MKTG/119

IKEA’s Global Marketing Strategy

“It’s the most Everyman store in retail. It crosses income, age, gender, nationality. It is truly a
wonder.”1
- Candace Corlett, Principal, WSL Strategic Retail2 on IKEA.
“Our IKEA vision is something that we’ve found is universally understood, from Moscow to the
United States and especially in Atlanta. This vision includes IKEA’s catchphrase of ‘You do a
little. We do a little. And together we save a lot’.”3
- Linda Mee, Store Manager of IKEA Atlanta, US.

INTRODUCTION

The Sweden-based Inter IKEA Systems BV (IKEA) was ranked 42 by BusinessWeek magazine in
its list of Top 100 global brands 4 for the year 2005. In January 2005, IKEA was placed third in
BrandChannel’s5 fourth annual Reader’s Choice Awards for the global brand with the most impact
in 2004. According to the BrandChannel rankings, IKEA was the #1 brand in Europe and Africa.
IKEA was the world’s largest furniture retailer that specialized in stylish but inexpensive
Scandinavian designed furniture (Refer to Exhibit I for facts on IKEA). IKEA’s success was
attributed to its vast experience in the furniture retail market, its product differentiation and cost
leadership. The company sold its furniture in kits, to be assembled by the customers at home. In
addition to furniture, IKEA also sold utility items such as utensils, hooks, clips, stands, etc.
IKEA’s founder Ingvar Kamprad (Kamprad) had built an international furniture chain of 226
stores in Europe, Africa, Asia and the US. For fiscal year 2004-05, the company generated
revenues of US$ 17.9 billion, a 15% increase over the previous fiscal year.
IKEA held a market share of not more than 10% in the markets in which it operated. In spite of
this, it had been successful in almost all countries, because of public awareness of the IKEA
brand. According to Anders Dahlvig, Chief Executive Officer (CEO) of IKEA, “Awareness of
our brand is much bigger than the size of our company. That’s because IKEA is far more than
a furniture merchant. It sells a lifestyle that customers around the world embrace as a signal
that they’ve arrived, that they have good taste and recognize value.”6 The British design
1
Donna Goodison, “Finding the Icky in IKEA: Offers Too Much of a Good Thing,”
www.business.bostonherald.com, November 09, 2005.
2
Headquartered in New York, WSL Strategic Retail is a consulting company that offers retailers and
manufacturers strategic solutions to marketing problems.
3
“IKEA Furnishes the Southeast,” www.ddimagazine.com, August 01, 2005.
4
Since 2000, BusinessWeek magazine has teamed up with Interbrand, a leading brand consultancy firm to
publish a ranking of the 100 Top Global Brands by dollar value. The brands are selected according to two
criteria. They have to be global in nature, deriving 20% or more of sales from outside their home country.
There also has to be publicly available marketing and financial data on which to base the valuation.
5
Brandchannel.com was launched on February 05, 2001 by Interbrand. It provides a global perspective on
brands. For increasing brand awareness, it offers tools and information including global listings for
conferences, courses and careers, as well as links to other valuable industry resources.
6
“IKEA: How the Swedish Retailer Became a Global Cult Brand,” BusinessWeek, November 14, 2005.
magazine Icon7 said, “If it wasn’t for IKEA, most people would have no access to affordable
contemporary design.”8 The magazine also voted Kamprad as the most influential tastemaker9
in the world.

ABOUT IKEA

Kamprad established IKEA in 1943 at the age of seventeen. He came up with the name IKEA by
combining the first letters of his name (Ingvar Kamprad), followed by the first letters of the farm
and village he grew in (Elmtaryd and Agunnaryd). IKEA began in a shed that was just two meters
square in size. Kamprad started his business by buying pens, Christmas cards, matches, cigarette
lighters, nylon stockings and other items in bulk. He sold these items to the residents of Smaland 10
at a reasonable price, but still made healthy profits. To save more money, Kamprad would
piggyback his packages on the trucks that delivered milk. IKEA soon started making money. In
1945, Kamprad started promoting business through mail order catalogues as conducting individual
sales calls became impossible.
Furniture was introduced in IKEA’s product portfolio in the year 1947. By 1951, the furniture sales
had increased so much that Kamprad decided to discontinue all other products and concentrate solely
on selling furniture that was classy and low priced at the same time. In the same year, the first IKEA
furniture catalogue was issued and the first IKEA furniture shop was opened in 1953 at Almhult in
Sweden. The first IKEA stores was opened at Almhult in 1958. The opening of the showroom was an
important milestone in the growth of IKEA as customers could, for the first time, see and touch the
furniture before giving an order. By visiting the showroom, customers could review three dimensions
of its products – function, quality and low price - before making their purchases.
In 1956, IKEA launched its most successful product – Flat pack furniture. It was invented by
accident when an IKEA employee Gillis Lundgren (Lundgren) realized that a bulky wooden table
could fit into a car only when its legs were removed. He put this observation to work and thus was
born furniture that could be easily dismantled and rearranged with the aid of accessories such as
nails and screws. Lundgren subsequently went on to establish the design team at IKEA that created
a bookshelf named Billy, and a sofa called Klippan, the two globally best-selling furniture pieces
from IKEA. This technology brought IKEA two distinct advantages: it made furniture easy to
carry (for both the buyer and the company), and it also reduced overall costs as buyers could
assemble the products at home using instructions provided by the company. These savings were
passed on to the customers. Over the years, many more innovative products came from IKEA.
Prominent among these was the ‘Olga’ chair, ‘Tore’ home storage systems and the Privat sofas.
IKEA followed the practice of giving a name to each of its products. It named its products after
Nordic towns, rivers, islands, and counties.
IKEA began its overseas foray in 1963 with the opening of its store in Norway. In the same year,
IKEA designed the MTP bookcase that went on to become a classic. In building this and other
wood products, IKEA forged good relations with Polish suppliers in the 1950s and 1960s. These
relationships provided a basis for maintaining prices at levels that the majority of people in these
countries could afford. With the success of the Norway store, IKEA began venturing into other
neighboring countries like Denmark in 1969 and Switzerland in 1973 (Refer to Exhibit II for a list
of countries in which IKEA established its presence).

