IKEA and Portakabin - Assignment Example

Marketing IKEA and Portakabin According to Ferrell & Hartline p. 7), the definition of marketing has constantly been changing over time in an effort to try and reflect changes in both the business and economic environments. Currently, marketing can simply be defined as the process of planning and executing a series of concepts, promotions, distribution of services and ideas with the sole objective of attempting to create exchanges that will be seen to satisfy both organizational and individual objectives. Marketing is generally involved with a range of processes that are seen to primarily be concerned with attempting to establish exactly what it is that customers require and then proceeding to provide it to them. The entire process of marketing involves a set of four key principles which are commonly referred to as the 4Ps of marketing, these key principles are place, product, price and promotion. Over time, the concept of 4Ps has gradually been developed to now to the more inclusive 7P’s of marketing. The 7P’s of marketing include the traditional for key principles of product, promotion, place and price, however in addition to these core principles the 7Ps also include the principles of positioning, packaging and people. Before conducting any marketing activities it is quite useful for companies to consider these principles as being a key starting point in carrying out market research. It is important that they establish what exactly are the customer requirements in relation to these principles. Since it was founded in 1943, IKEA has undergone a rapid growth that has seen it grow to now being considered as the world’s most successful mass-market retailer focusing on the sale of house goods and Scandinavian-style home furnishings. IKEA hosts an estimated 410 million shoppers each year across its 276 stores located in 25countries. None of the proposed designs are ever allowed into the company’s catalogue if they are deemed to not be affordable. IKEA’s primary objective it to attempt to create better everyday lives for people around the world while showing concern about both people and the environment. Low prices are considered to be a key attraction of the IKEA concept and this has enabled the company attract more customers who want to buy products from it. To promote its products, IKEA carefully uses a number of modern methods that include internet sales and free home delivery of purchased products (dircon, 2014). Portakabin Since its establishment by Adnan Sweid, Portakabin Prefab Houses and Décor LLC has grown to an extent that its name is now synonymous with the modular buildings industry. In its humble origins, the company started by providing portable buildings that enabled property developers in the construction industry to enjoy on-site accommodation and storage. In the last 40 years, the company’s portfolio of modular buildings has managed to gradually expand and now includes medical centers, offices and schools. To correctly establish what its customers need, Portakabin sometimes carries out one-of research projects that seek to focus on how to further develop either an already existing product, or a specific new product (Portakabin, 2014). Although they sometimes employ similar marketing techniques including market research to establish what their customers want, the advertising of products through their websites, as well as the offering of promotions and season sales, IKEA and Portakabin use different marketing techniques While Portakabin prefers to use targeted advertisements through channels such as trade magazines, open days and public relations, IKEA commonly uses leaflets, brochures and T.V advertisements to help in generating interest pertaining to their line of products (Portakabin, 2014). IKEA’s Marketing Strategy IKEA’s marketing strategies have largely been instrumental in helping the company capture large market shares around the world as well as in fueling the company’s expansion strategy that has helped it accomplish its objective of maintaining a strong brand image and strong position among all its competitors. Despite the successes of this marketing strategy as applied to different markets around the world, the strategy was largely met with failure in IKEA’s attempt to try and expand into the Asian market. The failure of IKEA’s marketing strategy in the Asian market is thought to mainly be due to a number of difference in consumer behavior, lifestyle and culture between the company’s other markets and the Asian market that it was attempting to venture into. According to an article appearing in the Japan Times, the company’s President and CEO Tommy Kullberg is quoted as stating that IKEA’s failure in the Asian market can be attributed to a lack of knowledge and international experience on the part of the Japanese consumers (Hasegawa, 2014). It is also thought that the persistently poor cooperation between IKEA and the Japanese company it had franchised also played a role in fueling the failed expansion into Japan. Portakabin Marketing Research In its marketing research, Portakabin tries to understand its market as well as the factors that might potentially cause the needs of its customers to change. These include working patterns, legislation and