IKEA's market entry strategy and consumer appeal in Bangkok, Thailand

IKEA Entry Into Thailand

As stated before, the objectives of this research are to critically understand how IKEA can differentiate in an effective way from other major home furnishing retail competitors in Bangkok. Also, the prominent style offering to consumer specific to Ikea, like the flat package and "DIY," could they be applied to Bangkok's consumer? Are the concepts going to influence positive or hamper the local Bangkok consumer decision of purchase? Another aim is to evaluate the potential success of a first Ikea store in Bangkok, Thailand.

For the aims of this paper, the appropriate method of research to use is qualitative research. This is due to the fact that qualitative researches try to obtain deeper understanding of behavior of human and the reasons behind their behavior. Qualitative method of research aim is to understand the why and how of how decisions are make. This is why, most of time, small samples of subjects, researched in a focused manner, are often more efficient than large samples of subjects such as the ones used in quantitative research (Denzin and Lincoln, 2005: 35).

This first results of the research can be later verified with the help of a quantitative research on big population of subjects, that can be possible clients of Ikea, with aim to understand better the behavior related to Ikea, and if they will like to buy products from Ikea, with DIY and flat pack. Because DIY and flat pack is a new concept on Thai market and Thai population can have different views on this kind of approach from a furniture provider, due to their lack of experience with such concepts.

Data Collection Method

The form of data collection and information gathering that will be used for this study will be semi-structured interviews with key informants of the Thai furniture industry.

This technique of research is used in order to gather qualitative data by allowing the respondents the time and the scope to discuss about their personal opinions on a certain subject. The focus of the interview is decided by the person who does the research on areas that he is interested in exploring (Valentine, 1997: 120)

The final objective is to understand the point-of-view of the respondents and not to generalize about behaviors.

The interview is constructed mainly by open-ended questions that are some suggested by researchers and part of them will appear naturally during the interview (McCracken, 1988: 25). This is why is stated that semi-structured interviews represent a method of research that is flexible and allows new questions to be enter in the time of the interview depending on what the interviewee says. As a consequence, the interviewer only needs to have a general framework for the subjects it plans to explore during the interviews.

While in the interview, the author has already a guide for the interview prepared, with questions grouped on the topics that the interviewer can approach in different ways for different participants (Lindlof and Taylor, 2002: 195). This helps in the interview because it does not constrains participants to a certain format, and lets interviewer adapt to every situation that can appear in the time of the interview and with every interviewee.

The wording of the interview questions will not need to be the same for all the respondents.

Data obtained will be categorized and organized by of responses and opinions, which give information about how the industry works in Thailand, what is important for the customer in the country, whether Ikea's method of differentiation is good, and so on and so forth.

Subjects

The subjects for the research will be persons who specialize in the retail sector or home furniture industry in Bangkok. Each of these persons will answer to a semi-structured interview for 40 minutes up to 1 hour.

In our case, the interview will count on the answers of a General Manager in Marketing Communication & Public Relations with a 13 years of experience in decorative items, 5 for furniture and decorative products; a General Manager of Customer Relationship Management with experience in architecture, decorations and styling and a major in Interior Design; a General Manager of Marketing Communication with vast experience in interior decoration design and furniture; a Project Manager with 6 years experience in the built-in furniture and professional interior design; a Sales and Marketing Assistant with more than 10 years experience in working with clients and adapting to their different lifestyles,

The questions to be asked regard the possible success of IKEA after deciding to open its store in Bangkok. This will include questions on how IKEA as a global brand can adapt its strategies to become a market leader in Bangkok, Thailand. Hence, how IKEA can compete with existing competitors such as S.B. Furniture and Index Living Mall.

Considering the specialization and long and relevant experience that interviewees have, author aims at better understanding the chances of Ikea on the Thai market by making use of their knowledge of the local market, the behavior, the culture, and the elements with high value for the Thai consumers.

Asking the specialists about the market they know very well is a method of indirect finding what is important for the target population for Ikea, and what should Ikea do to enter with success on the Thailand market of furniture.

