IKEA Public Relations Plan Paper Example

Introduction

IKEA is an acronym that comprises the initials of Ingvar Kamprad who established the organization in Sweden, and Elmtaryd a ranch and Agunnaryd his native land where he grew up (Kristoffersson, 2014). IKEA is a multinational organization that designs and deals with ready to assemble furnitures such as chairs, desks, beds and other home accessories. It is one of the biggest manufacturers of furniture with over 300 stores located in different countries (Kristoffersson, 2014). IKEA's vision is to help create a better everyday life for its consumers while offering affordable prices for the wide range of highly designed furniture products. IKEA plans to open new markets with an aim to reach a total of 3 billion customers by 2025 (Molin, 2018). IKEA plans to open branches in South America and in particular put up stores in the cities of Santiago in Chile, Bogota of Columbia and Lima of Peru (Molin, 2018).

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This Public Relation (PR) plan for IKEA will target and aim to achieve the stated strategies, objectives and goals for a smooth introduction of IKEA to South America markets. These objectives are intended to create awareness of IKEA to South America markets by increasing their presence in the media, maintaining their big brand image and engaging in activities that will educate the public on its products and services. IKEA's goal is to reach out to more consumers by opening more stores across the globe and creating more and convenient ways of selling their products, for instance, introducing the online market especially to countries that already appreciate e-commerce (Molin, 2018). With the timeframe in mind, it is possible to achieve the stated strategies, goals and objectives of the PR plan by implementing the recommended tactics.

Situation Analysis of IKEA

IKEA has identified a big market in South America which offers a good market due to its increasing population and development of the economy. South America will provide a ready market for its products and services. With the need to maintain an eco-society, IKEA will perfectly fit in South America market as it offers eco-friendly products which have no threats to the environment. With the aid of traditional SWOT analysis of strengths, weaknesses, opportunities and threats, the impact of IKEA and its introduction to South America markets will be identified.

Strengths

IKEA is a well-recognized organization for its reputation and brand image, and this will have an advantage over the local competitors because people will be eager to try out their well-known products (Gummesson et al., 2014). IKEA is characterized by perfect placement of its store in high-density areas which offers an active store operation and clear visibility that markets itself. IKEA uses the concept of economies of scales that help the organization in securing long term contacts and raw materials in bulk. The cost of transportation for IKEA products is relatively cheap as it places distribution centers in order to optimize transportation (Gummesson et al., 2014). Transportation is also made easier by the mode of packaging which uses brown cardboard that is cheap, easy to recycle and is always flexible enough to fit in a lot of their products. The idea of flat packing and ready to assemble products; with manuals for any help required will appeal to South America Market (Gummesson et al., 2014). The company's culture and the brand reputation match the external image which supports its vision of reaching many consumers by providing affordable goods. IKEA is also environmental friendly because of its culture of sorting and reusing every recyclable material (Gertner, 2013). It also boosts of the Recovery Department which practices the sale AS-IS where unsuitable products that cannot be sold at the full retail value are set available for sale in their condition (Gummesson et al., 2014). This reduces too much production of waste to the environment and also produces incomes. The product design, which is very sleek and minimalist in nature, is so popular in both Europe and North America, and this will make it acceptable in South America too. IKEA is a charitable company, and this makes it acceptable to many societies all over the globe because it gives back to society.

Weaknesses

IKEA is a global brand with a well-known reputation for producing quality products at an affordable price. Due to the size and scale of its business, it can present a problem in management, especially when introducing it to a new market where it should remain sustainable (Gertner, 2013). Due to global warming, financial restraints and environmental issues, it is very challenging for IKEA to maintain its quality when procuring low cost raw materials is almost impossible. The minimalist design which is appreciated in Europe and North America market may not be appealing to everyone. The idea of imported goods to the new market may be costly because of the restrictions and regulations of customs for exports and exports practiced in different regions. IKEA is new to South America, and this may provide a challenge for its products to be accepted in the market. IKEA will also face challenges of employees and their working conditions as it will have to adapt to the different cultural diversity experienced in work places.

Opportunities

The budget for shopping in South America markets is extremely growing in metropolitan cities and especially for young adults and college students who always want to be up to speed with the latest advanced technology. IKEA will provide a market where all these needs will be met. With the increasing demand for greener products, IKEA will provide a solution to the South Americans in terms of new products that are affordable and of good quality. With an established name and brand, IKEA will attract the attention of new consumers who will be eager to try out their products. IKEA will also maximize the media platforms to create awareness and acceptance of its products to the new market.

