Ikea Imc Plan

IKEA

Integrated Integr ated Marketing Communications Campaign

Kat Shanahan IMC 610 Final Project  Due: June 23, 2012

Executive Summery  IKEA is a home improvement store that takes pride in providing their customers with low-priced furniture and giving back to the world around them. Since the nearly 70 years since IKEA’ IKEA’s beginnings, they have grown into a $30 billion dollar company that strives to “create a better everyday life for the many” in in all of their business efforts. When shopping at IKEA, in-store or online, customers are treated to an experience that no other furniture store can offer. IKEA has a strong brand personality in addition to a solid business foundation. These concepts provide the foundation for a successful integrated marketing communications campaign. This campaign will build off of IKEA’s IKEA’s strong foundation and promote IKEA’s IKEA’s sustainability efforts, furniture customization options, and new marketing tools that will make the shopping experience more convenient for IKEA IKEA’’s customers. customers . Market research has indicated that IKEA as room for improvements in their digital/social media strategies, publicity of their sustainability efforts and improving customer relationships. This integrated marketing communications plan will focus on aligning IKEA’s IKEA’s marketing efforts with their sustainability efforts, while increasing the sales and awareness of IKEA’s IKEA’s products. This integrated approach will unite creativity crea tivity,, paid advertising, public relations, direct marketing and sales promotion to show customers why shopping at IKEA improves their life and the world around them. The tactics outlined in this plan will communicate to customers how IKEA has developed tools to make shopping in-store and online more convenient. Customers will also be informed of IKEA’s IKEA’s sustainability efforts and how they are contributing con tributing to the world around them while purchasing stylish, customizable furniture that ts into their budget. The single most important thing this campaign will communicate to customers is that shopping at IKEA not only allows the customer to get what they want, the way they want it and in the budget they want, it also has positive effects on the environment.

Table of Contents IKEA Background Information History Mission Statement Company Financials Creating a Better Life Product Mix Marketing Mix   Competitors Target Market SWOT Analysis Integrated Marketing Communications Plan Objectives   Strategies Creative Strategy Statement   Brief    Execution Paid Media Objectives   Strategies   Tactics   Budget   Flowchart Public Relations Objectives   Tactics Direct Marketing Objectives   Tactics Sales Promotions Objectives   Tactics Additional Social/Digital Recommendations Product Packaging Measurement and Evaluation Conclusion Works Cited Images

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IKEA Company Information

History Highlights

History 

1943

IKEA was founded in 1943 by Ingvar Kamprad and is currently under the parent company INGKA Holding B.V that is owned by Stichting INGKA Foundation. Ingvar Kamprad got his modest start selling pens, Christmas cards and seeds in southern Sweden. From there, Kamprad began advertising and demands grew too high for him to handle individual sales calls. In 1948, the rst piece of furniture was introduced into his product range. True to today’s IKEA philosophy, the furniture was made from local manufacturers and the resources were from the forests close to his home (ikea.com).

Kamprad founded IKEA in the village where he was raised. Some of the rst products sold were: Pens Wallets Watches 1945 

The rst IKEA advertisement was developed 1948

Furniture introduced into product mix 1951

Kamprad’s rst catalog was published in 1951, and since then IKEA has distributed 208 million copies in 30 different languages (IKEA Systems B.V., 2011). After the success of the IKEA catalog, Kamprad opened his rst furniture showroom in Älmhult, Sweden. Over the next seven years Kamprad introduced at packed furniture that requires self-assembly, opened the rst IKEA store in Älmhult and gained IKEA’s 100th co-worker. It wasn’t until the 1980’s that IKEA began to expand into other markets including the United States. Since then, IKEA has been expanding all over the world.

IKEA catalog created 1953

First furniture showroom opened 1956

Furniture is designed to be at packed and assembled by customers 1958

First IKEA store opens in Sweden 1959

IKEA’s current operations include: • 26 Distribution center • 11 Customer distribution center • 287 Stores in 28 countries • Operations in 41 countries

100th co-worked hired at IKEA 1960

First IKEA restaurant opens 1985 

IKEA opens rst store in the U.S. 10,000 co-workers in 60 IKEA stores

Mission Statement and Business Principle IKEA was built on the foundation of “creating a better life for the many people”. Their business principle is simple, “offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them (Inter IKEA Systems B.V., 2011).”

