IKEA and Super Amart Companies Marketing Strategies

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Table of Contents

Executive summary
Introduction
Background information
Literature review
Differences between IKEA and Super Amart
Similarities between IKEA and Super Amart
Recommendations and justification
Conclusion
References
Appendix

Executive summary

Furniture retail business is among the most competitive industries in Australia. It has several key players; however, the main players are IKEA and Super Amart. IKEA is considered the largest retail store in the globe, while Super Amart is considered the largest discount retail store in Australia. There are several similarities and differences in-store design and merchandize assortments between the two retail stores. The main similarities between the retail stores are the strategic location of stores, store layout, design, and establishment of a warehouse near stores.

On the other hand, the differences range from differences in the range of products provided to the area of operation, for instance, Super Amart mainly supplies furniture and home appliances and accessories while IKEA supplies furniture, home appliances and accessories, flats and family mobile among others. There are several recommendations that both retail stores ought to consider to prosper in the retail store industry; for instance, the retail stores should consider the culture of the respective market before naming their products. They should also establish an effective pricing policy such as discounts, among others.

Introduction

Marketing is the process of establishing a market for the product of a company or organization. It can also be viewed to be the process of ensuring that products of an organization meet the demands of the market and meet expected standards by consumers. Marketing ensures that goods of a respective company appeal to respective consumers. There are several organizations in the business environment, and each has a different marketing strategy. Marketing strategies are developed by organizations or companies with the aim of ensuring an increase in sales and establishment and maintenance of competitive advantage over other operators in the respective industry. This is a report on individual retail marketing in the furniture industry in Australia. The report is on two retailers, which are Super Amart and Ikea.

Background information

IKEA and Super Amart are the leading furniture retailers in Australia. These retailers offer furniture products at affordable rates, and their supply is reliable. They are considered the leading retailers in the furniture industry in Australia. Furthermore, these retail stores are considered among the most successful retail stores in Australia. The success of retail stores in the furniture industry has been boosted by the competitive nature of the Australian economy (McCain, 2011). Furniture is on high demand; hence operators in the industry experience high income, but competition is also intense. These companies are not only known in Australia but the global market, for instance, IKEA. IKEA is a private global company, and it offers home-based products.

Most of the products designed and sold by IKEA are ready-to-assemble in nature. The company mainly supplies desks, beds, and other home appliances and accessories. IKEA is considered the largest furniture retailer globally. The company was founded in Sweden by Ingvar Kamprad. On the other hand, Super Amart is also considered the largest discount retailer in bedding and furniture in Australia. The store is determined to provide products to customers at affordable prices. Though IKEA is considered the largest retailer globally, it faces competition from Super Amart in Australia being the largest furniture retail store in Australia, and both stores operate in Australia (Haliassos, 2011).

Literature review

There are several competitive industries in Australia. However, retail furniture is considered among the most competitive considering operators in the industry, especially organizations with the largest market share. Retail business is the most common due to the nature of the economy of the country. Furniture retail business has two major players in Australia; they are, IKEA and Super Amart. These stores offer different types of furniture and home appliances and accessories. IKEA is a Swedish company and has several similarities with Swedish business culture.

On the other hand, Super Amart is an Australian company, and most of its products are appealing to the Australian people (Datamonitor, 2010). Furthermore, IKEA is considered the largest furniture retailer globally, while Super Amart, the largest furniture retailer in Australia. Though IKEA has a global appeal and advantage in furniture retailing, Super Amart’s influence in Australia cannot be ignored. It is faced with intense competition from Super Amart being the largest furniture retailer in Australia and having operated in Australia for a longer period of time (Camic, 2001).

IKEA designs most of its products in Sweden, but they are mainly manufactured in the third world or developing countries. IKEA has adopted the strategy or trend because it intends to reduce the cost of production so that it can maximize its profit margin. Production of products in developed countries is expensive compared to production in developing countries. This is due to the high cost of materials and other production processes in developed countries compared to developing or third world countries. Though IKEA manufactures or produces its products in developing countries, they have a Swedish name and have Swedish characteristics. On the other hand, Super Amart products are mainly designed in Australia, being a domestic retail store in Australia. This makes most of its products appealing mainly to Australians because it understands consumer demands and market expectations in Australia (Christou, 2006).

There are different marketing strategies that can be applied by organizations in different markets. The choice of a strategy to use depends on the respective marketing where the company operates or opts to commence operation. A company or organization should adequately study a market before choosing the strategy to apply. The wrong choice of marketing strategy will definitely lead to losses or even closure of operation. Effective marketing research may also enable a company to determine products that the respective market or consumers are willing and able to purchase considering their demands and expectations and tastes and preferences (Brome, 2001).

