Glocalisation of IKEA
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Table of Contents
1. Introduction..................................................................................................................................3
2. Discussing the Concept of Glocalisation with the Organisational Context.................................3
2.1 Analyse the Concept of Glocalisation...................................................................................3
2.2 Evaluate the Impact of Glocalisation in Marketing Strategies in Organisational Context....4
2.3 Analysing the Effectiveness of Glocalisation within IKEA..................................................5
2.4 IKEA’s Approach towards Glocalisation during Marketing Strategies in China and Japan.6
2.4.1 Marketing Mix Strategy of IKEA in China....................................................................6
2.4.2 Marketing Mix Strategy of IKEA in Japan...................................................................10
2.5 Evaluating the Necessity of these Marketing Mix for these Two Market...........................13
3. Conclusion.............................................................................................................................14
References......................................................................................................................................16
1. Introduction
As the intensity of competitive edge is in the verge of exponential rise within the international
and renowned markets the multinational companies requires extensive and potential new markets
to successfully sustain the continuity of smoother marketing operations. However, due to the
presence of certain complexities within such potential new markets, such multinational corporate
entities face significant difficulties to operate adequately. The organisational context of IKEA
regarding the transition to Chinese and Japanese market is extremely relevant with this aspect.
Considering such facts the IKEA has designed some potential foreign market tactic termed
glocalisation. It is a comprehensive tactic by which the local marketer formulates direct
connection to the international marketing framework in the aspect of both economical and
cultural ways. It is simultaneously occurring in social and political, economic, and systems of
government, respectively between universalizing and particularizing trends. The notion of
glocalisation is a difficult task to oversimplified perceptions of procedures of globalisation as a
sequential development of the geopolitical dimension.
In this regard, the contextual study has evaluated the concept of glocalisation through the
perspective of IKEA and its penetration within the situated markets of both China and Japan. In
the following a comprehensive evaluation of both effectiveness and impact of glocalisation is
depicted that is supportive to the operational practices within the Japanese and Chinese market.
In addition, evaluation of marketing mix strategies of IKEA considering glocalisation practices is
also depicted and extensive evaluation is presented for potential and necessities of appropriate
practices.
2. Discussing the Concept of Glocalisation with the Organisational Context
2.1 Analyse the Concept of Glocalisation
Glocalisation is the adjustment of foreign and multinational goods to the local environments in
which they are used and distributed. The term was invented by sociologist “Roland Robertson in
the Harvard Business Review in 1980”. According to his statement, glocalization implies to the
simultaneity together with the co-presence within both globalisation and prioritising specific
targets.
This involves translating internationally distributed services and products to local markets with
respect to a single service or product. A multinational service or product that wants that can be
used by everybody can be customized for local regulations, traditions, or market conditions. By
implication, goods that are “glocalised” would be of far greater significance to the end-user, the
individual who ended up using commodity will be much more appreciated. This may be because
although it is something one can use and use as a global commodity, its position makes it more
unique to a person, its purpose and its requirements. Glocalisation operates in many, different
cultural environments for corporations with hierarchical governance systems and for companies
that operate and perform within such conditions. The system can be challenging and commodity-
intensive, but it always returns off after corporations that implement it, as it creates greater
access to a wider, increasingly diverse target market demographic. It also allows certain nations
around the world with more competitive adversaries within the industries.
2.2 Evaluate the Impact of Glocalisation in Marketing Strategies in Organisational Context
The consideration and execution of the glocalisation will allow the applicant company such as
IKEA in developing extensive amount of accommodations that will elevate the organisational
competitive edge together with the enhancement of brand recognition and market share within
the targeted market. In general aspects the implication of glocalisation makes some significant
impact within the operational activities of the applicant business. Glocalisation performs better
for companies that have centralized management systems and those that remain competitive in
different social environments. Glocalisation is a major investment, but it is still going to pay
large benefits. This will provide greater exposure to IKEA in different communities to a broader
target market. The idea makes it possible to properly prepare against the various countries with
distinctive environmental condition and effectively compete accordingly. In addition,
glocalisation programs also include culture-friendly media and advertising campaigns to promote
local consumer awareness of foreign goods.
It does have varying degrees of success for the bigger economy that can help to make IKEA
more competitive against rivals. It generally improves competition value and reduces prices,
rendering products more available and affordable. Glocalisation has a significant impact as it
allows discrepancies in delivery, allocation and political establishment for a particular country or
region depending on the social, national and regional distinctiveness that fits the key values,
initiatives and requirements of the company's credibility and reliability. It is therefore crucial for
transnational business to prosper in any foreign market, to recognise and support local customs,
background, distinctions, to acclimate to customer requirements, behaviours and lifestyle, and
also local market situations, attributes and requirements because it is critically important for
corporate business operations. This efficient brief-term marketing tactics of glocalising make it
possible for most determinations to introduce new product design and approve local projects to
be ascertained by local affiliates or suppliers and to maintain countrywide procedures, resulting
in a significant market involvement. With this strategy, IKEA has developed an environment in
which local areas profit from global resources while preserving their own cultures and traditions.
