Mkt 575 Ikea Case Study

Target Market and Positioning Strategy Identification

MKT/575

May 20, 2013

Target Market and Positioning Strategy Identification

Founded by Ingvar Kamprad, IKEA began operations in 1943. The first store sold needed products like pens, wallets, watches, jewelry, table runners, and picture frames at reduced prices. In 1945 IKEA begins to advertise in a local paper and within three years is selling furniture and delivering products to local train stations for delivery. In 1951, the famous IKEA catalog is produced for the first time, changing the target market of IKEA and strategically positions the future of the IKEA brand. Just two years after the first catalog release, IKEA begins using showroom displays so customers can see and touch the merchandise, pair pieces of furniture together, and demonstrates the quality and craftsmanship of the IKEA product line.

Target Market

A target market is customers that will most likely purchase products from a retailer. The target market must be specific and clear, targeting specific consumers that have high interest in the product being sold ("Entrepreneur", 2013).  Types of questions used to identify the target market are the age group, male or female, geography, career type, income, and rent or own. IKEA’s target market is “Young people of all ages”. IKEA focuses mainly on younger people with higher education, medium income, who are not very status conscientious. Quality home furniture and décor at reduced prices and maintaining a chic appearance lures the middle class shopper to spend more on items. IKEA’s target market has proven dominant since opening in 1943. With over 50 locations in 13 countries, IKEA holds 5% to 10% market share in every country location and is a household name.

Positioning Strategy

According to Samuels (2013), “Positioning refers to how you communicate the essential benefits of your small business to potential customers. Where you sell your product, how you make it, where you make it...