7
Icon is an international design and architecture magazine. It interviews top architects and designers in the
world, visits the best new buildings, analyses interesting new cultural movements and technologies and
reviews a range of exhibitions, books, products and film. The first Icon issue was released in 2003.
8
“IKEA: How the Swedish Retailer Became a Global Cult Brand,” BusinessWeek, November 14, 2005.
9
A tastemaker is one who determines or strongly influences current trends or styles, either in fashion or the arts.
10
Smaland literally means ‘Small Country.’ It is a province in southern Sweden.
IKEA did not have its own manufacturing facilities. Instead, it used subcontracted manufacturers
all over the world for supplies. All research and development activities, however, were centralized
in Sweden. No matter how beautiful a design, it was not put up for sale if it could not be made
affordable. To achieve this level of affordability, IKEA engaged 12 designers at Almhult in
Sweden, along with 80 freelancers to work in tandem with the production teams to identify
materials and suppliers. This was a trial-and-error process that could take as long as three years.
In fact, for its PS Ellan line of products (a dining chair), IKEA designer Chris Martin worked with
the production team for a year and a half to adapt a wood-fiber composite (a cost-effective
combination of wood chips and plastic resin that was used in highway noise barriers) for use in
furnishings. IKEA challenged 28 designers to find uses for discarded and unusual materials. This
resulted in the creation of a table from reddish-brown birch heartwood (furniture makers generally
preferred the pale exterior wood) and a storage system from recycled milk cartons. IKEA also
aimed to reduce prices by an average of 2% to 3% each year across all its products. For instance,
the Klippan sofa which was sold at US$354 in 1999 was sold at US$224 in 2005. This created a
wider reach for IKEA products and also helped phase out products at a slower pace. IKEA usually
phased out a third of its product line every year.
IKEA entered the US market in the year 1985. In the same year, it launched the ‘MOMENT’ sofa
in the US. To manufacture this sofa, IKEA went to a supermarket trolley factory to make use of
their knowledge about strength and stability. Based on this study, IKEA created a stylish,
comfortable and low-priced sofa with a modern look. The company designed a matching table in
1987 that went on to win the Excellent Swedish Design prize11.
In 1997, IKEA introduced ‘Children’s IKEA.’ IKEA realized that the play areas, children’s room
settings, baby areas and special meals in the IKEA restaurant made the company’s showroom a
place kids loved to visit. This prompted them to work with two groups of experts to develop
products for children. These included child psychologists and professors, who helped to develop
products that were good for children’s motor skills 12, social development and creativity. IKEA also
worked with children to understand what they were interested in. Based on the results of this study,
IKEA launched its kid’s range of products. By 2005, IKEA had grown into a US$ 17.9 billion
company with over 84,000 co-workers spanning 44 countries across four continents.

BUILDING THE IKEA BRAND

THE FOUNDER’S VISION

IKEA was known for its contemporary yet affordable furniture, even after twenty years of the exit
of Kamprad. Though Kamprad had long ceded day to day involvement in the company’s activities,
his vision and thoughts were deeply rooted in IKEA’s culture. Kamprad’s humble beginnings (he
was the son of a farmer) had created a unique IKEA culture that was founded on respect for money
and an innovative mindset. Kamprad was known for his frugal habits. He flew economy class, he
would take the metro to work, drive a ten-year-old second-hand Volvo and avoid designer suits.
This attitude trickled down to the co-workers, who would ensure minimal wastage and cost cutting
at every level. As a result, IKEA came up with products that were aesthetically designed and were
still available at affordable prices. This aspect greatly enhanced the brand image of IKEA, which
was perceived as a company that believed in social equality.