technology. The company uses both primary and secondary research as a mean to gain accurate information from its customers. The market in which Portakabin operates in is highly competitive and to obtain an edge over its competitors, Portakabin uses its market research to establish what its customers want, ensure that when its customers need change, it will be able to easily provide them with a solution as well as continue to attract new customers. The data that Portakabin obtains from its marketing research has enabled it to develop the new Ultimo Vision range that aims to provide the company’s customers with more light in their existing buildings. It has also enabled it to expand into meeting the need to deliver data cabling to office buildings through the provision of computer access points, telecoms systems and already installed air conditioning systems. Information derived from its marketing research has led to the company providing detailed explanations of its products on its website as well as using paid-for advertising through targeted media channels like trade magazines. Improving the Validity of Portakabin’s Marketing Research To improve the validity of the marketing research that is conducted by Portakabin, a number of recommendations can be implemented. These include: Random sampling techniques often tend to introduce responses from persons who are not considered to be members of the specific target group. A series of screening questions that block unsuitable respondents from participating in the survey can be introduced. Alternatively, Portakabin can collect all the responses and then proceed to discard the response received from persons who did not meet the criteria selection. The data collected during Portakabin’s marketing research survey should match the sample. The people surveyed by the company should essentially represent a cross-section of the entire target group. It is possible for the company to extend the results to the whole group provided that its sample is found to be representative. The goals of Portakabin’s market research influence its objectivity. As opposed to simply attempting to showing that the company’s approach is correct or proving something is correct, Portakabin’s research activities and surveys should be aimed at attempting to gathering data and finding out information in what is a neutral but specific fashion. By implementing these recommendations, Portakabin will ensure that the data that it uses in formulating its marketing strategy is accurate. The use of accurate data will in-turn help the company design effective marketing strategies that will be able to meet all the requirements that have been made by its customers. Conclusion Although operating in different fields, both IKEA and Portakabin have been able to successfully demonstrate the use of various marketing techniques in the promotion of their products and relationship marketing. The two companies a number of similar techniques such as the sale of products through their websites and the use of market research to establish exactly what it is that their customers require. However, they also employ a number of different techniques such as the use of leaflets and television advertisement by IKEA which contrasts to the targeted marketing employed by Portakabin when it uses trade magazine to advertise its products. References dircon. (2014). Profile: IKEA. Retrieved on 15 August, 2014 from http://fp05 -527.web.dircon.net/ikea_company_profile.html Ferrell, O. C. & Hartline, M. (2012). Marketing Strategy. Cengage Learning. Hasegawa, Y. (2014). Sweden’s IKEA back in Japan after 20-year hiatus Retrieved on 14 August, 2014 from http://www.portakabin.co.uk/aboutus.html Portakabin. (2014). About Portakabin. Retrieved on 15 August, 2014 from http://www.portakabin.co.uk/aboutus.html Al Ain Dairy’s Camel Milk Ice Cream Marketing Mix Al Ain Dairy is considered to be one of the UAE’s biggest producers of dairy products. The company is planning on introducing a range of ice cream products made from camel milk (AlAinDairy.com, 2014). Product: The ice cream is expected to be the first ice cream product made out of camel milk and the ice cream will be flavored by saffron, dates, chocolate, rose and cardamom (Sambridge, 2012). The ice cream will be produced by using pure camel milk and well as other ingredients without the addition of any cow milk-based ingredients. Although camel milk is more salty as compared to cow milk, it is nevertheless considered to be more nutritious as compared to cow milk. Price: To effectively compete with the existing cow milk based products that are already in the market, it is important for the Camel-milk to be priced at competitive rates. Of note however is that Camels tend to produce less milk as compared to cows which will necessitate that the company sets its prices slightly higher should the demand outstrip the supply. Place: Al Ain plans to initially introduce the camel milk ice cream products in the UAE market, however, as its popularity increases, it will gradually expand to other markets across the middle east. Promotion: To promote its camel milk ice cream, Al Ain should conducted targeted marketing in markets across the middle east where camel milk is considered to be part of the everyday diet. The