. ECONOMIC
8. Analysis• Inflation and slow economy: 40% increase in expenses, less savingsevery year (Nielsen report)• High personal income tax andVAT: Up to 30% and up to 14.5%• Weak currency: 1 kronor = 8.5 rupees, 1 dollar = 54 rupees– Ikea often imports its products from global suppliers– Might have higher price points in India in order to make profits
9. • Indian consumers price sensitive (Research in Asia Pacific Journalof Marketing & Logistics)• Consumer spending: set to go up from $977 billion to $3.6trillion by 2020• Average household disposable income: to hit $6977 by 2025
10. Hurdle & Solution- High taxes, inflation and slow economy reduce disposable income- Indians consumers price sensitive and seek value for money- High taxes, inflation and slow economy reduce disposable income- Indians consumers price sensitive and seek value for moneyEmotion and Product Identity innovation: Ikea Live Design-Customers provide dimensions of living space, furniture specificationsand budget, come to the store on the day of their appointment-Ikea builds a mock-up of their living space in front of their eyes-Consumers feel special, know for sure what they’re getting-Service can be offered with deep discounts and bundling to add toconsumer’s value for money perceptionEmotion and Product Identity innovation: Ikea Live Design-Customers provide dimensions of living space, furniture specificationsand budget, come to the store on the day of their appointment-Ikea builds a mock-up of their living space in front of their eyes-Consumers feel special, know for sure what they’re getting-Service can be offered with deep discounts and bundling to add toconsumer’s value for money perception