11
The Excellent Swedish design award was constituted in 1983. Every year, The Svensk Form (the Swedish
Society of Crafts and Design) singles out the best in Swedish design. The results are presented in a
traveling exhibition and catalogue.
12
Motor skills involve activities that use the small and large muscles of the body. They are classified into fine
(writing, cutting) and gross motor skills (running, playing, and climbing).
In 1976, Kamprad penned a book named ‘The Testament of a Furniture Dealer’ (Refer to Exhibit
III for a few excerpts). Through this book, he set out the philosophy, “We have decided once and
for all to side with the many. What is good for our customers is also, in the long run, good for us.
We want to create a better everyday life for the many people.” 13 In the book, he also penned
interesting tidbits like, “Divide your life into 10-minute units and sacrifice as few as possible in
meaningless activity,” “wasting resources is a mortal sin” and “it is our duty to expand.” 14
A pamphlet with these tidbits was given to employees the day they joined IKEA. Kamprad also
repeatedly insisted that it was fine to make mistakes. He wrote, “Only those who are asleep make
no mistakes. Making mistakes is the privilege of the active. It is always the mediocre people who
are negative, who spend their time proving that they were not wrong.” 15 He also claimed that no
one had made more mistakes than he had. Self-criticism, humility and the ability to compensate for
one’s shortcomings formed the foundation of IKEA culture.
The way IKEA operated related largely to lowering the costs of the company as well as offering
furniture at affordable prices to customers. However, there was also a deeply ingrained belief that
it was good for customers to pick up their own furniture, carry it home and assemble it themselves,
and IKEA had established this strong connection with the customer through its advertisements and
catalogues. There was a participation of both the company and the customers to make the business
model work. Kamprad believed that IKEA existed for not just improving people’s lives, but to
improve the people themselves. The company’s self-service store design and the ease with which
its furniture could be assembled were not merely cost controls, but an opportunity for developing
self-sufficiency among people. This vision was reinforced in IKEA’s advertising and catalogues.
This made IKEA very different, as it was positioned as the brand for masses.
COMPLETE SHOPPING EXPERIENCE
IKEA stores were usually located outside urban areas, isolated from other shops. This was done
intentionally so that IKEA could create a complete shopping experience for customers. The IKEA
products were themselves beautifully crafted and appealing, and even their stores were so
constructed as to enthrall shoppers. The visual appearance of the stores was the same the world
over. The blue-and-yellow buildings was generally 300,000 square feet in size and each store
stocked about 7,000 items, from kitchen cabinets to candlesticks. IKEA targeted middle class
customers worldwide. IKEA made shopping easy for customers. For example, right at the entrance
of the store, customers could drop their kids at the playroom which had many types of safe play
equipment, and then shop on their own in a leisurely manner.
The stores were constructed in the form of a circle, to allow shoppers to view all sections of the
store. They had wide passageways that let the customers examine the furniture, which was
aesthetically arranged as it would look in a home, with accessories like night lamps, bed sheets,
etc. The beautiful arrangements enticed shoppers to buy the products as they could see how they
would be used in a home.
Most IKEA products were competitively priced. Kamprad believed that, “To design a desk which
may cost US$1,000 is easy for a furniture designer, but to design a functional and good desk which
shall cost US$50 can only be done by the very best. Expensive solutions to all kinds of problems
are often signs of mediocrity.”16 Kamprad ensured that IKEA not only brought out the best
products, but also that many could buy them. There were even things shoppers would never put
into their shopping list, which when displayed in IKEA stores and priced under US$2, seemed to
be worth having. Thus IKEA seemed to have a knack for creating a need for totally new products.

13
Brad Cook, “IKEA,” www.brandchannel.com, August 04, 2003.
14
“IKEA: How the Swedish Retailer Became a Global Cult Brand,” BusinessWeek, November 14, 2005.
15
Oliver Burkeman, “The Miracle of Almhult,” www.guardian.co.uk, June 17, 2004.
16
“IKEA of Sweden,” www.geocities.com, January 12, 1996.
A case in point was the Mallen clip, used to hang magazines in the bathroom. This was one of
IKEA's hottest selling accessories. Researchers said people would never have thought of hanging
up magazines in the bathroom. However, IKEA felt that a Mallen clip was a must in every home.
Once people had seen a row of magazines hanging up, neatly suspended from a Mallen clip, in the
bathroom section of an IKEA showroom, most of them latched on to the usefulness of the item and
snapped it up. The Mallen clip costed only 90 pence for three. It was so affordable, that one did not
have to think twice before buying it. IKEA insiders called such items ‘hot dogs.’
IKEA realized that hunger could keep customers away from the stores. Hence, it had a cafeteria
located in the center of the vast building to give shoppers a breather and allowed them to refresh
themselves at the store itself instead of winding up their shopping in a hurry. The final destination
for a customer was the warehouse, where all the big items were flat-packed, enabling shoppers to
take their furniture home comfortably.
LOCALIZATION IN GLOBAL MARKETS
According to IKEA, the company’s target market was the global middle class which shared buying
habits. IKEA’s Billy bookcase, Lack side table and Ivar storage system were best-sellers
worldwide. The customer spending pattern was also similar across countries. Despite these
similarities, IKEA realized that to strengthen its presence in the global market, it was necessary to
localize. For instance in China, IKEA produced 250,000 plastic placemats in 2005 to honor the
year of rooster17. These placemats were sold out in just three weeks.
Similar practices employed by IKEA brought it closer to the local people in every country in
which it operated. To achieve cost cutting, IKEA ensured that suppliers were located in low-cost
nations, with proximity to raw-materials and reliable access to distribution channels. Not only did
IKEA have globally integrated operations, but it had also found an effective combination of low
cost, standardization of products, technology and quality. For instance, in addition to having stores
in many countries, IKEA also had a global web of 2,000 suppliers operating in 55 countries, which
allowed the company to design items and have them produced in countries where materials and
labor costs were low. IKEA bought most of its raw materials from China and Poland (Refer to
Exhibit IV for IKEA’s biggest suppliers of raw material). These two markets were strategically
placed to cater to the European and Asian markets respectively. Labor was also cheap in these
countries. Furniture designs were imported from Sweden and the items were manufactured in these
countries. The suppliers and designers had to customize some of the IKEA products to make them
sell better in local markets.
IKEA was especially keen to improve its performance in its three fastest growing markets – the
US, Russia and China. The US was a key market for IKEA, a market in which they had initially
struggled. When IKEA started out in the US in 1985, stores weren’t spacious enough to offer the
complete IKEA experience and many of the stores were at locations that were not very easily
accessible by people. Products were priced comparatively high. IKEA beds were measured in
centimeters, not king, queen, and twin, as in the US. Other problems were that sofas were not deep
enough, curtains were too short and IKEA’s modular kitchens did not accommodate home
appliances that were available in the US. Market studies also revealed that American customers
were buying vases to drink from as IKEA glasses were too small for them. These studies also gave
IKEA important insights such as: Americans preferred to store their clothes folded, unlike
Europeans who liked to hang their clothes.
As a result of these studies, IKEA made major changes in its US operations. The metric
measurement system was done away with, new and bigger store locations were chosen and
wardrobes had deeper drawers so customers could keep folded clothes, prices were slashed and