Limitations

Any research has its inherent and specific limitations. For this study, the following limitations have been identified:

Due to the limited time and resources allocated for it, the author could not sustain additional quantitative research with possible clients of Ikea, S.B. Furniture and Index Living Mall. Nevertheless, the interviews with the retail sector or home industry specialists try to cover as many interesting and relevant elements possible.

The Thai market does not already have a "flat package" and DIY furniture provider, and thus a certain pattern of customer behavior could not be identified. Thus, answers to related questions were mainly suppositions of interviewees, based on their vast experience with the Thai market and consumer behavior.

Ethical Considerations and Plagiarism

Both the paper and the development of the qualitative research as base for the data analysis and conclusion and recommendation respect ethical principles and follow anti-plagiarism guide.

All information sources are cited, according to the author's best knowledge, and specialist interviewees were chosen not to have any personal interest in the Ikea or S.B. Furniture or Index Living Mall and in consequence with no wish to state answers that are not true and do not represent the reality of the Thai furniture market.

They are informed about what the research's aim and objectives are and how their knowledge is of high importance for the result of the paper.

If during the interviews there appear elements that the specialists wish to remain "off-the-record," the author will respond to their desire, and only publish what was meant to be public information.

Also, the questions included in research and the methods to obtain answers do not enter the area of "industrial espionage," as they do not ask for confidential information about any of the furniture companies, but only require information that it publicly available in newspapers or at hand for furniture specialists or organizations.

Reliability and Validity of Research

Because of the specifics of the Qualitative Research with Semi-Structured Interviews, as describe in the Data Collection Method sub-chapter, it is normal to have an average rate for the reliability of this method, because such focused / semi-structured interviews are very difficult to repeat in the exact, as many of the questions will come naturally during the interview and are not pre-determined.

This method is similar to a conversation, and conversations are not exactly the same and they depend on the participating people. Different people can respond to the same question in different way, depends in how they feel, what is their experience about the subject of the conversation, what is the relation with the interviewer, so on and so forth.

As "content analysis can be fruitfully employed to examine virtually any type of communication," (Abrahamson, 1983: 286), rigorous analysis of the content will try to reduce any issues in reliability.

On the other hand, when we consider the validity (or credibility, or dependability) of this qualitative research, the validity of this method with semi-structured interviews is higher than of other methods, because of the use of open-ended questions that allow the respondents to freely speak about issues and elements of discussions with no constraints in their responses. This allows the interviewee to put questions aiming at finding out the truthful opinion of the subjects, without needing to follow a special structure.

The Data Analysis

Of the information obtained from the interviews with the subjects, interpretative techniques will be used for obtaining the final recommendations and conclusions. That is, the data obtained will be examined and interpreted by forming an impression and structuring it. The answers for similar questions will be added and compared, in order to observe what is similar and what is different in the opinions of the specialists (Taylor and Bogdan, 1998: 225)

Most important elements in forming such impressions and analysis will be the level of knowledge of the Thai industry of furniture that the subjects demonstrate. If two subjects will state different or contrary answers to a similar question, more importance will be given to the person that appear to have better knowledge about the industry, and which has known the market for a longer period. Nevertheless, these situations are not expected to appear, because the subjects have been carefully selected due to their experience with the industry and consumers in Thailand, and are recommended professionals in the industry.

There are also open-ended questions in the interviews that will most probable not be possible to compare or contrast between them, and these will be stated as they are recommended by subjects.

References:

1. Abrahamson, M. (1983). Social research methods. Prentice-Hall. New York

2. Denzin, Norman K. And Lincoln, Yvonna S. (Eds.). (2005). The Sage Handbook of Qualitative Research (3rd ed.), Sage Publications, Thousand Oaks, CA

3. Lindlof, T.R., & Taylor, B. C, (2002). Qualitative Communication Research Methods (second ed), Sage Publications, Thousand Oaks, CA

4. McCracken, G. 1988. The Long Interview. Qualitative Research Methods Series No. 13. Sage Publications, London

5. Taylor, S.J., Bogdan, R.(1998), Introduction to Qualitative Research Methods, Wiley, New York

6. Valentine, G. (1997). Tell me about...:using interviews as a research methodology. In Flowerdew, R. & Martin, D. (eds) Methods in Human Geography - a guide for students doing a research project. Longman, Essex.

