Consumer Behaviour- Comparing Retailer and Consumer Perspectives - Book Report/Review Example

? IKEA inserts his/her s Brand Overview- IKEA The Swedish retailer IKEA’s success can be traced largely to its successful branding strategy. The democratic design used at the company is reflected in its wide range of product offerings, including home furnishings, which offer a unique blend of competitive price and appropriate form and functionality. The IKEA brand caters to cost-conscious customers who do not want to compromise on quality; hence, the company offers the best of both. Its unconventional designs and compatibility with environmental safety adds to its strong brand image. Considering IKEA’s dogma of low prices, it is perceived as a low-end market offering affordable options for everyday use. For one thing, the company does not offer cliche designs; in fact, its modern and eccentric designs are a major source of competitive advantage for IKEA. The company has positioned itself as offering everything a customer would want to make a home. Although the Swedish influence dominates the ideology apparent in IKEA’s products, the company has succeeded in customizing its marketing messages across a host of countries. For instance, the company’s advertising in France is aimed at “tidying up” things (Duncun, 2006), whereas in U.S.A it markets itself through “winter sales”. Although it is predominantly a mass-market brand, the company’s PR stunts and guerilla marketing techniques vary from one country to another. Drawing on the research that balconies are widely used for storage purposes in Europe, the company advertised a picture of colored balconies of an apartment which appeared to be like chest drawers (Jepsen, 2009). Not only do such strategies enhance IKEA’s presence but appeal to customers of particular cultures. Furniture purchased from IKEA usually includes a set of instructions pertaining to the installation and setup of that furniture (Pride & Ferrell, 2008)- a concept unparalleled by its competitors. Although the brand has been associated primarily with furniture, it offers a complete home shopping experience to customers. The store’s layout is such that customers walk through the entire outlet before exiting which basically exposes the customers to a wide range of products and not just furniture (Pride & Ferrell, 2008). Visits to IKEA, therefore, are not just “grab-and-go”; rather, it induces a lot of spot/impulse purchases as customers end up buying what they never intended to. As far as its promotional strategies are concerned, IKEA has focused on including humor in its dominantly Swedish ads. In fact, the Swedish accent in the ads is so pronounced that customers have come to associate this accent with IKEA ads. This is consistent with the fact that the Country of Origin (COO) effect positively impacts brand equity (Bruwer & Johnson, 2010). Furthermore, the company is not just unconventional when it comes to product designs- its eccentricity can be judged from the fact that it launched a beer under the IKEA label which was sold at its store. This created a great deal of curiosity amongst customers who visited the store to experience it. All in all, the IKEA brand offers unmatched balance of affordability and usability along with a smooth shopping experience. Customers cannot possibly find such a combination of quality and cost anywhere else. Unconventional designs, enhanced user experience and user-friendly retail layout together strengthen the IKEA brand. Involvement theory and IKEA The involvement theory states that the extent to which customers process information depends on the “relevance of the purchase” (Schiffman, O’Cass, Paladino, D’Alessandro, & Bednall, 2011). IKEA offers a mix of products with some being low-involvement ones and the rest being high-involvement. The unconventionality of designs offered adds technicality to the usage and functionality of the product, thereby making it imperative for customers to engage in conscious cognitive processing before buying such products. Since the products’ attributes are crucial in the purchase decision of the customer, the central route to purchasing is used (Grace, Weaven, & Anderson, 2008) (see Appendix 1). On the contrary, however, the layout of IKEA’s stores is such that customers are made to walk through the entire outlet, thereby encouraging hedonic and impulse purchases. In this case, the customer engages in the peripheral route whereby little conscious information processing is involved and “cues” are the major factor behind customers’ purchase decision (See Appendix 1). For instance, a customer may go to buy a piece of furniture such as a bed but may end up buying decoration pieces or wall hangings along with it because of attractive store display. IKEA has utilized various strategies to increase the involvement of its customers. For one, the company attempts to build a strong relationship with its customers by offering exceptional in-store graphics such as a restaurant and day-care facility within its stores making it convenient for customers to spend several hours in the store without getting worried (Porter, 1996). It caters to customers’ social needs by enabling social interactions in cases where customers go to IKEA in with their friends/relatives. Furthermore, the store is designed such that the customer’s route increases the time spent in the store. The IKEA catalogue not only allows customers to plan their purchases in advance but also prompts them to purchase several products which they did not intend to purchase prior to seeing them in the catalogue. Customer service, however, seems to be limited owing to the self-assembly and transport feature of IKEA’s products. This, however, allows for greater self-actualization for customers as “knock-down kit packaging” increases the chances of future purchases by customers (Porter, 1996). Contrary to its efforts to build a bond with its customers, IKEA believes in having fewer support staff, thereby giving customers greater liberty to make their choices in store. This, however, is viewed negatively by some individuals who find self-assembly of the purchased products a tedious task and prefer after-sales support. However, such support is available on request should the customer find any difficulty in installing the products. Novel stimuli are also used to some extent since customers may find a product at a totally different place than where they’d expect it to be. At the same time, however, this store design adds to the frustration of customers since the illogical placement of products leads to a lot of time getting wasted (Backstrom & Johansson, 2006). Furthermore, IKEA demonstrates the use of prominent stimuli as is visible from its use of brightly painted storage compartments on the European balconies under its guerilla marketing campaign. The above factors behind customer involvement have been illustrated in Appendix 2. Involvement is also increased by targeting children who, according to research, account for majority of household purchases (Tanner & Raymond, 2010). IKEA’s showrooms contain furnished setups for children’s bedrooms that contain attractive comforters and fun beds which prompt children to spot and ask what they desire (Tanner & Raymond, 2010). Therefore, sensory appeals are used here to appeal to children that constitute a powerful reference group in this case. References Backstrom, K., & Johansson, U. (2006). Creating and consuming experiences in retail store environments: Comparing retailer and consumer perspectives. Journal of Retailing and Consumer Services, 417-430. Bruwer, J., & Johnson, R. (2010). Place-based marketing and regional branding strategy perspectives in the California wine industry. Journal of Consumer Marketing, 5-16. Duncun. (2006, November 6). Ikea Tidy Up French Advertising Campaign. Retrieved from The Inspiration Room: http://theinspirationroom.com/daily/2006/ikea-tidy-up/ Grace, D., Weaven, S., & Anderson, S. (2008). An examination of involvement in relation to superannuation consumption. Journal of Financial Services Marketing , 311-319. Jepsen, B. W. (2009, December 31). The House that Lars Built: Frankfurt. Retrieved from The House that Lars Built: http://www.thehousethatlarsbuilt.com/2009_12_01_archive.html Porter, M. E. (1996). What is strategy? Harvard Business Review, 61-78. Pride, W. M., & Ferrell, O. C. (2008). Marketing. Boston: Houghton Mifflin Company. Schiffman, L., O’Cass, A., Paladino, A., D’Alessandro, S., & Bednall, D. (2011). Consumer Behaviour. Australia: Pearson Prentice Hall. Schiffman, L., O’Cass, A., Paladino, A., D’Alessandro, S., & Bednall, D. (2011). Elaboration Likelihood Model (ELM). Tanner, J., & Raymond, M. A. (2010). Principles of Marketing. New York: Flat World Knowledge. Appendix 1 The Elaboration Likelihood Model Figure 1. Elaboration Likelihood Model (ELM). (Schiffman, L., O’Cass, A., Paladino, A., D’Alessandro, S., & Bednall, D., 2011). Appendix 2 IKEA and the Involvement theory explained Read More