Journal of Retailing and Consumer Services 18 (2011) 183–193

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Journal of Retailing and Consumer Services

0969-69

doi:10.1

n Corr

E-m

journal homepage: www.elsevier.com/locate/jretconser

Standardized marketing strategies in retailing? IKEA’s marketing strategies inSweden, the UK and China

Steve Burt a, Ulf Johansson b,n, Asa Thelander c

a University of Stirling, Institute for Retail Studies, Stirling Management School, Stirling FK9 4LA, Scotland, UKb Department of Business Administration, Lund University, P.O. Box 7080, SE-220 07 Lund, Swedenc Department of Communication Studies, Lund University, Campus Helsingborg, PO Box 882, SE-251 08 Helsingborg, Sweden

a r t i c l e i n f o

Available online 29 September 2010

Keywords:

IKEA

Retail internationalisation

Retail marketing mix

Standardisation

Sweden

the UK

China

89/$ - see front matter & 2010 Published by

016/j.jretconser.2010.09.007

esponding author.

ail address: ulf.johansson@fek.lu.se (U. Johans

a b s t r a c t

IKEA is often cited as an example of a ‘global’ retailer which pursues a similar ‘standardized’ approach in

every market. This paper systematically assesses the degree of standardisation (and adaptation) of four

commonly identified retail marketing mix activities – merchandise, location and store format, the

selling and service environment, and market communication – within three countries. These countries

– Sweden, the UK and China – represent different cultural settings and are markets in which IKEA has

been operating for different lengths of time. The data upon which the comparison is based was

generated from personal interviews, in-country consumer research, company documentation and third

party commentaries. The conclusions drawn suggest that whilst IKEA operates a standardized concept,

degrees of adaptation can be observed in customer facing elements, and in the supporting ‘back office’

processes which support these elements. These adaptations arise from differences in consumer cultures

and the length of time, and subsequent exposure to and experience of, the market. This suggests that

standardisation in international retailing should be considered from the perspective of replicating the

concept, rather than replicating the activities.

& 2010 Published by Elsevier Ltd.

1. Introduction

One theme that dominates the international marketingliterature is the degree of standardisation and\or adaptation ofmarketing activities, either employed by a company (e.g., Baek,2004; Levitt, 1983; Theodosiou and Leonidou, 2003, Szymanskiet al., 1993; Lim et al., 2006), or experienced by a consumer (e.g.,De Mooij, 2004, 2005; De Mooij and Hofstede, 2002). Thisdiscussion has not, however, penetrated the field of retailing tothe same extent which appears strange, as many of the researchthemes pursued in the retailing literature follow those establishedin international marketing. This may reflect the fact that retailinternationalisation into more distant markets is a relativelyrecent phenomenon (Dupuis and Prime, 1996; Evans et al., 2000;Evans and Mavondo, 2002).

IKEA, the Swedish home furnishing retailer, has been activein foreign markets since 1973, when the company enteredSwitzerland. Today IKEA has stores in 37 countries and isexpanding in many markets, not least in Asia where the companyhas only had a presence over the past decade. In broad terms,

Elsevier Ltd.

son).

IKEA has followed the ‘traditional’ pattern of internationalisation,first moving into neighbouring countries and markets withsimilar language and cultural traditions, before venturing intomore exotic markets on other continents.

One of the characteristics that makes IKEA stand out amongstinternationalising retailers is the (alleged) standardized approachtaken to every market it enters. It appears to operate in the sameway in every market—and is often referred to as a ‘global’ retailer.Existing analyses of IKEA’s marketing strategy are either relativelyold (Salmon and Tordjman, 1989) or take an overview perspective(Salzer, 1994, 1998; Martenson, 1981, 1987). Little emphasis hasbeen placed upon analysing retail marketing activities in specificcountries, and many studies lack a clear understanding of whatmarketing standardisation and adaptation might mean in a retailperspective. More recent studies (Edvardsson and Enquist, 2002;Edvardsson et al., 2006) take a service management perspective,rather than an overall marketing strategy perspective.

Amongst academics there has also been a growing debate overwhether one of the key success factors in international retailing isthe adaptation, rather than the standardisation, of customerfacing marketing strategies (e.g., Cui and Liu, 2001; Dawson andMukoyama, 2006; Rundh, 2003; Samiee et al., 2004; TheMcKinsey Quarterly, 2004, 2006a, 2006b). This seems to beespecially true for retail internationalisation into geographicallyand culturally ‘distant’ markets. So where does this leave IKEA and

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its ‘global’ business model? Is the model something that works inEurope and North America, but requires greater adaptation for thevery different Asian markets?

The aim of this paper is to examine IKEA’s marketing strategyin three different countries: Sweden, the UK and China. IKEA’shistory and presence differs in each of these markets: Sweden isthe home market where IKEA was founded in 1953 and the wherefirst store opened in 1958; the UK was entered in 1987 and is nowthe fourth most important market in terms of sales volume;whilst China saw its first IKEA store in 1998. These markets alsovary in terms of both the cultural and institutional setting:Sweden and the UK are essentially ‘home’ markets in theseterms—Sweden naturally fulfils this role but the UK is an Anglo-Saxon market with similar consumer behaviour and businesstraditions; China is of course very different in this respect, but willIKEA’s marketing strategy need to be different in recognition ofthis? Is there a need to recognise a more subtle gradation of theretail marketing mix, which takes into account a more con-strained geographical focus—for example at a regional level ? orwhich recognises the length of time in, and subsequent experi-ence of, a market ?

The paper starts with a brief review of some of the literatureon the retail marketing mix to establish a generic framework. Thisframework is then used to present an analysis of IKEA’s approachto the three different countries, based upon a combination of bothprimary and secondary data from these markets. Finally, theimplications for existing conceptualisations of globalisation andstandardisation/adaptation in an international retail context formthe conclusion.

2. Conceptual framework

What is standardisation and adaptation really about? There is(as Ryans et al., 2003 have pointed out) no common consensusamongst researchers. However, the core elements of standardisa-tion are generally seen as

ythe offering of identical product lines at identical pricesthrough identical distribution systems, supported by identicalpromotional programs in several different countries (Buzzell,1968, p. 103).

This definition is grounded, as with much of the literature,within the four P’s classification of marketing activities. Standar-disation thus refers to how and if marketing activities relating toproduct, price, place and promotion are adapted across thecountries or markets in which a company operates. One of thebest known advocates of strategy standardisation, Levitt (1983),argues:

The modern global corporation contrasts powerfully with theaging multinational corporation. Instead of adapting to super-ficial and even entrenched differences withering and betweennations, it will seek sensibly to force suitably standardizedproducts and practices on the entire globe (p. 65).