17
Chinese Astrology is organized according to 12 animals signs in the order – the Rat, then the Ox, the
Tiger, Rabbit, Dragon, Snake, Horse, Sheep, Monkey, Rooster, Dog and Pig. Rooster Years are tenth in
the cycle and recur every twelfth year.
 IKEA’s Global Marketing Strategy

services were improved. According to Pernille Spiers-Lopez, Head of IKEA, North America,
“Now US managers are paying close attention to the tiniest details. Americans want more
comfortable sofas, higher-quality textiles, bigger glasses, more spacious entertainment units.”18
Another major challenging market for IKEA was China. This country was also a very different
market, in terms of culture and local tastes and preferences. IKEA adapted products and services to
suit the Chinese market. In China, the IKEA store layouts reflected the layout of many Chinese
apartments. Many Chinese apartments had balconies and so the stores too included a balcony
section. The Chinese also spent the most on their living rooms. The Chinese living room also
served as a dining room. Chinese kitchens were small, hence the customers spent less on kitchen
furniture. Bedroom furniture and decorations were the least popular purchases as this room was the
most private and the least visible place in the house. This made IKEA realize that living room and
dining room items would be more popular in China, and so IKEA stores carried more of these
items. In the early 2000s, however, trends were beginning to change. As disposable incomes,
especially in Shanghai and Beijing, rose, the Chinese started buying different furniture items.
IKEA planned to launch a campaign that promoted complete bedroom furniture sets.
When IKEA first began operations in China in 1998, it sold Hong Kong-sized beds, which were
shorter than standard-sized beds. The company soon realized the beds were too short for the
mainland Chinese and switched to selling standard beds. IKEA also had to adapt its location and
do-it-yourself (DIY) assembly concept for Chinese customers. IKEA located its stores in China in
places accessible by public transport. The company also offered home delivery and long-distance
delivery to major cities in China for a fee. It also offered fee-based assembly services. Smedberg,
an IKEA employee explained, “Usually IKEA stores open relatively far out in the suburbs, but we
knew China had to be different since, for example, only 20 percent of visitors in Shanghai have
cars. But the stores also need ample parking so that people can visit with their own cars in the
future. The Shanghai store has almost 1,000 parking places.” 19 Smedberg also commented that
IKEA’s DIY products were appreciated in the West as the customers there knew it would save
them money. Customers in the West also loved self-assembling of products as it appeared
challenging to them. However, in China, labor was cheap and since the DIY concept had not gone
down well with customers, IKEA decided to assemble furniture for a fee.
In order to help Chinese customers, the company also posted in-store instructions and design
advice, published brochures and catalogues and also operated a website. For example, one in-store
poster depicted an older couple whose child had just moved away from home to attend college.
The poster portrayed the couple discussing how IKEA had helped them in converting their son’s
bedroom into a new room for their own use. Commenting on this, Charles Sampson, Chief
Executive Officer of Saatchi & Saatchi China, the advertising firm that created print
advertisements for IKEA in China, said, “Many Chinese consumers follow an ‘all or nothing’
approach to interior design. If they want to redesign their living room they will either completely
redo everything or do nothing. IKEA wanted to convey that change can be easy and that it is okay
to make small changes, step-by-step.”20

THE IKEA BUZZ

A big contributing factor in the growth of the IKEA brand was its ability to weave a story around
itself. For instance, before the opening of its store at Atlanta, USA, in June 2005, IKEA invited
locals to apply for the post of Ambassador of Kul (‘Fun’ in Swedish). The five participants had to
write an essay on why they deserved US$2,000 in gift vouchers. However, for them to qualify,
participants also had to take part in other contests and games in the store and sleep at the store for

18
“IKEA: How the Swedish Retailer Became a Global Cult Brand,” BusinessWeek, November 14, 2005.
19
Paula M Miller, “IKEA with Chinese Characteristics,” www.chinabusinessreview.com, 2005.
20
Paula M Miller, “IKEA with Chinese Characteristics,” www.chinabusinessreview.com, 2005.
 IKEA’s Global Marketing Strategy

three days. The winner Jordan Leopold (Leopold), a manager at Costco Wholesale 21 said, “I got
about eight hours of sleep in total because of all the drilling and banging going on.” 22 Leopold
finally got his gift certificates, which he used on a bedroom set.
With this event, IKEA had a story brewing. The company announced more gift certificates worth
US$4,000 for the first person in line and other smaller certificates at the opening of the Atlanta
store. Eventually, several people thronged the opening in an attempt to win the certificates. The
desire for IKEA products was such that Roger Penguino (Penguino), a newly wedded 24-year-old
Mac specialist with Apple Computer Inc23 spent seven grueling days outside the Atlanta store,
waiting for his booty. At the store opening, Penguino got his certificates and bagged a US$799
Karlanda sofa and a US$179 Malm bed, among other items. He also achieved celebrity status, both
at IKEA and among his colleagues. These events were reported in great detail in the press. This
brought more shoppers to IKEA, and more sales for the company.
The buzz around IKEA had been a healthy contributor to the company's popularity. Since its
inception, IKEA store openings witnessed huge crowds the world over. In April 2000, when IKEA
opened a store in Emeryville in Berkeley, California, a huge crowd gathered in the hope of
collecting gift vouchers and US$149 chairs for the first 100 in queue. People had started queuing
up as early as a day before the opening of the store. IKEA was such a reputed brand that a
customer, Bethany Cue came all the way from Albany in New York to claim her vouchers. She
was the first in line to enter the store. Carl Denyer, second in line, brought his wife, 5-month-old
daughter and a portable television to keep him company while he waited. He said, “We just
thought it’d be fun.”24 He also brought his father’s military sleeping bag to keep him warm while
he slept in the parking lot.
Similarly, in early 2005, IKEA announced that it would be introducing Boklok homes in the UK
(Refer to Exhibit V for pictures of Boklok homes). The Boklok was a flat-pack house. It offered
hope to hundreds of thousands of people in UK who were unable to buy a house of their own.
Boklok homes were made from timber frames and could be either one or two bedroom homes.
These homes were targeted at lower income families. Providing affordable houses had been an
issue of concern for the UK government for over a decade. Hence, they welcomed IKEA’s Boklok
venture. The Boklok home had been very popular in Denmark, Norway, Finland and Sweden,
where more than 2,000 BoKloks occupied 45 sites. IKEA offered the Bokloks at 13 stores across
the UK. The British showed great enthusiasm for IKEA’s Bokloks on the day it was launched,
with over of 6,000 customers coming for the opening at a north London IKEA store.

