Repositioning from high-end to working-class IKEA brand

On December 14th, at the "2006 China Top 10 Management Practices" forum sponsored by Global Sources, IKEA's "brand repositioning" was named "2006 China Top Ten Management Keywords". Experts pointed out that IKEA has entered the 8th year of the Chinese market and shifted its position from the high-end to the working-class, which has successfully achieved the reverse of the market's decline, and is worthy of study and discussion in the industry.

Brand positioning aims to determine an appropriate market position for a particular brand to attract target customers. “The market is not static and the positioning of the brand can not be done once and for all. Perhaps the initial positioning of a brand in the market is appropriate, but when the competitive brand is approaching or the market share is reduced, it must reposition itself to win the market.” Huadian Guo Yangdao, CEO of Tongtuo Performance Consultant Co., Ltd., explained that repositioning equals a new face for the company, but only in this way can it be separated from Other companies of the same type to be able to escape from the quagmire of homogenous competition.

Eight years ago, IKEA entered the Chinese market with a high-end fashion image. All along, IKEA seems to be the first choice for Petty families. However, with the gradual development and maturation of the Chinese home market, more and more foreign giants are rushing into China, and local home companies are rising, and consumers are quietly changing. In recent years, IKEA has reduced its sales of 1,000 kinds of goods sold in China, and the maximum decline rate has even reached 65%. At the same time, it has changed the “careful” shop-opening plan and increased the speed of expansion. It plans to open three new stores in the next year. The reason why IKEA has undergone such a big change is simply because IKEA has to change with the changes in the Chinese market. It is no longer a copy of its positioning in Europe, nor is it that those who want high style can no longer afford it. The young guys at the price stopped at Ikea outside the door. IKEA has repositioned its brand and locked its target customer base to a working class with a monthly income of more than 3,000 yuan. IKEA's recent "Beijing's lowest price" sign for the Beijing market is a good example of this brand's repositioning. It wants to tell consumers that the working class can also afford IKEA products, because the price here is "Beijing's lowest price" is so low that it cannot be lower.

Experts in the industry pointed out that it is not difficult to rebrand new positions and reposition them, but it is worth noting that brand repositioning is not only a panacea but also very expensive. Enterprises must consider their own affordability and whether they can demonstrate the company’s core values. . IKEA has been practicing in China for eight years and is very aware of the "rules of the game" that survives and develops in China. Not every company can afford to use it as IKEA does.