IKEA: the customer experience strategy

IKEA is a famous furniture brand all other the world. Behind this success story we can find a proven management strategy…

The key of success: IKEA’s competitive advantages

Since the beginning IKEA found the key recipe in order to differentiate itself from its competitors: one of the main competitive advantages of the brand in the 1970s was the innovative concept of self-assembly. This characteristic is now at the heart of IKEA’s identity.

Another distinctive feature of IKEA’s strategy is that the products were displayed in a store and the customers could pick them up by themselves directly in the warehouse.

Learning from the mistakes

In a first place IKEA started its expansion in Europe by only transferring its concept and products. However this transfer strategy did not work on the American market: this particular market required adaptations. Therefore, the sizes of the products did not fit (for example size of the sheets not adapted to the size of the American beds). In addition, the products were shipped from Europe, therefore this made the prices increase even more compared to the products IKEA sold in Europe and it was hard for the brand to compete with cheaper local competitors.

IKEA learnt from its mistakes on the American market and made great modifications in its transfer/adaptation strategies. Nowadays IKEA perfectly uses this strategy like for example in China by opening a “balconies section”, a characteristic of the Chinese houses.

Moreover, in order to get back on its foot after the failure in the USA, the brand decided to communicate more with its target market: the young generation, interested in innovation.

The customer experience: biggest strength  of the group

IKEA is not a traditional furniture store. Indeed, the brand offers a great variety of products, such as decoration products, kitchen utensils, pets accessories… everything is designed to satisfy the entire family. The design of the stores is very important as well. Indeed, the shop is designed like a “maze” in order to get the customers to go through all the sections and make impulsive purchases. IKEA also offers a great customer experience in store with the restaurant, playgrounds for the kids and a Swedish grocery store we can find in every IKEA store. IKEA knew how to transform the traditional shopping trip into a fun experience for the whole family. This characteristic is at the basis of its strong brand identity all over the world.

The family of IKEA’s “co-workers”

IKEA also highlights the fact that the “co-workers” of the group are like a family, the hierarchy is invisible and all the employees are working together by putting the customer at the center of their work. The strong corporate identity of IKEA is also part of the current success and strategies of the group. It is common to find in store giant posters introducing some of the IKEA co-workers, from the designers to the sales assistants.

And the future…

As Ingvar Kamprad, the founder of the group is at the center of the IKEA business and the development of its strong identity, we can wonder if someone will have enough power decision and enough knowledge of the brand to take over from him after his death. The position of Kamprad can make us thinks about the relation between Steve Jobs and Apple for example, and we can wonder about the future of the company.

References:
- "Furnishing the World", The Economist, November, 19th 1995
- "Flat Pack Accounting", The Economist, MAY, 13th 2006

Lush: building Brand Identity

Everybody heard about Lush and its amazing cosmetic products. I am really fascinated by the concept and strategies of this company and its strong personality that enabled the brand to become a reference in the business of cosmetics.

Just to set the things up: Lush is a British company created in 1995. In 18 years the brand opened 830 stores in 53 countries all over the world. But what is the secret recipe of this brand to expand so quickly and successfully? Eveyrthing lies in the identity of the brand that the founders, Mark and Mo Constantine, perfectly knew how to manage and develop in order to become a reference.

Lush is a brand that stands out the crowd and has great competitive advantages on the market:

First of all, the brand offers all kind of products from scrubs to shampoos, lotions, moisturizers and soaps exclusively made with vegetarian and organic products. These unique products' recipes represent the ingredient at the heart of the company’s strategy. Indeed, in this video I found on the British website of the brand, we could think we are visiting the kitchen of a restaurant offering organic products. All the cosmetic products manufactured in Lush factories are made with fresh fruits and vegetables, from asparagus to pineapple, as if they were eatable.

Another important thing that differentiates Lush from its competitors is the position of the brand towards animal testing: Lush as become a reference is the cosmetic world for this position. On its website the brand claims this position and publishes videos explaining how to fight animal testing. Moreover, Lush is a committed brand fighting for different causes: on its French website the brand even launched a campaign to join the anti bull-fighting claims making the headlines in France at the moment by offering a sangria exfoliant “certifies 100% anti bull-fighting”.

Another point to highlight is that, contrary to some of its competitors, Lush offers a real experience to the customers entering its stores. First of all, the fruity smells of Lush products attract people from outside the shops, and once inside it is possible to discover great ranges of soaps, fizz bath balls and other candy shaped products. All the cosmetics are displayed in the same way as in a grocery shop, without any unnecessary packaging. In this way the customers can choose the products by weight as if buying food. This presentation matches with the commitment of Lush to protect the environment and be a “green” brand.

