Reasons For Selection Of New Market For Entry Marketing Essay


IKEA a Swedish company has grown itself to a big concern administration from a little mail order concern. IKEA was found by Ingvar Kampard in Sweden. It has grown itself to 253 shops and 37 states around the universe. IKEA has opened shops in United Kingdom, Hong Kong, China, Japan, and many more doing IKEA a trade name around the universe. Harmonizing to Usunier ( 2000 ) , the deductions and barriers in set uping a new market in the international trade concern is cut downing twenty-four hours by twenty-four hours which creates new chances for the concern for globalization.

Reasons for choice of new market for entry by the Company

India has become a emerging trade state for many transnational administrations for set uping their concern through the old ages. In twelvemonth 2009, the GDP of India stood at US $ 1.243 trillion which had made makes itself the 11th largest economic state in the universe. In July, Reserve Bank of India has claimed a growing of 8.5 % growing in the fiscal twelvemonth ( BBC intelligence, 31 August 2010 ) . Sing the mean growing of the India from two decennaries it has been 5.8 % ( Achin Vanaik, July 2006 ) . It has been the fastest turning economic system in the universe. India has involved itself in universe trading market by opening its doors to the transnational administrations to carry on concern in India. Sing the international market the civilization barrier comes in forepart of any administration conducting concern internationally. So a perfect international selling scheme should be designed before taking measure in the Indian market.

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Alternative markets which were campaigners and grounds non selected?

IKEA has established itself in every portion of the universe in Europe, North America, Middle East, Caribbean and Asia Pacific, so traveling after the set up part markets will assist IKEA merely in developing its communicating web and non construct its trade name around the universe. India is the location where IKEA has non established itself and had been incognizant of the range of the Indian market in increasing its concern.

Proposed market entry scheme, including principle

The proposed selling scheme which can be used by IKEA for set uping in Indian market Marketing Mix ( The 4P ‘s ) . Marketing mix is considered has one of the chief tools in marketing for understanding the different constructs related to monetary value, merchandise, topographic point, and publicity ( 4P ‘s ) ( Armstrong and Kotler, 2006 ) . IKEA can modify its selling scheme harmonizing to the targeted market with marketing mix.

Fig:1 The 4P ‘s of Marketing Mix

Beginning: Armstrong and Kotler ( 2006 ) Selling: an debut. New Jersey: Pearson Education, Inc.

The merchandise subdivision is the first class where IKEA can foremost concentrate on and choose what are the merchandises which can be targeted to India. However IKEA offers a great scope of the family merchandises which can be utile houses. Sing the merchandises targeted by IKEA to the clients they can be given an option of taking different scope of the merchandises within a scope of monetary value and besides allow them take different coloring material combinations for screen at low and inexpensive monetary value. IKEA has ever supported planetary heating and does non cover its merchandises with all the composition board material covered with man-made balls and everything, but uses environment friendly merchandises to cover them. IKEA can supply free place bringing option to the clients with ego to make furniture and can supply support if needed.

The most of import parametric quantity is the monetary value which affects clients runing from different economic system category degrees. Sing the earlier facts by IKEA where it changes the monetary value by supplying price reductions, EMI strategy harmonizing to the demand and supply of the merchandises. Therefore by supplying strategies for monetary values to the clients it keeps the pricing policy balanced with client values and besides integrates with other 3P ‘s of selling mix.

The 3rd P of the selling mix is Place which harmonizing to IKEA is a of import parametric quantity as in for aiming clients. The sub classs involved in the Topographic point are medium of channel, coverage of the country i.e. distance between shop and the clients, mixtures, locations, stock list, transit and logistics. However IKEA has developed its communicating web by presenting the merchandises from providers to clients at clip and up to day of the month. IKEA uses flatpacks play which helps in cut downing the costs involved in transit. Opening a store in the Indian suburbs can besides assist in cut downing the monetary values involved in transit of the stuffs from topographic points.

