Got a tricky question? Receive an answer from students like you! Try us!

IKEA marketing concept - Essay Example

Only on StudentShare
Undergraduate
Author : lpacocha
Essay
Marketing
Pages 8 (2008 words)

Summary

Value based pricing is a pricing strategy based upon the potential value the product or service will bring to its customers; based on the amount they are willing to pay for the product or service. The company determines how much value the prices will bring to customers from factors such as efficiency and stability…

Extract of sample
IKEA marketing concept

The consumer lacks consideration, but the cost of production is considered. It is favorable for goods sold to highly sophisticated customers. (Hilstrich 2000 page 12).
The benefits of value-based pricing are the ability to set prices that are likely to attract buyers because of the market consideration. The major challenge for this approach is the extensive need of advertisement to sell the brand name to customers for them to accept its benefits. The profit margin is also extremely low, and it is not easily accounted for entirely. It can also alienate some customers who purchase based on pricing. (Hilstrich 2000 page 24). Cost based pricing benefits ranges from the high profit margins by goal setting by the company. The greatest drawback is the high pricing that may exceed the consumer threshold, which leads to a struggle in the generation of enough volumes for the market. It also ignores the image of the product to consumers and thus lower profit per sale than would otherwise be realized.
The IKEA Company uses the value based pricing strategy in the pricing of its products. This is the best pricing strategy that the company uses to provide the home products to its customers. ...
Download paper

Related Essays

IKEA Analysis
Retaining competitive advantage is inevitable for firms to ensure profitability. This can be achieved by implementing effective management strategies and processes that allow them to conduct a thorough internal analysis of their businesses, such as benchmarking, value chain analysis etc., to name a few. For the purpose of this paper, benchmarking as a method of internal analysis is used and applied on IKEA. The process of benchmarking is of vital significance for organizations today, since it affords them the ability to compare their performance with that of their rivals or similar processes…
10 pages (2510 words)
IKEA of Leadership and Management
Opportunities of IKEA….7 3.1.4. Threats of IKEA….8 4. Complexities of the Environment…. 8 5. Key Business Challenges and a Rationale for a Leadership and Management Challenge Underlying IKEA….…9 6. Leadership within IKEA….…9 6.1. Problems with the Current Situation of Leadership….11 6.2. Options for Improving Current Leadership Situation at IKEA through Application of Models….13 7. Recommendations to address the major challenges IKEA is facing….17 7.1. Factors that may affect implementation of recommendation….….19 7.2. Conclusion….21 8.
20 pages (5020 words)
How does Starbuck or IKEA create the customer experience in their marketing?
It will look at this issue in collaboration with important factors such as the marketing mix, brand image, CSR and CRM. Customer experience is generated when the customer engages in “contact” with the company (Meyer and Schwager, 2007). This contact can be generated “directly”, that is through purchase of product/service, use of product/service and after sales service provided by the company. Contact can also be created “indirectly” where customer experience is created through means such as advertisement, promotion, reviews and recommendations (Meyer and Schwager, 2007). The…
12 pages (3012 words)
IKEA Marketing Plan
A look into the present situation of IKEA is included in this plan along with other pertinent information that would help in deciding how to further develop the IKEA business, e.g., situation, product, competition and SWOT analyses along with the look into IKEA’s mission and vision and its financials. The analyses made in this plan showed that IKEA is indeed a strong brand to contend with and is capable of expanding and growing further. It offers products that consumers patronize and gives value to those products. Further expansion can be made and better plans for marketing the products of…
8 pages (2008 words)
Entry Strategy of IKEA into Brazil
IKEA through its various marketing strategies has created a steady demand for its products. The company also prides itself in being innovative and has managed to get customers to accept products that they would not normally accept through design changes. In the initial stages IKEA expanded its business into new markets outside of Sweden including Norway by direct entry and by acquiring other businesses. However, over the years IKEA has been focusing on expansion of its business through franchising. IKEA now operates over 325 stores which are located in 35 countries. An analysis of the…
6 pages (1506 words)
IKEA marketing concept
It also stands for the competitive prices offered by the price leader. IKEA Company cuts across the diverse cultures of different countries and so the brand represents the meeting point where global tribes that mind the cost and design converge. The shopping premises of the company are similar and share similar architectural designs and interior designs. They are easy to recognize to its distinct yellow and blue coloration. These combinations make the IKEA a strong global brand. …
8 pages (2008 words)
Strategy Context Report : IKEA
The company can yield high amount of profitability along with enhancing its business model through the varied recommendations given by the author of the study. The main motive of the strategic group and competitor analysis would be to identify the company’s current market and strategic position in the market. The author of the study has focused on the current strategic issues faced by the company with respect to the current situation of the furniture industry. Thus, IKEA could not only enhance its business model but also formulate varied strategies to improve the existing business systems.…
12 pages (3012 words)