Ikea: the Buyer Decision Making Process Essay Example

com, 2008).

IKEA stores, certainly in the UK, are synonymous with check-out queues, traffic congestion and assembly problems (Watson-Smyth, 2000); most IKEA shoppers can report at least one bad experience at IKEA, and yet people head back to IKEA in droves when they need to replace their furniture. This essay will look at the way in which IKEA managed to attract new customers whilst ensuring repeat business through their use of the buyer decision making process. The buyer decision making process (BDMP) can be summarised as the basic five stages which a consumer goes through when purchasing a product or engaging a service (Schiffman & Kanuk, 2000).

The five basic stages of the BDMP are; problem recognition, information search, evaluation of alternatives, purchase decision and the post-purchase evaluation. Each stage of the BDMP is equally involved in the acquisition of a new product; however the fifth stage, post-purchase evaluation, holds influence on two levels. Firstly it is the evaluation of whether the product meets the needs of the consumer and whether they are satisfied with it; if not, it will likely be returned to the store.

Secondly, when a consumer reaches the purchase decision stage they will rely on past experience, i. e. prior post-purchase evaluations, if the brand or store pleased them in the past, they are more likely to repeat-purchase (Nagle, 1984). Initially, each stage of the BDMP will be looked at individually. The BDMP can only begin once a consumer perceives a difference between their actual state and their desired state, i. e. problem recognition, a need is created. From IKEA’s point of view it is problem ‘creation’, they must be able to make the

consumer want.

It might be thought that there is no point IKEA focusing on consumers recognised expressed needs, as consumers are already at the ‘information search’ stage of the BDMP. However, IKEA try to mould consumer’s basic needs by exposing them to product innovations in the hope that they can change a physiological need into a higher need, i. e. social or symbolic need. More importantly than recognised needs, in which consumers are already likely to consider IKEA for fulfilment, IKEA focus on a consumer’s latent needs.

These are the needs which consumers are not aware of or do not even exist with-in the consumer, however these latent needs are created or transformed in to recognised needs. All of IKEA’s products are innovative and often striking in design which clearly labels them as being IKEA, therefore they are easily recognised by consumers when seen in others homes and work places. This creates a social need, a need to be a part of the IKEA way of life. This need creation can become self-perpetuating as the consumption of IKEA products becomes a consumption purely for the need of classification.

By ensuring that their products are available for most social classes, IKEA make their products a status quo in most homes which again helps to perpetuate the social shopping motive of social groupings (Foxhall & Goldsmith, 1994). Another social shopping motive which IKEA take advantage of is the symbolic message which a product exudes. All of IKEA’s products are simple in their design with clean designs which makes them look more expensive than they really are. Therefore consumers buy IKEA products as a way of expressing to their peers that

they are successful and can afford such luxuries.

IKEA have reached a stage where they are a lifestyle brand, they have product sets which target markets from young, upwardly mobile people to families to couples of all ages. Through this lifestyle brand IKEA have extended their brand and their ethos into the homes and lives of their consumers, which make it easier to elicit latent needs (Helman & Chernatony, 1999). Product design and aesthetics has become a key area of competitive differentiation (Kotler & Alexander, 1984).

IKEA, taking note of this, re-design over 35% of their product range each year (IKEA. om), continually giving consumers something to hold their interest. Consumers are enticed by IKEA’s new products via displays in-store, their seasonal catalogue and the ‘new products’ section of their website. Once a consumer has a recognised need, they begin their information search. This is a stage of the BDMP which can be very lengthy or impulsively short dependent of the involvement factor of the product. Consumers do not participate in a search, confer a high level of attention to a product or actively search for information regarding a range of products (Schiffman & Kanuk, 2000).

A low involvement product, i. e. choosing a soft drink, requires an information search ranging only to the innate preference in flavour. However, a high involvement product, i. e. a bed or kitchen, necessitates most consumers to actively search for information regarding perceived value, quality guarantees, material used and peer reviews. In 2005, IKEA topped the UK customer satisfaction tables because they are better aware of their customer needs than other stores (Blackley, 2005), therefore IKEA come with high recommendation from most

consumers/peers.