Promotion plays an of import function in branding of any merchandise and IKEA has achieved it through its old ages of selling techniques used in advancing its merchandises. Promotion does involves advertisement, gross revenues parametric quantities, public dealingss and personal merchandising and other selling techniques which can be used for constructing relationships with Indian clients. IKEA involves advertisement of its merchandises in Television, newspapers and manus to manus bringing of the booklets to people places. As said earlier IKEA involves itself in environmental concern and so has been a portion of some environmental NGO ‘s through the universe, UNICEF, and WWF merely making a favorable public image to the clients.

Culture plays an of import function in set uping a new house in international states. IKEA will hold to take in head the cultural constructs before puting in India. There has been many literature based on different constructs of civilization harmonizing to different writers and publishing houses. Terpstra & A ; David ( 1985 ) defines the civilization as medium for acquisition, sharing, compelling, set of actions or symbols which can supply some significance to the members of the society. Harmonizing to Parker ( 2000 ) , A relation between establishments, administrations and direction itself plays as a cultural communicating between the squads. Ien ( 2005 ) presents a nice construct where he thinks rise in the consciousness of the civilization in the society is in relation to globalization in peculiar. Culture plays an of import function in marketing which is besides related to the 4P ‘s of the selling mix while planing the selling scheme for Indian markets. Sing the thought that IKEA will be covering with the Indian clients which has distinguishable civilizations, linguistic communications and different income degrees. If we use the same selling techniques used in United Kingdom, China, Hong Kong we wo n’t be able to vouch that the selling schemes used in those will assist us win in Indian markets.

Cross civilization selling will play an of import function in developing the IKEA a trade name name in Indian cultural trade market. Usunier ( 2000 ) , has stated in his publication that usage of civilization attack in developing the selling schemes for international states can be utile. Globalization does Acts of the Apostless as a barrier in international cross cultural selling which creates entry measure barriers which can be reduced during the span of period. Following in this study we will be researching the Armstrong & A ; Kotler ( 2006 ) selling mix ( 4P ‘s ) construct with civilization and design a selling scheme signifier Indian clients. In this study we will use the planetary selling scheme of the IKEA and keep balance between globalization criterions and Indian market apprehension.

Usunier ( 2000 ) , the selling scheme for any concern should be globalised but the selling constructs can be tailored harmonizing to the client and cross cultural selling demands. The chief attack of IKEA will be to pull every bit many as clients by adaptation through local markets. The undermentioned subdivision will explicate the selling scheme by the IKEA in co relation to Indian civilization.


Merchandise is an built-in portion of any Retail based concern which has to be harmonizing to the demands and demand of local clients. The salesrooms should be designed harmonizing to the Indian manner and will besides incorporate quality and design of the merchandises harmonizing to the client penchant. A big assortment of the merchandises will be displayed in the salesroom runing low monetary value to high monetary value along with combination monetary values. Sing the Indian civilization and manner of cookery, 4 sorts of meat cliverss and 7 types of spoons and forks along with the western manner of merchandises will be displayed. Sing the Indian civilization which has a different combinations of colorss included in it, the design of the salesroom will be coloured with different combination of colorss. During “ Diwali ” ( Indian festival of visible radiations ) IKEA can convey new scope of merchandises with less and low-cost monetary value to the Indian market. During this festival people normally renovate their houses and convey in new merchandises to their new place. New designs and furniture ‘s can be really effectual in Indian markets apart from the local furniture shops. However this measure will be in investing to IKEA but will besides assist in pulling the clients and increasing gross revenues. For illustration, IKEA sells mattresses in Sweden as in different sizes such as 70X 200 centimeter, 90X 200 centimeter, 120X 200 centimeter, 170X 200 centimeter. But in they can be displayed as individual bed, dual bed, large two-base hit bed etc. which besides considers the Indian civilization because in Indian people believe that kiping in two different beds creates jobs in relationships in the house harmonizing to the Indian Vastu shastra.