Chapter 4: Data Analysis

The purpose of this chapter is to analyze in a structured manner the answers obtained during the five semi-structured interviews, in order to see what are the options, advantages and challenges that will need to be taken into account by Ikea when entering the Thai market.

The result of this Data Analysis chapter will constitute the base for the next chapter, Conclusions and Recommendations.

In order to make it easier to differentiate between the five respondents, a short analysis of their know-how regarding the Thai furniture market and its consumers will be offered. This analysis will serve in helping decide the relevance given to their answers, in case of opposing opinions on similar issues.

Respondent analysis

Even though most of the interviewees hold important positions within companies (General Managers), and some are at lower hierarchical levels, such as Project Manager or Assistant, nevertheless, the differentiation between them will not be made entirely on their level of seniority within their companies, but also on the level of know-how they demonstrate, the completeness of their information regarding Thai customer preferences and behavior.

Respondent 1:

31 years old, and a Project Manager with the company he works with, has a 6 years experience with the furniture industry, mainly with his current job, where he works with customers who want built-in furniture and professional interior design. He has some valuable insights about the industry, consumer needs and the do's and don'ts of a furniture provider in Thailand (e.g. -- he mentions the importance of having furniture built only from hard wood due to the high humidity of the atmosphere in the country, which is a threat for Ikea, as it has many products made of soft woods such as pine wood). Nevertheless, he is not one of the respondents ready to offer many valuable ideas for Ikea's differentiation strategies.

Respondent 2:

33 years old, and General Manager with the company he works with, has about 20 years of experience with the Thai furniture market and gives complete and well informed answers. He sees rather clearly the points of success and possible weaknesses of Ikea, elements that need to be adjusted in order to make in on the market, but also perceives the uniqueness of Ikea's proposition to the market and the chances for it to have a success story in Thailand.

Respondent 3:

33 years old, and General Manager with the company he works with. Besides his youth passion for architecture, he majored in Interior Design and worked in the field of furniture and interior decorations for over 5 years, then took his Master degree in the U.S.A. In Marketing Communication. Currently is working in Customer Relationship Management, thus having as his main activity building strong relationships with customers and stakeholders. For this reasons, he might prove to have well informed opinions regarding the Thai customer's preferences, behaviors and needs.

Respondent 4:

33 years old, and General Manager with the company he works with, has 18 years of experience with the Thai furniture market. Even if his answers tend to be shorter and more direct, his opinions are well informed and objective. He offers input on how Ikea's weaknesses compared with the other players on the market could be adjusted, and also, how its strengths should be build on in order to succeed on the market.

Respondent 5:

31 years old, with a previous experience as a Brand Manager but currently occupying the position of Sales and Marketing Assistant, has more than 10 years of experience in learning about the differences in customers' lifestyle, both on the Thai and British markets. She is working in Thailand for about 2 years and a half and brings in the ideas of additional market for Ikea in the expats living in Bangkok, as well as the need for the global player to improve the length of shelf life of its products in order to better penetrate the Thai market.

Data analysis

In order to better analyze the information obtained from the five semi-structured interviews, and perceive the answers in their context, the analysis will use the same grouping of the questions, on their topics of interest, as it was presented in the Research and Methodology chapter.

The first section's responses were already successfully used in order to deliver the short analysis of our respondents' profiles above. These questions aimed at finding out more about the interviewee, about their background with the industry and their experience with the industry of furniture in Thailand. (Questions: "Could you please tell me your name and age?"; "Which company are you working with and what is your position and responsibilities?"; "how long have you been experiencing with furniture industry in Thailand?").

The next set of questions refers to the way the interviewees perceive the furniture industry in Thailand, the level of its competitiveness, its trends and the behavior of customers in relation to furniture purchase.

All respondents agree that the market is very competitive, with many local firms such as Index, SB Furniture, HomePro, and Homework brands offering products for customers looking for home improvements, furniture and decoration, as well as a strong player for construction materials: Boontavorn Cementhai Homemarts. There are many furniture fairs during the year (about 10), and they represent a good opportunity for Ikea to launch its products and build awareness.