Threats

The furniture business is highly fragmented, and IKEA will face stiff competition from the local markets from the high-end special retailers to the low-end discount retailers. The local competitors will have an advantage of IKEA because of their established market base and customers. IKEA is new to South America markets, and it will take time for it to adopt to the cultural differences, rules and regulations of markets, consumer needs, supply and demand chain, market strategies, and market language, just to mention a few. The cost of transportation and availability of raw materials will present major concerns to IKEA, and this will affect their pricing policies which strive to provide quality products at affordable prices. The impact of new and advanced technology may also present a threat to IKEA. Availability of household companies in South America that provide similar goods at lower prices will negatively impact IKEA.

Target Audience

IKEA's vision is to help create a better everyday life for its consumers while offering affordable prices for the wide range of highly designed furniture products. This vision and mission help the company in identifying its target audience. The target audience varies with needs, functions and styles and it is determined by the economic capabilities of an individual (Gummesson et al., 2014). For instance, for the young adults who are in their teens and stay in rented apartments always go for style rather than function. The teens are so intrigued by style, and their buying capacity is limited by their financial status. They do not have enough money to spend on luxurious goods. For customers who area about to start their families, style and function really matter, but just like the teens, they are also limited by their financial capabilities because they are struggling to stabilize their careers and families.

However, for mature adults who are at the peak of their careers always choose functional furniture over style. For business entities, style and function are important to maintain their reputation and class, and these entities always require assembly and after sales services. Factors to consider when choosing demographics are age, the young and old have different tastes and purposes (Gummesson et al., 2014). The young always go for style while the aged choose to put function as their priority. Another factor to consider is gender, income to determine what type of goods to sell and how to price them.

South America seems to be a perfect choice because of the fast pace and the developing economy. Lifestyles of the target audience also matter because there are those people who go for simplicity while others yearn for class. To understand the lifestyles, Maslow hierarchy of needs comes in handy as the need of quality of life is ranked above the need of function is which is lower, demanding for physical survival such as a home. The consumer buying cycle is also another factor to consider (Gummesson et al., 2014). It revolves from the urge to buy new furniture, conducting due diligence on the company's website, evaluation of alternatives, purchase and eventually experience or past-purchase evolution.

Objectives

IKEA's main objective is to offer a variety of well-designed, quality, durable and functioning furniture. IKEA plans to expand its market share in South America, and its goal is to win the market share by establishing the brand and reputation to that market. IKEA is globally recognized as one of the best manufacturers of furniture and household goods, and so its objective is to continue that culture in South America and hope it picks up. This is aimed at boosting the sales, store visits, website visits, and product trials to the South American markets. This will be done by raising awareness to the South America markets, to both customers who have heard about their products and to the new customers who have no clue about their products. By raising awareness, IKEA also plans to preheat publicity by engaging in social responsibility events of giving back to society, and by doing so, it will attract the attention of the public by winning their hearts and also using the chance to market their products and services (Gummesson et al., 2014).

Strategies and Tactics

IKEA's strategies and tactics are aimed to target the stated audience while achieving the company's goals and objectives. IKEA will concentrate on the rising metropolitan cities where the growing population will present a ready and available market for its products. The organization also plans to target the University areas that are crowded with budget-focused students and young adults who have no problem purchasing products that meet their modern lifestyles. The young and old families will also be targeted as they also offer a ready market by balancing their needs for good function and styles (Gummesson et al., 2014). IKEA will also target the rural parts by offering transportation services to expand their market share and try winning it by offering transport services that are appealing to the new customers. Apart from showcasing the furniture in real life living arrangements, IKEA will adopt the automatic selling system that will enhance and minimize client independence.

However, the main strategic plan is to concentrate on the young population because the older population is always loyal to their providers. IKEA targets to win the loyalty of this young population so as to grow with them. The young population also has a very active lifestyle, and this will help IKEA to advance their products to meet the modern lifestyles by being more creative and innovative (Gertner, 2013). IKEA will use the available Internet advertisements as this is the common mode of communication among the young population. Globalization has been made easier by the use of the Internet w...