Table of ContentsIntroductionScopeLimitationsSegmentationMarket IdentificationMethods and theories used to determine segmentsMarketing MixConclusionIntroductionThis report is the supplementary report based on the initial report Australian furniture retail industry. Here the main focus will be on one of Australia's most distinguished companies - IKEA - which operates in the furniture retail sector. At the same time, the study will attempt to analyze the marketing mix of two specific segmentations that IKEA's marketing strategy emphasizes. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Scope This report talks about two market segmentations of IKEA and its current promotional strategy to these different target segments. Looking at both segments, this report focuses on seven Ps from sellers' perspective, such as product, price, placement, promotion, people, process and physical evidence. The data mentioned in this report was collected from some journal articles, IKEA's home website based on the two segments and relevant links on its website. In addition, secondary data such as textbooks and the annual report of the furniture retail industry were also used there. Limitations Limitations of the report were lack of experience in data collection, time constraints and the inability to book an interview with staff working in IKEA. The difficulty of obtaining current marketing strategies was also discussed. While preparing this report, it is assumed that the information collected on the subject is correct and the readers have the basic knowledge of marketing strategies. SegmentationMarket IdentificationEven as Kotler, Brown, Adam and Armstrong (2001, p. 10) explain that the market is a group of all actual and potential consumers of a product. The main product of the furniture retail industry is furniture and decoration. Customers buy furniture to decorate their work or living place and get a better environment. IKEA's market is all customers who need furniture. IKEA's business idea is to offer a wide range of well-designed and functional home furniture at prices so low that as many people as possible can afford them. This group of consumers constitutes the main market. They also create children's furniture. Due to its global organization, IKEA has an international market. IKEA tried a new segmentation called “Enjoy life, work IKEA”. This segment is based on business people who work in Australia. Ikea marketers divided the market based on whether people work from home or from an outside office. These workers are generally white-collar workers and belong to the middle class of society as a whole. Marketers believe that the key to making work fun lies in creating a better workspace, designed with freedom, flexibility and fun in mind (http://www.ikea.com.cn /english/range/enjoy.htm). . Therefore, IKEA marketers have segmented this type of workers into a particular group. According to Kotler, Brown, Adam and Armstrong (2001, p. 294), they segmented the consumer market by demographic segmentation. This consumer market was divided into groups based on occupation and income between twenty-five andfifty-five years old, men or women, married or not. Ikea uses income and socioeconomic status segmentation to target affluent consumers. On the other hand, IKEA marketers have also segmented the consumer market into a children's market called "Ikea for Kids". This group of target customers is completely different from the previous one. For IKEA, they believed that children were the most important people in the world. When parents decorate the house, children always have a certain expectation of their room. Therefore, children have the ability to tell their parents what type of room they like and what they want to buy for decorations (http://www.ikea.com.au). Therefore, IKEA marketers have segmented children as another particular group. According to Kotler et al. (2001, p 294), they segmented the consumer market by demographic segmentation. This consumer market has been divided into groups based on age and gender. Methods and Theories Used to Determine Segments Market segmentation is the first step in target marketing. It divides a market into several distinct groups of buyers with different needs, characteristics or behaviors (Kotler et al, 2001, p 293). IKEA focuses its customers on workers and children. These two segmentations are divided according to four theories such as geographic, demographic, psychographic and behavioral. Kotler et al (2001, p294) also describe demographic segmentation as “dividing the market into groups based on demographic variables”. It includes age, gender, family size, family life cycle, income, occupation, education, religion, race and nationality. These two segmentations both take into account age, family life cycle, income and profession. The first segmentation is divided according to family life cycle, income, occupation and education; the second focuses on age, gender and family life cycle. Additionally, psychographic segmentation refers to the method of dividing a market into different groups based on social class, lifestyle or personality characteristics (Kotler et al, 2001, p 297). People from the same geodemographic group can have very different psychographic profiles. Furthermore, the last segmentation method is behavioral. Kotler et al (2001, p 297) suggest "it involves dividing a market into groups based on consumers' knowledge of the product, their attitude towards it, how they use it and their responses ". These typically include purchase occasion, benefits sought, user status, usage rate, loyalty status, readiness stage, and attitude toward the product (Kotler et al , 2001, p 295). These two segments are both measured in terms of benefits sought and user status. Marketing MixAccording to McDonald and Tideman (1993, p 1), marketing mix is ​​the term used to describe the tools and techniques used to implement the marketing concept. When a company has decided on its overall competitive marketing strategy, it defines the marketing mix described as the 4 Ps (Kotler et al, 2001, p 69). However, McCarthy, Perreault and Quester (1998, p 42) have a more explicit explanation of the marketing mix, they suggest that it is a “set of controllable variables that the organization brings together to satisfy a target group”. A representative marketing mix involves a product, provided at a price, combining some promotion to inform potential customers and a means (a location) of meeting those customers (McCarthy, Perreault and Quester, 1998, p 42). However, in the marketing of services,Marketers consider three extensive elements. People seem to be