Integrated Marketing Communications Campaign

[Pages:45]Integrated Marketing Communications Campaign

Leyda Hern?ndez West Virginia University

Author Note Leyda Hern?ndez, Perley Isaac Reed School of Journalism, West Virginia University

Running head: IKEA IMC CAMPAIGN

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Executive Summary

IKEA holds 10 percent of the market share in the United States in the industry of home furnishing. While the data is impressive, it also provides us with a different perspective. Ninety percent of the market share in the industry is being occupied by other parties. Target accounts for 7.7 percent of this market, but the most important aspect to note is that furniture is not one of Targets core products. Needless to say, this presents IKEA with a huge opportunity for growth (Business Week).

The IKEA integrated marketing communications plan was prepared strategically, on the basis of research and creative thinking. It is designed to target three market segments that fall within our target audience and is purposefully crafted to address the lack of brand awareness amongst IKEAs target market and to stimulate communication between the IKEA brand and its existing customers in the efforts of further building brand loyalty.

The plan outlines strategies and tactics for 2012. It consists of an introductory ,,Come home to your home phase that increases the awareness of the IKEA brand with a combination of television, outdoor advertising, social media and public relations tactics. This is followed by an invitation to customers to take IKEA into their homes with a YouTube contest that will result in two consumer-generated commercials. Events and sales promotions have been crafted to improve community involvement and increase IKEAs customer base. Following the suggestions outlined in this plan, the results are aimed to increase sales and aid in strengthening customer acquisition, retention and growth.

Running head: IKEA IMC CAMPAIGN

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Table of Contents

Executive Summary .......................................................................................................................2 Table of Contents ...........................................................................................................................5 Introduction to IKEA ....................................................................................................................5

Vision ...........................................................................................................................................5 History ..........................................................................................................................................6 Business Objectives and Financial Progress ................................................................................7 Competitors ..................................................................................................................................8 Product .......................................................................................................................................10 Pricing Strategy ..........................................................................................................................12 Distribution .................................................................................................................................13 Promotion ...................................................................................................................................15 Target Audience ...........................................................................................................................17 Target Market Segment A ..........................................................................................................18 Target Market Segment B ..........................................................................................................19 Target Market Segment C ..........................................................................................................20 SWOT Analysis ............................................................................................................................21 Marketing Objectives and Strategies .........................................................................................22 Creative .........................................................................................................................................23 Creative Strategies (Possible and Final).....................................................................................23 Creative Brief .............................................................................................................................24 Creative Execution .....................................................................................................................25 Media Plan ....................................................................................................................................27 Media Objective .........................................................................................................................27

Strategy ..............................................................................................................................27 Budget ................................................................................................................................27 Tactics ................................................................................................................................27 Rationale ............................................................................................................................27 Media Objective .........................................................................................................................28 Strategy ..............................................................................................................................28

Running head: IKEA IMC CAMPAIGN

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Budget ................................................................................................................................28 Tactics ................................................................................................................................28 Rationale ............................................................................................................................29 Flowchart ....................................................................................................................................31 Public Relations Objectives and Tactics ....................................................................................32 Objective ....................................................................................................................................32 Tactics ................................................................................................................................32 Objective ....................................................................................................................................32 Tactics ................................................................................................................................32 Objective ....................................................................................................................................33 Tactics ................................................................................................................................33 Direct Marketing Ideas................................................................................................................35 Objective ....................................................................................................................................35 Tactic..................................................................................................................................35 Objective ....................................................................................................................................35 Tactic..................................................................................................................................35 Sales Promotion Ideas..................................................................................................................37 Objective ....................................................................................................................................37 Tactic..................................................................................................................................37 Objective ....................................................................................................................................37 Tactic..................................................................................................................................37 Measurement and Evaluation Plan ............................................................................................38 Conclusion ....................................................................................................................................40 References .....................................................................................................................................41

Running head: IKEA IMC CAMPAIGN

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Introduction to IKEA

IKEA is an international retailer of furniture, home furnishings and house wares. The company designs and sells its items through its uniquely designed stores and through its yearly catalogs. The company is distinguished by its wide range of affordable and stylish high-quality product offerings.

