Project 1 Exercise 01: Market Research

Group 2

Brand X: IKEA

IKEA is an international furniture retailing company founded in Sweden by Ingvar Kamprad in 1943. The brand is well-known for its huge collections of affordable and sustainable product furnishing solutions, home accessories and kitchen appliances. Moreover, their neutral furniture designs allow harmonious integration into any household aesthetic. Since IKEA products are fairly priced without sacrificing quality, customers worry less when making purchasing decisions. For these reasons, the brand has a well-established customer base that can easily accept new brand extensions produced by IKEA.


Brand Y: IKEY Facial Cleanser [Brand extension type: company authority extension]

IKEY Facial Cleanser is a vegan-friendly and cruelty-free gel cleanser suitable for all skin types. This skincare product is easy to apply and helps to remove dirt, dead skin cells, makeup, excess oil and other pollutants from the skin. It is formulated with all-natural tea tree oil and peppermint oil that are effective at calming and soothing skin while removing acne-causing germs. It also contains vitamin C to boost skin radiance and protect the skin from sun damage. 


Questions:

1. What is IKEA's vision and business plan?

According to the official website, IKEA's vision is "to create a better everyday life for the many people”. The brand's business plan is “to 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”.

2. How is IKEA's business structure?

To maintain the company's vision and ensure its long-term growth, IKEA currently operates under a franchise system, which separates the ownership of retail operations into independent business groups around the world. Subsequently, companies under the IKEA franchise system can work together to expand the brand internationally without straying from the IKEA concept.

3. What are the key values in IKEA culture and their importance?

IKEA culture is important for building trust and maintaining the efficiency of the organisation. It also helps to set IKEA apart from other brands in the same niche. According to the official website, the 8 key values in IKEA culture are:

  • togetherness
  • caring for people and the planet
  • cost-consciousness
  • simplicity
  • renew and improve
  • different with a meaning
  • give and take responsibility
  • lead by example

4. Who are IKEA's competitors?

According to Abbott (2021), some of IKEA’s top competitors worldwide include Wayfair, Amazon, Walmart, and Home Depot. These brands are well-known for their home furnishing products and are often considered alternatives to IKEA.

5. What is IKEA's target market?

IKEA's main target market demographic is middle-class individuals and families aged between 20 to 35 years old. These people most likely prefer budget-friendly products without sacrificing quality because they have average incomes.

6. What is IKEA's competitive advantage?

IKEA's competitive advantage in the market includes affordable pricing and brand reputation. IKEA has a strong reputation as a consumer-friendly brand that supplies goods at reasonable prices. Moreover, IKEA's franchise system allows effective management in their business operations, such as their supply chain, production, marketing and sales. 

7. Why do customers prefer IKEA?

Customers often choose to purchase from IKEA because the products are affordable without compromising on quality. Moreover, IKEA's warehouse store showrooms are purposely designed to feel homely and comfortable. This gives customers a unique shopping experience that encourages them to buy on impulse or visit the store again in the future. Customers also love the cheap and delicious food served in IKEA's in-store cafes.


8. What are the disadvantages of buying IKEA products?

While most IKEA products are durable, some customers have voiced that IKEA's wooden furniture is more likely to wear, tear, chip, and scratch. Moreover, IKEA also has a stringent return policy for online purchases and deliveries. Customers only have 14 days to return their products in person, which may be inconvenient due to the number of items to return or transportation problems.


9. What common complaints do people have about IKEA?

According to reviews on Sitejabber, IKEA's customers often complain about the brand's terrible customer service for online purchases and deliveries. Common problems include faulty products, missing packages, and no refunds. Customers also receive no response after reaching out to IKEA; if they did, they got empty promises.


10. Who is the target audience of IKEY Facial Cleanser?

The main target group of IKEY Facial Cleanser is middle-class and young individuals with normal or sensitive skin.

11. Who are the competitors of IKEY Facial Cleanser?

Some of the competitors include CeraVe, Cetaphil, Garnier, Nano White and many more.

12. What is the objective of IKEY Facial Cleanser?

IKEY Facial Cleanser aims to provide affordable and high-quality facial cleansers for individuals with an average income. This is so that they can maintain their facial hygiene without spending a lot of money.

13. What skin problems do the target customers of IKEY Facial Cleanser have?

The target customers of IKEY Facial Cleanser often have dull face complexions, acne-prone skin, oily skin, or dry and sensitive skin.

