Ikea Brand
IKEA has created a global brand 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). IKEA's success is attributed to its vast 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 bigger 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 Atlanta 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 networks to attract target customers. To promote the opening of its new 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 name to win it for free! As the word about the campaign spread (through participant's profiles, news 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. IKEA’s 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 because
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