Levitt argues his case in broad terms. No products or marketsare exempt from his vision of globalisation, and he identifiedtechnology and converging consumer demands as key drivingforces. Although extremely influential and extensively debated,the weakness of the Levitt proposition lies in its generalisticperspective. It can be argued that from that ‘distance’ – thegeneral overview perspective – everything tends to look the same.

In the other ‘corner’ of the debate we find those who argue foradaptation from a national culture perspective (e.g., Hofstede,

2001; De Mooij, 2004, 2005; De Mooij and Hofstede, 2002). Herethe view is the reverse

Ignoring culture’s influence has led many companies tocentralise operations and marketing, which instead of increas-ing efficiency resulted in declining profitability. Several largemultinational firms have seen their profits decline becausecentralised control lacks local sensitivity (De Mooij andHofstede, 2002, p. 61).

From this perspective it is obvious, though again usually notbacked with anything other than illustrations and anecdotalevidence, that the world is ‘spiky’ (Florida, 2005), rather than ‘flat’(Friedman, 2006): the business landscape is not homogenous butinstead heterogeneous which makes adaptations necessary, at leastwhen the view is international and when working in culturallydiverse markets. While Levitt and his fellow ‘globalists’ suggestthat the world, driven by technology and converging tastes, ismoving closer together, de Mooij and her supporters argue thatalthough the world is moving, some things do not change.

Although the debate surrounding the appropriateness of thestandardisation or adaptation of marketing activities has gener-ated a large volume of research, there is little specifically on thistopic in the international retailing arena despite the centrality ofthis theme in internationalisation. We find some discussionsabout specific aspects of international retailing, for example retailimage (e.g., Burt and Carralero-Encinas, 2000; Burt and Mavrom-matis, 2006; McGoldrick, 1998; McGoldrick and Ali, 1994;McGoldrick and Ho, 1992) but very little relating to the overallmarketing activities of retailers. Image mainly concerns itself withthe effects – from a consumer perspective – of marketingactivities, not with the marketing activities per se.

Some authors (e.g. Sternquist, 1997) discuss standardisation inretail internationalisation in general terms, particularly in relationto the categorisation of different internationalisation approaches.IKEA has often featured as an example of a ‘global’ retailer inclassifications of retail internationalisation. In Salmon and Tordj-man’s (1989) classic article, IKEA is reported to have a centralisedapproach to management systems but adjusted marketingactivities (in dimensions like assortment, pricing and promotion).However, the IKEA discussed by Salmon and Tordjman is 20 yearsold, and based upon a company with 13 years of internationalexperience, operating 74 outlets all based within Western Europeand North America. Martenson (1981) uses IKEA as an example ofinnovation diffusion in international retailing. She provides amuch more detailed picture of a centralised retailer, and suggeststhat promotion is basically the only variable in the marketing mixthat is adapted to different markets. Whilst this is a more in-depthcase study of IKEA, it is now also close to 30 years old and followsa company that was essentially a European company at the timeof writing. Finally, Treadgold (1991) categorises various interna-tional retailers along the dimensions of local responsiveness andbenefits from integration. Global retailers – such as IKEA – areargued to achieve high benefits from integration and display lowlevels of local responsiveness. The discussion of marketingactivities in his paper is again at a very general level and littledetail is provided about different marketing activities. As well aslimitations in the level of detail provided, inherent in all of thesestudies is the time context. IKEA today is a much moreexperienced international operator, both in terms of length oftime in the market and in geographical scope.

When analysing marketing strategies of individual firms thereis a need to employ some form of classification of the differentmarketing activities. The marketing activities of retailers havebeen described in the literature in many different ways. Almostevery source generates its own specific categorisation, but the

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common ground seems to be some version of the traditional fourP’s approach. Generally, the manipulation of these marketingactivities is one way that the seller – in this case the retailer – canadjust the offer to the local market. This is how marketingactivities will be interpreted in this paper.

Although an empirically grounded, research based, classifica-tion of marketing activities would have been preferable, theclassification used here is based upon the common ground foundin several established retail marketing textbooks (Fernie et al.,2003; Sullivan and Adcock, 2002; Freathy, 2003; Levy and Weitz,2007; Cox and Britain, 2004; Varley and Rafiq, 2004; Gilbert,2003; McGoldrick, 2002; Omar, 1999; Kent and Omar, 2003;Davies and Ward, 2001). Four retail marketing activities arecommonly identified: merchandise; location and store format;the selling and service environment; and market communication.

Merchandise is a broadly defined marketing activity andinvolves the creation of an attractive assortment of products forthe consumer to buy in the store. This activity includes theselection of national and retailer brands, the depth and width ofthe product range, together with the pricing strategy and thesetting of product prices. Location and store formats refers mainlyto where retailers establish their outlets/stores. As we will notengage in a detailed locational analysis in this paper, location hereis seen as where – in relation to the city centre – a store is located.Store format encompasses other dimensions involved with thegeneral set up of the store such as scale and physical character-istics. The selling and service environment of the store involvesseveral dimensions, which contribute to the in-store environment.This incorporates the overall layout and the atmospherics in thestore. We also include service and service levels in this criterion asthese are integral to creating the selling environment. Finally,market communication involves traditional tools, such as advertis-ing (TV, print and outdoor) and promotion (different types of salespromotion), which are widely used by retailers to communicatewith customers. Direct marketing, catalogues, and the internet asan information source are included in this group of activities.

3. Methodology and approach

Based on these four criteria the remainder of the paperassesses how IKEA presents its retail marketing mix activities indifferent markets. We first start with an assessment of the‘corporate’ approach as outlined by IKEA before looking at theSwedish, British and Chinese markets in turn. The corporateapproach is taken to represent the ‘ideal’ perspective assuming astandardised ‘global’ approach. By using the same four criteria topresent the material for each of the three countries, we illustratethe extent to which practice ‘on the ground’ in these marketseither conforms to or deviates from the ‘ideal’.

The corporate and country cases draw upon primary datacomprising interviews with senior managers at IKEA both in thecorporate office and in the national markets over the 2005–2008period, consumer research conducted in some of these markets,and secondary data drawn from company documentation, con-sultancy reports, newspapers and magazine articles, and aca-demic case studies from a number of sources including HBS andECCH. This range of material, whilst at times drawing on theanecdotal and other narratives, provides several perspectives onretail marketing activities.