Respondent 3 mentions also the existence of an opportunity for Ikea due to its unique style and strong position on the global market.

Respondent 5 states that huge amounts of money are put in advertising by the expanding stores, who also make use of celebrities to persuade customers to become their clients, and then to keep them through loyalty programs and improvements in operations and services to meet their satisfaction expectations.

When it comes to the trends noted on the furniture market, all respondents agree that simplicity is important for the customer, as well as the modern style, with monotones or contrasts (in some opinions), but also colorful and "alive" (in other respondent's opinion). Easy care for the products is also a trend in the market.

Regarding the purchasing behavior of Thai consumers when it concerns furniture, there are some differing opinions:

Respondent 1 is very certain that medium-income consumers (Ikea's target) will go for the cheapest products with the best options for them, after assessing the size of the company and the after service offered. Also, he believes that consumers will not buy furniture frequently, and only when is a real necessity. For this reason, a possible positioning of Ikea in order to appeal to these clients could be that of provider of good quality furniture for long time usage. A response in these lines is also offered by Respondent 5, who mentions the fact that due to the recession of the global economy, people started to ask for value for money. This does not nevertheless implies similarity with Respondent's 1 answer of just "price," as "value for money" can signify a bit more expensive products but with more quality and better services, as it is also stated by the respondent: "customers prefer to spend a reasonable price, not too expensive, and the shelf life must be longer." With more expensive products, the expectations for high service standard will also increase exponentially, and this is why Ikea, who aims at reducing the additional services, should take care when defining its pricing strategy.

Respondents 2 and 4 opinions on the consumer trends in furniture purchase differ quite a lot from respondent 3 answers. If the first two see the trend introduced by Index with promotions of furniture sets for good price, thus inducing the behavior of buying combinations sets and not buying the furniture piece by piece (thus reducing time of search, effort of finding the right pieces of furniture, and also reducing costs), Respondent 3 states that there is a trend of Thai people having fun to design and decorate their home more than before, more willing to buy new furniture just to change the mood in their house, purchasing a lot based on style and price, with not so much concern for the brand anymore. For them, buying furniture is not such a big deal as it used to be before, or as it continues for the more traditionalist customers. These customers have more fun by buying furniture and moving it around their houses.

Of course, these answers present two different types of customers, and the latter type is the one that would be easily attracted by Ikea's products. As all three respondents have important backgrounds with the furniture industry, their answers need to be assessed with care, as it is very probable that they describe indeed very different customer behaviors, but both of them very real and existent on the market. It would have been important for us to know the size of each of these customer segments, in order to know the efforts needed to be made in order to gain new customers. That is because, if Ikea wishes to attract also the type of customers described by Respondents 2 and 4, it will need to put enough effort in educating them and making them see the fun part and the benefits of the liberty in choosing each individual piece of furniture.

The following set of questions tackles the way Ikea's products are different from its main competitors' ones. This request for comparison and differentiation is further developed for the specific of Ikea's way of business when compared to Thai customer behavior and preferences. The concepts of flat packs, customer self transportation of furniture and its DIY installment in their homes when offered better prices than the competitors, are also tested. Solutions are asked for the situation when such business models are deemed not to be working on the Thai market and the need for adaptation shall appear. (Questions that tackle these elements are: "What is your opinion on how can Ikea differentiate itself from its major competitors: SB Furniture and Index Living Mall on the Bangkok market?"; "Do you think Thai people's mind will be open to internationalism and thus follow Ikea's global concept? Or should Ikea adapt to meet with local preferences and characteristics of purchasing decision?"; or "There is so much available information leading to the idea that middle class in Thailand likes to buy built-in furniture rather than DIY and install by themselves at home. Do you think DIY concept will work with Bangkok's customers?," or "If the flat packs design prove to become trouble for Thai consumers to install by themselves, how could Ikea deal with such problems?")

For this set of questions, Respondent 1 does not give a large amount of ideas, but nevertheless raises some very good points to be taken into account: Ikea's main competitors, SB Furniture and Index Living Mall are everywhere in Bangkok, while Ikea plans to open its independent store far from the city centre, where not so many people go shopping, as the location is to far and customers will not go the distance unless they are convinced they will find something special, worth buying (meaning a great effort for Ikea to convince customers about the value they will find there).

