StudentShare solutions
Triangle menu

IKEA marketing concept - Essay Example

Nobody downloaded yet

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. A nonprofit oriented company provides the goods to the market at somehow consumer friendly prices. The company also enjoys a large market and is being exempted from taxation due to consumer consideration during pricing. During the company’s establishment, they used the penetrating pricing strategy by offering lower prices for their products in order to attract the market. This approach made them accrue a larger market around the world. Their production costs were also low because they used the prisoners as their source of labor. With time, they gained momentum in business but continued offering their products at lower prices. They were exempted from taxation due to this undertaking. They did not mostly use the skimming approach though they were a significant competitor in the market. To attract other companies into the market, they used the skimming approach, which later lowers the prices due to increased supply in the market. The company’s aim is to provide the household products to the market at lower prices. They are exempted from taxation and the profits accrued are shared to the owner at a constant rate. Economic recession forces it to increase the prices as well as the other competitors increase their prices. The economy approach also gets used because the costs of marketing and product promotion are low. The price notations at different times of the year by using offers are common in the company. The power pricing consideration shows that the company determines its prices in relation to the price elasticity of demand. Therefore, an increase in the prices of its products does not decrease the demand of its products. The increase in prices is so low and thus it has a little effect on the demand. Question 2 – on distribution Hilstrich, 2000 states that vertical marketing is a form of distribution from the producer to the wholesaler, then to the retailer and to the consumer with the aim of targeting a given industrial niche. This is carried out by related businesses that take part in the provision of a given specialized needs. Horizontal marketing is a form of distribution channel whereby many organizations, which are at the same level, join for capitalizing on ...Show more

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…
Author : lpacocha
IKEA marketing concept essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"IKEA marketing concept"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

The Market of IKEA in China
With the rapid growth and development of China, especially after 1987, the level of economy and the life quality of Chinese people increased dramatically. When they have enough money for food and cloth, they shift their interests in other aspects, such as furnishing, to make their life more colorful.
60 pages (15000 words) Essay
IKEA assignment
II. Competitive Advantages IKEA’s success can be summed up by saying it “provides a one-stop sanctuary for coolness” (BusinessWeek). Specifically, IKEA outlets are not just furniture stores, they are gathering spots where families can have a social outing (Normann & Ramirez).
7 pages (1750 words) Essay
Essay Chosen organisation IKEA
is of franchise type. Contemporary designs and low prices are the hallmarks of which made IKEA a cult brand globally. Environmental sensitiveness of the company is well recognized by the consumers. The other companies that specialize in Nordic furniture design the in the US, whose prices are comparatively very high are Design Within Reach, Minimalista, Boconcept and Tema.
16 pages (4000 words) Essay
IKEA Marketing Plan
It currently has 316 stores selling its high quality products. In its pursuit to maintain its position in the market, IKEA intends to maintain its sales and even gain further ground through expansion and possibly through the creation of new products. This marketing plan will serve to assist in such pursuit.
8 pages (2000 words) Research Paper
IKEA Warehouse System
After the war, taking advantage of the clamour for furniture, Swedish furniture manufacturers came to an agreement to artificially inflate prices by as high as 43 per cent, by entering into inter-association contracts between suppliers and retailers. The result was that only well-to-do people who can afford the high prices were able to purchase the beautiful new furniture and household items offered by these establishments (Reichert, 1998, p.2).
3 pages (750 words) Essay
IKEA marketing concept
The IKEA Company brand is a strong brand. This is mainly due to its unique cultural branding that portrays the fashionable design and value to ensure the creation of affordable and contemporary furnishing products. The brand symbolizes the unique and tasteful household products that offered at an affordable price that inspires customers.
8 pages (2000 words) Essay
Supply chain management - IKEA

The author states that in the IKEA Company everyone is involved in ensuring that the company produces the best products available. This means that from management, everyone in the company is motivated to do their best in their department to ensure that the company produces the best products possible.

6 pages (1500 words) Essay
IKEA -
IKEA has about 12,000 product designs, with 2400 suppliers in 65 countries. This research study will examine IKEA’s business strategy in implementing stores in different countries. IKEA
10 pages (2500 words) Essay
Strategic analysis of IKEA
Our business idea supports this vision 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.” (IKEA world website) This plain-speaking, deliberately
18 pages (4500 words) Essay
IKEA UK Marketing Analysis
According to the report for most businesses, this has been challenging to attain due to the prevailing harsh economic times globally, which have solely contributed to challenging business conditions for businesses in the world today. Every business attempts to adopt business strategy that they deem to be effective and efficient.
10 pages (2500 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Click to create a comment