I K E A

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I K E A

• Marketing Research

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IKEA The Basics

• Founded - 1943 in Smaland, Sweden By Ingrav
  Kamprad
• Stores Located Outside Cities In Europe, Asia,
  US, and Canada
• Sells Furniture, Kitchen Needs, Decorations, etc.

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IKEA In The U.S.
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IKEA Management Decision

• Should IKEA Open Smaller Satellite Location In
  The Christiana Mall?

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Processed Research Design

• Survey
• Focus Group

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Shopped at an IKEA
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Age Of Participants
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Distance Traveled
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Last Time Shopped There
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Distance Discourage Visit?
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Visits To The Mall
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Focus Group

• 3 Focus Groups
• University of Delaware Students - Dorms
• University of Delaware Students - Off Campus
• Homeowners in the Newark Area
• Wanted Overall View Of
• How These Groups Made Use Of Current IKEA
• Would Consider Using Smaller Branch Of IKEA
  Stores

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Focus Group

• Topics of Discussion
• Frequency Of Visits
• Intentions Prior To Entering Store
• Experience Received At IKEA
• Factor Of Time
• Feelings Of A Closer IKEA
• Feelings Of A More Accessible, Scaled Down IKEA

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Focus Group - Results

• Group 1 UD Students Dorms
• Seldom Visited
• Went For Smaller Items (Lamps, Chairs, etc.)
• Time Was Factor
• Liked Idea Of Closer Store
• Caught In Middle With Proposed Idea

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Focus Group - Results

• Group 2 UD Students Off Campus
• Frequently Visited
• Went For Larger Items (Beds, Tables, Desks, etc.)
• Time Was Factor
• Few Showed Extreme Interest
• Hesitant To Proposed Idea

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Focus Group - Results

• Group 3 Newark Homeowners
• Frequently Visited
• Went For Larger Items (Bedroom Sets, Kitchen
  Sets, etc.)
• Time Not Much Of A Factor
• Might Take Advantage Of Closer Store
• Extremely Hesitant Of Proposed Idea

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IKEA Decision Tree

• Two Initial Decisions
• More Research
• Estimated Cost 50,000
• No Research
• Zero Short Term Cost
• Increased Risk With Decision

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IKEA Decision Tree

• With No Research
• Open
• Open Single Pilot Store
• Open Multiple Stores (4)
• Dont Open

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• 82.5 M/Yr/Full IKEA
• 1/3 For Micro 27.5 M
• 27.5 M 15 M Start-up Cost
• 12.5 M/Yr Micro IKEA w/ No Market Research

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IKEA Decision Tree

• With Research
• Receive Positive or Negative Feedback
• Open
• Open Single Pilot Store
• Open Multiple Stores (4)
• Dont Open

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IKEA Decision Tree

• Conclusion
• Agrees With Group Research Decision
• Negative Research Says Dont Open Store
• Research Is Worth Investment

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IKEA Lessons Learned

• Larger IKEA Preferred
• Focus Groups Elaborated On Survey Findings
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• Time Is Important Factor In Data Collection
• Research Worth the Investment
• Must Be On Look-Out For Overlooked Variables

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THANKS!
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Bibliography

• Furnishing the world
• The Economist
• November 19, 1994 Richard Stevenson.
• IKEA Invades America
• Harvard Business School
• September 14, 2004
• www.IKEA.com