I K E A Marketing Research

IKEA – The Basics Founded in Smaland, Sweden By Ingrav Kamprad Founded in Smaland, Sweden By Ingrav Kamprad Stores Located Outside Cities In Europe, Asia, US, and Canada Stores Located Outside Cities In Europe, Asia, US, and Canada Sells Furniture, Kitchen Needs, Decorations, etc. Sells Furniture, Kitchen Needs, Decorations, etc.

IKEA In The U.S.

IKEA – Management Decision Should IKEA Open Smaller Satellite Location In The Christiana Mall? Should IKEA Open Smaller Satellite Location In The Christiana Mall?

Processed Research Design Survey Survey Focus Group Focus Group

Shopped at an IKEA

Age Of Participants

Distance Traveled

Last Time Shopped There

Distance Discourage Visit?

Visits To The Mall

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

Focus Group Topics of Discussion 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

Focus Group - Results Group 1 – UD Students – Dorms 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

Focus Group - Results Group 2 – UD Students – Off Campus 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

Focus Group - Results Group 3 – Newark Homeowners 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

IKEA Decision Tree Two Initial Decisions Two Initial Decisions –More Research Estimated Cost: $50,000 Estimated Cost: $50,000 –No Research Zero Short Term Cost Zero Short Term Cost Increased Risk With Decision Increased Risk With Decision

IKEA Decision Tree With No Research With No Research –Open Open Single Pilot Store Open Single Pilot Store Open Multiple Stores (4) Open Multiple Stores (4) –Don’t Open

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

IKEA Decision Tree With Research With Research –Receive Positive or Negative Feedback –Open Open Single Pilot Store Open Single Pilot Store Open Multiple Stores (4) Open Multiple Stores (4) –Don’t Open

IKEA Decision Tree Conclusion Conclusion –Agrees With Group Research Decision –Negative Research Says Don’t Open Store –Research Is Worth Investment

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

THANKS!

Bibliography “Furnishing the world” “Furnishing the world” –The Economist November 19, 1994; Richard Stevenson. November 19, 1994; Richard Stevenson. IKEA Invades America IKEA Invades America –Harvard Business School September 14, 2004 September 14,