Month: November 2013

Have you ever got lost in IKEA stores?

My answer is yes. I was confused why I got lost almost every time when I was a kid, but I enjoyed get lost in different types of model home. Now, I know that is exactly what the owner expected.

IKEA stores designed as a maze in order to make the consumers stay in the store as long as they can. The reason for that is disorientated customer feels compelled to pick up a few extra impulse purchases. If the consumer doesn’t want to get lost, they should follow the path guide. However, if you look at the path guide, it will lead you through almost every sales areas before meet the casher. A majority of consumers will be attracted by the cheap and fashionable products during the path and buy something they don’t expected before.  That is the strategy, which IKEA uses to create 60% impulsivity consumption.

However, does this smart strategy – make your store a maze works for other types of store? Imagine that if a convenience store designed as a maze, what will happen? Most likely drives customers crazy. Nevertheless, nobody can deny that this strategy perfectly works for IKEA because its feature.

By thinking of the consumer behavior, people go to IKEA buying stuff for their home; therefore, they would like to stay for long time in the store and easily make unconscious purchasing. But when people go to a convenience store, they usually have clear list on their mind and want to get them as soon as possible.

Sometime a “good” business strategy not always good, it depends on the combined work  between many part in the market, such as target consumers and the feature of the store.

The company that our group investigated is Starbucks Inc.  

During the group project, I have the chance to better understand the world largest coffee company. We concluded several factors that make Starbucks succeed. In this case, I was really inspired by the power of culture. When I do the marketing research, I found an interesting thing that the cost that Starbucks spent on advertising is zero. They don’t spend money on advertising. Even through, when we see the signature green on the street, we know it is Starbucks. The indirect marketing strategy that locates its stores on every street corner servers them “free” advertising. The competition in coffee market has always been intense, especially in North America.

However, Starbucks not only successes in North America which has coffee-loving culture; they also got a great success opening the market in Asian. For example, in some Asian countries; as we all know, people in China and Japan has tea-drinking culture. Then how Starbucks gains the favor of customers in those countries?

I think the most important factor is the culture. People choose Starbucks not because they serve the best coffee in the world. People are not go to Starbucks to consume a cup of drink, what they really like is the Starbucks’s culture, the unique style and environment in their store. Starbucks is selling and spreading their culture to young adults, a lifestyle.  When Starbucks enter a new country, such as china, they made few change for Chinese customers, they made special drinks, which only served in the country. In this way they show the respect to different culture while transmit their concept.

In this case, I’ve learnt that if a company want to be succeed worldwide, how to suit different culture is always the key issue to be solve, which makes marketing research very important.

In today’s class, we talked about innovation and value, which draws mine attention to the success in iPhone.

Although apple already had strong brand name in computer market before IPhone launched, it is still a miracle in IPhone’s unprecedented success.

A market as competitive as mobile phone is always difficult to get into. Before iPhone launched, some mobile phone producers, such as Nokia, Motorola has already had great success in mobile phone market. They have large group of loyal consumers, strong brand name.

As I see, the key point of IPhone to be succeed in the market is that apple changed the competition rules in mobile phone market. In other word, they were opening a new market, which is different from people’s impression of mobile phone. They redefined the function of mobile phone, and bring this mini computer in your hand.

IPhone is always expensive compared to other mobile phone. However, look the people around, almost everyone has an IPhone. How could this be? Is that when people saw IPhone suddenly become non-price sensitive?  I asked some of my friends about this issue. When I asked them “do you think IPhone is expensive?” almost everyone answers yes. Then, I asked “so why don’t you buy blackberry or Nokia?” They told me they like the system; they get used to use apple products and so on.

From my analysis based on the success of IPhone, I found 2 factors to be succeeded. First, the success belongs to the one who rule the market. Secondly, lower price not always win. Consumers don’t like cheap stuff, they just want the feeling of worth to pay. That’s why even iPhone set such a high price; people still want to get one. That is because the joy that iPhone brings to its customers makes them feel worth to that price.