1997 

IKEA launches website Children’s IKEA is created 1999

50,000 co-workers in 158 stores located in 29 countries 2004

200th IKEA stores opens

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Company Financials It is because IKEA still strives “to create a better everyday life for the many people” that in 2011 they achieved more than $30 billion in total revenue, celebrated 131,000 coworkers in 41 countries, and saw 655 million store visitors and 870 million website visitors (Inter IKEA Systems B.V., 2011).

Total revenue in billions of dollars

Creating a better life Not only did IKEA see business success in 2011, they helped create notable changes in the world around them. Because of IKEA’s business success, the United Nations High Commission for Refugees saw a $62 million dollar donation, and UNICEF and Save the Children saw a $13.8 million donation to provide books, classrooms and teachers to approximately 2.8 million children located in 20 countries around the world (Inter IKEA Systems B.V., 2011). In addition to donating to organizations around the world, IKEA has been focusing on sustainability efforts including wind turbines and solar panels. At the end of IKEA’s 2011 scal year, they had 69 wind turbines creating 15 percent of the energy needed to run their stores and distribution centers. By July 19, 2012 IKEA’s U.S. solar panel array reached 535,800 square feet and contained 17,443 panels. This addition allows IKEA to reduce carbon emissions by the equivalent of 791 cars annually. IKEA still has 17 solar panel projects underway in the U.S. (Combes, 2012). IKEA was also built on the principle of growing from their own resources, which means the company earns money before they spend money. In 2011, customers saw this in the form of a 2-3 percent price reduction on products across the store (Inter IKEA Systems B.V., 2011). This principle also translates into the treatment of their employees. The company believes their coworkers, and the values they share, are their most valuable asset and pride themselves on their development opportunities. Page 5

Product Mix Currently, IKEA offers approximately 12,000 products including furniture for the kitchen, bathroom, bedroom, living room and patio. All products are designed with cost effective packing, shipping and distribution in mind. This strategy furthers IKEA’s focus to keep costs low while providing stylish and innovative products for their customers. IKEA focus their marketing communication strategies on the customization and diversity of these products, and most importantly, their price point.

Product Lines of Interest  

EKTORP 

BILLY 

 

STRANNE 

LAIVA

 

HEMNES

FÄRGRIK 

 

MALM 

 

BAROMETER

 ARV 

RUTBO

IKEA designs product based on: • Determining the price tag rst • Seeing things differently: Reusing products and experimenting with re-purposing materials • Flat packing: IKEA is able to keep costs low by at packing products and customer selfassembly • Responsibility for people and the environment: IKEA strives to reduce their contribution to climate change • Good design and function • Products and materials: IKEA strives to reduce the negative impact of their materials on the environment

Marketing Mix One of the most memorable IKEA marketing campaigns was the 2010 “life improvement store” campaign, which was based off of their mission of “creating a better life for the many.” This was the rst campaign for IKEA in three years. The campaign aimed to convince the target market that having better spaces in your home made for a better life. IKEA spent $90 - $100 million dollars on the campaign, which lead to more than $23 billion in total revenue (Vega, 2010). Previously, IKEA has focused their marketing efforts on print and outdoor advertisements. In recent years they have been slow to enter the digital advertising and social networking media. IKEA has four primary areas in their marketing mix. • IKEA Product Range: IKEA’s product range is the key to their marketing efforts • IKEA Catalog • IKEA Stores • Advertising and Public Relations: Advertising and PR help support the other three areas of the marketing mix

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Competitors IKEA faces competition from many low-priced furniture outlets in the United States and overseas. Some of the largest competitors in the United States include, Pottery Barn, Pier 1 Imports, Ashley Furniture and Bedding, Target and Walmart. Some of these competitors are outlined below. Target

• Target offers similar furniture pieces to IKEA’s EXPEDIT and LACK product series • Prices are very competitive • Target has more brick-and-mortar locations in the US than IKEA • 2011: $69.87 billion in revenue (target.com)

