answer these questions
CASE STUDY 7.2
The IkEA catalogue: are there any cultural differences?
IKEA was founded in Älmhult, Sweden, in 1943 by
Ingvar Kamprad. The company name is a composite
of the first letters in his name, in addition to the first
letters of the names of the property and the village in
which he grew up: Ingvar kamprad Elmtaryd
Agunnaryd.
The IKEA business philosophy is: ‘We shall offer
a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.’
In the late 1940s, the first IKEA advertisements
appeared in local newspapers. Demand for IKEA
products soared, and Ingvar Kamprad quickly outgrew his ability to make individual sales calls. As a
result, he began operating a mail order catalogue
and distributed his products via the county milk van.
This resourceful solution to a difficult problem led to
the annual IKEA catalogue.
First published in Swedish in 1951, the IKEA
catalogue was in 2010 published in 55 editions, in
27 languages for 36 countries, and is considered to
be the main marketing tool of the retail giant, consuming 70 per cent of the company’s annual marketing budget. In terms of publishing quantity, the
catalogue has surpassed the Bible as the world’s
most published work – at an estimated 160 million
copies (in 2010) worldwide – triple that of its less
materialistic counterpart. However, since the catalogue is free of charge, the Bible continues to be the
most purchased non-fiction work.
In Europe alone, the catalogue reaches more than
250 million people annually. Containing over 300
pages and about 12,000 products, it is distributed
free of charge both in stores and by mail. Furthermore, there were also over 500 million visitors to the
IKEA websites during 2010. The annual catalogue is
distributed in August/September of each year and is
valid for a full year. Prices in the catalogue are guaranteed not to increase while the catalogue is valid.
Most of the catalogue is produced by IKEA Catalogue Services AB in IKEA’s home town of Älmhult,
Sweden.276 Part II DeciDing which markets to enter
At the beginning of 2011, there were 276 IKEA
stores in 25 countries operating under a franchise
from Inter IKEA Systems Bv. Total IKEA turnover in
2010 was €23.5 billion.
IKEA accounts for just 5 to 10 per cent of the
furniture market in each country in which it operates.
More important is that the awareness of the IKEA
brand is much bigger than the size of the company.
That is because IKEA is far more than a furniture
merchant. It sells a Scandinavian lifestyle that customers around the world embrace.
Cultural difference
There are about 12,000 products in the total IKEA
product range. Each store carries a selection of
these 12,000 products depending on store size. The
core range is the same worldwide but, as shown,
there are differences in how the IKEA catalogue
displays its products in the different national editions.
Below are two different illustrations featuring the
same product. In this case the two illustrations for
the same product are taken from the Danish and the
Chinese catalogues.
QUESTIONS
1. Discuss the advantages and disadvantages of
having the same product range shown in all IKEA
catalogues around the world.
2. The catalogue is the most important element in
IKEA’s global marketing planning. Discuss whether
there could be some cultural differences in the
effectiveness of the catalogue as a marketing tool.
3. Explain some cultural differences which are illustrated by the two different illustrations of the same
product (from the Danish and Chinese IKEA
catalogues).
Source: www.ikea.com.