IKEA ensure that when consumers are researching one of their products, all the information is easily available. In-store, in their catalogue and online all IKEA products come with measurements, materials, care instruction, guarantee length, size of flat-pack and any special requirements. In addition to these pragmatic concerns a consumer will inevitably be swayed by emotive factors, such as positive brand experiences. In 1998, Martin posed eleven factors which influence consumer choice on high involvement product; IKEA were already utilising several of these and have included more since 1998.

The first is the creation of a unique brand image which IKEA maintain through their pioneering ideas, i. e. allowing customers to sleep in some of their stores in order to properly test their beds (Fouche, 2007). The second factor is a brands nostalgic value, which is strong internationally and IKEA has been a name in the UK for over twenty years. Thirdly, IKEA reduce a consumers perceived price risk by guaranteeing their high involvement products, i. e. kitchens, beds and bathrooms, for twenty-five years. The fourth area which Martin (2005) identified was total quality management and conveying this to the consumer.

Conveying their quality to the consumer is something which IKEA excel at, in addition to their length guarantees on most products, they display their quality in their advertising. A recent advert for IKEA mattresses presented the audience with the ‘Doink’ test, a large robot which pummels IKEA mattresses to test the durability. The audience are then told that the mattress is guaranteed for twenty-five years and that they can take a mattress and try it at home for ninety days, returning it if they are not totally

satisfied.

Another factor which will influence consumers in their information search is a brand’s social visibility. This is the extent to which a brand name occurs in socially accessible areas, i. e. newspapers. Again, this is something at which IKEA are leaders, the opening of each new store attracts international media attention due to the frenzy created by their opening promotions. With twenty-three new store openings planned this year, IKEA are sure to keep their brand name socially accessible. The interactivity of a brand with a consumer is a key factor in building a relationship between the two parties.

IKEA’s system of flat-pack self assembly not only involves the consumer in the production process, giving them a sense of creativity, but also provides them with a sense of control which promotes better feeling towards the brand. The information search stage of the BDMP will likely involve consumers visiting a store; here IKEA help consumers to envisage the attainment of superordinate goals through their well laid out, luxurious and clean displays. Consumers are shown how buying into the IKEA brand can lead to a stylish and luxurious lifestyle.

The final factor, which Martin (2005) proposed, that IKEA utilise is sensory appeal. This, naturally, can only be utilised within their stores. IKEA use a mix of striking and soft products to create a homely feel to each of their small displays, consumers have to open their kitchen cupboards in order to purchase the cups which are nestled inside; thus forcing consumers to touch and feel their products. All aspects of IKEA’s products are testable in their stores, which satisfies Foxhall and Goldsmith’s hedonistic social shopping motives (1994).

The next stage of

the BDMP is the evaluation of alternatives, for a consumer looking to buy a settee this potentially includes all the settee manufacturers in the world. It is, of course narrowed down to the manufacturers which the consumer is aware of. A consumer will then discard brands in which they have little confidence, leaving them with a ‘consideration set’. At this point their prior information search will be used to compare the respective products on factors which are important to the consumer.

Consumers are then faced with their evoked set of choices, only a small number or products or brands remain, the consumer will now make a final choice. This final choice may be made on one factor, but is more likely to be a culmination of several factors, such as the ones laid out by Martin (2005). IKEA are well placed to be a brand which is included in the consumers evoked set and since IKEA can fulfil each of Foxhall and Goldsmith’s (1994) social shopping motives (physiological, social, symbolic, hedonistic and experiential needs), they are likely to be a final choice.

One reason why Ingvar Kamprad decided that all IKEA stores should be so large, was to get consumers to reach the evaluation of alternatives stage whilst inside the store, therefore the evaluation of alternatives would be purely IKEA products as opposed to other brands. The penultimate stage of the BDMP is the purchase decision stage. This stage has two main influences; peers and perceived risk. Laaksonen’s (1994, cited in Smith, 2007) involvement theory postulates the cognitive view that consumers may be worried about how their peers will judge a certain purchase.

This is one of the

main reasons why peer evaluation is a main influence in the BDMP. IKEA are fairly guarded against a negative peer response as most of its consumers’ peers will be IKEA patrons themselves, for example “…it has been estimated that 1 in 10 Europeans are conceived in an IKEA bed. ” (Rohrer, 2005, p. 1). Therefore, peer influence towards IKEA should be positive in the purchase decision stage. The main influence is that of perceived risk, which can be divided in to at least six sections, and includes peer evaluation; financial, performance, physical, social, psychological and time.

