When we think of IKEA words like ‘Malm’, ‘Ektorp’, ‘Lack’ or ‘Billy’ come to our mind; these terms are part of our lives. The Scandinavian giant is where it is thanks to its Glocal Marketing (Global and local) defined strategy, which has made it possible that today the company is present in 49 countries, with more than 400 stores and it’s a clear success of internationalization.
Very few international brands have succeded in consolidating in different countries, given the difficulty of adapting to different cultures and markets, but IKEA is a clear example that this is possible.
The first steps of the expansion were relatively simple taking advantage of the proximity of some neighboring countries like Norway in 1963 and Denmark in 1969. Later they decided that Switzerland in 1973 was the first adventure outside of Scandinavia, at first it was thought that the Swiss market was the most difficult and most conservative in Europe but the cultural and geographical proximity was a key to the beginning of its expansion in the old continent.
Some markets weren’t easy, such as China, one of the company’s biggest challenges. IKEA opened its first store in 1998 in Shanghai and a year later in the capital Beijing. They started off good assuming that Chinese apartments were smaller and that customers needed more functional solutions. Thanks to this strategy, the company grew fast but had a problem: local stores weren’t profitable. For China, the traditional low prices of the company weren’t enough, since furniture from local stores was cheaper because they were manufactured there. IKEA understood that it had to start manufacturing in the country itself to reduce manufacturing costs and eliminate high import taxes. The adaptation to China was hard, and many changes of strategies were necessary for the multinational to be profitable today in Asia.
Creatives of international campaigns.
In the United States they started in 1985 and they had to realize that local demands demanded bigger beds and cabinets, besides putting measures in inches; However, this market wasn’t as complicated as the Chinese market and over time both China and the United States have become the fastest growing markets along with Australia, Canada, Poland and Germany, which is the leading market.
In Spain, a country of contrasts, each region has a very different strategy: for example, on the southern surfaces of the peninsula there is a greater offer of outdoor furniture, because the climate allows more life to be made on the terraces.
From OTS Media International we have experienced this strategy. In 2011, we began to plan campaigns in different international media collaborating with Ymedia, the agency that manages the IKEA account nationwide. From the beginning the strategy was based on impacting foreigners living in Spain, IKEA knows that once they come to our country they need furniture and impact them in local media that they consume daily like Costa Blanca Nachrichten, Costa Blanca News, Round Town News , South En Español, The Coastline, The Euro Weekly News, The Sun, etc. This type of media is very consumed by the target and they are informed both with local news and with news from their countries of origin.
Creativities of international campaigns in media for foreigners residing in Spain.
In relation to e-commerce, the company is creating new store formats, shorter delivery times and improved distribution solutions to attack more digital customers. However, they are very clear that their business is in the physical stores: they are aware that moving to the outskirts of the cities in search of stores, spending a lot of time inside them and waiting for long lines is, ironically, part of their strategy . The experience can be so exhausting that many times we force ourselves to buy unnecessary things so as not to return home empty-handed or with the feeling that the trip hasn’t been worthwhile. The Swedish company, at the end of it’s last fiscal year, which ended on August 31, exceeded 34,100 million euros in global sales, 3.8% more than the previous year. Today, it is the largest global furniture retailer in the world.
No doubt much of the above mentioned helps, but the creation of affective ties and presence in the lives of their customers is what makes IKEA be who it’s. The ultimate purpose of IKEA is to be “the leader of life in the home”, hence its own workers must understand what life in the home really is like. They often visit different homes and make reports of “Life at home” with which they discover new routines, habits and desires of the public and then achieve unforgettable advertising campaigns, for us this is what marked a before and after … in Spain, for sure.
Published by: Jose Serra – OTS Media International