PROMOTIONAL STRATEGIES

IKEA’s advertising campaigns were based on unique marketing conditions and cultural
sensibilities of each country, which varied significantly across markets. For example, European
advertisements, especially in the UK, were more straight-forward than those in North America,
which were generally more witty. IKEA was present in some countries such as Canada, Australia
and Germany for over twenty five years while in countries such as the US, Britain and Italy, it had
been around for only a little more than a decade.

21
Costco Wholesale is the largest wholesale club operator in the US. The company operates 460-plus
membership warehouse stores serving 45 million cardholders in 37 US states and Puerto Rico, Canada,
Japan, Mexico, South Korea, Taiwan, and the UK. Stores offer discount prices on its 4,000 products
(many in bulk packaging), ranging from alcoholic beverages and appliances to fresh food,
pharmaceuticals, and tires.
22
“IKEA: How the Swedish Retailer Became a Global Cult Brand,” BusinessWeek, November 14, 2005.
23
Apple Computer Inc. is based in Cupertino, California, US. Its core business is computer technologies.
Apple initiated the personal computer revolution in the 1970s with the Apple II microcomputer.
24
Janet Adamy, “Stores Ready for Swedish Invasion,” The Contra Costa Times, April 12, 2000.
 IKEA’s Global Marketing Strategy

Over the years, IKEA had worked with different advertising agencies to bring out some of the
most creative and unconventional television spots across the globe. For these reasons, an IKEA
account was considered a choice catch as it allowed the agency the freedom to explore some
interesting and unexplored ideas. A typical IKEA spot although outrageous on some occasions,
helped build brand awareness. For instance, a campaign in IKEA’s homeland, Sweden, by
Forsman Bodenfors, targeted the nation’s male population – a segment that was less inclined to
shop at IKEA by inviting them to stores to compete in bed-making and sewing machine races. This
strategy created a buzz and kept an unending stream of customers flowing into IKEA.
In North America, Deutsch, a New York based advertising agency created a campaign that
portrayed IKEA workmen refurbishing the interior of a hut on ‘Gilligan’s Island’ 25 and the living
room of the ‘Brady Bunch.’26 The premier element in both the spots was ‘fun.’ Commenting on
IKEA’s advertising strategies, Geoffrey Roche, Head of Roche Macaulay & Partners 27, an
advertising agency said, “They feel that any communications that they have, anything where they
are talking to the consumer, should have a twinkle in the eye, should have a little bit of humor
attached to it. There’s quirkiness about them.”28
In Britain, St. Luke, IKEA’s advertising agency started a campaign in 2000 that challenged
complacency among the British. The company used the tagline “chuck out the chintz” and
implored the British to rid their homes of fussy, old-fashioned furniture. The next round of ads told
the English to “stop being so English” and suggested they become open to the idea of buying
IKEA furniture and brightening their homes. It was a bold concept and a radical departure from
IKEA’s previous ads in Britain when it had started its operations in 1987. Advertisements at that
point had stressed on value and IKEA’s sturdy Swedish design. At the time, the British regarded
IKEA’s simple ads as cold, boring and just too Scandinavian. However, with the new
advertisement campaign, the British were eventually won over, and IKEA’s UK business boomed.
Allan Young, St. Luke’s Creative Director for IKEA, said, “IKEA is anti-conventional. It does
what it shouldn’t do. That’s the overall theme for all the IKEA ads: liberation from tradition.”29
For another spot, St. Luke created the ‘Tattoo Man.’ In this spot, the Tattoo Man addressed IKEA
employees who were bewildered because customers were complaining about assembling their own
furniture. The ad also featured the staff asking the company to stop selling DIY furniture and just
sell ready-made furniture. At this stage, Tattoo Man instructed the employees to smell his armpits
and one another’s. On doing so, he asked them, “What do they smell? Then he said, “Honesty,
integrity.” The Tattoo Man further added, “When we sweat here, it’s in honest exchange for labor.
When a customer sweats at home, it’s in exchange for savings.”30
In yet another spot, IKEA co-workers complained that the stores were too crowded. The Tattoo
Man then used his tattoos to tell a story. A lone-wolf tattoo on him symbolized customers being
able to get around on their own with confidence. He also revealed a bat tattoo on his thigh,
25
Gilligan’s Island was a popular American television show of the 1960s. It centered on a group of people
who where stranded on an uncharted deserted island somewhere in the Pacific Ocean. They all were on a
boat tour, which found itself in the middle of a storm leading them to crash on an island. Those stranded
include, Gilligan, the Skipper, a millionaire and his wife, a movie star and a professor. Gilligan was the
first mate on the boat, the SS Minnow. Most episodes dealt with the castaways trying to get off the island,
but their attempts seemed to always be foiled by Gilligan.
26
The Brady Bunch was a classic situation comedy that aired on American television in the late 1960s. The
story revolved around Mike Brady, a widowed architect with three boys (ranging in age from 7 to 13)
married to Carol Martin, a single young mother with three young girls (ages 6 through 12). The couple
and their formerly-separate families become one close-knit. Stories revolved around family unity and
sibling rivalry, dating, misunderstandings, family vacations and growing up.
27
Roche Macaulay & Partners was a Canada based advertising agency. After merger with a US agency, it is
known as Lowe Roche.
28
“IKEA Advertising Hits Home,” www.boardsmag.com, June 01, 2000.
29
Ernest Beck, “Ikea Uses Quirky Ads to Sell Furniture in UK,” www.financialexpress.com, January 07, 2001.
30
Ernest Beck, “Ikea Uses Quirky Ads to Sell Furniture in UK,” www.financialexpress.com, January 07, 2001.
 IKEA’s Global Marketing Strategy

