Ikea Brand

IKEA has created a global check focused on low prices and contemporary designs. In 2009, Interbrand ranked IKEA 28th on its list of the top 100 global brands ( 35 in 2008 indicating 10% increase in brand value over just year). IKEAs success is attributed to its massive experience in the furniture retail market, its product differentiation and cost leadership. The brand Ikea has become iconic in consumers minds. CEO, Anders Dahlvig, states the awareness of our brand is much larger than the size of our company (Kling, K & Goteman, I. 2003). IKEA is growing aggressively around the world and at each of the store openings there are wacky promotions. For example, at an capital of Georgia store opening (2005), the company offered a $4,000 gift certificate for the first person in line. (The man who won the contest camped outside the store in the boiling heat of summer for seven days. ) The recent IKEA facebook campaign shows how they are leveraging the power of social media nets to attr act target customers.To promote the opening of its unfermented store in Malmo, Sweden, they created a facebook profile for their store manager and the team then uploaded IKEA showroom images into the store album. People were encouraged to tag items in the photos with their throw to win it for free As the word about the campaign spread (through participants profiles, tidings feed links and other forms of word of mouth), the photos were tagged in seconds and brand awareness grew rapidly.Not only did the Malmo IKEA store became popular in just few weeks, the story was picked up throughout the world by various news channels and online blogs. IKEAs competitors include Kmart and Target Corp. in the US, Fly in France, Japan Nitori Co. in Japan. They differentiate themselves from their competitors on the basis of Price IKEA is perceived as a value brand following their affordable solutions for everyday living tagline. Ikea focuses on lowest price segmentation. The company can do this bec ause they have whiz of the lowest operating margins in the industry, 10%.As compared to its competitors, IKEA stands out as a cost leader providing affordable products with good quality and design. To achieve that goal, the companys 12 full-time designers at Almhult, Sweden, along with 80 freelancers, work hand in hand with in-house production teams to identify the appropriate materials and least costly suppliers. With a network of 1,300 suppliers in 53 countries, Ikea works overtime to find the right manufacturer for the right product. Simplicity, a tenet of Swedish design, helps keep costs down. For e. g. the 50 cents Trofe visage comes only in blue and white, the least expensive pigments ). (Carpel, K. , 2005) The company focuses on cost control, similar to Wal- Marts practice of squeezing suppliers and Toyotas elimination of waste and errors in manufacturing. IKEA is exceedingly Competitive at this front while constantly dropping the price (2-3% annually) to provide the best values for customers. The suppliers and designers have to customize some Ikea products to make them fail better in local markets.For e. g. Julie Desrosiers, the bedroom-line manager at Ikea of Sweden, visited peoples houses in the U. S. and Europe to peek into their closets, learning that Americans prefer to store most of their clothes folded, and Italians like to hang. The resolution was a wardrobe that features deeper drawers for U. S. customers. (Carpell, K. 2005) Majority of products at IKEA are designed for flat-pack distribution so that they can be easily stored and then transported in the add up car.They are easy to self-assemble by the customer. IKEAs brand positioning and how it impacts their brand image and branding strategies. As IKEA is expanding rapidly around the globe, it faces a number of challenges in terms of varied cultural, demographic and market specific needs. The one-design-suits-all global expansion strategy might not be suited for the culturally diverse markets, that the brand is perceived in a similar way by the customers around the globe exhibiting low price as the core brand value.As IKEA expands globally, the branding strategies revolve around providing value (quality and design) to the customers at affordable prices. References Capell, K. ( November 14, 2005). Ikea, How the Swedish Retailer Became a Global Cult Brand, Business Week, pp. 96-101. Retrieved from http//www. businessweek. com/magazine/content/05_46/b3959001. htm Lee, S. (2007). IKEA A Branded Experience Is More Important Than Customer-Centricity. Retrieved from http//www. customerthink. com/article/ikea_branded_experience_important