IKEA - Entering the Bangalore market

Abstract

Introduction IKEA is a well-known international success story, often depicted in academic case studies on retail formats and supply chains. The company continuously succeeds in achieving high levels of growth, but to sustain this level, many new stores in new locations all around the world are opened every year. Thus, the company is on a never ceasing expansion path, looking for new countries to conquer. India with its 1 billion population is an attractive alternative and may very well be next in line. As the Indian economy continues to expand, the income levels of households will increase. Along with increased incomes comes increased purchasing power and thus more and more foreign companies will see the potential for entering the market. A recent program on NDTV discussed the possibility of IKEA’s entry into the Indian market. According to the program, the “word about town” was that IKEA would most probably be entering during 2008.1 Even for a large player like IKEA, it will be vital to enter this new market with a promotion plan, which can communicate the chosen position in the market, and establish an image which can pull the consumers into the shop and to the purchase. This challenge leads us to the objective of this paper: To evaluate the potential for IKEA to enter the Indian market, and to design a promotion strategy for IKEA in the Bangalore furniture market. Structure of the report The initial part of the investigation is a situation analysis taking into consideration both internal and external elements of the Bangalore furniture market, the furniture market in India as a whole and IKEA as a company. This is followed by the segmentation, targeting and positioning, value proposition and communication objectives. These findings will constitute the foundation for creating the promotion plan and communication design for IKEA. Finally, conclusions will be drawn from the investigation.