Last but not least, Lush attaches a great importance to the customer relationship. Indeed, this is part of the “Lush experience”, inside and outside the stores, on the social networks for example. Moreover, entering a Lush store, the customer is always welcome by sales assistants who are very into the concept of the brand and take great pleasure to make the customer discover the amazing products. The customer can try out every product in the store and discover their incredible properties such as the soap that glows in the dark.

The brand invests a lot to maintain an innovation cycle in order to offer the customers more and more outstanding products. This quality creates a great competitive advantage for the brand.

Setting up all these strategies, Lush could build its name all over the world on the value it defends and the high quality products it offers as well as the great customers experience everyone can discover by visiting its stores.

References:
- lush.com
- Interview of the founders: http://www.theguardian.com/business/2007/apr/13/retail2
- Wikipedia

Decathlon: Why entering the Finnish Market could create a competitive advantage for the Brand

Decathlon is a French brand of Sporting goods Stores implanted in 22 countries all other the world. The chain develops and sells its own brands (separate brand names for each sport/activity), emphasizing in first place on the quality of the products.

In the countries where Decathlon implanted its shops, the brand is known for its expertise by offering quality equipments and advice for every sport. The Concept of Decathlon is similar as a group of several specialised Sporting Stores brought together in one place.

Situation of the market in Finland:

I chose to talk about the way Decathlon could enter the Finnish market because while living there I noticed that this kind of Sporting Stores doesn’t exist in Finland.

Of course we can find 3 major sporting stores (Stadium, Sportia and Intersport) but none of them offers a concept similar as Decathlon’s.

For instance, Intersport in Finland is more a “clothing shop”, providing expensive sport clothing from famous brands such as Adidas or Nike.

In these shops you can’t find clearly defined sections dedicated to each sport or activity.

How Decathlon can target new segments:

One of the most important advantages of Decathlon on the Finnish market would be its different ranges of products, from the entry-level products to the “professional” equipments. 
Indeed, the range of entry-level products offers good quality goods at an affordable price. This range could attract a new kind of purchasers, the families, and become a big advantage compared to other Sporting Stores not offering this kind of products.

The Decathlon Concept of Expertise in every field could also attract more experienced athletes looking for particular advice.

The communication strategies to build the brand awareness:

Decathlon could also make a noticeable difference by introducing the staff members of the store as members of the same team, the “Team Decathlon” in order to create this convivial “sporting atmosphere” Decathlon is also known for in other countries.

To stand out from the regular Finnish Sporting Stores, it is important for Decathlon to show the degree of expertise its staff members can provide in every sport. The aim is to make the customers feel like they are talking to real sports experts practising the same sport as them, and not only salespersons.In order to create this, the stores could broadcast short videos introducing the different staff members while practising their own sport. This could also lead to a campaign in the street (posters) highlighting the expertise of this brand.

Entering the Finnish market, Decathlon could become the leader on the Sporting goods Stores with its unique Concept.

Sources:

- decathlon.com

Signal: A good name adaptation strategy?

I chose to talk about the toothpaste brand Signal in this post. Indeed, this Unilever brand is a very good example of adaptation to foreign markets, with a presence in 48 countries in the world.

Product:

By continuously innovating, Signal became the leader and best-selling brand in the oral hygiene markets in most of the countries it is implanted in. Its expertise enabled the brand to become a reference in these markets, and is now perceived as a expert in dental care.

Different ranges of products care available in the markets of implantation of the brand:

- toothpastes adapted to different needs (white system, sensitive...)

- range of toothpastes for kids

- mouthwash

- tooth brushes

Not all these ranges are available in each country, however in France and other European countries for example, you can find them all.

Name adaptation:

An important adaptation in the product characteristics from a country to another is related to the name of the brand. Indeed, at first called “Shield toothpaste”, the brand quickly changed its name to “Signal”. Although this is a word understandable in most of the languages, the brand decided to adapt its name in some countries:

- Signal: France, UK, other main European countries

- Pepsodent: Finland, Asia, Latin America

- Mentadent: Italy, Austria

- Zhong Hua: China

- Aim: Greece

- P/S: Vietnam

However, in my opinion this adaptation strategy could be dangerous for the brand.

