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

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