Global Marketing: An Analysis Of Ikea And Ashley Furniture Industries’ Marketing Activities

3490 words - 14 pages

For most ambitious companies in today's complex business environment, gaining competitive advantage and achieving expansion in capacity often requires internationalising operations and entering new markets with the goal of building a broader and more diversified customer base. However, internationalisation typically presents the problem of how to establish the company’s business or brand in a foreign market, considering the cultural and contextual differences in global markets (De Mooij, 1998). Due to the spread of globalisation and the convergence of markets and economies, it has been increasingly acknowledged that a broad range of products and services can potentially have a global appeal and generate considerable revenues across the world. As long as the marketing activities designed to promote products and services are tailored to suit respective markets in line with the prevailing cultural and environmental realities, there is every possibility of achieving commercial success (Kandampully and Duddy, 1999). Accordingly, global marketing requires a flexible framework or structure that enables companies to respond dynamically to observed differences in the respective markets in which they do business (Philip et al., 1994). This makes it possible to organize, plan, and control global marketing activities effectively and efficiently (Keegan, 1989). This report therefore focuses on the marketing activities of the furniture market, specifically on two leading international furniture manufacturing and retailing companies: IKEA and Ashley Furniture Industries, with a view to establishing the kinds of marketing activities they have adopted to establish their presence in specific countries.

IKEA in Russia
As the largest furniture retailer in the world with extensive operations in several markets across the world (Armitstead, 2010), IKEA's entry into the Russian furniture market was in line with its sustained global expansion driven by strong product development and differentiation, attention to operational detail, and emphasis on consistent cost control (Thomas White, 2011). In spite of the relative strengths that IKEA have accumulated with its long history of international retail business, it is widely argued that internationalization of retailers is a decidedly challenging and complex proposition. This is because, in contrast with, for instance, manufacturing, international retailers often do not have the benefit of using a traditional export strategy because they need to develop and manage several stores located in their new markets (Dawson, 1994). For IKEA therefore, it was imperative to devise knowledgeable strategies that would not only ensure efficient development and management of its stores in Russia, but also effective marketing activities that would give it competitive advantage in the tough Russian market. Consequently, the company found it necessary to adapt its promotion and communication strategies for Russia in order to present its...

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