Walmart

• Competitive pricing on furniture • More brick-and-mortar locations in the United States than IKEA • Walmart is a super store that allows for convenient shopping on a diverse range of products • 2011: $44.4 billion in revenue (walmart.com)

Pottery Barn

• Large furniture dealer with locations in the United States, Canada and the Middle East • Online design tools and inspiration • Outlet centers • Heavy utilization of social networking and digital marketing efforts

Ashley Furniture and Bedding

• Competitive pricing on furniture • Specialize in furniture production • Retail locations in the US, Costa Rica, Japan, Mexico, Puerto Rico, Canada and Indonesia • Delivery and assembly services available Page 7

Target Market  IKEA’s target market is men and women living in the United States between the ages of 2231, landing them in the millennial generation (CBS News, 2008). They are the target of many advertising campaigns and are one of the most difcult audiences to effectively reach. These individuals have bachelor’s degrees and are in pursuit of, or recently placed in their rst professional employment opportunities, and for the rst time in their lives have disposable income. Additional characteristics are outlined below.

  Geographic • Live in the U.S. • Live in a state with an IKEA store however, it usually takes a few hours to get to a location • Purchasing or renting unfurnished spaces • Spent many years in university living arrangements or parent homes • Reside in medium to large cities • Public transportation available in cities

Demographic Information • On the verge of marriage, or are recently married • Average annual income: $26,000 – $45,000 • Bachelor’s degree • English is primary language • Born in the United States • No children or very young children • Average debt: $40,000 single • Average debt: $70,000 married • Own Smartphone • Dwellings contain multiple computers/tablets • Occupations: technology, art, medical, engineering

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Psychographic Information • Budget-conscious, • Not afraid to invest for the future • Value a low price on quality products • Value strong customer service due to being raised with a “me rst” mentality (CBS News, 2008) • Take pride in their appearance • Enjoy customization • Self condent • Free time: entertaining, engaging with friends, video games, and traveling • Enjoy online shopping • Open minded • Support global initiatives and shop at companies that support those initiatives • Disposable income: dinner, movies, coffee, traveling, entertainment and technological gadgets • Members of multiple social networks including Facebook, Twitter and LinkedIn

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SWOT Analysis Overview  IKEA is a global company with a strong brand image. They have a very strong company mission, which contributes to their marketing success. Currently, they are facing challenges ranging from economic issues in the United States to increases in social/digital media advertising demands.

Strengths

Weaknesses

• Strong brand identity/personality • Product customization, diversity and integration between product lines • Cost effective products made from recycled and environmentally friendly materials (Inter IKEA Systems B.V., 2011) • Investment in solar panels and wind turbines • Strong company values

• Being a global brand makes maintaining standards difcult • Less than one store per state in the U.S. • Poor delivery service, complicated truck rental, and expensive shipping • Heavy reliance on cost effective products leads to difculty improving struggling areas • No option for purchasing assembled furniture

Opportunities

Threats

• Increased interest in sustainable efforts • Increased demand for affordable furniture • Increased demand for social networking/ online marketing • Lower carbon footprint

• Additional stores selling low priced furniture (Target, Walmart) with more brick-and-mortar locations in the U.S. • Economic recession in the U.S. (Zucherman, 2011) and in Europe (Bruce & Spicer, 2012) • Americans are waiting longer to purchase their rst homes (National Association of Realtors, 2011) • Rising gas prices in the U.S. make traveling great distance to IKEA stores difcult

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Integrated Marketing Communications Plan Overview  The following campaign is designed to promote IKEA’s sustainability efforts and increase product awareness and sales in the target demographic. The campaign will also convince customers that shopping at IKEA and utilizing their new online and digital tools will make their lives easier, and the world around them better. In addition, shopping at IKEA means customers get what they want in a budget that ts their life style.