company can also engage in persuasive advertisement on television, newspapers and radio where it will highlight the benefits afforded by the ice cream (Sambridge, 2012). References AlAinDairy.com. (2014). About Al Ain Dairy. Retrieved on 15 August, 2014 from http://www.alaindairy.com/en/aboutus/Pages/about-us.aspx Sambridge, A. (2012). UAE dairy plans to launch camel milk ice cream. Retrieved on 14 August, 2014 from http://www.arabianbusiness.com/uae-dairy-plans-launch-camel-milk-ice -cream-450432.html KIA Motors Kia is able to build a competitive advantage over its European rivals by entering into high profile sponsorships. These sponsorships have helped the company in the creation of a positive perspective of its products to the consumers who now view Kia as being a manufacture of cars with great design and quality. KIA has also been able to effectively use above the line promotions that focus on advertising to large audiences to help it in further building up its competitive advantage. To achieve this objective, Kia uses online media, print, cinema and television advertising (Kia.com., (2014). SWOT Analysis of KIA Motors Strengths: KIA motors has a number of strength which include that fact that it firmly established itself as being one of South Korea’s largest Automobile producers, it has a strong brand presence as well as good product portfolio. Another of the company’s key strengths is that its market presence is further enhanced by its engagement in event such as Formula one, the World Cup, as well as the Euro Cup. KIA motor’s strength is also accentuated by the fact that with its estimated sales of about 1.5 million cars per year, it has quickly emerged as one of the top 5 largest automobile manufacturers as a result of this impressive number of sales (Kia.com., (2014). Weaknesses: Despite its numerous strengths, KIA motors is seen to have a number of weaknesses that include the fact that the company has not been able to successfully leverage its recognition and presence globally to its advantage despite its having created numerous sponsorships. KIA motors has in the past faced criticisms over the performance of its products especially the braking system which was at one time a huge concern (Kia.com., 2014). Another key weakness facing the company is that it has not been able to aggressively expand its geographical reach as effectively as its competitors. Opportunity: There are a number of opportunities that are available to KIA motors, chief of which is the opportunity of venturing into a number of emerging economies that have huge markets. Kia also has the opportunity of venturing into markets where its competitors have failed to attract large numbers of customers. An example of this is the Indian market where Hyundai has largely been unable to successfully sell its luxury SUV Santa Fe. Kia motor’s all electric cars can be positioned to open new business avenues for the company. Threats: Kia’s competitors pose a significant threat to the company as they tend to have products with better technology and designs. This has led to their offering better differentiation as compared to KIA. Another threat to KIA motors is the fact that Japanese players have already established a firm presence in most markets in addition to their having secured steady market shares. This aspect makes it rather difficult for KIA motors to expand into these markets Kia.com., 2014). Some of KIA motor’s key competitors include Toyota, Nissan and Honda. References Kia.com. (2014). KIA Motors Corporation. Retrieved on August 15, 2014 from http://www.kia.com/eu/company/kia-motors-corporation/ Air Arabia Market Segmentation Market segmentation is a marketing strategy that generally entails the division of a broad market into a number of subsets of consumers that tend to have similar priorities and needs. This allows for the designing and implementation of targeted strategies (Air Arabia, 2014). There are a number of different types of segmentation that can be employed by a company these include behavioral, psychographic, Demographic, benefits and geographic segmentations. Air Arabia is seen to have been engaging in geographic segmentation when it established Air Arabia Marco and announced Air Arabia Egypt. A key factor that will influence the use of targeting strategy for Air Arabia is that Morocco and Egypt passengers have different needs and requirements and by segmenting them, Air Arabia will benefit from its being able to tailor specific services that will greatly satisfy its customers in these markets (Wedel & Kamakura, 1999). Pestel Analysis of Air Arabia Air Arabia is a low-cost airline that began operations in 2003. The airline operates from Sharjah in the UAE to connect several destinations in North Africa, India, Middle East and Central Asia using a fleet of 9 leased Airbus A 320 aircraft. The company announced air Arabia Egypt which was to be based in Egypt (Wedel & Kamakura, 1999). Political Factors: Political instability is seen to have affected airlines in the Middle East as it made it difficult for them to conduct business with other global airlines and join international alliances with airline leaders such as American Airlines. The volatile political situation in Egypt has also had an effect on the airlines operations in the