However, China is not only the country to accept and adapt such "Glocal" approach for which
the organization has also approached Japan's innovative market as well.
2.3 Analysing the Effectiveness of Glocalisation within IKEA
The application of glocalisation practices also diverse ranges of effective resolutions that directly
affect the operational affairs of the IKEA. As the incorporation of glocalisation makes extensive
amount of impact within the international business the operative processes of the IKEA also felts
the consequences of the integration. There are several distinctive ways the glocalisation affects
the operative statures of IKEA within the situated market of China and Japan.
The social events can have a significant impact on the global sector as a major event can have a
major effect on the local economic system. It implies that situations are interconnected. For
instance, an exporting region in which a natural disaster occurs might not be sufficient to provide
in the importing region immediately the necessary resources for production. In a raw material
production region, if there is political turmoil, the price of such ingredient products can rise in
the importing regions. IKEA guarantees that its service or product is tailored to potential area or
community in the targeted country at which the brand is sold on the markets. The transition helps
place the business with its core beliefs, expectations and complexities to be important in the local
customs. Glocalisation takes place in all market segments that increases the effectiveness
significantly as well. Glocalism is also moving the products or services for national and global
customers. In the contextual situation, it involves meeting clients in both Japanese and Chinese
markets that the business targets successfully because, at the same time, local clients want to
learn about the products themselves and determines if it can meet local user's obligations and
requirements.
Another significant aspect of glocalisation is the utilisation of social media platforms and web
promotions. Glocalisation was on the rise as early as 2013 and it was estimated that social media
will make it prominent. Considering that, it was assessed that the IKEA has exert greater
advantages under glocalisation in aspect of cultural backgrounds, welfare states and local clients.
It allows them to demand the conversion of services and goods into the language they
understand. At the very same period, IKEA also have able to talk to local customers in a fashion
that is appropriate to them. In addition, IKEA has complete affordability to glocalisation
expenditures as a larger company. Therefore, the company can reduce prices, and also take a
larger part of the market, that can hurt smaller and regional companies as the production cost for
larger companies is narrower. It can stifle competition that may eventually lead to inflation.
2.4 IKEA’s Approach towards Glocalisation during Marketing Strategies in China and
Japan
2.4.1 Marketing Mix Strategy of IKEA in China
This report enlightens the different marketing strategies of IKEA in several marketplaces of
China. This very report also reflects the process of how IKEA is adopting the local variation and
maintaining the Global standardisation in different market places of China (Steenkamp, 2017
p.95). This report is going to discuss the external factors those will be helpful for IKEA to retain
balance of its marketing management in China.
Product
Any enterprise's product is the core promotional component for an organisation. There are
approximately 7900 items, with 21 elevations made by the company, according to the IKEA
website. In order to operate their business in the emerging market of China, IKEA structured a
smoother and easier furnishing design, in comparison with the Chinese conventional furnishings.
In recent years, on the Chinese New Year, IKEA has published a number of innovative products
in the very market (Trendafilov, 2018 p170). This transition by IKEA has gained several of
China's consumers, particularly those who want to change the glance of their residences. The
company's initiative is to bring the product line to Chinese clients based on their needs and
requirements.
Figure.1: IKEA furnishing Products
(Source: Trendafilov, 2018 p170 )
Price
For the social aspect between both the seller and the buyer, price is relevant. It helps to construct
an agreement and pattern on their lengthy-term relationship. The most effective way for IKEA to
attract the attention of the Chinese consumers is to drive down prices of their products. The first
and most effective tactic for increasing the sales volume in the economy is to trim the prices of
products (Zentes, Morschett and Schramm-Klein, 2017 p.315). IKEA utilises an effective
strategy concerning the prices of the product in order to imprisonment the attention of the
Chinese consumers towards the organisation, which will be beneficiary for both the products and
profitability. The primary focus of IKEA is to stun ever more buyers at the cheapest price
available by regional procurement.
Place
The choice of appropriate location is one of the most important strategical elements for every
organisation’s marketing mix. In order to provide customers adequate products, the place or
availability of the exact location is excessively significant. IKEA worked hard to create a cost-
effective and risk-effective distribution and logistics network for operating their business in
China. About 300,000 cubic meters can be used by every logistics fulcrum (Sinha and Sheth,
2018 p.220). The existing logistics infrastructure can concentrate product lines from producers to
local stores. The Chinese market is home to IKEA shops that are advantageous to the public.