14. What are the characteristics of different skin types?

  • Normal skin
    • Clear and even colour
    • Feels neither tight nor greasy
    • Is soft and supple when touched
    • Has good elasticity and moisture
    • Has small, less visible pores
    • Not prone to breakouts
    • Not sensitive to normal external stimulation
    • Still requires proper skincare

  • Oily skin
    • Shiny skin
    • Often have acne breakouts
    • Visible and enlarged-looking pores
    • Makeup may wear off easily

  • Dry skin
    • Caused by external factors such as the weather, low air humidity and immersion in hot water
    • Skin feels tight and irritable
    • Often looks flaky
    • Shows fine lines
    • Has visibly small pores
    • Occurance of peeling, itching, redness, and small cracks

  • Sensitive skin
    • Very sensitive and delicate to external stimulation such as heat, surfactants and exfoliation
    • Gets irritated and may have allergic reactions and become red or swollen more easily than others without sensitive skin
    • Often sensitive to certain chemicals in skin care products, such as fragrances and colourants

  • Combination skin
    • Have at least two skin types
    • Includes dry and oily areas
    • Either oily or normal skin around the T-zone area of the face, which includes the nose, forehead and chin
    • Dry or normal skin around the U-zone, which is the cheek, mouth and eyes

15. What are some facial cleanser ingredients and their functions?

  • Retinol
    • Suited for acne-prone or oily skin
    • Improve skin texture
    • Fix uneven pigmentation
    • Unclog pores
    • Help with both whiteheads and blackheads
    • Prevent acne breakouts
    • Increase collagen production

  • Salicylic Acid
    • Suited for acne-prone or oily skin
    • Remove old skin debris
    • Remove bacteria 
    • Diminish excess oil
    • Clean and unclog pores
    • Prevent acne

  • Ceramides
    • Suited for dry or sensitive skin
    • Hydrate skin
    • Lock in moisture
    • Soothe sensitive skin
    • Protect from pollution, dry air, and other irritants

  • Glycerin
    • Suited for dry and sensitive skin
    • Keep skin moisturized and hydrated
    • Prevent dryness
    • Prevent skin irritation
    • Help to maintain the skin barrier

  • Vitamin C
    • Suited for all skin types
    • Prevent overproduction of melanin that results in dark spots and hyperpigmentation
    • Prevent premature ageing 
    • Preserve skin texture 
    • Brighten complexion


References:

  1. Lewis, R. (2019, February 18). IKEA. Encyclopedia Britannica. Retrieved February 4, 2023, from https://www.britannica.com/topic/IKEA 
  2. Jenkins, P. (n.d.). Why is IKEA so successful. Shift Online. Retrieved February 4, 2023, from https://shift.online/en-gb/blog/why-is-ikea-so-successful
  3. Nano White Fresh Deep Cleansing Gel. (n.d.). Watsons. Retrieved February 5, 2023, from https://www.watsons.com.my/fresh-deep-cleansing-gel-100ml/p/BP_24129
  4. Curtis, L. (2022, October 18). Vitamin C benefits for skin. Verywell Health. Retrieved February 5, 2023, from https://www.verywellhealth.com/vitamin-c-for-skin-5084225
  5. Abbott, A. (2022, November 14). Top 15 IKEA competitors & alternatives. Business Strategy Hub. Retrieved February 5, 2023, from https://bstrategyhub.com/ikea-competitors-alternatives/
  6. The IKEA concept. (n.d.). IKEA. Retrieved February 5, 2023, from https://www.ikea.com/jp/en/this-is-ikea/the-ikea-concept-pube700d670
  7. The IKEA vision, values and business idea. (n.d.). IKEA. Retrieved February 5, 2023, from https://www.ikea.com/gb/en/this-is-ikea/about-us/the-ikea-vision-and-values-pub9aa779d0
  8. Clifford, C. (2019, October 5). Meatballs and DIY bookcases: The psychology behind Ikea’s iconic success. CNBC. Retrieved February 6, 2023, from https://www.cnbc.com/2019/10/05/psychology-behind-ikeas-huge-success.html
  9. Bob Cut Editors. (2022, October 4). IKEA target market, age, demographics, gender, salary, more. Bob Cut Magazine. Retrieved February 6, 2023, from https://bobcutmag.com/2022/10/04/ikea-target-market/
  10. Bob Cut Editors. (2022b, October 4). IKEA’s competitive advantages. Bob Cut Magazine. Retrieved February 6, 2023, from https://bobcutmag.com/2022/10/04/ikeas-competitive-advantages/
  11. Clark, L. (2022, November 11). The pros and cons of buying home decor from IKEA. House Digest. Retrieved February 7, 2023, from https://www.housedigest.com/1098381/the-pros-and-cons-of-buying-home-decor-from-ikea/
  12. IKEA reviews - 3.2 stars. (n.d.). Sitejabber. Retrieved February 7, 2023, from https://www.sitejabber.com/reviews/ikea.com
  13. IKEA culture & values. (n.d.). Inter IKEA. Retrieved February 8, 2023, from https://www.inter.ikea.com/en/how-we-do-business/ikea-culture-and-values
  14. Laderer, A. (2020, July 31). The best facial cleanser ingredients for each skin type, according to dermatologists. Insider. Retrieved February 9, 2023, from https://www.insider.com/guides/beauty/best-facial-cleanser-ingredients
  15. What is my skin type? (n.d.). Olay. Retrieved February 10, 2023, from https://olay.co.uk/skin-care-tips/oily-skin/find-out-your-skin-type
  16. What type of skin do I have? (n.d.). CeraVe. Retrieved February 12, 2023, from https://www.cerave.com/skin-smarts/skincare-tips-advice/what-skin-type-do-i-have

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