The chief property of IKEA is packaging of its merchandises which contains a simple wrap like stuff used to cover the merchandises. But in India people seems to wish their merchandise wrapped in a stuff such that no wear and tear is done to merchandise. IKEA can do usage of the low reclaimable stuffs to do such screens which will be cheaper to the other packaging stuffs. By utilizing the reclaimable stuffs IKEA will stand by its environment friendly organisations. Distinguishing IKEA from other furniture salesrooms IKEA can open in shop eating house functioning Indian culinary arts and Swedish culinary arts to the clients. Indians love eating which will add as a net income to IKEA. Free place bringing and installing charges services can be provided to the clients under a nominal monetary value and can been given an option of cut downing this charges through direct payment of the high scope merchandises. Branding plays an of import function for any administration and IKEA can lend to branding by acquiring involved in the Indian civilization.

Monetary value

Price plays an of import parametric quantity in pulling clients for any concern administrations in any universe market. Reduce in the monetary values will assist IKEA in pulling clients. Reduce in the monetary values will assist in increasing the gross revenues for IKEA. Sing India most of the market population is in in-between category and IKEA with low monetary values can hit this big in-between category population with appropriate selling scheme. This monetary values can besides be changed during the gay seasons and new merchandises can be displayed with appropriate monetary values cut downing the loss component of IKEA. Full furniture designs can be displayed in the booklets and existent designs can be displayed in the salesrooms. IKEA has a policy of pulling and winning client values through low monetary values.

Topographic point

Place provides a medium of communicating between the administration some or the other signifier if the merchandises are supplied to the clients in clip and on day of the month it creates some sort of the dependable relationship between organisation and clients. After analyzing through the logistics, transit paths with easy traffic IKEA can open salesrooms in town where thier are high category income clients and in-between category clients which would be easy for clients to make the salesroom and easy for IKEA in transit of their merchandises through logistics. The salesrooms will be designed harmonizing to the Indian civilization picturing assorted colorss with colorful floorings and fiting the furniture designs which can give the clients and thought on how they can supply their places. Sing the location of the IKEA salesroom and traffic jobs in Mumbai, IKEA can assist in belowground carking parking installations bear downing a nominal monetary value for parking. The timings of the salesroom will be from 10am to 10pm daily through twelvemonth. Future investings can be considered in pulling more in-between category clients by opening salesrooms in suburbs and edifice efficient distribution system between the two salesrooms. This can assist in cut downing the monetary values and making more clients through Mumbai.


Promotion is an of import component in any selling scheme for any concern organisation. Promotion consists of sub classs such as advertisement, gross revenues parametric quantities, public dealingss and personal merchandising and other selling techniques used for advancing merchandises. Ads can assist IKEA construct client relationships through cultural agencies. IKEA has its known policy of non utilizing personal merchandising and giving out limited picks to the clients, it wants its clients to hold a scope of merchandises so that they can choose their favorite 1s. IKEA can expose the assorted color combinations of flooring and material which goes with the furniture ‘s and can make local employments by using staffs to assist the clients related to any merchandises. IKEA can advance its merchandises through advertizements through Television, newspapers and dropping out booklets in some residential countries. IKEA can advance its new merchandises during festival seasons and pull more clients. Internet been a large market for gross revenues of the merchandises IKEA can advertisement through cyberspace by ads through assorted web sites and personal web site giving out each information needed by the client. IKEA can advance its merchandises during festival season by giving free place bringing over purchase of Rs. 30,000/- . An advertizement has to been done in English and Hindi for better communicating to the Indian clients. Through advertizements IKEA can make to its clients for better gross revenues and services. IKEA can construct its public dealingss by allowing clients know on purchase of merchandises more than Rs. 20000/- a well-thought-of sum of Rs. 4000/- will travel into charity assisting hapless kids ‘s in Mumbai.

Outline of recommended selling mix

This selling mix ( 4P ‘s ) Merchandise, Price, Place and Promotion in combination with Indian civilization can be utile in implementing the selling scheme for IKEA covering each and every factor required to set up in Indian market. The cultural consciousness of the market can assist in planing the selling scheme and accommodating 4P ‘s harmonizing to the market. This cultural consciousness of the market can assist IKEA in constructing a strong foundation in market and doing it different from other organisations. Multinational organisation can do usage of this selling mix ( 4 P ‘s ) for set uping them self in any international market and accommodating the 4P ‘s harmonizing to the cross cultural selling techniques in new international markets.

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