implying that customers could find their way around in the dark if there was proper store signage.
He also showed a tattoo of a scale on his back, a symbol of the ‘balance of quality and price’ that
customers could find at IKEA. Although very unconventional, these ads convinced customers
about the IKEA concept and philosophy. The ads always ended with a moment of enlightenment:
Tattoo Man would take the staff to a window to gaze at shoppers and happy families loading their
furniture into their cars, while music played in the background. At this point, IKEA used the
tagline, “This is the way of IKEA, the way it has always been.”31
Another very important market for IKEA was the US. Creating a brand image in a country as big
as the US was not a simple task for IKEA. In general, furniture, the world over was regarded as a
family asset and was handed over from generation to generation. Hence, furniture was not
perceived as a fashion item. Market studies in the US also revealed that Americans kept sofas for
eight years before relegating them to another use. Bedroom furniture was also used for as long as
16 to 20 years, while the dining room furniture had a life span of 20 years or more. Gina Raiser,
IKEA’s Advertising manager for North America admitted that the US was a big challenge for her
and her team. She said, “The American furniture culture has been founded by Puritans. People
have made a culture of hand-me-down furniture. You have to die with it. You pass it on from your
grandmother to your mother to you, whether a piece is loved or not.”32
IKEA, however, did not lose hope. It employed unique ways to convince American customers. For
instance, in August 2003, IKEA launched a whacky advertisement campaign for the American
market. This award winning advertisement spot featured an old lamp that was slumped on a curb
with rain beating down on it. At the same time, one could see the former owner of the lamp,
appreciating a new light fixture in the background. Then, a man with a Swedish accent would
approach and say, “Many of you feel bad for this lamp. That is because you are crazy. It has no
feelings. And the new one is much better.” 33 Through this advertisement, IKEA urged viewers to
not to feel bad for the lamp and encouraged them to discard old furniture and get what they really
wanted. This advertisement campaign tuned in to the feelings of many people and was very well
received by the audience. The approach was typical of IKEA. Americans soon started seeing IKEA
as a source of products that made them look sophisticated without spending too much money.
IKEA became the one-stop shop for cool, trendy, and affordable furniture and home accessories.
Such was the reputation of the company, that Americans began naming their children ‘IKEA.’

THE CONTROVERSIES

In spite of its success all over the world, IKEA was criticized for traffic jams and overcrowding at
its outlets, particularly at store openings which brought in frenzied crowds. In September 2004,
three people were crushed to death and sixteen were seriously injured in a stampede that broke out
at IKEA’s store opening in Jeddah, Saudi Arabia. More than 8,000 people had gathered near the
store for the US$150 gift vouchers, some of them having camped overnight. Immediately after the
incident, IKEA released a statement that read, “The management of IKEA Saudi Arabia expresses
deep sorrow over the tragic incident that occurred at the opening hours of Jeddah’s new showroom
and conveys its sympathies and condolences to the families of the dead” 34. The IKEA corporate
office also went on to add that this incident had been an important learning experience and IKEA
would ensure that such tragedies did not occur in the future.
Again, in February 2005, five people were hospitalized after hundreds were crushed at the opening
of England’s biggest IKEA store in Edmonton, London. More than 6,000 people flocked to the
store tempted by advertisements that guaranteed big discounts, including £45 sofas and £30 bed
31
Ernest Beck, “Ikea Uses Quirky Ads to Sell Furniture in UK,” www.financialexpress.com, January 07, 2001.
32
“IKEA Advertising Hits Home,” www.boardsmag.com, June 01, 2000.
33
Brad Cook, “IKEA,” www.brandchannel.com, August 04, 2003.
34
KS Ramkumar, “IKEA Regrets Fatal Stampede,” www.crowddynamics.com, September 03, 2004.
 IKEA’s Global Marketing Strategy