Financial risk is worry associated with not getting the best value for money. IKEA product however are reduced in price year by year due to huge economies of scale; the only area of IKEA’s business which prevents them opening stores at break-neck speeds is the inability to produce in even bigger quantities (Capell, 2005). The perceived performance risk is the possibility that the product will not be fit for its purpose or it will not be durable. As previously mentioned, all high involvement products from IKEA come with long guarantee periods and some with trial periods.

This displays to the consumer that IKEA have confidence in the quality of their products, which in turn gives the consumer confidence in the products. The physical risk is something which is far less prevalent in the today’s society, it is the possibility that a product might injure a consumer. With current safety laws there is a low possibility of this being an issue and is unlikely to play on the mind of many consumers. The perceived social risk is whether peers and family will

be impressed or accepting of the purchase, as mentioned before IKEA are guarded against a negative response from peers.

The psychological risk is that of the consumer’s ego, will they feel good about the product and will it please them. Firstly, all IKEA products have an eclectic feel to them, so they are likely to fit in to anyone’s home, style wise. Secondly these products usually have a unique or innovative feature which competitive products often lack, so they provide the consumer with a novel pleasure. The final section of perceived risk is one which IKEA may face some problems, time. IKEA are synonymous with queues, however IKEA have managed to turn this worry of time into somewhat of an advantage.

Instead of IKEA being a time consuming chore, it becomes more of a recreational activity. Tauber (1972) proposed that shopping can be a diversion, a recreational activity and even entertainment. Therefore IKEA have introduced areas to make their stores less boring. Stores have things such as a restaurant serving authentic Scandinavian food, a nursery for small children, areas where children can test/play with IKEA garden games, a gift shop, fish tanks, a hostel offering a bridal suite and other ideas specific to country and store.

In addition to these main influences there are other concerns which, whilst not being insurmountable to many people, are considered important by most; environmental and human factors. IKEA have a strong code of conduct which includes these factors. For example, all IKEA stores use energy saving light bulbs and customers can bring their old ones to stores to be recycled; instead of discarding scraps of wood, IKEA challenges its designers to create

a product out of it. They are also humane, ensuring that all their workers and those employed by their suppliers have fair conditions and fair pay.

These factors mean that consumers need not feel guilty about exploiting the environment or fellow human beings when purchasing from IKEA. The final area of the BDMP occurs after the purchase has been completed; post-purchase evaluation (PPE). This stage is concerned with the products performance in comparison to the consumer’s expectations. There are three possible outcomes from the PPE; performance matches expectations and the consumer is content, the performance exceeds expectations leading to positive disconfirmation of expectations, i. . satisfaction; the third possible outcome is that the product falls below the consumer’s expectations which leads to negative disconfirmation of expectations causing dissatisfaction (Peyton, Pitts & Kamery, 2003).

Once a consumer has made their decision they will actively try to avoid cognitive dissonance by rationalising their purchase or seeking out others who have the same product or brand. A positive side-effect of IKEA’s popularity is that there are many owners of their products.

Therefore a consumer is likely to be reassured by their peers that they have made a wise purchase, thus avoiding cognitive dissonance. Whilst studies have shown that reduction in cognitive dissonance does not equate to consumer retention, it does strengthen the consumer’s opinion of the brand; and brand opinion is a much stronger force in consumer retention (Schiffman & Kanuk, 2000). Therefore it behoves IKEA to try and allay cognitive dissonance, the ways in which they do this have been mentioned i. e. their guarantees and trial periods.

For product which offer a trial period, such as mattresses, cognitive dissonance has

usually been dealt with, as consumers would return the product if it did not meet or exceed their expectations. The 2005 customer satisfaction survey, in which IKEA came top (Blackley, 2005), took in to account after sales service and post-purchase satisfaction suggesting that IKEA do manage to allay the majority of consumers cognitive dissonance. IKEA have become a global cult brand through their innovation, dedication to consumers and constant striving to ever lower prices.

They utilise every aspect of the BDMP, some areas are directly affect by them, such as purchase decision, and other areas are a happy side-effect of their immense popularity, such as avoiding cognitive dissonance. Their success comes from micro-management of each stage a buyer goes through and once IKEA have a buyer in their store it is likely that they will be able to entice the consumer with something, even if it is only a Svepa at 1. 49 (IKEA. com, 2008).