While Ikea's range of product is in Respondent 1's opinion is not so different from its competitor, Ikea also has the disadvantage of using pine wood for part of its furniture, which is a soft wood and not recommendable for the high humidity of Thailand, where hard woods such as plywood are recommended. This is a threat that indeed can be important, and should be verified and addressed with care by Ikea.

On the concept of DIY, Respondent 1 shares most of other Respondents opinion, that DIY is still a new concept that might successfully address only a (small?) segment of the Thai consumer population. Most of the Respondents (Respondents 1, 2, and 4) agree that for small and simple furniture pieces, the DIY concept could apply, but not for more complex ones, such as beds or cupboards. While only a part of the customers will be able to see in the concepts of flat pack and DIY a chance for having fun with the family, most of them are presented as needing help in installing their furniture and preferring this kind of services to be provided by the furniture retailer. Thus, if Ikea will not offer them, they will not consider becoming Ikea's customers.

Even with certain price discounts vs. The other two players, Respondent 1 does not seem to give many chances of success to the self-transportation, flat pack and DIY practices of Ikea, due to high additional costs to be supported by the clients (oil price, risks of not assembling correctly the furniture. Respondents 2 and 4 nevertheless, see this option valid for discounts around 20-30%.

The solution offered by Respondent 1 is that "Ikea has to deliver and assemble," and can charge extra for these services.

Respondents 2 and 4 bring several ideas useful to be taken into account for Ikea's differentiation strategy, such as the fact that Ikea should take advantage of the type of products it offers, and position itself as the provider that lets the customer "build their own room in their own style," as a differentiator from the practices of Index and SB Furniture who try to sell their furniture to customers in pre-defined sets, thus reducing the individuality and diversity of choices. Thus, Ikea could have a grip on inventive, free-minded customers, who like to be different.

Additionally, one important differentiator of Ikea, seen also by Respondent 5, is the diversity of their products and the fact that they receive new items every month, while their competitors only renew their design offering at every 4 months only.

The good perception of Ikea's prices within the Thai population should also represent another strong point of differentiation for Ikea.

Nevertheless, the need for Ikea to adapt part of its practices to the local customs appears here also (and so does in Respondent's 5 opinion), especially due to the fact that DIY is considered a valid option mainly for the new generation, but not so much for the other customers, who will search for after sale service for delivery and assembling of the furniture.

Respondent 3 comes with somewhat different opinions: it considers Ikea's products simpler and long lasting, which is a trendy element and will remain so, and sees Ikea's main differentiator as being more fun and trendy. It also brings in front the importance of Ikea designing some products specific for the Thai market.

The idea of DIY does not seem so inapplicable to the Thai market, as long as it will come with lower prices that the other firms. Nevertheless, let's remember that this respondent is the one who sustained its Master in the U.S.A. And tends to focus more on the "new generation of furniture consumers," to call it so, who enjoy decorating their homes, choosing each piece of furniture by themselves, being more independent and free-minded. Thus, it must be kept in mind that, given the fact that the other 4 respondents do not perceive this kind of customers as being very large (as they do not speak that much about it) it might be safer to consider such type of customer as the ones that set the new trends, that like to try new things, but that most probably are not yet a very large segment.

Nevertheless, also this Respondent sees the need for Ikea to adapt and offer delivery, installation and even exchange services. It does, nevertheless, not recommend to have a return policy, because it is widely used in Thailand. Analyzing this last proposal, even if such a policy is common in Thailand, if Ikea would decide not to have it, it would most probably loose credibility and trust of its possible clients.

What Respondent 5 brings new to the image, is the differentiation of Ikea due to the trendy and diverse products and the need for Ikea to research the Thai market in order to decide on the product ranges to be offered; also, the need for Ikea to educate customers on the advantages of DIY; the importance of a new group of customers: expats, who are accustomed to Ikea. One important suggestion Respondent 5 offers is the need for Ikea to make sure that the main categories of products for the Thai market will be reasonable in pricing, as the image it has over Ikea's products is that they do not last for long time.