Promotion
Preferment of the products of an organisation can be referred to an effective and most
beneficiary manner to promote the products amid the people of a new market. The company
usually uses the methods to facilitate customers in order to manage an appropriate client
relationship on the market. In the case of IKEA, the company is responsible as a nit, which
concentrates on personal sales (Gummesson, 2017 p.17).
Figure.2: Headquarter of IKEA in China
(Source: Gummesson, 2017 p.17)
People
The primary objective of IKEA is to target buyers relying on their taste and desires in the
Chinese market. The showrooms will be modeled in Chinese designs, in which buyers are
attracted. The company's policy is to take Chinese designs into accounts and to conveniently
incorporate the collection of product attributes (Pomering, 2017 p.160). IKEA provides
experienced sales persons who support the customers to choose the significant items of the
furniture. They provide detailed product information to the customers. The workers in the
background are not related to the buyers but, they are engaged in the productions of the furniture
products.
Figure.3: Chinese people attracting to IKEA
(Source: Pomering, 2017 p.160)
Process
To enhance the business in the Chinese market IKIA has followed some particular processes
such as: they are making the wooden furnishings by its own. They always provide a concern into
making innovative furniture with attractive accommodation. For the effective sales of their
furnishing products they go through a distinctive process to supply their products to the
customers (Prange, 2016). The buyers firstly come to the showrooms of the IKEA Products and
make a selection of their desired products. Then the company make the delivery of their product.
Physical Evidence
Significantly IKEA has encompassed sustainability in their business through providing the
proper and efficient information regarding their furnishing products, to the customers. It has
physical evidence because, a numerous products of the IKIA Company is recyclable for the
proper investment on the solar power as a green energy. IKEA's very largest and independent
shops are the physical evidence of the company (Steenkamp, 2017 p.88). They are numerous
warehouses in outside the city and lend a vast range of furnishings f the company. Shops are
often well outfitted with eateries, huge car parks, and advanced display systems.
2.4.2 Marketing Mix Strategy of IKEA in Japan
IKEA must develop a marketing strategy to accomplish the targets of the company in the
Japanese marketplaces (Giunta, 2016 p.88). By developing the proper marketing mix the
company can get the different aspects of the Japanese Market as well as they can identify the
desires of the peoples of Japan and got a chance to fulfil them. The basic elements of the
marketing strategy are discussed bellow.
Product
In five distinct categories, IKEA retails its product lines, and each of those is a distinct product
line. IKEA is the brand name of all of its products. IKEA makes products of a wide variety,
which enabling the Japanese buyers to choose the right orientation for them. The IKEA provides
an advanced quality of products to fulfil the desires of the customers to consider the uniqueness
of the products (Giunta, 2016 p.88). In the Japanese market the IKEA products are admired for
its customary designs and the excellence quality over than the other furniture companies.
Figure.4: Japanese monorail showroom of IKEA
(Source: Giunta, 2016 p.88)
Price
A reasonable price policy is the current valuation plan to be pursued by IKEA, Due to a huge
amount of competitors inside the market, and the quality service provided by
them. Instead, IKEA provides further functionalities and renders up a high price for its product
lines higher than the competitors (Yaw, 2018 p.4). In the Japanese Market, the IKEA has to face
a huge amount of competitors. So, they have to attract their customers by providing a high
quality of innovative furnishing product within a reasonable price.
Place
In two platforms, IKEA retails its product lines. Firstly it privately sells the furnishing products
to its customers via its website. Secondly, it sells to distributors, who would then sell to various
retailers throughout the country. Then these are sold to their clients. IKEA has established eight
stores in the different places of the Japan (Hultman et al., 2017 p.233). Though, the CEO of
IKEA Japan has announced that moreover 20 shops or IKEA showrooms is going to be started in
Japan within 2020, to make a more stronger relationship with the Japanese Customers and to
fulfil their requirements.
Figure.5: IKEA Japan
(Source: Hultman et al., 2017 p.233 )
Promotion
To significantly promote the products, IKEA utilizes several media platforms. It employs
mainstream media, including TV and radio advertising. Due to the technical advantage of Japan,
IKEA has got a chance to effectively advertise their products through the digital marketing
platforms (Steenkamp, 2017 p.95). They utilize the YouTube, face book, and twitter as a social
platform for the effective promotion of their furnishing products.