frames, to those who bought before 3 am. Hence when the main doors were opened, the forty
security guards were besieged and crowds pushed through, leaving people pinned to the wall.
Similar incidents happened at other store openings as well. It was beginning to look like IKEA had
not done much to curb the pandemonium it was causing.
IKEA was also criticized for putting in furniture assembly instructions that could not be
understood, and that there were missing components in the kits that caused unnecessary delays and
discomfort to the customers. A case in point was that of popular Hollywood actor Russell Crowe
who was furious when he could not figure out the instructions for assembling his baby’s cot and
attacked the flat-pack furniture pieces with his pocket knife before calling the company for help.
Another customer, Nicole Courneya (Courneya), a graduate student at the University of
Minnesota, said, “My first impression of IKEA was the furniture in my friend’s apartment. I really
liked it, and when they told me how much everything cost, it seemed that much more appealing.” 35
However, when she did make it to an IKEA store in Minessota, she was frustrated with the large
number of out-of-stock items. She finally got the bookshelf, she had been looking for at the third
attempt. At the time of making this purchase, she had also checked out a bed and was told was in-
stock in large numbers. However, when she went to the store the next day, she had no luck;
overnight, the store had run out of the beds she was looking for.
In another incident, Dave Brennan, a Professor, complained that the most frustrating aspect of
IKEA was the long queue at the billing section. He also added that people had abandoned their
carts due to the long wait involved. He said, “People just walk out. If you’ve got an hour or maybe
two hours in (during the trip), and it’s taking you 45 minutes to get to the cash register, some
people just say, ‘The heck with it, it’s not worth it.”’ 36 Justine Forsythe, a law student in the State
of Minnesota, USA, took over two hours to get her billing done. She said, “I think that they were
incredibly understaffed. I don’t know if they didn’t hire as many people as they could (have),
maybe they just weren’t prepared for the deluge of Minnesotans who would arrive.” On her second
visit to the store to return a defective dresser, she received no help from IKEA staff to unload the
furniture piece. She also had a bitter experience with the rude employees. She added, “I couldn’t
find an employee to help me lift the dresser out of my car to get into the store to return it, so I
asked several employees, and they’re like, That’s not my job. Finally, another customer helped me
get it into the store.”37
Unfortunately, such instances had not been one-offs. Many such sentiments were echoed across
other IKEA stores as well in several countries. Finally, taking a note of this rising resentment,
IKEA’s management expressed regret and apologized for such incidents, promising that such
instances would be minimized.
Notwithstanding all these issues, analysts recognized that IKEA had managed to build a brand
identity of a company offering good designs at low prices. Kamprad had clearly played a big role
in creating this IKEA image. However, Christopher A Bartlett, Professor at Harvard Business
School who wrote a case study on IKEA in 1996, wondered how long this brand image could be
sustained. He said, “The great challenge of any organization as it becomes larger and more diverse
is how to keep the core founding values alive. IKEA is still run by managers who were trained and
groomed by Kamprad himself and who are personally devoted to the founder. As the direct links
with Kamprad disappear, the culture may start to fade.”38

35
Jeff Horwich, “Huge Crowds, Inventory Troubles Cloud IKEA Honeymoon,” www.news.minnesota.
publicradio.org, October 18, 2004.
36
Jeff Horwich, “Huge Crowds, Inventory Troubles Cloud IKEA Honeymoon,” www.news.minnesota.
publicradio.org, October 18, 2004.
37
Jeff Horwich, “Huge Crowds, Inventory Troubles Cloud IKEA Honeymoon,” www.news.minnesota.
publicradio.org, October 18, 2004.
38
“IKEA: How the Swedish Retailer Became a Global Cult Brand,” BusinessWeek, November 14, 2005.
 IKEA’s Global Marketing Strategy

Exhibit I
Facts on IKEA

Turnover of IKEA

Year Turnover (In Euro million)

1954 1
1964 25
1974 169
1984 1,216
1994 4,396
1999 8,220
2005 15,212
Number of IKEA Catalogues

Year IKEA Catalogues Distributed (In millions)

1954 0.5
1964 2.0
1974 6.8
1984 35.0
1994 72.0
1999 96.0
2005 160.0

Number of People who Visited IKEA Stores

YEAR IKEA Visitors (In thousands)

1954 52
1964 1,644
1974 8,161
1984 52,114
1994 125,595
1999 219,353
2005 453,791
Contd…
 IKEA’s Global Marketing Strategy

Contd…
Number of IKEA Stores

Year IKEA Stores

1954 0
1964 2
1974 9
1984 52
1994 114
1999 152
2005 226
World’s Biggest Purchasers of IKEA Products

Country Percentage
Germans 19
Americans 11
British 11
French 9
Swedish 8

Source: www.ikea.com.
 IKEA’s Global Marketing Strategy

Exhibit II
IKEA’s Foray into Foreign Countries
1963 Norway – Oslo (Nesbru)
1969 Denmark – Copenhagen (Ballerup)
1973 Switzerland – Zürich (Spreitenbach)
1974 Germany – Munich (Eching)
1975 Australia – Artamon
1975 Hong Kong – Hong Kong (Tsim Sha Tsui)
1976 Canada – Vancouver (Richmond)
1977 Austria – Vienna (Vösendorf)
1978 Netherlands – Rotterdam (Sliedrecht)
1978 Singapore – Singapore
1980 Spain – Gran Canaria (Las Palmas)
1981 Iceland – Reykjavik
1981 France – Paris (Bobigny)
1983 Saudi Arabia – Jeddah
1984 Belgium – Brussels (Zaventem and Ternat)
1984 Kuwait – Kuwait City
1985 United States – Philadelphia
1987 United Kingdom – Manchester (Warrington)
1989 Italy – Milan (Cinisello Balsamo)
1990 Hungary – Budapest
1991 Poland – Platan
1991 Czech Republic – Prague (Zlicin)
1991 United Arab Emirates – Dubai
1992 Slovakia – Bratislava
1994 Taiwan – Taipei
1996 Finland – Esbo
1996 Malaysia – Kuala Lumpur
1998 China – Shanghai
2000 Russia – Moscow (Chimki)
2001 Israel – Netanya
2001 Greece – Thessaloniki
2004 Portugal – Lisbon
2005 Turkey – Istanbul
Source: www.ikea.com.
 IKEA’s Global Marketing Strategy