4. IKEA’s marketing strategy

At the end of the 2009 financial year (31st August), the IKEAGroup operated 267 stores in 25 countries. A further 34 stores

were operated by franchisees. (IKEA Facts & Figures 2009). AtJanuary 2010 the total network comprised 304 stores in 37countries, with stores due to open in the Dominican Republic andIsrael by the end of March. To understand IKEA’s marketingstrategy it is necessary to start with the business concept asformulated in IKEA’s vision:

The IKEA vision is to create a better everyday life for the manypeople. We make this possible by offering a wide range of well-designed, functional home furnishing products at prices so lowthat as many people as possible can afford them (IKEA’scorporate web site).

The marketing strategy and associated activities emanate fromthis statement, including the alleged standardised approach: IKEAhas as a fundamental guiding principle to work in the same wayand to be perceived in the same way in every country. Thisprovides operational advantages and makes it possible, so it isargued by senior management, to keep prices low and attractivefor as many people as possible.

To relate IKEA’s marketing strategy to the retail marketing mixclassification discussed above, the starting point is the merchan-

dise, i.e., the product range and the prices of products. These aresupposed to be the same, with very small adaptations, for allcountries and in all stores. The brand and sub (product) brands arethe same. The pricing of products is intended to be low incomparison to what consumers can find in competing stores: thebasic aim is to deliver high value at low price. The location and

store format employed by IKEA involves large stores located on theoutskirts of major cities making access by car the preferred modeof customer transportation. The format comes in three differentsizes with accompanying assortments ranging from 7500 to10,000 items. The assortment differs little between the same storeformats across countries. The selling and service environment in thestores is intended to be basically the same in terms of corefeatures: layout and design, number of departments, display andcolours, service levels etc. This allows the same shoppingexperience regardless of where the store is located. The room-setting displays are adapted to reflect local housing and livingconditions, rather than following a centralised formula. Thismight, for example, mean smaller rooms is some countries andmore cultural cues in others. Service levels are intended to be thesame around the world with similar staffing levels everywhere.The core IKEA concept which requires the customer to play a rolein contributing to low prices has important implications forthe levels of service: to have low prices the consumer mustcontribute – by picking items up in the store, carrying them totheir cars, taking the items home, and assembling the itemsthemselves - even though home delivery and assembly servicesare now widely available for a fee. IKEA’s in-market communica-

tion is dominated by the catalogue: a method that is unusual foran international retailer but which is at the core of IKEA’smarketing strategy. This is the most important marketing toolemployed by the company, accounting for 70% of the annualmarketing budget. Almost 200 million copies are published, in 56different editions and in 27 languages. These adjustments aremade from a standardised base (same products, same overallinformation etc), to minimise country/region adjustments. Thecover of the catalogue may change to some extent, and in ‘newer’markets there is more information about IKEA, the concept, andhow to shop at IKEA, but again these are relatively minordeviations from the core template. IKEA Family, the loyaltyscheme, is not yet available in all markets but the plan is toextend it around the world, as it is seen as an important tool increating long-term relationships with IKEA customers. Marketcommunication is the marketing activity that can be amended by

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the national organisations. Based upon central guidelines estab-lishing the market position that IKEA wants to hold in the market,the national offices can adjust the detail of communicationmessages and adapt offers to fit local tastes and the localcompetitive situation.

From this brief review of IKEA’s retail marketing mix, aspresented by the company in both documentation and interviews,the main conclusion to be drawn is that IKEA (at least in theory)employs a highly standardised approach. The same marketinginstruments are employed in the same way around the world, andindividual countries and stores have only limited opportunities toadjust to what are perceived as fundamental national and localmarket needs. From IKEA’s point of view, such standardisation islogical as it makes it possible to deliver a strategy of low prices ‘for

the many people’ in a way that a more adaptive strategy wouldnot. Whilst company ‘rhetoric’ is one thing, what happens ‘on theground’ in the markets is another. The next sections shall explorethe extent to which the retail marketing mix elements arereplicated or adjusted in three markets : Sweden and the UK,representing established ‘European’ markets and China – aculturally and geographically ‘distant’ market. These marketsare chosen to reflect differences in experience (time in market)and cultural and psychic distance.

5. IKEA in Sweden

The first IKEA’s store in the world, was opened in 1958 inAlmhult, in Smaland (a county characterised as having a barrenlandscape, and as inhabited by people who are extremely stingy).IKEA Sweden now has 17 stores and is, not surprisingly, a majorplayer in the home decoration market, having been so for manyyears. IKEA’s mission statement to make furniture for ‘the many

people’ is very evident in Sweden. Product penetration is veryhigh, much higher than in other markets. Swedes have extensiveknowledge about IKEA – the products, stores and the company -and most Swedes have experienced IKEA for generations. This,from a company perspective, presents a recognised challenge - asIKEA has, for some, become associated with ‘boring’ furnishingstyles popular with older generations.

While ‘the many people’ is an accurate description of the IKEAconsumer base in Sweden, in actual marketing terms the targetmarket is a more focused: namely women, 20–49 years old, oftenwith children. In addition, an important target group in recentyears has been the 55+ age group who no longer have children athome, and who are in a good financial position.

5.1. Merchandise

Although the total IKEA assortment is around 10,000 products,in Sweden the stores are relatively small and only carry 6–7000items. Adjustments are made at the local level by the stores whohave the authority to adjust the range in response to localcompetition. In recent years, the stores have also developed morelocal marketing initiatives than was previously the norm. Price isa core aspect of market positioning in Sweden – IKEA is known forits low prices. This is achieved by having a low price promise, andby offering low prices in comparison to competitors in differentareas. In recent years, here as in most parts of the IKEA world,cutting prices has been a major part of the marketing strategy.Prices have been reduced by some 20% over the past 8 years.Sourcing for all the larger, heavier and bulkier products is done inEurope, and Sweden itself is one of the largest sourcing countriesfor IKEA outside of Asia, accounting for circa 6% of grouppurchases.

5.2. Location and store formats

In Sweden IKEA stores are located as in much of the IKEAworld: outside city centres, with a focus on consumers using theirown cars to travel to and from the stores. IKEA receives regularpropositions from different municipalities who want to open astore. One recent, and much publicized store opening, was inHaparanda Tornio, in the far north of Sweden on the border withFinland. The launch of this store was regarded as a major success,not only for IKEA, but for the whole community wheredepopulation had been a major problem. However, even thoughit is relatively easy to find places to establish IKEA stores inSweden, there is still competition with other retailers for the bestlocations.

As mentioned above, IKEA stores in Sweden have traditionallybeen relatively small, in terms of floorspace and the number ofarticles offered—the exception being the Kungens Kurva store inStockholm, which is the largest IKEA store in the world. There areplans to refurbish existing stores and make them larger, and newstores are always bigger than the older ones. The format of thestore follows the standard IKEA design of a two storey buildingwith a large parking lot outside, although some of the new stores,like that in Malmo, are to be built on pylons to provide a car parkunder the store (as in Shanghai).