Integrated Marketing Communications Objectives • Increase website trafc by 10 percent in 12 months • Increase foot trafc in-store by 5 percent in 12 months • Increase awareness of sustainability/philanthropy efforts in the target market by one million people in 12 months • Increase sales by 10 percent 12 months • Increase sales of returning customers by 15 percent in 12 months • Increase the percentage of customers in the target demographic who associate IKEA with lowpriced, customizable furniture and environmental sustainability by 10 percent in 12 months

Integrated Marketing Communications Strategies • Promote sustainability/philanthropy efforts across all paid media • Create interactive web/digital tools to engage target audience and simplify shopping experience • Participate in community events to generate earned media coverage • Develop sales promotions redeemable in-store only to attract customers from greater distances and increase in-store trafc • Promote furniture and non-furniture items to customers through direct marketing efforts • Utilize social media to communicate with target market • Utilize consumer information to encourage return visits from customers • Develop consistent and integrated creative concepts for paid media, social/digital media, sales promotions and direct marketing tactics

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Creative Strategy  Creative Strategy Statement: IKEA has low priced, customizable furniture that ts everyone’s needs and has a positive impact on the environment. Creative Brief  Client: IKEA Type: Overall IMC Campaign

Date: 06/17/12 Pages: 1

Why are we creating an IMC campaign?

We are creating this campaign to increase awareness of IKEA’s sustainability efforts, to highlight the customization options and diversity of IKEA products, and demonstrate how shopping at IKEA will make the customers’ lives and the world better. To whom are we talking?

We are talking to men and women, between the ages of 22 and 31, in the United States who enjoy customizing their furniture and are on a tight budget. These individuals appreciate sustainability efforts. What do they currently think?

Our customers think IKEA has inexpensive, trendy furniture but at times quality suffers. Many of them also think that shopping at IKEA is an all day trip because they do not live near a store. They are somewhat aware of the customization options with the furniture. Customers are typically unaware of the contributions that IKEA makes to the environment and the world. What would we like them to think?

IKEA has low priced furniture that customers can create or customize to match their style, and the online tools make customers’ lives easier. By shopping at IKEA the customer is also making a contribution to the environment. What is the single most persuasive idea we can convey?

Shopping at IKEA not only allows you to get the products you want, the way you want them and in the budget you want, it also has positive effects on the environment. Why should they believe it?

IKEA gives the customer a unique shopping experience while allowing them to effortlessly give back to the world. IKEA allows shoppers to customize and custom build furniture. IKEA’s online resources also simplify and enhance the shopping experience. Are there any creative guidelines?

Fun, upbeat ads that show the target audience having fun traveling to IKEA, shopping at IKEA or using the IKEA website. The ads will also show IKEA products, resources and stores making customers’ lives and the world around them better. All materials will include; IKEA logo, the slogan The Life Improvement Store, bright colors, IKEA products and website URL. Page 12

At the life improvement store we want to make your life, and your world, better. You enjoy low prices and customizable furniture, which allows us to give back to the environment. You don’t have to sacri�ice style to stay in your budget. Shopping at IKEA means you get what you want, in your budget and you’re giving back. Your life, your world, better.

www.ikea.com

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Paid Media Overview  Paid media will be essential to promoting sustainability efforts and product knowledge to IKEA’s target market. Over the next 12 months, television, radio, social/digital media, and outdoor advertising will be utilized to meet the campaign objectives.

Media Objectives • Use broadcast media to reach 60 percent of the target market a minimum of 10 times over a 12 month period • Achieve a minimum reach of 75 percent during April, May, August, September and a minimum reach of 60 percent during the remaining eight months with a minimum frequency of 10 during all 12 months • Target 60 percent of media resources at current customers and 40 percent towards potential customers • Use social/digital media to maintain a consistent weekly reach of 250,000 members of the target audience at a minimum of 4 times per week over 12 months • Utilize outdoor advertising to target potential customers living between one and three hours away from an IKEA store at a frequency of 3 times per week over a 12 month period

Media Strategies • Create ads to run on cable television • Cable television spots are essential to the campaign because they reach a large audience in many geographic locations. • Create ads for use in print magazines • Print magazines are a great addition to the campaign because they have pass along readership and are read by many individuals in the target market. • Generate Social Media/Digital ads to drive trafc to the IKEA web site and stores • Social Media/Digital ads are important because 97% of individuals 18-29 years old use the Internet, and 66% of adults use social networking sites (pewinternet.org). • Develop outdoor ads for use within a 150 mile radius of IKEA stores • Outdoor ads will be utilized to express how it feels to shop at IKEA. The outdoor venue allows for messages to meet the customers without interrupting their day. • Develop radio ads for use on satellite radio • SiriusXM satellite radio reaches over 35.5 million listeners a year (siriusxm.com/ advertise) and free trials are included with the purchase of many new cars including Hyundai, Chevy and Ford.

