A Case Study On Ikea 305ib

A CASE STUDY : HOW IKEA DESIGNS ITS SEXY PRICE TAGS

Kelompok 2 : Bagus

y Arno Primaditya - 9115201308

ORIGIN The origin of this IKEA is Sweden.

• Dominates markets in about 32 countries. • Also conquered North America.

BATTLE PLAN “Keep making its offerings less expensive, without making them cheap”.

ONE FACTOR S FOR IKEA’S SUCCESS • Good quality at a low price. • Sells household items at cheap rate but not cheapo. • Prices runs 30% to 50% below the competitions. • Price of Pöang chair has fallen from $149 in 2000 to $99 in 2001 to $79 today.

CORPORATE MOTTO

“LOW PRICE WITH MEANING”

ONE OF THE IKEA’S MUG VÄRDE RA

STORY OF THE MUG • IKEA works from a co-worker’s bright idea through to production and sales. • Also tells about our demand and customers place on IKEA. • Our requirements-function, modern design, environmental considerations and making sure products.

PICK A PRICE Product development Has a team behind every product • Designers • Product developers • Purchasers get together to discuss design, materials and suitable suppliers. E.g. Purchasers use their s with suppliers all over the world via IKEA Trading Services Offices.

Development of Mug • Pia Eldin Lindsten (company owner) given the task of creating a new mug over 5 years. • Also told about its cost in the stores. • The mugs are incredibly low cost. • Mug had a read knock-out price.

How to produce the right mug at right place? Pia and her colleagues had take into the following things : • Materials • Colour • Design E.g. If the mug is made on green, blue, or yellow or white as these pigments cost less than other shades, such as red.

CHOOSE A MANUFACTURER Suppliers and Purchasing • Task of developing products never ends. • Working with suppliers, the mug was shortened and the handle change so it stacks more efficiently, saving space for transport, warehousing and store display and not least, in the customers cupboards at home. • IKEA is always keen to banish as much air as possible from its packaging.

Story about a Romanian Supplier • Worked with IKEA for 15 years. • Long-term relationships help both parties to build up a huge fund of knowledge about demands and expectations. • Products are developed in close cooperation with suppliers.

Introduction of code of conduct by IKEA • Governing working condition. • Environmental awareness among suppliers. • Healthy and safety conditions on the workplace. • Forbids the use of child labour. • This code is carried out by co-worker in IKEA Trading Services Offices.

IKEA Price Tags • Low price tags makes it crucial to the vision IKEA of creating a better everyday life for many people. • IKEA works non-stop to reduce cost. • Low-cost mugs is an example of low environmental considerations can influence the development of products.

Characteristics of New Mug • Lighter in colour. • Cuts costs. • More environment friendly. • Lead and cium free. • Use of less pigment.

NEW VÄRDERA

DESIGN THE PRODUCT • Designer begins design process by writing a brief. • Explains the product’s price. • Function. • Materials to be used. • Fabricator’s capabilities. • Send its to IKEA’s designers and freelancers. • Refines promising designs. Designer wants products to be like Swiss Army knives-to get maximum functionality of minimum cost.

SHIP IT! • Distribution and logistics-lifeblood of IKEA • Important pieces of the puzzle on their road to a low price. • Sends goods at right number to right stores at right time. • Calculate the goods requirements and make sure about deliveries. • About 2024 mugs are distributed all over the world from Romania by rail, road and sea. • Transportation by IKEA also reduces environmental impact.

SUPPLI ER

CUSTOM ER

Concept of Flat • Establishment of company’s eureka moment in 1956. • In case of chair taking more space: remove the legs. • IKEA products have been designed to ship disassembled. • Flat enough to be sipped into the cargo hatch of a station wagon. • Safety tied down an auto’s roof rack. • It lowers the shipping cost by maximizing the use of space inside shipping containers. • Items assembled means transport volume will be 6 times of its original volume.

From design studio to warehousing, IKEA’s employees motto

“We don’t want to pay to ship air”

3 Times redeg of IKEA Mugs • To maximize the number of mugs that can be stored on a pallet. • A redesign-Added a rim such as in a flowerpot, where each pallet could hold 280 mugs. • Another redesign-a shorter mug with a new handle, allowing 2024 mugs to squeeze onto pallet.

Mug’s sales price-50% Shipping cost-reduced by 60% • When 25 million cubic metre of goods all over the globe is taken, flat-pack frugality adds up. It shifted more of its buying from Europe to the far East. • Shipping time. • Costs have become an even more critical concern. • Last year China tied Sweden atop IKEA’s list of supplier countries.

Company’s response • Global network of distribution centers. • Near container ports. • Major truck. • Rail routes. 18 distribution centers in the world • Handle 70% of IKEA’s total product line. • 30% of IKEA’s products travel directly from supplier to store.

SELL IT! Sells lot of expensive furniture by these processes : • Put a piece in a lush setting. • Let the customer fall prey to visions of wealth and comfort. • Offer plenty of easy credit.

Selling Mugs • Mugs are packed on pallet. • Transportation packaging is collected from recycling. • Price tags has been placed by the suppliers. • Display is to be done in-store. • Providing inspiration for smart interior solutions. • Contribution of customers to low prices by selecting and collecting the products from the self-serve area.

Ease of Buying IKEA Products • Taking them home. • Enclosing instructions to assemble them.

IKEA produced catalogues about the products printed in 34 different language versions.

Scene of IKEA stores • Scene of meticulously constructed virtual Sweden. • Company sponsoring child care facility. • Swedish meatballs and lingonberries. • Information kiosks provide advice on home décor. • Color-coordinated cards offer plenty of suggestions. • Low-priced products that IKEA calls BTIs (“breathtaking items”) are often perched on risers, framed by huge yellow price tags.

IKEA’s Point of View • Biggest selling point-price tag. • Blatantly manipulation layout. • Having plenty of time to consider purchases. • Broadcast ethos for living in the modern world.

IKEA’s Main Motto for the Customers

“In New year it will be an even cheaper”.