5.3. The selling and service environment

The stores are an important marketing tool for IKEA Sweden, asthis is where the customers come into contact with the companyand where they can see what the IKEA concept is all about. As theSwedish stores have been relatively small in many places it hasbeen difficult to expose customers to the full width and depth ofthe assortment. The newer (and larger) stores now being builtallow customers access to the full IKEA product range.

The stores in Sweden are laid out in a fairly standard way. Thecommon store blueprint is used as a starting point. As in all IKEAcountries, the furniture section on the upper floor always startswith five room settings, although these are adjusted to thenational market. A Swedish IKEA store for instance often has akitchen island (a standalone unit integrating cooking, washing upand eating spaces) in the kitchen setting, and large walk-in closetsin the bedroom settings.

To Swedes, the DIY element of the concept is accepted:customers collect their flatpacks, carry them home, assemblethem, and in return they pay a lower price. Still, in recent yearsIKEA Sweden has added home delivery and assembly services fora fee. IKEA’s own Customer Satisfaction Index (CSI) – astandardised customer survey carried out in every country everyyear – identifies the major ‘problems’ for IKEA Sweden as waitingtimes and stock availability, which is something that IKEA Swedenhas improved in recent years. IKEA Sweden still scores well in thesurvey for innovation and the low prices.

5.4. Market communication

In Sweden the catalogue is the most important promotionaltool. It makes IKEA unique and is a source of inspiration forcustomers. In Sweden the launch of the new catalogue is a majorPR event – for example to support the launch of the 2008 edition,IKEA furnished the waiting hall of the Stockholm train terminal –and all major newspapers carry lengthy reviews and commen-taries.

The IKEA Family scheme was first launched in Sweden and wasat the time one of the first loyalty programmes in the country.Today it is still one of the larger ones with 1.7 million members

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and has become an important marketing tool for IKEA Sweden.The web is also an important means of communication, especiallyfor new customers, to prepare customers for the store visit, and tomake different planning tools accessible at home, e.g. the kitchendesign tool.

IKEA’s approach to the Swedes in terms of advertising andpromotion is intended to be youthful and different, fun andsurprising, emphasising that nothing is impossible, but that thecompany also is very honest and human. At the moment IKEASweden is in a ‘re-launch’ phase. Although being well known isoften an advantage, it also brings problems: consumers becomevery familiar with the company. IKEA Sweden is in a particularstage of the IKEA lifecycle, where homes are already filled withIKEA furniture and accessories, and where IKEA is the marketleader for kitchens, etc. In these circumstances, it becomes morechallenging for IKEA to make itself appear new and exciting. Theadvertising strap-line for 2008 was ‘Decorate the home as you want

to live’ and ‘Long live diversity’.A good example of how IKEA typically addresses Swedish

customers is from a campaign that is now a few years old.Recognising that within the IKEA target group there were agrowing number of divorced parents, the campaign focused onhow IKEA could contribute to these circumstances with the slogan‘Better divorce for everybody’. IKEA has also focused campaigns onthe ethnic diversity of the Swedish population, by showingdifferent ethnic groups as customers, and one of the best knownand longest running campaigns was ‘Not for the rich but for the

wise’—implying that IKEA offered high quality for low prices, andthat ‘clever’ customers realised this.

6. IKEA in the UK

In the UK, IKEA has a 23-year history, having entered themarket in 1987 and now operates from 18 stores. Expansion plansinclude a further 7 stores in the near future. The UK is one ofIKEA’s major markets, and the recently retired IKEA CEO, AndersDahlvig, was the country manager during much of the 1990swhen the brand was repositioned in the UK. The target group inthe UK is primarily middle class women aged 25–45 with families.This then varies for different products and product groups.

6.1. Merchandise

Overall the assortment in the UK stores is no different fromanywhere else in the IKEA world. There are some small quirks tothe product range. For example, the beds are larger than is normalin the UK, but this is something that IKEA tries to make into apositive selling point—and from a company point of view it alsomeans that no adjustment needs to be made to the product. Apartfrom the plugs on electrical products, there are no otheradjustments made to the merchandise sold in the UK. The normalsupply chain is used and bulkier products are sourced in Europewhilst accessories are sourced in other parts of the world. IKEA UKalso has a low price image: low prices but good quality. In recentyears, as elsewhere, one of the main marketing focuses has beenon cutting prices and reinforcing the price position of IKEA. As inSweden prices have allegedly been cut by more than 20% over thepast 8 years.

6.2. Location and store formats

The fact that IKEA UK has only 18 stores serving around 60million inhabitants, whilst IKEA Sweden has 17 stores and 9million inhabitants suggests that UK retail planning laws make it

difficult for big box out of town retailers like IKEA to open newstores. This problem has been a major concern for IKEA UK formany years, and has forced some new thinking about the designand layout of the IKEA store format. This has led to a new conceptstore in Coventry, which trades from three storeys and is locatedcloser to the city centre, thereby taking up less space. Whetherthis adjusted format will become a solution for IKEA UK in thefuture is not yet clear. Most of the other stores in the UK are set upthe standard way in out of town locations.

6.3. The selling and service environment

UK customers are said to be very demanding and do not mindairing their problems with IKEA. The British generally live inhouses which they own and are again not alien to the DIY concept.Here, as in Sweden, services removing some of the DIY elementshave been offered—e.g. home delivery and home assemblyservices.

IKEA UK has however struggled with some elements of theselling and service environment. From the company’s perspectivethis all relates to having only 18 stores to service a population of60 million when the UK is one of IKEA’s largest markets—i.e.,IKEA is very popular in the UK and this leads to problemsthat are reflected in the IKEA CSI. Access to stores and productavailability are the main areas of concern picked up by thissurvey. Customers say that it is difficult and time consuming toget to the stores, and there is a risk of not being able to takeproducts home if they are out of stock. These are aspects that IKEAhas responded to, through the long term ambition to establishmore stores, and through improved personnel planning—which isdifficult in itself as IKEA UK has a fairly high level of staff turnover.The CSI results suggest that British consumers are satisfied withthe price position and feel that prices are low for the qualityprovided.

6.4. Market communication

The catalogue dominates the marketing effort in the UK. Itaccounts for 70% of the marketing budget, although efforts arebeing made to lower this proportion as it is very expensive todistribute in high population markets like the UK. It is alsobelieved that the catalogue is no longer as effective a marketingtool as it once was.