the main advantage of the entire marketing mix because the entire marketing mix focuses on people such as customers, prospects, and even employees. Additionally, there are two other Ps for services marketing, such as processes and evidence. These two Ps emphasize the importance of people (McColl-Kennedy and Kiel, 2000, p 328). The marketing mix helps marketers reach their target customers. The seven Ps include product, price, promotion, place, people, process and physical evidence across the entire marketing mix. Additionally, people, processes and physical evidence are three specific elements of services marketing. McColl-Kennedy and Kiel (2000, p 45) explain a product as "a set of attributes (benefits) that a seller offers to the potential buyer to satisfy the buyer's needs or desires". This is the combination of goods and services (Kotler et al, 2001, p 69). Price is the amount of money customers must pay to obtain the benefit (product and service). products and the competitive atmosphere of the market. (Barnes, Meyer, McClelland, Wiesehofer and Worsam, 1997, p. 249) This is a very important question for both marketers and consumers (McCarthy, Perreault and Quester, 1998, p 46). Then, the third is promotion, that is to say the activities which communicate the value of the product and persuade target customers to buy it (Kotler et al, 2001, p. 69).Promotional activities can be grouped into advertising, personal selling, sales promotion and publicity (McColl-Kennedy and Kiel, 2000, p. 46). The fourth P is location described as “the marketing channel used and the physical delivery of the logistics of obtaining a product to market” by McColl-Kennedy and Kiel (2000, p 46). This includes goals, channel type, intermediaries, store locations, etc. (McCarthy, Perreault and Quester, 1998, p 44). “Placement involves the company's logistics and marketing activities related to the manufacturing and distribution of the finished product to target consumers” (Kotler et al, 2001, p 69). The extended marketing mix includes people, processes and physical evidence. They are used in marketing to consumers. It is defined by Kotler et al (2001, p 342) as “products purchased by end consumers for their personal consumption”. Due to the fact that the furniture retail industry belongs to the consumer market; these three Ps must be taken into consideration. Therefore, it focuses on staff, managers and all employees in the service sector. The first concerns people. As Barnes et al (1997, p 250) described: “The people involved in each transaction have a major role to play and can be a major force in the customer's decision-making processes. » The process was then defined as follows: “The process includes the actual procedures, mechanisms and activity flows used to carry out the service” (McColl-Kennedy and Kiel, 2000, p 328). This refers to the actual documentation involved in the purchase, the stages of negotiation, the simplicity or complexity of making it (Barnes, Meyer, McClelland, Wiesehofer, & Worsam, 1997, p 250). The last P is physical evidence which explained by McColl-Kennedy and Kiel (2000, p 328) as “The environment in which the service is provided and where the business and customer interact; and all tangible components associated with the service.” For example, brochures, reports, letterhead, business cards, installations and evencolors used in the decoration of the service area (McColl-Kennedy and Kiel, 2000, p 328). Products for “Work IKEA” include computer tables. , home office chairs, home office desks, organizational tools, storage boxes and task lamps. The computer table is designed to accommodate your computer monitor, processor, keyboard, mouse, printer and all your other workspace needs. All parts are in one unit and can fit perfectly in the corner. IKEA task chairs are height adjustable and have casters to best suit your workspace. Organization tools include a letter tray, pen holder, magnetic board and cable winder. IKEA storage boxes come in many sizes, materials and colors to meet your many storage needs. Label the outside of your boxes as a reminder of what people have stored inside. IKEA task lamps also add style and functionality to your workspace. As is known, the price charged by IKEA on the products is comparatively lower than other furniture retailers in Australia. The price is much lower than that of FREEDOM, its biggest competitor. Task chairs are priced between $100 and $300 and computer tables are priced between $100 and $500 (http://www.ikea.com.au). According to (IKEA catalog 2003), if the customer finds a lower price at another retailer within 30 days on an item purchased at IKEA, it will give them a refund along with a free meal at the IKEA restaurant. This allows customers to buy with confidence from IKEA and get the lowest price. During these years, IKEA has carried out many successful promotions among its target customers so that its business attracts more and more consumers. The best known is the IKEA catalog. Every year, IKEA will publish a catalog to local resistance fighters to present the latest new products in store. IKEA has also created its websites all over the world. People can know all the details of office furniture at home instead of going to the store. IKEA also advertises on television to promote the products. Place is about the marketing channel and distribution used to obtain the products. In Australia, IKEA has established its stores in Sydney, Melbourne, Brisbane and Perth. There are two stores in Melbourne. One is in Richmond, the other in Moorabbin. These two stores are very large and have just opened their doors. IKEA not only focuses on consumers, but also pays attention to its employees. Because well-trained staff can provide better service to customers. Therefore, they spent time on recruiting and training. When customers are satisfied with the services provided by IKEA, they will choose it again. The process refers to the set of procedures used to carry out the service (McColl-Kennedy and Kiel, 2000, p328). IKEA has a very convenient and quick process for consumers to meet their wants and needs. It is famous that IKEA uses the self-service method. People can find office furniture in a certain area and then go to the indoor market to get the products. After that, they can go to the checkout to pay for the goods. The IKEA store also offers home delivery if the customer cannot bring the goods themselves. Physical evidence consists of any tangible items such as brochures, fixtures and even colors used in the decoration of the service area associated with the service (McColl-Kennedy and Kiel, 2000, p328). By,.