Exhibit III
Excerpts from ‘The Testament of a Furniture Dealer’
Source: Oliver Burkeman, “The Miracle of Almhult,” www.guardian.co.uk, June 17, 2004.
We have decided once and for all to side with the many. What is good for our customers is
also, in the long run, good for us. This is an objective that carries obligations...
Exhibit IV
The objective must be to encompass the total home environment; that is, to offer furnishings
IKEA’s
and fittings for every part of theBiggest Suppliers
home whether of Raw
indoors Material
or outdoors ... It must reflect our way
of thinking by being as simple and straightforward as we are ourselves. It must be durable and
Country
easy to live with. It must reflect an Percentage
easier, more natural and unconstrained way of life ...
The Ikea spirit is a strong andChina 18 to those who are the pillars of our
living reality ... Be thankful
society! Those simple, quiet, taken-for-granted people
Poland 12 who always are willing to lend a
helping hand. They do their duty and shoulder their responsibility without being noticed. They
are to be found everywhere -Sweden
in our warehouses, in our9offices, among our sales force. They
are the very embodiment of the IKEA spirit ...
Italy 7
Simplicity is a fine tradition among us. Simple routines have a greater impact. Simplicity in
Germany 6
our behavior gives us strength. Simplicity and humbleness characterize us in our relations
with each other, with our suppliers, and with our customers. It is not just to cut costs that we
Source: www.ikea.com.
avoid luxury hotels. We do not need fancy cars, posh titles, tailor-made uniforms, or other
status symbols. We rely on our own strength and our own will!
The feeling of having finished something is an effective sleeping pill. A person who retires
feeling that he has done his bit will quickly wither away. A company that feels it has reached
its goal will quickly stagnate and lose its vitality.
Happiness is not reaching your goal. Happiness is being on the way. It is our wonderful fate to
be just at the beginning ... The word impossible has been and must remain deleted from our
dictionary.
 IKEA’s Global Marketing Strategy

Exhibit V
Boklok Homes

Source: www.boklok.dk.
 IKEA’s Global Marketing Strategy

Additional Readings and References:

1. IKEA of Sweden, www.geocities.com, January 12, 1996.

2. Janet Adamy, Stores Ready for Swedish Invasion, The Contra Costa Times, April 12, 2000.
3. Jake Wise, IKEA Advertising Hits Home, www.boardsmag.com, June 01, 2000.
4. Ernest Beck, IKEA Uses Quirky Ads to Sell Furniture in UK, www.financialexpress.com,
January 07, 2001.
5. The Bible vs. the Ikea Catalogue – Which is Winning Hearts?
http://www.martinrothonline.com/MRCC23.htm, August 22, 2002.
6. Linda Hales, Throw Old Stuff Away!: New Ads Deride Attachment to Worn-out
Things, www.sfgate.com, September 28 2002
7. Maria Drago, A Couch in Every Living Room: IKEA Pushes Further into the U.S.
Market, www.jrn.columbia.edu, 2002
8. Brad Cook, IKEA, www.brandchannel.com, August 04, 2003.
9. IKEA Founder Overtakes Gates as World's Richest, http://in.news.yahoo.com/, April 4, 2004.
10. Oliver Burkeman, The Miracle of Almhult, www.guardian.co.uk, June 17, 2004.
11. Rasheed Abou-Alsamh, Pushing, Shoving, Chaos at Jeddah Store Opening,
www.crowddynamics.com, September 02, 2004.
12. Roger Harrison, Essam Al-Ghalib, Survivor Describes Brush with Death,
www.crowddynamics.com, September 02, 2004.
13. KS Ramkumar, IKEA Regrets Fatal Stampede, www.crowddynamics.com, September 03, 2004.
14. KS Ramkumar, Three Killed in IKEA Stampede, www.crowddynamics.com,
September 03, 2004.
15. Abdurrahman Al-Shayyal, IKEA Tragedy, www.crowddynamics.com, September 05, 2004.
16. IKEA Owns up Responsibility for Death, www.crowddynamics.com, September 17, 2004.
17. Jeff Horwich, Huge Crowds, Inventory Troubles Cloud IKEA Honeymoon,
www.news.minnesota.publicradio.org, October 18, 2004.
18. Scott Allen, Ingvar Kamprad - IKEA Founder and One of the World's Richest Men,
www.entrepreneurs.about.com, 2004.
19. Francesca Caferri, IKEA: The Global Giant that Just Wants to be Loved,
www.cancerworld.org, 2004.
20. Birgitta Forsberg, Trendy Ikea Ho-hum at Home: Swedish Shoppers don't Buy Into U.S.
Fascination with Giant Retailer, www.sfgate.com, January 22, 2005.
21. John Tilak, Apple Usurps Google as Top Global Brand, www.dmeurope.com,
January 31, 2005.
22. Man Stabbed in IKEA Store Chaos, Reuters, www.crowddynamics.com, February 10, 2005.
23. Oliver Finegold, Chris Millar, Chaos at Ikea Opening, www.thisislondon.com,
February 10, 2005.
24. IKEA BoKlok Flatpack Houses Spread Swedish Gospel, www.treehugger.com,
February 14, 2005.
25. IKEA - Brand of the Many, The Observer, http://observer.guardian.co.uk, June 12, 2005.
 IKEA’s Global Marketing Strategy

26. Bill Catlin, IKEA Furniture Wins Loyal Fans Even Though Assembly's Required,
www.news.minnesota.publicradio.org, July 14, 2004.
27. IKEA Furnishes the Southeast, www.ddimagazine.com, August 01, 2005.
28. Christopher Muther, Things I learned on My Trip to IKEA, www.boston.com,
November 03, 2005.
29. Donna Goodison, Finding the Icky in IKEA: Offers Too Much of a Good Thing,
www.business.bostonherald.com, November 09, 2005.
30. IKEA: How the Swedish Retailer Became a Global Cult Brand, BusinessWeek,
November 14, 2005.
31. Paula M Miller, IKEA with Chinese Characteristics, www.chinabusinessreview.com, 2005.
32. www.ikea.com.