One of the most noticeable things about IKEA UK’s advertisingis the daring and challenging approach that has been used overthe years. The IKEA and St Luke’s campaign ‘Chuck out the Chintz’from 1996 is famous (indeed even Tony Blair referred to it), as isthe ‘Stop Being So English’ campaign. In the UK, more than in mostmarkets, IKEA has challenged the existing norms and attitudes ofthe market and its customers. The preferred message is ‘being

different’—but to do so in a way that connects to the fact that IKEAsells home furnishings. According to the IKEA message, Britishconsumers should appreciate their homes more (and spend moretime there) and IKEA can help with low prices, good products andgood design, coupled with 65 years of experience in homedecoration.

The opening of the IKEA store in Glasgow, Scotland, provides agood example of adjusting the campaign to the local marketwhilst sticking to the main IKEA ‘be different’ message. The storeopening campaign focused on two Glasgow ‘hard men’—who ‘gosoft’ talking about pink pillows and house plants purchased fromIKEA (see Picture 1).

The web is a very useful communication tool in the UK, asthere are so few stores and there is a need to provide information

Picture 1. IKEA print brochure in the UK (Scotland).

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on product availability. IKEA Family was introduced in 2007, andis reported to be very successful in the UK where loyalty schemesare well established.

7. IKEA in China

For IKEA the step into the Chinese market was an importantone, maybe as significant as the first move onto foreign soil atSpreitenbach in Switzerland in 1973 (Torekull, 1998). IKEA,however, targets a different customer group in China than inother countries which are at a later stage in the IKEA ‘life cycle’.The Chinese customer group is typically aged 25–35 (the corecustomer is around 30), and many are ‘little emperors’: thegeneration born into the One Child Policy (now between 15 and27 years old). This segment of the population comprises30 million people and is characterised as being impulsive,easy to influence, very social, and committed to foreign consumerbrands (Gunnarsson, 1997). This group is well educated, livesin the large cities, and with increasing salaries, is growingevery year.

The customer in China buys less when they visit the storethan the average IKEA customer. But in Shanghai, the corecustomers visit IKEA more often than anywhere else in theworld: 33% come to the store every month. This means, amongstother things, that there needs to be regular changes to thedisplays in the store. The Shanghai store for example rearrangesthe room settings at least seven times a year to display newproducts or to reflect different holidays and promotionalcampaigns, etc.

IKEA’s offer reflects the core mission—to supply affordablesolutions to Chinese customers. However, the overall image ofIKEA is different from this (see below), forcing IKEA to offer otherforms of value to their Chinese customers. In the primary marketarea of the Shanghai store, the monthly household income of corecustomers is 6000 RMB. This is high by Chinese standards but notin the IKEA world: IKEA compares different countries by using atypical IKEA basket of goods. A Swiss consumer only has to workfor 2 months to purchase the basket, whereas a Chinese consumerwould have to work for 18 months.

7.1. Merchandise

Some of the key challenges facing IKEA are summed up in thecitation below:

When Ian Duffy was first put in charge of IKEA’s China storesfour years ago, he spent hours at the checkout line observingcustomers. He didn’t see many. Instead, he saw plenty ofpeople crowding the Beijing store for freebies—air condition-ing, clean toilets and even decorating ideas. Adding insult toinjury: shops right outside were offering copies of IKEA’sdesigns at a fraction of the cost. So, to lure shoppers, theEnglishman launched what could be the cheapest IKEA non-sale items in the world: a scoop of vanilla ice cream in a conefor 12 cents. Thus began IKEA’s strategy to beguile the finickyChinese consumer by slashing prices in China to the lowest inthe world—the opposite approach of many Western retailers(The Wall Street Journal, March 3, 2006).

IKEA is used to being perceived as having low prices within themarket, and as discussed above, this is one of the competitivecornerstones of the whole IKEA concept. However, this is notthe case in China, where the perception of IKEA is that of a fairlyexclusive western retailer and as a store for the higher middleclass (Lewis, 2005). To the Chinese, Billy (the inexpensive, highselling book case) is perceived as a luxury item (Jungbluth, 2006).

In response IKEA has accepted that to some extent, the mainapproach must be to cut prices, and to do that, IKEA China hasbeen allowed to ‘break’ some of the established operating codes inthe organisation. China is a major sourcing country for the IKEAgroup, accounting for 20% of total company purchases. Yet, formany items, IKEA China initially sourced products from the sameplaces as all the other IKEA countries, for example Poland. Thiscentralised approach placed severe constraints on the low pricepolicy and on service levels as products brought into the countrywere subject to import taxes (22%) and originally involved lead-times of 12 weeks (now down to 5 weeks). To be able to cut pricesin the Chinese market, IKEA China has been allowed to expand theproportion of products sourced locally. Some commentators saythat half of the products now found in an IKEA store in China are

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made in China (The Wall Street Journal, 2006), whilst IKEA claimsthat the figure is 30%, although the local trading office is nowlooking for Chinese suppliers for an additional 500 items.According to IKEA, these changes to the sourcing model haveresulted in a real lowering of prices in the market. Priceshave fallen by at least 30% since 2003, and for some productsthe price has dropped as much as 90%. IKEA’s single-seat Ektorparmchair retails for 112$ in China, 67% lower than in the US (TheWall Street Journal, March 3, 2006).

IKEA, like many other companies doing business in China, isvulnerable to copying. One observer noticed that many Chineseshoppers in IKEA were drawing pictures of the furniture andscribbling down descriptions of the products but not necessarilybuying them. (Lewis, 2005). Copying is made easier by thepresence of the catalogue and the in-store product line leaflets,which in many cases even provide measurements. IKEA stylehome furnishing has, in some areas, become a holistic concept inits own right, outside the control of the group. A search onbaidu.com, a local Shanghai search engine, for ‘IKEA style’ willgenerate more than 39,000 hits. To counter this, IKEA has tried tofocus on the broader concept of delivering help in homedecoration, rather than on individual furnishing products as such.The company believes this is one way to achieve a market positionthat is not as easily copied: e.g. it is easy to copy the Karlanda, butless easy to replicate the home decorating ideas and skillsprovided by the company in the store, on the web site, and inthe catalogue.

As price will not, in the foreseeable future, be the main source ofcompetitive advantage, IKEA China tries to position itself as acompany with unique competences in interior design. Helpingcustomers with interior design has become the core message,rather than selling individual products at low prices. The focus hasalso been on selected issues, like storage. Most Chinese live in smallapartments and IKEA argues that it can help with smart solutionsfor storage that make life easier. IKEA’s claim is very much aboutfunction, which contrasts with the traditional Chinese furnituremanufacturers were everything is about tradition.

