA Facebook page
2.5.3 Direct Marketing
The direct marketing part of the integrated marketing communications campaign for IKEA will utilize direct mail and catalogs to achieve the desired objectives. The target market for IKEA’s direct marketing efforts will be individuals which are demographical targeted by the company: people that have recently changed their living situation, or individuals who do not live near IKEA stores, and also individuals who enjoy shopping at IKEA.
Direct Marketing Tactics
‘ Redesigning of the IKEA catalog for a better alignment with sustainability efforts and concentration of information for better utilization by the clients in the target demographic
– IKEA will create a catalog with high amount of information concentrated in the pages to allow an easier utilization by target demographic clients and will reduce postage costs. This campaign will create a series of ‘mini-catalogs’ that together compose the traditional IKEA catalog. Each catalog will highlight different areas of the home in order to make a more manageable content and encourage more frequent Internet sales. The catalog will also inform customers of price reductions and product changes. The catalog, will be entirely available to be downloaded on the IKEA website. In order to align with IKEA’s sustainability efforts, the mini-catalogs will be printed on recycled paper and included in the current IKEA catalog app. The timeline for release of the catalog will depend on IKEA’s seasonal offerings, product release information, and price reductions.
Suggested distribution of catalogues:
‘ distribution in stores
– At entrances and checkouts
– Positioned according to the store maps
‘ distribution by digital meas
‘ IKEA mini-catalogs will have a .pdf format on the website for easy
download and integration on mobile devices (ex. iBooks)
‘ a mini-catalog with useful information will be represented in the IKEA
newsletter
‘ The mini-catalogs will be available for download by suing the IKEA catalog
app
‘ Customers can sign up on the IKEA web site
The format of the catalogues will be attractive and allow a more easy communication with target market. This technique will encourage the clients in the target demographic to improve their home room-by-room and be not overwhelmed by the many products in the IKEA range. Maintaining the contact with customers, and focusing on items with lower shipping costs, will encourage the clients to utilize IKEA’s online store.
2.5.4 Sales Promotions
The sales promotion strategy will utilize a loyalty program in addition to a promotion targeted to individuals.
A loyalty program will be designed to increase brand relationships between IKEA and their customers.
The loyalty program aims to make customers feel valued by the company by receiving awards for their purchases. The program also aims to connect IKEA’s sustainability efforts with the customers’ shopping experience.
Sales Promotion Tactics
Implementation of the IKEA customer loyalty program:
– IKEA will implement a loyalty program where customers will receive rewards for purchasing
products from IKEA. Customers will be free to join the program which will be renewed every year. The customers in the program will also receive the IKEA newsletter, which contains the mini-catalog information.
The program will be designed as follows:
– sales information about the customer and will be kept in a digital format and viewable online by customers
– Customers can reach milestones -when customers reach a milestone, they will receive a coupon in the mail for a discount on their next purchase ‘ or ‘ free shipping.
‘ Create Build It To Win It events held in stores:
-The event will be hosted four times in a year by IKEA and will offer the opportunity couples to compete and win products. Couples will compete against each other and the couples that build the IKEA products the fastest will win those products. There will be different ‘heats’ and advancement opportunities throughout the day and the products will become more challenging as the day progresses. This will be a great event for returning customers and they will encourage their family members to watch them compete and IKEA will gain more in-store traffic.
Product Packaging
‘ The QR codes used on all IKEA products aim to lead to an interactive list used by store shoppers
‘ This is allowing the target audience to keep an easy track of their purchases and locations for product pick up areas. QR codes have the role to improve customer satisfaction and help customers keep track of their purchases.
2.5.5 Measurement and Evaluation
Measurement and evaluation of the integrated marketing communications campaign is
based on a variety of measures. In order to achieve its goals the overall campaign will have to:
‘ Increase sales
‘ Increase positive material on third party media
‘ Increase the number of customers visiting IKEA stores and online website
‘ Decrease negative customer service calls
‘ Increase customer growth
Pretesting
This campaign will use copy testing for pretesting ads before releasing them on the channels of communication. Portfolio tests will be performed of print ads and on-air theater tests for broadcast utilizing the target market in the process.
media. The following will be utilized to further evaluate the campaign.
Qualitative analysis
– It aims to conduct 4 focus group session during the 12 month campaign
– The session groups will have the size of 6 ‘ 10 individuals
– Every session will be composed of the target audience members split in two groups:
-one group, members that live near IKEA stores
-the second, group members that do not live near IKEA stores
The session will analyze:
– the areas of focus
– the overall brand awareness
– the overall brand impression
– initiatives that would increase return visits
‘ Inside IKEA stores will be held short interviews with clients to discuss to discuss the individual opinion about their shopping experience
‘ The interviews will be discussion based and the customer will be the one who will dictate the
direction of the conversation
‘ Employee will ask the clients if they saw any ads, etc. that lead them to IKEA
Quantitative analysis
‘ Conduct of panel studies to measure the how effective are IKEA’s online efforts
‘ Conduct of tracking studies that will have to measure how effective is the integrated marketing communications campaign

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