country. Economic Factors: Being a low cost air line, Air Arabia is able to compete with other more established airlines such as Emirates and Etihad. However, with its limited destinations, Air Arabia still has a long way to go in its development. The joining of the Arabia Air Carriers Organization alliance is considered to be a key factor that will help Air Arabia in reducing its operation costs (Air Arabia, 2014). Social Factors: As the UAE is a multicultural country having an ever growing population of expatriates, Air Arabia’s profit margins are expected to continue to increase as it continues to ferry this ever increasing number of passengers. Other social factors such as increasing global terrorism have continued to negatively impact some of the destinations served by the airline as the number of tourists visiting these locations continues to decline. Technological Factors: The use of new technological innovations such as the e-booking system has made it easier for passengers to make reservations with the airline (Air Arabia, 2014). However, other technologies such as teleconferencing have greatly reduced the need for face to face business meetings which is a factor that has reduced the sale of business class tickets and business travelers. Legal: The number of lawsuits instigated against airlines by both workers and customers has been on the increase over the years and this is a factor that has also impacted Air Arabia. Regulators are also being stricter with airlines which has forced airlines such as Air Arabia to be wary of their strategies and only actualize them when they are convinced that there are no legal violations. References Airarabia.com. (2014). About us: Air Arabia. Retrieved on August 15, 2014 from http://www.airarabia.com/en/about-us. Wedel, M. & Kamakura, A. W. (1999). Market segmentation: conceptual and methodological foundations. Boston : Kluwer Academic Roads and Transport Authority (RTA) and Sharaf DG There are a number of segmentations that can be developed by RTA to help in servicing its new In Safe Hands taxi service. These segmentations include demographic segmentation and geographic segmentation. Demographic segmentation is particularly applicable as the service is not intended to service all sections of the society and will particularly focus on female office-goers and students and families that regularly travel on a fixed route. The geographic segmentation is also applicable as the service will not be provided anywhere else in the world (Wedel & Kamakura, 1999). In introducing the HUAWEI Ascend P2 into the market, Sharaf DG can create an income segmentation as not all of its customers will be able to afford the smartphone. Another segmentation that might prove to be useful to the company is the occupational segmentation as the phone seems to be particularly suited to students and business people who might need the speed and features that are available with this phone (Wedel & Kamakura, 1999). Buyer behavior will affect the marketing activities for the In Safe Hands transport service that is being offered by RTA and the Huawei Ascend P2 being offered by Sharaf DG as the companies will both have to engage in target marketing to attract specific demographic segments. The In Safe Hands service that is being offered by Sharaf DG can also be positioned to attract the business persons segment who regularly travel to the UAE. This segment can be assured that wherever they are in the country, they can be assured of safe and convenient travel. References Wedel, M. & Kamakura, A. W. (1999). Market segmentation: conceptual and methodological foundations. Boston : Kluwer Academic Facebook Inc and Elsevier In marketing its services to individuals, Facebook Inc. can engage in above the line promotions such as mass marketing using paid mediums such as television, however, this strategy would not be effective for Elsevier as it would best be served by specifically approaching target companies and offering them tailor made solutions. Another key difference between marketing products and services to organizations as opposed to consumers is that it is important for Elsevier to focus on building a relationship with its customers. However, this is not of particular importance to Facebook Inc. as due to its strong position, the company needs to concentrate on offering more innovative products than Twitter as this strategy will help it attract more users than twitter (Ferrell & Hartline, 2012). In marketing its services and products to organizations, Elsevier does not have the freedom to engage in as extensive market segmentation as compared to Facebook which can be able to tailor make different marketing strategies designed to appeal to a myriad of market segments. The costs of marketing its products to organizations is relatively cheap as compared to the costs incurred by Facebook in its marketing of products to consumers. This is because Elsevier can opt to use direct marketing strategies that will see it approach organizations directly or advertise in trade magazines and journals. On the other hand, Facebook will have to invest in expensive mass media marketing to attract more users (Ferrell & Hartline, 2012). References Ferrell, O. C. & Hartline, M. (2012). Marketing Strategy. Cengage Learning. Read More