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Media Tactics • Cable Television • How I Met Your Mother – CBS • Supernatural – CW • The Big Bang Theory – CBS • So You Think You Can Dance – FOX • Suits - USA • Print • Good Housekeeping • People • In Style • Social Media/Digital • Social Media • Facebook • Create ads to increase trafc to/and interaction with IKEA USA Facebook • YouTube • Create background and pre-roll ads for use on popular YouTube videos to drive trafc to IKEA website • Ads will be displayed behind videos searched with the following tags: • Stylish furniture, low-priced furniture, home improvements, sustainable furniture, better furniture, life improvement, modern furniture, home goods • Digital Media • HuluPlus • Sponsorship of Modern Family • The TV show Modern Family originally airs on ABC Family. The episodes are posted on HuluPlus the following day. HuluPlus is a paid service and allows companies to sponsor shows/episodes with “limited commercial interruption.” In addition, select IKEA furniture is used on the set of Modern Family. The ads will be aired one per commercial break and each ad will further a continuous story line. The viewer isn’t looking at one ad multiple times, but rather a series of ads that tell a story throughout the program. • Sponsorship of Design Star • Similar to the Modern Family campaign, ads shown during Design Star will create a unique story line featuring a couple making a day trip to IKEA.

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• Outdoor • Billboards, bus stop benches and train stations: Individuals utilizing these types of transportation typically value sustainability • Ads will feature a collage of photos of IKEA products. The small product photos will be arranged so that when viewed as a large image the photos create a benet to the environment. • Example: Small photos of IKEA products create an image of the world • Car wraps on hybrid cars • Wraps will be used to highlight IKEA’s sustainability efforts and how easy and convenient it is to transport IKEA products. Hybrid cars will be used to promote environmental sustainability and how many IKEA products you can t in a small space. • Radio • SiriusXM: • Ads will be heard on the following stations: • The Pulse, KIIS, The Blend, The Coffeehouse, The Highway

Budget Allocation The following represents a breakdown of the $20 million advertising budget designed for this year with $3 million built in for a contingency plan. Television: $7 Million Print: $4 Million Digital/Social: $3 Million Outdoor: $2 Million Radio: $1 Million Contingency: $3 Million

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Public Relations Overview  IKEA’s public relations efforts will focus on earning positive media for IKEA’s sustainability efforts and IKEA’s contributions to local communities. Efforts will also be made to monitor customer satisfaction among returning customers.

Public Relations Objectives • Generate a minimum of 50 positive media reports about IKEA’s sustainability efforts over the next 12 months • Co-Sponsor 30 service projects in the United States over 12 months • Increase awareness of IKEA sustainability efforts in the target market by 25 percent over the next 12 months • Achieve 75 percent customer satisfaction among returning customers over the next 12 months • Sponsor 3 in-store events in the next 12 months attended by 300 members of the target audience at each event

Public Relations Tactics Out of Store

• Co-Sponsor 30 Habitat for Humanity houses in 30 different U.S. states containing IKEA stores • IKEA will donate a shopping trip to Habitat for Humanity members and the family in need, to purchase furniture and other needed items for their new home. IKEA will also donate the time of two employees for one day to help assemble the furniture and decorate the house. • Implementation • Send press releases to all media outlets within a 45 mile radius of targeted houses in development • Contact housing blogs, community blogs, and community social networking sites at all housing locations to build preevent excitement • Invite members of the press to an “open house event” when the Habitat for Humanity house is fully decorated •Create social media buzz by posting photos and information in real time at each location • Create Facebook events for each building site and invite local community members to the open house • Create “in-house” videos of the habitat family shopping for their IKEA products and the IKEA employees helping to assemble the products • Videos utilized on IKEA USA YouTube and Facebook pages Page 18