Competitive industries or business ventures require the development and establishment of effective strategies. Marketing is a process and needs consistent review. Furthermore, consumers’ needs are dynamic and frequently change, while market expectations also change due to changes in consumer demands. IKEA is an international retail store, is well versed in the demands of different consumers in different markets. Moreover, the store has adequate knowledge of general market expectations hence may adequately and effectively meet the demands of the Australian furniture industry. On the other hand, Super Amart is an Australian domestic retailer hence well versed with the demands of consumers in the market. Therefore, both IKEA and Super Amart have adequate knowledge and experience in furniture retailing, leading to the competitive nature of the business in Australia, not forgetting the high demand for the products prevailing in Australia (Miller, 2008).

Differences between IKEA and Super Amart

IKEA and Super Amart are retail stores, and both operate in Australia. However, there are certain differences between the retail stores due to differentials in marketing and operating strategies. The differences are mainly on operational methods, store design, and merchandise assortments, among others. IKEA is considered the largest furniture retailer globally. This has enhanced the design of the stores of the retail store in different countries due to its global experience in the business. Its store design meets global standards and is unique in nature because it blends designs from different markets (Haliassos, 2011). On the other hand, Super Amart is considered the largest discount retail furniture store in Australia. This has influenced the design of the company’s store to reflect Australian culture and design hence mostly appeals to Australian consumers and customers (McCain, 2011).

Super Amart has a strategy of providing furniture and home appliances and accessories at affordable prices. It aims at ensuring that its products are of low but reasonable prices hence increase their sales. Super Amart has a discount strategy hence sells its products at discounted prices. On the other hand, IKEA mainly sells its products through its cash sale policy without discounts. IKEA store does not have a discount strategy or policy in its sales. Furthermore, IKEA offers a diversified range of products apart from furniture and home appliances and accessories. The products that IKEA offers apart from furniture and home appliances and accessories are houses, family mobile, and flats. On the other hand, Super Amart is strictly concerned with the supply of furniture and home-based appliances and accessories (Miller, 2008).

IKEA has several products with different names. However, IKEA has a policy that influences the naming of the products of the retail store. Most of its products have single names. Furthermore, the names of the products supplied by IKEA are derived from Swedish. This is because IKEA was founded by a Swedish and has its headquarters in Sweden. On the other hand, Super Amart is an Australian based furniture retail store. Most of its products are named in accordance with Australian culture. Moreover, Super Amart is only based in Australian and greatly appeals to most Asian consumers. On the other hand, IKEA products mostly appeal to the Europeans because it was founded in Sweden, which is a European nation. This has influenced most of its production the European way while Super Amart products are produced Australian way hence more appealing to Australian consumers (Miller, 2008).

IKEA is an international furniture retail store and has several stores in different countries and regions globally. This has increased its knowledge of the retail store business, especially on furniture and home appliances and accessories being its main products. IKEA has a strategy of maximizing profit and hence designs its products in Sweden but produces them in developing or third world countries. This is because production cost is low in developing countries compared to developed countries due to the cost of materials and production process. On the other hand, Super Amart designs and produces its products in China and other countries with low production costs. This is because the retail store mainly operates in Australia; hence considered the largest domestic furniture retail store in Australia has to operate in the country since 1970 (Broome, 2001).

IKEA retail stores usually have Swedish national colors on their windows. Moreover, IKEA retail store is owned and managed by profit and non-profit corporations. On the other hand, Super Amart is owned and managed by a single corporation, which is profit-oriented. Finally, IKEA is a furniture retail store that serves the entire global market, while Super Amart is a domestic furniture retail store that serves Australia and its region only (Miller, 2008).

Similarities between IKEA and Super Amart

There are several differences between IKEA and Super Amart. However, there are also similarities between the two retailers’ store design, operation methods, and merchandise assortments. IKEA deals in the production and supply of furniture and home appliances and accessories. Similarly, Super Amart also produces and supplies furniture and home appliances and accessories. Secondly, both companies have the same office layout, which is accessibility. The office layout of both retail stores enables customers to access their products in the showroom easily. Both retail stores have showrooms with glasses hence enhances access to their products (Garnett, 1999).

Furthermore, both retail stores ensure that environments, where they operate, are safe and free from pollution. Both stores have established an environmental initiative plan that enhances the safety of the environment. Most stores of the retailers have warehouses, and most of their stores are located outside central business districts. Finally, both retail stores have a 24-hour operation policy hence operate on a 24-hour basis to ensure reliability (Broome, 2001).

