IKEA
IKEA
Introduction
The competition level in this digitized and globalized business economy is very dynamic and constant and with technology as the central theme in terms of the changing dynamics all Multinational, Medium and Small organizations keep themselves in lieu with the changes to keep the business operations effective and sustainable.
IKEA Group operates in 43 countries that mean 43 different cultures and consumer segments, although the main products are the ones that have made IKEA as the leading concept based company, furnishing home products with creative designs and low price (IKEA Group FY15, 2015).
As discussed in the week 2 assignment, the focus is on the cosmopolitan market by designing unique products, to be able to cater to the lifestyles of the targeted consumers.
The premise for the new product line is based on the fact that, IKEA group’s commitment towards climate action, in relation to investment in renewable energy and have spent a massive EUR 1 billion supporting communities and environment in general (IKEA Group FY15, 2015).
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IKEA will be launching a new product line, Krydda/Växer series that will enable consumers to grow plants inside the kitchen without needing soil (Betsy. M, 2016).
Considering the aforementioned fact, the new product line that will be launched by IKEA will be organic fruits and vegetables based on the same model as Krydda/Växer series, to be targeting health conscious individuals who will take care of their own fruits and vegetable plantations in the kitchen as per their choice and requirement
Besides, saving cost of buying fruits and vegetables on a constant basis the product line will provide organic food at home for the health conscious young individuals who will be targeted (to be discussed in detail in Target Market).
The name of the new organic product line will be ‘Organ-Ikea’, the name to be theme around the company and the face of the product i.e. organic food.
Organ-Ikea is the name that will be used to promote the new line in marketing communication and the product line to be put for sale will be for fruits and vegetable, aptly named as ‘Fruit-Ikea’ and ‘Vege-Ikea’.
The product line will come with a ‘Kit’, that will simple enough to be maintained by consumers at home, with the system not requiring any weather conditions, it will help consumers who don’t have a garden and who always wanted to grow their own fruits and vegetables.
The fruits and vegetables seeds will be available at IKEA stores starting the launch from Singapore, since Singapore consumers are very high on health and fitness and organic food brands have a strong niche market.
The price of the kit will be low key for a start and the communication launch will showcase the progress of first 100 buyers for the innovative product.
Target Market
The target market for the new product launch will be of young university and office going professionals.
The target market for the new product launch resonates with the positioning of the global target audience of IKEA that is defined as ‘young people of all ages’ (Michael et al, 2007).
The university and office going professionals in Singapore and more so, globally, are looking out for a product that are not only unique in design but are also light on the pocket and IKEA’S low price approach is directly related.
The demographics of the target market are from 18-36 years, with both genders targeted i.e. male and female with basic income of at least $4000 per month.
The Psychographics of the target market is that their attitude and beliefs are in socializing, new movies, music, modern fads and trends (health based i.e. organic food) with a focus on fun with health primarily for Singaporeans and also a global selected target market base.
The Geographic segmentation is based in Singapore city, urban areas where, the personality of the target market is that they know what they want from life, are confident, artistic and modern, expressive and exploratory with regards to trying out new things in life and are in control of their actions.
The target market’s behavioral needs and motivations are to enjoy and lead a healthy and active life. The target market’s buying behavior is depending on the decision making and thus it can be both impulsive and motivation driven, if the product is compatible and bring improvement in their life style they will try it to gauge its impact.
One aspect that is very much pertinent with the target market, is that Singapore nationals lives HDB and condos flats, and the option of a garden is not available so the kit will help them to grow fruits and vegetables.
Research Question
Demographic: What is your age? 18-26; 26-26
Psychographic: What are your hobbies & interests? Sports, Gym, Outdoor Activities etc___________
How much $ do you spend on Fruits and Vegetables every month?
Below $50; $50-$100; $100-$150
Geographic: Where do you live in? North, South, West or Central Singapore
Behavioral: What motivates you to purchase organic products?
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Best Methods of Research
The research questions in essence delves into the psyche of the consumers in terms of determining the age, to check out the preferences of the target market with regards to the activities they undertake, the amount they spend on fruits and vegetables as it will be help in fixing the price of the kit accordingly to create an economic affect besides the health benefit and own gardening benefit.
The market research methods that will be undertaken will be Focus Groups, Surveys and Questionnaire method.
The Focus group will help in connecting with the targeted group from ages 18-36 and get the insight through a discussion conducted on the organic food market, besides the possibility of growing one’s own in the kitchen, this insight will also help in determining the target markets, motivations and requirements, that can be molded into product specification and also used in marketing communication at the launch.
The survey method will be chosen in two forms, the first will be an online survey that is easy to contain in terms of questions and also getting connected with maximum target segment, the second survey method will be Telephone surveys as it is an inexpensive form of survey and can be manipulated as per the persons requirement, and with the name of IKEA being used the telephone survey may yield a higher percentage of response.
The questionnaire method will be utilized in a controlled environment i.e. in universities, offices by doing an activation just to connect with the right target segment to generate effective responses.
New Product Development Process
The first step is Idea Generation, with IKEA being a leader in developing and introducing new designs and with focus soon innovation with the soon to be launched line Krydda/Växer, the idea is primarily generated from the consumer market segment in view of the geographic location and with Singapore being the base, the focus on organic food product is the key in generating the new product line idea of ‘Organ-Ikea’ (Boundless, 2016).
R&D are the key in Idea Screening, that is the 2nd & a very key step, as whether or not the organic kit feasibility is taken into account in terms of benefit, manufacturing capability and the eventual profitability, that are asked before any investment.
A business analysis will be done as this will help get more details on the kit’s specification and business perspectives in relation to justify the cost involved, this process will entail the marketing research information and will mainly focus on the profit aspect in terms of volume and break even of the organic kit.
Technical and marketing development is the next step, which will involve the lab research for exact specification of the kit, to develop a prototype for evaluation and also manufacturing method of kits will be tested in normal conditions for mass production.
Manufacturing Planning comes next for Oragn-Ikea, is which the plan for mass production will be shared and approval is given in terms fund, facilities and personnel’s.
The Marketing Planning step will take into account the marketing mix of the organic kit and will be followed by Test Marketing that will entail testing the kit’s utilization.
And finally, Commercialization will see the kit’s launch that will be done with a major a launch event in Singapore with the lived feeds being promoted to all major media tools to push the buzz to a very high level.
References
Besty, M (2016). Ikea's Awesome New Product Will Be Your Favorite Thing in the Kitchen. Innovative. INC. Retrieved from http://www.inc.com/betsy-mikel/ikeas-awesome-new- product-will-be-your-favorite-thing-in-your-kitchen.html
Boundless (2016). New Prodcut Development Process.Retrieved from https://www.boundless.com/business/textbooks/boundless-business-textbook/product- and-pricing-strategies-15/new-product-development-97/following-a-product- development-process-452-6132/
IKEA Group FY 15. (2015). Sustainability Report: IKEA Group at a glance. Retrieved from http://www.ikea.com/ms/en_US/img/ad_content/2015_IKEA_sustainability_report.pdf
Michael et al, (2007). International Marketing. Part 2: International Market Entry and Development. Chapter 6: Strategic Planning. Pp. 197. 8th Ed. Thomson, South Western.