• Create a biweekly electronic newsletter highlighting IKEA USA product information and worldwide sustainability efforts. • The newsletter will contain sustainability information, recall information, soon-to-be discontinued products, design tips and feature a client-designed space. This will generate interest in IKEA products and keep customers and other stakeholders informed about sustainability efforts and products in IKEA stores. • Implementation • The newsletter will be disseminated electronically to align with sustainability efforts • Social networking sites will also promote mailing list sign ups • Client-designed spaces featured in the newsletter will also be showcased on the IKEA Shared Space web site • It will be sent as a hybrid press release/newsletter to media outlets, customers, community members, and interested parties that opt-in to the mailing list currently found on IKEA web page • The newsletter will be disseminated quarterly • Implement a follow up program with current customers in order to monitor and improve customer satisfaction. Customer satisfaction surveys will be utilized in two ways. • Implementation • Exit Surveys: An exit survey will display on self-check out screens. This will help monitor customer satisfaction and increase repeat purchases. • Online Surveys: A survey page will be developed on the IKEA web site. When customers’ receipts print, it will include a link for the survey. In Store

• Create foursquare check-ins in departments around IKEA stores. When customers checkin they will receive tips and products of interest in each department. A badge will be created for individuals who check in at 75 percent of locations within IKEA stores.

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• Create three sustainability conferences where customers can come to an IKEA store and hear updates on IKEA’s sustainability efforts and meet IKEA executives. • These “conferences” will provide attendees with the opportunity to learn not only about IKEA’s sustainability efforts, but also what they can do to contribute. Each IKEA USA location will provide three, oneday conferences a year. Attendees will receive media kits which include the following. • Photos of children IKEA has helped through their donations • Fact sheets on IKEA’s sustainability efforts and progress with solar panel installation and distribution • Product news and information Pre-event PR initiatives include: • Send press releases to all local media outlets three weeks prior to event • Generate promotional content on IKEA USA Facebook page • Place small potted trees in local communities with invites attached

Direct Marketing Overview  The direct marketing portion of the integrated marketing communications campaign for IKEA will utilize direct mailings and catalogs to achieve the desired objectives. The target market for IKEA’s direct marketing efforts will be individuals in the target demographic who have recently changed their living situation, individuals who do not live near IKEA stores, and individuals who enjoy shopping at IKEA.

Direct Marketing Objectives • Utilize direct mail to generate 1,000 new leads in the target market over 12 months • Utilize catalogs to increase direct-order internet sales by 2 percent over 12 months

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Direct Marketing Tactics • Utilize direct mail to generate leads and create new customers • IKEA will create miniature magnetic IKEA products and mail them to customers in the target market. Segments of interest include: • Individuals in the target demographic who have recently moved/had their mail forwarded • Individuals in the target demographic who recently purchased their rst homes • Individuals in the target demographic recently accepted into a higher education program • Examples of products and slogans: • A small kitchen product • We heard you moved and might need one of these • A miniature furniture piece • We can help you with small spaces Direct mail will generate interest in IKEA products and assist in the formation of brand relationships. In addition, the miniatures can also be used as magnets and remind customers of the products IKEA offers. Miniature products for this promotion will be selected on the basis of product awareness, price, popularity and season. Also included on the mailer will be a response card to request an IKEA catalog or sign up for the mailing list. The mailings will be sent in  January, May, September, and November in order to ensure the message is still applicable to the target market. • Redesign the IKEA catalog to better align with sustainability efforts and condense information for better utilization by target demographic • IKEA will create a condensed catalog that allows for easier utilization by target demographic and reduces postage costs. This campaign will be a series of “minicatalogs” that together compose the traditional IKEA catalog. Each catalog will highlight different areas of the home in order to make the content more manageable and encourage frequent Internet sales. The catalog will also inform customers of product changes and price reductions. The catalog, in it’s entirety, will be available for download on the IKEA website. In order to align with IKEA’s sustainability efforts, the mini-catalogs will be printed on recycled paper and included in the current IKEA catalog app. The timeline for release will be dependent upon IKEA’s product release information, price reductions and seasonal offerings.