Indeed, going abroad, the consumers are looking for brand they already know in the supermarkets. As the Signal’s main competitor is Colgate, the customers of Signal could switch to Colgate, which name remains the same abroad. As “Signal” is a quite global word, if the brand had decided to transfer it to its different countries of implantation it would have been easier for the foreign consumers to identify it and buy it.

This is what I experienced when moving to Finland as the only toothpaste brand I identified from my country was Colgate. I realized “Pepsodent” was the Finnish name of Signal only after a couple of weeks, but I would have bought it if I had identified the brand in a first place.

Therefore, in my opinion, this strategy could be profitable for the brand's main competitors.

Communication strategies for the implantation in a new market:

When entering a new market, a good option for the brand would be to give away some samples of its toothpaste in order to convince the consumers. Experiential Marketing would be a very good option in this case to make the consumers adopt the product.

Introducing freebies, by-products such as shopping bags, or plastic glasses to put in the bathroom would also be an efficient way to introduce the brand in the mind of the consumers, and build brand awareness.

Sources
- Signal Unilever France: http://www.unilever.fr/nos-marques/detail/Signal/333566/
- Signal Unilever website: http://www.unileverme.com/brands/personalcarebrands/signal.aspx

HEINZ: conquering the Chinese market

HEINZ is the leader on the sauces and condiments market all over the world. The Company (created in 1869) is based in Pittsburgh in Pennsylvania (USA) and employs more than 32 000 people all over the world with a turnover of 11 billion $. HEINZ sells its products in more than 200 countries.

I chose to analyse the situation of the company in the United Kingdom (UK), France and China compared to the USA. I will focus on the components of the two most relevant "Ps" from the Marketing Mix concerning Heinz: Product and Promotion. Which of these did the company transfer, adapt and create on the British, French and Chinese markets?

Product

Heinz first reminds people of ketchup all around the world. Through the years the company developped new ranges of products: the ranges of canned prepared meals and snacks, baby food products and other sauces and condiments are available on the American market.

Transfer: The name of the brand his a transferred to all the countries Heinz is operating in. This is a short word, easy to remember and to pronounce in every language.

The range of baby food as been transferred to the British market as well.

Adaptation: In France the tomato-based sauces ranges are adapted to the local tastes and image of fine cuisine (ie. balsamic vinegar ketchup, culinary ketchup range, blue cheese sauce, tomato purée suitable for cooking...)

Creation: on the UK market Heinz created other ranges of prepared meals with pasta, soups and baked beans ranges responding to the needs of the British market.

In china, a range of western-sauces is available appealing to local people identiying more and more to the western way of life.

Promotion

(Click on the pictures to enlarge them)

The ways Heinz communicates about its products varies from a country to another.

On www.heinz.com the visitors can find webites for each region of the world where Heinz is operating. 

Concerning its websites, Heinz adapts them to each country by highlighting specific sections or range of products appealing to the target market.

This is an example with the French website highlighting the range of culinary products available for cooking. This is the first image the customer sees when visiting the website. The brand decided to emphazise this range because it reflects a good quality cooking France is known for.

The language is also adpated to each country, but the design can change as well. The main contents remain the same (ranges of products, history of the company) but are customised for the targeted segments in each region of the world.

 Heinz also uses different media in the different countries such as Facebook pages, for example in France or the UK. The French website of the brand is therefore directly linked to this page on the social network.

 In another way, on its American website, Heinz chose to highlight its commitment to some causes related to nutrition in the world. A way to show a good corporate image worldwide.

Furthermore, Heinz uses also other communication tools such as setting up contests or cooking events. This is a very important way to build the awareness around its products. People are also more reactive to new and innovative communication tools and being involved in an action for the brand is creating customer loyalty as well.

Implantation in China: 

In February 2013, Heinz signed a contract with a frozen food company in China. With this agreement Heinz wants to focus on infant food and sauces in the Chinese market among other emerging markets in this region of the world. In my opinion, Heinz would conquer the Chinese market by implanting ranges of condiments and seasoning for the rice. This would be a challenge for the brand as several companies have already settled in the market. However, with its already famous reputation in the sauces market, Heinz could become a leader in the rice seasoning. 

Concerning the communication means, Heinz could gain new customers by setting up tastings in the shops where Chinese people buy rice. This kind of communication would be a very efficient way to bring the new product to the consumers and persuade them to adopt it.

Sources
- Heinz USA: www.heinz.com
- Heinz UK: www.heinz.co.uk
- Heinz France: www.heinz.fr
- Heinz Global websites: http://www.heinz.com/heinz-global-websites.aspx