Figure.6: Promotion of IKEA in Japan
(Source: Steenkamp, 2017 p.95)
People
IKEA employs people who play an important role in advertising the IKEA product lines by their
efforts and encourage its sales staffs in a significant way. These compelling people were trained,
but also to show respect for the loyal customers, trying to take their preferences into account
(Reitz, 2018). The proper skills and sustained effort is very crucial for the improvement of the
company productivity as well as the business improvement of the IKEA in the marketplaces of
Japan. IKEA has numerous peoples engaged with the suppliers of the raw materials which is
very effective for the company.
Process
IKEA has an online delivery method by shipping the appropriate commodity from the stockpile
to its courier service operator, where requests are obtained on the computerized system. In order
to fully understand customer requirements, IKEA is involved in investigating new business
opportunities (Giunta, 2016 p.85). It also builds awareness of customers requires via reviews
from the store, support line or social media channels.
Physical Evidence
IKEA sold its product lines on supermarket shelves in a divergent pigment branding that can be
easily identified. These are positioned on different display cases, both of which are colourful and
designed by the company. This makes finding such shelves in crowded retail outlets simpler for
customers (Mols, 2019 p.410). IKEA seems to have a consumer-friendly website that allows
shoppers to observe their product lines from different points of view in elevated-quality images.
2.5 Evaluating the Necessity of these Marketing Mix for these Two Market
The incorporation of glocalisation is thus considered to factor of excessive significance for the
marketing operations in both Japanese and Chinese market. The marketing mixes considered by
the company have addressed the distinctive requirements and preferences of the situated markets
of both China and Japan. According to the evaluation of the market within the china the
preferences of the customers are more centric towards the traditional styles and tastes therefore
the organisation have to integrate more traditional Chinese elements within its developed
furniture in order to attract the buyers. In this regard, IKEA has to conduct comprehensive
research on the traditions and history by aspects of glocalisation to better comprehend the
perspectives of the peoples of the country and manufacture products in reasonable prices that are
appreciatory to them.
Similarly, within the Japan the considering the traditional prospects and perspectives also plays
crucial role as well, although as this country is extremely progressive in terms of innovation and
demand for attractive commodities are also extensive therefore the organisation needed to
integrate substantial amount of innovation within its production to compete in the competitive
innovation driven market. In this regard, by considering adequate glocalisation and evaluating
traditional aspects and customer demands IKEA retails its product lines in five separate
categories, and each one is a different product range. IKEA marks all its products. The
company produces an extensive range of products that allow Japanese purchasers to select the
correct preferences. However, as the implementation of innovation is expensive therefore the
prices of the products are also elevated to some extent.
By Appling effective marketing mix within the both of the situated markets of China and Japan
the business has executed extensive range of promotional activities by utilising the media
platform as well as mainstream media such as television commercials, electronic bill boards and
radios. This enabled the company to increase the brand awareness in exponential pace and
improve the competitive edge in the business to handle the local intense competitors. Although
there has been significant amount of distinctness between both the targeted markets in terms of
political and economical conditions the organisation have been able to conduct effective
marketing practices considering the marketing mix approach driven by glocalisation. In this
respect, it can be rationalised that the consideration and execution of glocalisation techniques
within the emerging markets of both China and Japan backed by comprehensive and highly
supportive marketing mix method the IKEA has successfully able to established within the
targeted marketed and allowed to develop sustainable and potential brand recognition by
mingling with local trends and demands. Therefore, the incorporation of both glocalisation
supported with marketing mix has been apt and significant for the company as these approaches
enabled the company successfully comprehend the targeted markets and conduct efficient
marketing.
3. Conclusion
At the conclusion it can be stated that the concept of the glocalisation regarding the IKEA
Company is significantly described in this report. The application of the glocalisation on the
designing of the marketing mixes is also described in this report. It also reflects the utilisation of
the extent marketing mixes in the context if the IKEA in the business field of the Chinese and
Japanese marketplaces and discusses about the processes to evaluate the business by thinking
globally and operate them as local market strategies. This project has been a successful way of
testing the business, recognizing local demands and adjusting tactics to achieve competitive
edge. As IKEA employs its product inventory as an important marketing tool, IKEA must
customize to the business strategy. IKEA's global reputation is due to its reasonable prices and
revolutionary furnishings. It experienced specific problems in China, due to the huge amount of
competitors. Its minimal-price approach has angered people among aspirant Chinese consumers
and copied their models by local competitors. This case study looks at how IKEA has adjusted
its expansion and profitability methods in China and Japan. In order to deviate from the
competing companies and meet the expectations of potential buyers, IKEA employs the existing
three aspects to offer excellent service and products. Focusing on each component of the
Marketing Mix, advertisers concentrate on the target audience; include an observation paradigm
and ultimately a recipe for the proper marketing advertisement. IKEA can accomplish its diverse
marketing strategy by finding better ways to remedy the different facets of each aspect.
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