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• Suggested distribution • In-store distribution • Entrances and checkouts • Positioned with the store maps • Digital distribution • IKEA mini-catalogs will be a .pdf on the web site for easy download and integration on mobile devices (ex. iBooks) • The mini-catalog information will be represented in the IKEA newsletter • The mini-catalogs will be downloadable through the IKEA catalog app • Customers may sign up via the IKEA web site • Direct mail distribution • Mini-catalogs will be mailed to individuals in the target demographic that do not live within 45 miles of an IKEA store • Customer may request the mini-catalog via the direct mail tactic listed above This format will generate excitement and allow for more frequent communication with target market. This technique will encourage the target demographic to improve their home roomby-room and not be overwhelmed by the many products that IKEA has to offer. Contacting the customers frequently, and focusing on items with reasonable shipping costs, will encourage customers to utilize IKEA’s online store.

Sales Promotions Overview  The sales promotion medium will utilize a loyalty program in addition to a promotion targeted to individuals living more than 45 miles from an IKEA store. The target demographic for IKEA’s sales promotion efforts will be returning customers and potential customer living greater than 45 miles from an IKEA stores.

Sales Promotion Objectives • Acquire 50,000 new members in the IKEA loyalty program over the next 12 months • By targeting customers living more than 45 miles from an IKEA store, create a sales promotion that is redeemed by 25 percent of customers over 12 months

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Sales Promotion Tactics • Implement an IKEA customer loyalty program • IKEA will implement a loyalty program where customers are rewarded for purchasing items from IKEA. The program will be based on dollar amounts, not the quantity of products purchased. The program will be free for customers to join and be renewed on a yearly basis. The customers in the program will also receive the IKEA newsletter, which contains the mini-catalog information. The program will be designed as follows: • The customer and sale information will be kept in a digital format and viewable by customers online • Customers reach milestones based on the dollar amount they spend • When customers reach a milestone, they will receive a coupon in the mail for a discount on their next purchase – or – free shipping up to a predetermined dollar amount • When the customer views their receipt (in-store or via the website), their loyalty information will be included as well as how they’re contributing to IKEA’s sustainability efforts A loyalty program will increase brand relationships between IKEA and their customers. Customers feel valued when they receive awards and feel as though they’ve become part of the IKEA family. The program also ties the customers’ shopping experience with IKEA’s sustainability efforts. • Implement a sales promotion that rewards customers who are not located near an IKEA store for shopping in-store • Customers that live at least 45 miles from an IKEA store and bring in proof of address will have a calculated amount taken off of their total IKEA bill. This promotion will be utilized one weekend a month over the course of a year. The promotion will be designed as follows: • Customers drive to the nearest IKEA store with proof of address • The number of miles between the two locations will be multiplied by a pre-determined rate (ex. .25) and that amount will be subtracted from the customer’s total bill. This promotion will encourage customers who do not live near an IKEA store to make a “day trip” to IKEA and purchase larger items for their homes. Customers that need to travel a substantial distance to IKEA stores are more inclined to make additional purchases because they can’t “swing by later and pick it up.” This promotion also rewards customers for shopping at IKEA stores and diminishes the idea of “wasting money on gas” if they do not nd the items they need. However, when customers are in the store, they nd items they weren’t necessarily looking for, which increases their total sale.

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• Create in-store Build It To Win It events. • Three times a year IKEA will host Build It To Win It events where couples have the opportunity to compete to win products. Couples will compete against each other and the couples that build the IKEA products the fastest will win those products. There will be different “heats” and advancement opportunities throughout the day and the products will become more challenging as the day progresses. This will be a great event for returning customers and they will encourage their family members to watch them compete and IKEA will gain more in-store trafc.