From experience IKEA managers know that markets runthrough some kind of life-cycle: when stores open in a newcountry most customers buy market-hall products, i.e., everythingbut furniture. In established countries the proportion is said to be65:35 between furniture and market hall products. Although theratio varies across the IKEA stores in China, China has maturedrelatively fast with the furniture: market hall proportions fastapproaching those found in older markets like Sweden andGermany. The Chinese view IKEA products as innovative andnon-traditional—for example square tables (as opposed to theusual round ones) and the colours used by IKEA.

According to the company, the ‘IKEA’ brand is well known—inShanghai, 96% of the catchment area of the store are aware of thebrand, and the first Fortune Cookies opinion poll in China showedthat 75% of those with a monthly income of more than RMB 2500,living in urban areas, and aged 15–55, knew of IKEA (DagensIndustri, 05/05/2006). The meaning of ‘IKEA’ in Chinese haspositive connotations: the Chinese translation means ‘desirablefor home living/comfortable home’, and it is pronounced ‘Yi Jia’,similar to the English pronunciation of IKEA.

The core assortment in an IKEA China store is very similar toelsewhere, although a few minor adaptations have been made toreflect local culture. In 1998 three products were introduced justfor China – chopsticks, a wok with a lid, and a cleaver – but theseitems are now available in almost every store around the world.The IKEA China stores also have a special set of tea cups for theChinese New Year, and 500,000 plastic placemats were producedto commemorate the year of the rooster (Business Week, 15/11/2005). Currently, in mainland China, as well as in Hong Kong, the

beds sold are shorter (190 cm) than standard-sized beds (200 cm),although this is under review. Many Chinese live in apartmentswith balconies and this space is very important to the Chinese.Consequently, IKEA has provided a ‘room’ setting in the storewhich show how a balcony can be furnished, and a specialbalcony section exists in the stores (Lewis, 2005).

7.2. Location and store formats

The big-box IKEA format is unusual in China where shopping istraditionally done locally and through specialist stores. The IKEAstores in China are located closer to the city centre than isnormally the case in other parts of the world, although thelocation is not exactly down-town. Lower levels of car access inChina make out-of-town locations unpractical. Instead storeshave to be located close to public transportation hubs to ensure ahigh volume of customer traffic. A good example is the Shanghaistore which is very close to several bus lines and one of the metrolines. However, as the Shanghai store also has 700 parking placesunder the store, IKEA is expecting Chinese shopping patterns tochange in the future.

Customer reliance on public transport is a contributing factorto service levels: home delivery services are more common andmore extensively used. Also, outside the stores in China localentrepreneurs can be found offering transportation and homeassembly services.

In the new Beijing store – the largest IKEA store after theKungens Kurva’ store in Stockholm – a further adjustment to thestore format can be found in the form of wider aisles, to cater forthe fact that IKEA stores in China have up to three times thevolume of visitors than IKEA store elsewhere in the world(The Wall Street Journal, 2006).

7.3. The selling and service environment

Although the products available in the Chinese stores arebasically the same as in any IKEA store in the world, the stores donot look the same inside. IKEA tries to create room settings thatare relevant to Chinese customers with realistic room sizes andkitchens. The in-store room settings reflect those of Chineseapartments. One obvious example, mentioned earlier, is theincorporation of balconies (The China Business Review, July–August, 2004). So even with the same products, the room settingsin the store in Shanghai look and feel very different from the storein Malmo. The outcome is basically the same product range—butadaptation in the store through the presentation of goods andtypes of home solutions offered.

The shopping experience is also different. As other customersare an important part of the shopping experience, the way thestore is used by Chinese consumers – not only as a shop but alsoas a social area – is recognised and accepted. Initially, Chineseconsumers came not to shop but to socialise in a pleasantatmosphere, which was much ‘freer’ than that found in otherfurniture shops in China, where you are not allowed to touch themerchandise. This is still true – people can still be found in theShanghai store who appear to be asleep on the beds, having a napon a sofa, or reading books with their feet on one of the tables inthe room settings – but IKEA tolerates this ‘being at home’behaviour as they hope that these people will return ascustomers. In store communication is not just aimed at theyounger target market. For example, one in-store sign portrays anolder couple whose child has just moved away from home toattend college. The couple discuss how IKEA can help them toconvert their son’s bedroom into a new room for their own use.

Picture 2. IKEA print advertisement in China.

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The Beijing store expects to receive 20,000 visitors a day, andat weekends the crowds are so large that staff use megaphones tokeep control. This equates to around 6 million visitors each year,compared to the IKEA store ‘norm’ of 2 million visitors/year. Asstaffing levels are the same as in other countries there areinevitable consequences for service. IKEA’s own CSI shows that –expect for service and the shopping experience –IKEA Chinascores below the IKEA average, although it still scores highly forproduct range and fashion. Given the high number of people thatvisit the stores in China it is no surprise that the overallsatisfaction levels are lower than normal. Today overall satisfac-tion in China is argued to be equal to the rest of the world, despitea lower score in some areas. For the criteria of inspiration, waitingtimes, and helpfulness of staff, IKEA China scores above averageon the CSI.

Another element of the IKEA business concept which confusesChinese customers is the added labour that the customer has toput in. As well as the self-service concept throughout the store,including having to visit the warehouse to pick up products—thefact that the customer then has to assemble the products at homeis alien to the Chinese. Although one does not need many tools todo this, as China does not have a DIY culture, few customers haveeven the most common tools at home. When the Chinese needsomething done in the house they employ someone, as labour isinexpensive. Explaining and justifying the DIY concept – which isat the heart of the IKEA business model – is hard work in China.IKEA provides home delivery, for both long and short distances, aswell as an assembly service for a low fee (e.g. short haul homedelivery for RMB 50, and assembly of a single item for RMB 40).IKEA has also created – although not intentionally – an industry ofdelivery drivers that help to assemble IKEA furniture : these pick-up trucks and their drivers are lined up outside the stores (Lewis,2005). However, this service is already included in the purchaseprice at other stores. In Europe and in the US the product price isso low that consumers can see the benefit of doing these activitiesfor themselves, but in China where the price of IKEA products isseen as high and then the customer is expected to do these thingsthat no other retailer makes them doy.this causes resentmentand confusion. IKEA acknowledges this, and provides informationin the stores, on the website, and in the catalogue to prepare theChinese consumer for the IKEA store experience. They alsoemploy shopping hostesses to walk around the store explaininghow the concept works to customers. IKEA representatives arguethat this aspect is progressing, but slowly.

