Ikea ‘About $5’ (KOBAYASHI, SHOKO.) Consequently, 9 is kind

Ikea furniture marketing mix (product, price, place, promotion)1. PriceThe price is the amount that a customer is willing to pay for the product. The price of a product is obviously a significant factor of the sales complete. IKEA group is a values-driven company. The main reasons why IKEA became successful are because they take advantage of price adjustment strategy, especially in consumer’s psychological pricing, referent pricing and price discount (promotional pricing ). The first strategy is psychological prices ending in 99 only. In Sweden as well as in Australia, IKEA sets their product with price ending in 99 only, such as $3.99 or $9.99 and this price strategy is successful and became an icon of IKEA’s low-price ideology. The secret behind is that people might believe that round number such as $5 or $10 would be easier to recognize, however, it is accurately known that price $9.99 is more attractive than $10 because people read from left to right and have a tendency to put more emphasis on left numbers than right. Therefore, when customers see the price of ‘$5.99’, they believe that it is ‘About $5′ (KOBAYASHI, SHOKO.) Consequently, 9 is kind of a magic number for sellers. Second strategy is the referent prices in which IKEA often considers a price change, making their consumers believe that new price is a good deal. The strategy is that when IKEA sets the new prices, they also put the previous prices so that the consumers can estimate a price of product to decide whether the new price is a good deal by checking the price with some references. Then, customers might think the new price is a good deal based on reference they are given (KOBAYASHI, SHOKO.) Therefore, IKEA have great appeal to customers by launching new price of products with reference.Third strategy is called promotional pricing or price discounts, in which the sellers put their products on sale occasionally. Customers feel satisfied when they purchase something for a better price than usual price (KOBAYASHI, SHOKO.). Moreover, IKEA’s price discounts can boost power of demand with referent pricing so that customer might spend more money in the store. IKEA’s psychological pricing strategy is related to consumer behaviour and making customers believe that IKEA’s products are price competitive and encourage them to purchase their products.  IKEA’s basic of pricing policy is established on cost leadership i.e. low prices or no-frills pricing. Some products which currently has an existence through markets are sold at 30 to 50% lesser than their competing products. IKEA is allowed to increase its important market share by this pricing strategy. IKEA also gain profits from economies of measure and strong supplier-firm. IKEA mainly focuses on efficient operational details and cost control. Generally, the IKEA customers are more satisfied with matching the prices they are paying for the products and its good quality. IKEA products are not expensive but they are not too cheap either. It also uses flat packing to save on the shipping costs. Compared to the other competitors like West Elm or Bed, bath and Beyond, the IKEA offers the products at much affordable prices. IKEA should maintain its low cost leadership by using the low cost leadership strategy and must ensure that it is always known for having the lowest prices on the market in the future.2. Product IKEA’s products are the shopping products which are less frequently purchased products that the customers compare quality, price and style carefully on suitability. IKEA has a wide range of furniture for children’s rooms, bedrooms, dinning room and living rooms including coffee tables, DVD storage, book shelves,side tables, sideboards, bookcases, sofa, beds, armchairs, leather sofas and fabric sofas and many other products ( IKEA Marketing Mix (4Ps) Strategy ). Approximately 50% of IKEA’s products are made from wood or wood fibres and it’s aim is to recycle 90% of materials which is responding to eco-efficiency and sell at acceptable prices, thus making their products available for middle class.The range of products sold by IKEA is quite wide in term of function as well as styles. It includes nearly everything that you would need or want to furnish your homes. The firm brings product to the local market after researching the local cultures and people’s lifestyles, mainly focused at the tastes and needs of the customers so that the customers can find an equally wide choice of styles at the IKEA stores. Generally, good quality products are found in the markets for high prices, however, such products can be available at affordable prices at IKEA stores. That does not mean that IKEA uses the cheap quality raw material since the firm relies on cost efficient and design innovative methods to match customers’ expectations of price and quality.  3. Position/PlacePlace is the marketing channel and distribution used to transfer the products into the hands of consumers. Offering the correct product to the correct habitation at the correct time includes the supply strategy. As a part of its marketing mix, IKEA has got an excellent position and distribution strategy .IKEA has a global distribution network and huge volumes on manufacturing side and flat packages. Products are transferred from suppliers to IKEA stores directly using more of ocean transport than road transports. IKEA has 186 stores strategically placed in 31 countries, with 20 located in U.S. The IKEA group is an International Marketing business which sells furniture and accessories in Europe, North America, Australia and Asia. (IKEAMarketingMix.) From this, it can be seen that IKEA is spread geographically wise. In addition, providing good inventory management and in-time product distribution from over 1300 suppliers might be one of the reasons of company’s world recognition and success. The stores themselves are very large and many of these stores are positioned in accommodation regions . Many of the stores even have restaurants, Swedish market and food shops. This can be one of the issues in the attainment of IKEA’s low pricing. Moreover, IKEA promotes itself as a multi-channel retailer effectively online and offline sales channels to the target customer segment. Its website ikea.com attracted 2.1 billion visitors during last year alone .4. PromotionPromotion is a system used to communicate with the customers and contribute evidence which supports them to take judgement to purchase a product or service. IKEA has focused a lot on successful promotions and its marketing activities to be a brand recognized globally over its history. IKEA uses promotion tools like TV advertising, online blogs, online ads, catalog, billboards etc. The most well-known promotion is the IKEA Catalog. Every year, IKEA mails a catalog to consumers near its locations and also has numerous Web sites tailored to the consumer’s home country in order to introduce the latest products, on-demand pricing and product specifications to the potential customers. The promotions mix includes TV advertising, sponsorship, newspaper and magazine advertising, and many other elements. IKEA advertises heavily on television to promote its store and product concept. Recent campaigns is the IKEA kitchen party ads ‘Be Happy Inside’ campaign.( ) IKEA also launched a UK-wide advertising campaign which was named ‘home is the most important place’ and used signs like “Not for Sale” written on them as a part of the campaign. Moreover, the advertisements promoted IKEA products are demonstrating the problems faced by people and also offering solutions. For example, an advertising campaign was launched to gauge whether men or women are worse at home with two men and two women, debating which gender is worse. The idea behind the campaign is that a social clutter leads to a conflict which can be avoided according to IKEA. Obviously their iconic yellow IKEA logo support the brand image.  “Secret Behind IKEA’S Pricing Strategy.” T1 2016 MPK732 Marketing Management (Cluster B), 2016, https://mpk732t12016clusterb.wordpress.com/2016/04/30/secret-behind-ikeas-pricing-strategy/.  KOBAYASHI, SHOKO. “Secret Behind IKEA’S Pricing Strategy.” T1 2016 MPK732 MarketingManagement(ClusterB),2016, https://mpk732t12016clusterb.wordpress.com/2016/04/30/secret-behind-ikeas-pricing-strategy/.”IKEA Marketing Mix (4Ps) Strategy | MBA Skool-Study.Learn.Share..” MBA Skool-Study.Learn.Share., https://www.mbaskool.com/marketing-mix/services/17066-ikea.html.”IKEAMarketingMix.”Marketingteacher.Com, http://www.marketingteacher.com/ikea-marketing-mix/.