 Additional Social/Digital Media Recommendations • In order to improve relationships with target market via social networking, IKEA will need to closely monitor their social networking sites such as their IKEA USA Facebook site. Recommendations include: • Create splash page to ensure customers “like” IKEA page prior to viewing content • Respond to comments, questions and feedback within one hour of user submitting content • Offer exclusive content for Facebook USA site. Content could include: • Design insight • Increased development of the “Spaces” series (also shown on YouTube page) • New series for different types of rooms such as dorm rooms, studio apartments, two bedroom apartments, etc. • A new web page will be developed on the IKEA website that allows users to input their room dimensions and available furnishing options will appear on the right side of the screen. The user will then be able to drag and drop furniture into their room to nalize designs. This will create a positive experience for shoppers that live a few hours away from IKEA stores and will also generate positive online reviews. IKEA USA can utilize their Facebook page to push out content and announcements about the sites.

Product Packaging  • QR codes on all IKEA products will lead to an interactive list for use by store shoppers • This will allow the target audience to easily keep track of their purchases and locations in product pick up areas. QR codes will assist in improving customer satisfaction and help customers keep track of their purchases. Page 24

Measurement and Evaluation Overview  Measurement and evaluation of this integrated marketing communications campaign will be based on a variety of measures. In order to be successful the overall campaign will: • Increase sales • Increase the number of customers visiting IKEA in-store and online • Increase positive material on third party media • Diminish negative customer service calls • Increase customer growth and retention

Pretesting  This campaign will utilize copy testing to pretest ads prior to releasing them. The target market will also be utilized to perform portfolio tests of print ads and on-air theater tests for broadcast media. The following will be utilized to further evaluate the campaign.

Qualitative • Conduct 3 focus group session over the course of this 12 month campaign • Session group size: 8 – 10 individuals • Each session will be composed of target audience members in two groups • Those that live near IKEA stores • Those that do not live near IKEA stores • Areas of focus • Overall brand awareness • Overall brand impression • Types of experiences/initiatives that would increase return visits • Intercepts at IKEA stores will be utilized to discuss how the individual viewed their shopping experience • These intercepts will be discussion based and the customer will be dictating the direction of the conversation • Employee will ask if they saw any ads, etc. that lead them to IKEA

Quantitative • Conduct panel studies to measure the effectiveness of IKEA’s online efforts • Conduct tracking studies semi-annually to measure the effectiveness of the integrated marketing communications campaign

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Conclusion Integrated marketing communications (IMC) is the key to successfully building and maintaining customer relationships. IMC ensures the message from the company is reliable and thus builds relationships with clients. Due to the vast marketing opportunities available today, IMC is a necessity for IKEA’s future campaigns. A solid company identity can be effectively communicated through IMC and adds reliability to the company voice. This campaign is designed to build customer relationships, and showcase IKEA’s sustainability efforts. The combination of creative strategy, paid media, public relations, direct marketing and sales promotion listed above will assist IKEA in increasing sales, increasing sustainability awareness and improving relationships with customers. One of the most pressing areas for IKEA to further develop is digital communications and social networking. IKEA has taken great steps by segmenting their social networking however, the IKEA USA Facebook page is lacking in content, customer support and overall maintenance. By creating the splash page and additional content outlined in the social/digital media section of this plan, IKEA will be able to increase customer interaction with the page and more effectively communicate IKEA’s mission and vision to the target audience. IKEA cannot afford to ignore customers’ comments and reactions voiced through social media. Promptly responding to customer feedback in a public manner and addressing concerns will generate positive reactions from the target market. In addition, IKEA needs to focus on paid advertising tactics listed that increase reach to individuals in the target market that do not live near IKEA stores. This is a critical market that is being overlooked by IKEA’s current paid advertising efforts. The previously outlined paid advertising and sales promotion tactics will build relationships with this key market and increase in-store and online sales. Many individuals in this market consider a visit to IKEA an all day “adventure” and IKEA will benet nancially from capitalizing on this. In past years, IKEA has focused primarily on print advertising and relied very heavily on their catalog efforts. With IKEA’s increased investment in sustainability, and the shifts in marketing to digital/social media, IKEA needs to realign their marketing efforts in order to better communicate with their target market. Communication with the target market through the integrated marketing communications plan listed above will assist IKEA in their mission to create a better everyday life for the many.

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