WELCOME EVERYONE

A CASE STUDY
PRESENTED BY SOMALI DAS MADHURIMA DAS PRAJNA PATTNAYAK LIPIKA PADHY

SUBMITTED TOMISS POOJA PATTNAIK

CASE STUDY ON
HOW IKEA DESIGNS ITS SEXY PRICE TAGS

ORIGINThe origin of this IKEA is Sweden. DEVELOPERPia Eldin Lindstn

Dominates markets in about 32

countries. Also conquered North America. BATTLE PLANKeep making its offerings less expensive, without making them cheap.

ONE FACTOR ACCOUNTS FOR IKEAS SUCCESS Good quality at a low price. Sells household items at cheap rate but
not cheapo. Prices runs 30% to 50% below the competitions. Price of Pang chair has fallen from $149 in 2000 to $99 in 2001 to $79 today.

IKEAS CORPORATE MANTRA-

LOW PRICE WITH MEANING

IKEAS ONE OF THE PRODUCTTROF MUG

STORY OF THE MUG IKEA works from a co-workers bright

idea through to production and sales. Also tells about our demand and customers place on IKEA. Our requirements-function, modern design, environmental considerations and making sure products.

PICK A PRICEProduct developmentTeam behind each product Designers Product developers Purchasers get together to discuss design, materials and suitable suppliers. E.g. Purchasers use their contacts with suppliers all over the world via IKEA Trading Services Offices.

Development of Trof Mug Pia given the task of creating a new mug
over 5 years. Also told about its cost in the stores. The Trof mugs are incredibly low cost. Mug had a read knock-out price.

How to produce the right mug at right place?

Pia and her colleagues had take into account the following things Materials Colour Design E.g. If the mug is made on green, blue, or yellow or white as these pigments cost less than other shades, such as red.

CHOOSE A MANUFACTURERSuppliers and Purchasing Task of developing products never ends. Working with suppliers, the mug was shortened and the handle change so it stacks more efficiently, saving space for transport, warehousing and store display and not least, in the customers cupboards at home. IKEA is always keen to banish as much air as possible from its packaging.

Story about a Romanian Supplier Worked with IKEA for 15 years. Long-term relationships help both
parties to build up a huge fund of knowledge about demands and expectations. Products are developed in close cooperation with suppliers.

Introduction of code of conduct by IKEA Governing working condition. Environmental awareness among
suppliers. Healthy and safety conditions on the workplace. Forbids the use of child labour. This code is carried out by co-worker in IKEA Trading Services Offices.

Price Tags by IKEA Low price tags makes it crucial to the

vision IKEA of creating a better everyday life for many people. IKEA works non-stop to reduce cost. Low-cost mugs is an example of low environmental considerations can influence the development of products.

Characteristics of New Mug

Lighter in colour. Cuts costs. More environment friendly. Lead and cadmium free. Use of less pigment.

DESIGN THE PRODUCT Designer begins design process by

writing a brief. Explains the products price. Function. Materials to be used. Fabricators capabilities. Send its to IKEAs designers and freelancers. Refines promising designs. Designer wants products to be like Swiss Army knives-to get maximum functionality of minimum cost.

SHIP IT Distribution and logistics-lifeblood of IKEA Important pieces of the puzzle on their road
to a low price. Sends goods at right number to right stores at right time. Calculate the goods requirements and make sure about deliveries. About 2024 mugs are distributed all over the world from Romania by rail, road and sea. Transportation by IKEA also reduces environmental impact.

Concept of Flat Establishment of companys eureka moment in

1956. In case of chair taking more space: remove the legs. IKEA products have been designed to ship disassembled. Flat enough to be sipped into the cargo hatch of a station wagon. Safety tied down an autos roof rack. It lowers the shipping cost by maximizing the use of space inside shipping containers. Items assembled means transport volume will be 6 times of its original volume.

From design studio to warehousing, IKEAs employees mantraWe dont want to pay to ship air.

3 Times redesigning of IKEA Mugs-

To maximize the number of mugs that

can be stored on a pallet. A redesign-Added a rim such as in a flowerpot, where each pallet could hold 280 mugs. Another redesign-a shorter mug with a new handle, allowing 2024 mugs to squeeze onto pallet.

Mugs sales price-50% Shipping cost-reduced by 60%

When 25 million cubic metre of goods all

over the globe is taken, flat-pack frugality adds up. It shifted more of its buying from Europe to the far East. Shipping time. Costs have become an even more critical concern. Last year China tied Sweden atop IKEAs list of supplier countries.

Companys response by
Global network of distribution centers. Near container ports. Major truck. Rail routes.

18 distribution centers in the world Handle 70% of IKEAs total product line. 30% of IKEAs products travel directly from supplier to store.

SELL ITSells lot of expensive furniture by these processes Put a piece in a lush setting. Let the customer fall prey to visions of wealth and comfort. Offer plenty of easy credit.

Selling of Trof Mugs Mugs are packed on pallet. Transportation packaging is collected
from recycling. Price tags has been placed by the suppliers. Display is to be done in-store. Providing inspiration for smart interior solutions. Contribution of customers to low prices by selecting and collecting the products from the self-serve area.

 Taking them home. Enclosing instructions to assemble them.

IKEA produced catalogues about the products printed in 34 different language versions.

Scene of IKEA stores Scene of meticulously constructed virtual

Sweden. Company sponsoring child care facility. Swedish meatballs and lingonberries. Information kiosks provide advice on home dcor. Color-coordinated cards offer plenty of suggestions. Low-priced products that IKEA calls BTIs (breathtaking items) are often perched on risers, framed by huge yellow price tags.

IKEAs Point of View Biggest selling point-price tag. Blatantly manipulation layout. Having plenty of time to consider

purchases. Broadcast ethos for living in the modern world.

IKEAs Main Mantra for the Customers-

In New year it will be an even cheaper.

THANK YOU EVERYONE

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