As indicated above, consumers in China are very demandingwhen it comes to service. They expect, if not world class service,that there are at least people to help them with all kinds of tasks.The IKEA self-service concept and the DIY concept in general ishard for the Chinese to accept. It is also difficult to gain animpression of the level of service orientation amongst staff in theIKEA store. IKEA uses mystery shoppers to gain some information,but taking into account 50 years of dictatorship, state rule, stateowned enterprises with little scope for the individual, etc.—howservice minded can one expect the Chinese to be? IKEA tries, aseverywhere else in the world, to implement a staff strategy thatregards everybody as co-workers rather than employees. However,this is theoretically at conflict with the established culturalbehaviours, in a country regarded as having high power distancerelationships. IKEA argue that service levels and the servicementality is improving as conversion rates – consumers visitingstores that buy something – are improving, and are now above 41%.

IKEA also has another challenge that affects service. Manyproducts – despite the increased level of sourcing in China – stillhave long lead times in terms of shipping from Europe and othermarkets. This has historically made it necessary for the Chinesestores to ‘push’ products, i.e. sell what they have available in the

store, rather than what is in the catalogue but not necessarily inthe store. A lot of effort has been put into improving this situation– e.g. increasing domestic production, a new warehouse in China,etc. – and it is claimed that availability in China is now almost thesame as for the rest of the IKEA group.

7.4. Market Communication

One of the major differences when it comes to communicationwith the consumer in China compared to the rest of the world isthe role of the catalogue. In China it is impossible, cost and reachwise, to distribute it in the same way as in other countries. Thecatalogue is distributed in the store and in some of the primarymarket areas, but there is a greater reliance on smaller brochureswhich are sent out several times during the year. These brochuresare produced by the same people in Almhult in Sweden thatproduce the catalogue in order to make sure that the brochureshave the same layout and IKEA ‘feel’.

IKEA is known for its ‘out of the box’ thinking when it comes tocreating an interest in IKEA and its products, and IKEA China is noexception. One example is a campaign which involved thetransformation of 20 elevator interiors in less affluent residentialdistricts in Beijing. The purpose was to create a nice environmentin a dull place, to reach untapped markets, with the broadmessage that ‘change is easy’. Other PR activities include takingChinese journalists to Sweden and Almhult, to teach them aboutSweden, IKEA, and the roots of the company, and IKEA is supposedto have started or sponsored a TV-show in which viewers areoffered lessons in home decorating.

IKEA has run many different advertising campaigns in China,through TV, newspaper and print media. The general theme inthese campaigns are the same as everywhere in the world butwith a Chinese twist (be different, break tradition). The IKEAadvertising line in China may be viewed as being a little ‘softer’than in other places—more humble advertising which does notstand out very much, with a friendly focus upon home furnishingsolutions, education of the consumer, and the offer of a partner-ship for the future. The advertisement featured below (Picture 2)is typical:

The message in this advert is ‘small changes, a refreshing new life’.Life can be made better, easier and nicer through small changes.‘Small changes’ is a key phrase in IKEA advertisements and in-storecommunications. Other campaigns that IKEA have run use thetheme ‘don’t be like your parents’, and are designed to speak directlyto IKEA’s target group of younger women (Lewis, 2005).

IKEA in general IKEA in Sweden IKEA in the UK IKEA in China

Merchandise Brandname is IKEA Basically same products (95%)Increasing local souring in few markets (Russia), otherwise centralised sourcing and supplyCutting prices in all countries

Brandname is IKEA Basically same products (95%)Centralised sourcing and supply of bulky products from nearby areas

Cutting prices

Brandname is IKEA Basically same products (95%)Centralised sourcing and supply of bulky products from nearby areas

Cutting prices

Brandname is IKEABasically same products (95%)Increasingly local sourcing for all products in the assortment

Cutting prices dramatically

Location & store format

Location in most cases well out of city centre, out of town location (adjusted for car use) Two floors, parking outside store, restaurant, Sweden shop

Location in most cases well out of city centre, out of town location (adjusted for car use) Two floors, parking outside store, restaurant, no Sweden shop. Here also signs of changing formats for stores (China)

Location in most cases well out of city centre, out of town location (adjusted for car use)Two floors, parking outsidestore, restaurant, Sweden shop - but increasingretail planning laws but focuson innovation concerning format (China)

Location closer to city centre, closer to public transport etc

Two floors, underground parking, restaurant, Sweden shop, wider aisles in store

The selling environment & service

The room settings are adjusted to fit with local tastes, size of rooms etc of customers in countries were IKEA work

DIY etc concept of IKEA is increasingly accepted – the DIY etc is the ‘price’ you pay for low prices

The room settings are adjusted to fit with local tastes, size of rooms etc of Swedish customers

DIY etc concept of IKEA is increasingly accepted – the DIY etc is the ‘price’ you pay for low prices

The room settings are adjusted to fit with local tastes, size of rooms etc of British customers

DIY etc concept of IKEA is increasingly accepted – the DIY etc is the ‘price’ you pay for low prices

The room settings are adjusted to fit with local tastes, size of rooms etc of Chinese customers

More visitors than in other IKEA stores in the world – with the same staff level DIY etc concept is alien in a country were labour is less expensive – with prices that are not perceived as generally low.

Marketcommunication

Catalogue is the base, advertising to fit the IKEA concept to local tastes, humour and position, promotion increasingly run from stores, IKEA family is rolled out across countries, web is a tool that increasingly is used on new markets as information tool to increase knowledge of IKEA concept to new IKEA customers

Catalogue is the base, advertising to fit the IKEA concept to local tastes, humour and position, promotion increasingly run from stores, IKEA family is well established, web is an information tool to increase knowledge of IKEA concept, for planning the visit.

Catalogue is the base (but its efficiency is somewhat questioned) advertising to fit the IKEA concept to local tastes, humour and position, promotion increasingly run from stores, IKEA family was introduced in 2007 and is spreading, the web is an information tool to increase knowledge of IKEA concept, for planning the visit and for giving access to IKEA planning tool (fx kitchen)

Catalogue is minor part, adjusted (smaller) brochures are the concept, advertising to fit the IKEA concept to local tastes, humour and position, promotion increasingly run from stores, IKEA family was introduced in 2007, the web is a tool that provides opportunity to increase knowledge of IKEA concept to new IKEA customers

Fig. 1. IKEA retail marketing mix activities.

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The web sites of the different stores in China are also viewed as animportant communications vehicle, as the internet is an importantinformation source for the target group. The internet is also used toeducate customers about the IKEA concept and the shoppingexperience in particular before customers come into the stores. TheIKEA Family loyalty scheme was introduced in China in 2007.

