The Case of Ikea

IKEA
How do IKEA generate customer loyalty?
Firstly, IKEA has been very good at forming strong bonds with customers by creating and delivering superior products, services and experiences. In particularly, IKEA understands that their customers value designs and costs the most so the company strongly focuses on cutting costs and passing savings to customers using various tactics (e.g: having many suppliers, choose inexpensive location to build store…). Moreover, according to Kotler, there are three types of marketing activities companies are using to improve loyalty and retention: interacting with customers, developing loyalty programs, and creating institutional ties. IKEA definitely has been exploited the first type of activities effectively. By observing the customers preferences, listening to customers’ feedback, IKEA was able to cater to each individual market’s taste (e.g: make bigger glasses for the U.S. market). IKEA also organized events that allow interaction with customers and raise brand equity such as the “Ambassador of Kul” in Swedish. Furthermore, the company sets up a loyalty program where loyal customers would be benefited by promotions and exclusive offers. There tactics have allowed IKEA to generate customer loyalty effectively which contributes hugely to their success.
What affects customer behaviour?
To understand the influences on customer behaviour, companies need to know the study of consumer behaviour which is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. In particular, according to Kotler, a consumer’s buying behavior is influenced by cultural, social, and personal factors. Take the cultural factor for example, to understand how culture influences customers, marketers must closely attend to cultural values in every country to understand how to best market their existing products and find opportunities for new products. For...