Vision

IKEA presents the following as its vision and business idea:

At IKEA our vision is to create a better everyday life for the many people. 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. ("Our Business Idea", 2011)

The companys identity revolves around the principles of product range, low prices, innovation, flat packaging, environmental and human consciousness, and function and design (Inter IKEA Systems B.V., 2011, "Our Product Range").

Running head: IKEA IMC CAMPAIGN

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History

IKEA was founded in 1943 and named after its 17-year old founder, Ingvar Kamprad, the son of a farmer, who was born in 1926 in an impoverished region of southern Sweden, Sm?land. IKEA being an acronym for its founders name and address, Ingvar Kamprad and Elmtaryd, Agunnaryd.

The first IKEA mail-order catalog was issued in 1947, which included in its array of products the newly invented ballpoint pen.

In the 1950s, furniture and home furnishings were added to the product line. Kamprad purchased a small furniture factory and opened a showroom in ?lmhult. They began designing its own furniture and employing the strategies of flat packaging and customer self-assembly. The first ,,giant store, which consisted of 13,000 square meters, was opened, and a restaurant was added to the store a year after its opening.

In the 1960 and 1970s, signature pieces were created and the concept of IKEA was documented in Kamprads The Testament of a Furniture Dealer. These concepts include how the showrooms were structured, flat packaging, customer self-assembly, no sales assistants on the floor and in-store services ranging from a childrens nursery, restaurants and extensive parking.

In the 1980s IKEA expanded internationally, Childrens IKEA was introduced and the IKEA Group was formed positioning the company as a responsible and environmentally aware company.

Running head: IKEA IMC CAMPAIGN

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The 2000s propelled the company into further expansion into new international markets such as Russia and Japan, and in continuing to grow its philanthropic efforts.

(Inter IKEA Systems B.V., 2011, History)

Business Objectives and Financial Progress

In 2005, Bloomberg Business Week noted that, "The IKEA concept has plenty of room to run: The retailer accounts for just 5% to 10% of the furniture market in each country in which it operates" (pp. 4) and grow, they did; IKEAs goal was to have 50 outlets in the United States by 2010 (pp. 9). By August 31, 2010, they closed the financial year closely aligned to its expansion goal with 48 stores in the United States, as illustrated in its 2010 yearly summary, Welcome Inside.

Mikael Ohlsoon, President and Chief Executive Officer of the IKEA Group noted in the 2010 yearly report regarding the companys business objectives:

We keep increasing our knowledge about peoples lives at home and we want to make IKEA accessible to more people. Currently, were investing a lot in improving our existing stores, securing our supply of products and spreading the IKEA culture and spirit among our many new co-workers.

Soren Hansen, Vice President and Chief Financial Officer of the IKEA Group also remarked on the companys positive financial levels for the 2010 fiscal year:

Running head: IKEA IMC CAMPAIGN

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Sales increased to 23.1 billion EURO in FY10, an increase of 7.7% compared to the previous year. The growth came both from existing stores, which grew by 2.4% and new stores. Sales grew in almost all countries, with China, Russia and Portugal showing the strongest increase. Gross margin improved to 46.1% from 44.6% in FY09. This increase was driven by higher sales and reduced costs in our supply chain, strongly supported by steps taken together with our suppliers.

Net income increased by 6.1% to 2.7 billion EURO. We reduced our long-term debt by 213 million EURO during FY10.

Competitors

Some of IKEAs competitors in the United States (U.S.) are: Pottery Barn

Continuous sales promotions (price-offs and sweepstakes) Direct marketing (e-mail and catalogs: which are specific to different markets:

general, bed and bath, kids, teen, outdoor spaces=available e-catalog, iPhone & iPad) As of October 22, 2001, Social Media (Facebook :744,531 likes, Youtube: 1,844 subscribers, Twitter: 13,553 followers) Decorating, entertaining and design Better Homes & Gardens type homes, country/rustic Simple corner desk approx $900 (Pottery Barn) Pier 1 Imports

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