8. Summary

When comparing IKEA in general (i.e. how the companyportrays itself) with how the company marketing strategy is

implemented in the three countries under discussion (see Fig. 1),we observe a retailer with a standardised retail concept andworking principles, but one which has had to adjust to localmarket conditions through specific aspects of the retail marketingmix. The IKEA product assortment is the base from which countryoperations assemble their merchandise assortment. Whilst there isevidence of some minor adaptations to individual products, ingeneral the assortment is so wide that there is the scope for everymarket to adjust by finding something that fits. One area wherewe can, however, observe more a significant difference is inthe focus on a low price position—which is less clear and moredifficult to achieve in China. Although low price is a cornerstone of

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the IKEA concept, this is an example of where the realities of localmarkets have had the better of the generic strategy and associatedpolicies. With respect to location and store formats, the main storeformat remains an out of town, car based format and only minoradjustments have been made to the established model. However,we are now seeing changes in this model, initially arising frommarkets where planning regulations constrain expansion (the UK,China), and these physical changes might come to other marketsas well, making for a more adapted way of looking at the storeformat within IKEA. In terms of the selling and service environment

this area seems, from the IKEA perspective, to be a standardisedelement allowing for very few adjustments, beyond culture basedadaptations to the room settings on the first floor. How the storeis shopped by consumers – how they react to this environment –is a different matter. In most markets there is evidence of agradual implementation of a wider range of supporting servicessuch as home delivery and assembly, and the IKEA Family loyaltycard. Finally, in market communications we see another majordifference—in the use of the main marketing tool, the catalogue.The usual dependence on this mechanism has had to be adjustedin China to relate to conditions in the marketplace. Also outsideSweden, where the catalogue has iconic institutionalised status,the effectiveness of the catalogue in its present form may be anissue. Advertising and promotion appears to be the area whereIKEA allows for a much greater level of local adaptation.Adaptation of this part of the marketing mix is not uncommonin international markets. Whilst IKEA should be seen as beingdifferent and challenging and providing home solutions, how thisis communicated through the message in particular, is based onlocal conditions.

9. Conclusions

In this paper we have analysed IKEA’s marketing strategies inthree countries from a standardisation/adaptation perspective. Whathave we found? We are dealing with a standardised retailer thatwants all markets – and continents – to conform within a givenframe. Compared to several other global retailers operating out of alarge store format – Tesco, Wal-Mart, Carrefour – we have observedmuch less adaptation in how the market offer is constructed andportrayed. This in part reflects the fact that IKEA is, to some extent, aniche retailer, but it also reflects the centrality of the business modeland a desire to hold onto what made the company successful. Theview of senior IKEA managers is that sticking to the establishedbusiness model – low price, centralised sourcing, new design and self-assembly/self-service retailing – is what has made IKEA successful,and that this will continue to be a successful formula, rather thanallowing uncontrolled adaptation just because a particular marketdoes not like self-service, etc. The IKEA argument is that markets willlearn and see the benefits of the IKEA concept as a whole. In essence,the retailer will drive market change and the market will ultimatelyadapt to the retailer (Tarnovskaya et al., 2008).

When IKEA has journeyed further afield onto new continents(in this case represented by China) some of the very differentmarket conditions seem to have come as a surprise. However,should an experienced retailer really have been surprised to findthat the Chinese have a lower standard of living, so the concept ofprice and value may differ, and that big-box retailers are rare? Onthe basis of the evidence from China, it appears that IKEA took avery European ethnocentric approach to this intercontinentalmove. This approach is characterised by Usunier and Lee (2005) asexhibiting self-reference criteria, meaning that we tend to thinkthat what works here (Europe) will work in other cultures as well(or others will adjust to our ‘superior ways’). If IKEA had notadded other support services (home delivery and assembly) in

China and if the proportion of local sourcing had not beenincreased, to keep prices down, China might well have providedIKEA with the same experience that it had in another distantmarket, Japan, in the late 1970s.

In the case of retailing, it is often argued that ‘back room’processes can be standardised, but customer facing elements mayneed some adaptation. Whilst this would appear to apply in thecase of IKEA, the country cases also reinforce how important someof the ‘invisible’ aspects of the retail business, for example thesupply chain and sourcing approach, are in the ultimate deliveryof the market proposition. The focus in retailing, and particularlyin the globalisation debate, is often on the customer facing ‘front’end of the retail operation in isolation, and less attention is paid tothe contribution – and one may argue the key role – performed byunderlying systems and processes. For example, if IKEA hadpersisted with the standardised approach of sourcing merchan-dise from Europe, Chinese customers would have been faced withuntenable market prices and out of stock situations. This suggeststhat the contribution of ‘back room’ functions and activities inretailing, which are perhaps taken for granted at home, ismagnified when trying to do business in more distant marketson a different continent.

Of all the retail marketing mix activities, intra-country and intra-continental differences appear to be the most magnified withrespect to communications both with and in the market. In general,communication appears to be the one area where some divergencefrom the standard approach is expected. Whilst the company’s viewof its market position is to be respected, and the message shouldreflect a similar theme (i.e. different from the norm), the way thatthis is expressed reflects and reacts to the local context andbehavioural norms in the host market. Also the tools used tocommunicate the message show some variation. The IKEA catalogueis not so sacrosanct in some markets as one might believe.

Finally, another consequence of doing business globally is theopportunities and challenges which arise from the organisationallearning experience, and the role of the length of time spent in themarket. Whilst in China the internationalisation challenge has beenabout introducing a business concept that is – at least in some parts –very different to what customers are used to, in Sweden and the UKthe different contextual situations have also impacted upon theapproach taken to these markets. Swedes have 50 years of experienceof IKEA, and the risk in this market is one of over-exposure – theconcept and activities become so familiar that they are perceived asboring, establishment, and even old-fashioned, if innovation is notmaintained. For a ‘standardised’ retailer continual innovation needs tosomehow be found from within the established business concept.British consumers have over 20 years of experience of IKEA, so thechallenge here is also to continue to be innovative whilst becomingmore and more part of the establishment.

From a theoretical retail standardisation and adaptation pointof view, the IKEA case shows that it is possible to operateinternationally through a fairly standardised concept in marketsthat are very different from that where the business conceptoriginated. However, the case also shows that there are limits toretail standardisation. In the IKEA case it is clear that someadaptation is needed to be true to the business concept. This alsosuggests that in future research it may be more beneficial to focuson whether or not a retail company is true to its business concept,rather than if it is using the same marketing strategies all over theworld (Burt and Mavrommatis, 2006). The challenge, therefore,becomes one of replicating the concept, rather than the activities,so the emphasis on standardisation switches to the businessconcept. It is the retail business concept that is exported and inorder for the concept to be the same all over the world, themarketing strategies sometimes need to be adapted to achieveconcept standardisation.

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