Recommendations and justification

There are several marketing recommendations that both retail stores, IKEA and Super Amart, should consider to ensure that they meet market demands and maintain their profit margin and or gain a competitive advantage in the retail furniture industry. These recommendations may also improve operations of the retail store in case they are considered. IKEA is an international retail store and is considered the largest globally. However, it designs its products in Sweden, and their names mainly derived from Swedish. Swedish names might not appeal to other consumers from other markets.

This is due to differences in business culture. It might also affect sales of the retail store in some countries. Therefore, IKEA should consider the cultures of other business environments while naming their products to ensure that consumers in the respective market identify with their products. IKEA should, therefore, name products that relate to the business culture and environment of the market where they opt to operate to avoid losses (Miller, 2008).

IKEA is the largest furniture retail store globally. However, it is faced with intense competition from Super Amart, which is considered the largest furniture retail store in Australia. Though IKEA has global experience in the furniture retail industry, it is unable to compete and outdo Super Amart in the Australian market effectively. This is due to the pricing policy established by Super Amart of selling its products at discounted prices. Therefore, IKEA should also consider selling its products at discounted prices in the Australian furniture industry to ensure it effectively compete with Super Amart. Moreover, IKEA should review its corporate structure and consider management of its affair by a single corporation, especially profit-oriented. This will ensure that the retail store increases its profit margin and increase market share (Nielsen, 2008).

Finally, Super Amart should consider venturing into the global market, considering its competitive nature and strategy. The retail store has effectively competed for IKEA hence proved its competency in strategic decisions. Globalization will also enhance the effectiveness of Super Amart and increase its market and or gain a competitive advantage over other retail stores globally considering their competition with IKEA. Despite being a domestic retail store, it has effectively competed with IKEA due to its discount policy in sales (Levitt, 2005).

Conclusion

Retail stores need to establish an effective strategic retail marketing and merchandising policy to address diversity in retail store demands and expectations in case they opt to globalize. There are different retail marketing strategies that can be applied by retail stores in different markets. The choice of a strategy to use depends on the respective market where the retail store operates or opts to commence operation. Effective marketing research may also enable retail to determine products that the respective market or consumers are willing and able to purchase considering their demands, expectations, and tastes and preferences. Moreover, a retail store opts to redefine corporate layout and store design to ensure its products are easily accessed by respective consumers. Therefore, effective retail marketing should consider the establishment of accessible store layout, pricing policy, location of stores in strategic and accessible places, adoption of effective promotional strategy, adoption of effective and reliable customer service, and merchandise selection.

References

Broome, J. (2001). Retail marketing information. London: Routledge.
Camic, P. (2001). Strategic Marketing: Retail industry. London: Routledge.
Christou, C. (2006). Marketing Information digest. Stanford: Stanford University Press.
Datamonitor, H. (2010). Retail Industry: Australia. New York: William Morrow.
Garnett, R. (1999). Marketing essentials: Entering new markets. Indiana: Pearson Education.
Haliassos, M. (2011). Furniture retail: Super Amart. New York: Pearson Education.
Levitt, S. (2005). Retail marketing industry. Stanford: Stanford University Press.
McCain, D. (2011). Furniture retail store: IKEA. New York: Pearson Education.
Miller, D. (2008). Retail Marketing. Melbourne: Tilde University Press.
Nielsen, N. (2008). Strategic Marketing. Ox ford: Oxford University Press.

Appendix

There are several competitive industries in Australia. However, furniture retail store is considered among the most competitive considering key players and level of competition between them. Retail store marketing is also considered among the most complex and difficult to develop. This is because cost of establishing such stores is limited hence the industry is densely populated. Furthermore, retail store business is common and easy to operate.

There are several retail stores that have entered the industry but later ceased operation due to the prevailing competition in the retail business or industry. However, there are other exceptional retail ventures that have developed effective retail marketing hence maintained operation in the industry. Development of effective retail marketing strategy has been the main reason for sustainable profit in the industry. Retail store businesses have to develop realistic and dynamic retail marketing strategies to ensure increased market share and sustainable profit gain.

Retail stores have direct contact with consumers. This requires effective retail marketing strategies. Furthermore, retail stores opt to establish good customer relation and service to ensure increased sales. Location of retail stores should also be strategic to ensure easy access by consumers. Most people prefer purchasing from retail stores; therefore, establishment of effective pricing policy such as discount among others may ensure sustainability. Moreover, retail marketing requires establishment of strong brand, choice of the best promotion policy. Finally, retail stores should ensure establishment of an effective store layout that gives consumers easy access to products of the respect retail store. It should also ensure its warehouse is established next to the store to enhance reliability and consistency of supply.

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