On the remaining questions of target population for Ikea in Bangkok and the level of awareness of Ikea with the Thai population and how can this be increased, as well as the opportunity and timing of Ikea's entrance on the local market, most of the respondents agree: target population is about 25-45 years old, both male and female, with high education, mid-high income, and modern lifestyle, who's numbers are evolving in a positive rate. Regarding Ikea's awareness, only Respondent 1 thinks that the brand is not very well-known to the Thai consumers, while the remaining 4 respondents agree that the brand is well-known and expected to enter in the market and bring new options for the consumers, which is a positive outlook for Ikea. All respondents also agree that even if Ikea should and could have entered before on the market, it is not too late and there should be enough opportunities for the business to go well.

Several ideas for Ikea to increase its awareness are given: all respondents agree that investing money in active promotion activities and presence in all furniture fairs in Bangkok and focus on educating customers to accept the concept of DIY and flat packs, Respondent 3 brings the specific idea of huge investments in advertising in house and decoration magazines such as Living, Casa Viva and Bann lae Suan, while Respondent 4 also emphasizes the importance of brand building through PR in pre-launch due to the fact that main target customers are well educated individuals who read newspapers, enter the internet and use social media. Therefore, for the launch, a big advertising campaign and tie-in program in major TV programs should be used, as well as using Ikea as location for shooting music videos and entertainment programs. Another opportunity for Ikea to build awareness is brought by Respondent 5, who focuses on the opportunity of Ikea to coordinate with home village / villa companies and do co-business with them. All these must be seen as indeed, valid proposals that should be taken into account by Ikea.

As to the last question of the interview, regarding the added value services, all respondents agree that in one way or another, Ikea should offer at least services of optional/paid delivery and assembly of the furniture, some even mention after sales services such as the return or exchange of products, or an efficient call center to help customers on installing products, and a better loyalty program.

Indeed, all the interviews offer a vast source of data, to become a strong starting point for the set of conclusions and recommendations.

Chapter 5: Conclusions and Recommendations

Chapter 5 completes the full circle of this research project, by returning to the research objectives and bringing concluding remarks about the study of Ikeas perspective on the Thai furniture market.

As stated previously in the paper, the objectives of this research were to critically understand how Ikea can differentiate in an effective way from other major home furnishing retail competitors in Bangkok. Also, the prominent style offering to consumer specific to Ikea, like the flat package and "DIY," could they be applied to Bangkok's consumer? Are the concepts going to influence positively or hamper the local Bangkok consumer decision of purchase?

Conclusions:

Regarding the possibilities of Ikea differentiation from its main competitors, there are several ideas to be kept in mind:

The furniture business in Thailand is very competitive, with strong players being very present on the market, with many stores and a more traditional approach towards services offered to customers (delivery and assembly of furniture, loyalty programs, value added services such as consultancy and interior design advice).

Buying furniture starts to become a more common occupation, with only one Respondent seeing this activity as a very rare one and only conditioned by low prices. The rest of Respondents see it as a regular activity for people who wish to update their furniture, change the "mood" of the house, replace older or out of order items, etc.

Opinions regarding Ikea's awareness tend to form the idea that Ikea has a rather good level of awareness between Thai people, but in order to be successful will need to invest important amounts of money in order to attract customers to its store.

It was a consensus regarding the fact that Ikea, even if it could/should have entered even earlier the Thai market, can still have a good business by entering at this moment the local market.

Ikea's main differentiators are the fun, trendy and appealing style of the furniture it offers, the higher diversity of products (with new ideas and new items coming to Ikea every month, a lot faster than in the case of its competitors), and the possibility for its customers to "build their own room in their own style." For some respondents, Thai consumers' perceptions regarding prices practiced by Ikea on other markets seem to be also a positive differentiator.

The capacity of Thai consumers to be more international and follow Ikea global concept is a question that does not receive similar answers, as one respondents finds the regular Ikea practices as appealing, while the others bring in front the need for Ikea to adapt to the patterns of services already promoted on the local market by Ikea's competitors and market leaders (delivery, assembly assistance, loyalty programs, etc.)

