Date: September 25, 1986
Subject: Responding to Sears “Elements” Line of furniture
The Canadian furniture market has brought success to IKEA Canada due to the high quality and low priced “quick-assembly” furniture designed by IKEA’s European engineers. However, this success brought many imitators. Sears Canada has recently published a new catalogue that includes a new line of furniture called “Elements”. The new line of furniture very much resembles IKEA’s knock-down, self-assembled line. IKEA is facing an imitation threat and should tactically respond to minimize its effects.
IKEA is considered to be a low cost, high quality producer in the ...view middle of the document...
Key success factors
To effectively compete in the Canadian market, IKEA needs to ensure high quality raw material and product, European design, customer service and low prices. It also needs to increase its marketing efforts by printing and distributing more catalogues. IKEA should learn more about demographics of market segments in Canada since management feels that the IKEA concept appeals to a much wider group than the existing target market. In addition, IKEA can increase the frequency of catalogues distribution. E.g. quarterly or semi-annual distribution. Despite the increase in costs that comes from printing more catalogues, IKEA can reduce its marketing expenditures on magazines advertisement and other means of promotion.
Since Sears “Elements” products can only be purchased through a catalogue and can not be viewed in store, it is advantageous that IKEA informs consumers that all items shown in the catalogue are available in store. This will greatly appeal to existing and new customers and enable them to view the item before purchase.
Despite the increase in costs that comes from printing more catalogues, IKEA can reduce its marketing expenditures on magazines advertisement and other means of promotion.
In order to minimize the imitation threat, IKEA Canada should employ a few tactics...