Ikea's DIY and flat pack concepts are not a very popular option among Thai consumers. Even if some of the respondents considered this a good options for the customers who see these activities as fun to do with the family, most of the respondents state that this is not a common practice in Thailand, and that the busy middle class customers who are the target population of Ikea will find this bothersome, especially for more complicated items, such as beds, cupboards, and so on and so forth.

If Ikea will choose to offer a better price comparing to the other players, but however expect the customers to transport their products and assembly them by themselves, this options seems valid only if the price reduction is large enough (a 20-30% price reduction was stipulated by some Respondents), and even like this, it cannot be considered as a given. Therefore, this element needs to be carefully analyzed by Ikea.

Having the options for clients to pay for their delivery and assembly or to have these services for free if their purchase surpasses a certain amount or a certain number of items seems to be the recommended practice for a furniture provider like Ikea on the Thai market, even though it is not a common practice for the global player.

The fact that there is no other international player on the Thai market does not represent a reason to fear for Ikea. It just means that there was no strong enough international player to enter this market. Of course, now this is not the case for a player of Ikea's size and value.

Ikea's target market, middle-aged adults, well educated, medium-high income, modern, is a segment that will register a slight growth in the future years, thus insuring a good market potential for Ikea businesses.

The fact that the other providers have added value into their services (such as free of charge delivery, assembly, interior design, 3D interior design and several loyalty programs), bring the need for Ikea to respond with the minimum necessary of such practices, by offering after sales services, return and exchange policies, the options of delivery and assembly of furniture, maybe even efficient call centers to help customers with the installation of their furniture, and so on and so forth.

These conclusions, structured mainly on the logical flow of the questions present in the semi-structured interviews, bring to front several recommendations for Ikea's entry on the Thai market. Some of these recommendations do not require very much effort or change of policies from Ikea's side. Nevertheless, some will ask from the global player to start making some exceptions from its general practices, if it wishes to make a great entry on this market.

Recommendations:

Looking back at all the information we have gathered from the five interviewees and the conclusions we could extract from them, there are indeed several important recommendations for Ikea to follow or to analyze with care before launching their business in Bangkok, Thailand.

For a more comprehensive analysis, the recommendations have been split into the four elements of the marketing mix, or the four P's: product, price, placement, and promotion.

Product:

Between the elements that enter the sphere of the "product," are the variety, quality, design of the products offered, their characteristics, their brands, packaging, size, additional services offered, guaranties and other elements such as the return or exchange policies.

Quality: it is an element that has appeared as being important during our interviews for two key elements: the type of wood to be used in the fabrication of the items. One interviewee mentioned that due to the high humidity of Thailand's weather, only objects built of hard wood are suitable and more resistant, while Ikea has part of its product built in pine wood (soft wood). For this reason, Ikea should carefully analyze this issue and take measures: either reduce the variety of soft wood products sold in Thailand, or have them built in hard wood (if this issue proves to be valid after consultation with specialists). Also, another interviewee stated strongly that Ikea's products have short shelf life and this should be reflected in better price offers. If such a statement is true (after specific comparison with competitors' similar products), Ikea could either work on improving it's product life span, or position them in such way that it would not affect its image on the market (lower priced for lower income population, etc.). These actions should be taken care as soon as possible, even before its official opening.

Additional services (transportation, assembly, guarantees, return and/or exchange policies): this question has appeared very frequently during the semi-structured interviews, seems to be a very important issue, and for most of the respondents a "must have." In some interviewees' opinions, not all these services are very necessary, or some of them could be compensated by price reduction of about 20-30%. This is not an easy decision to be made, and the best recommendation for this point would be for Ikea to conduct specific quantitative research on these elements and decide upon. If for example, the need for transportation and assembly will result to be a very important decision point for possible Ikea customers, even if it will be "out of ordinary" for Ikea, it could try to arrange some co-operation with specialized transportation and assembly companies to be located also at Ikea's location at Bang Na Trad Road and take over from Ikea the orders for transportation and furniture assembly at reasonable prices for the customers.

Price:

As a newcomer on the market, but nevertheless with an appealing offer and a rather important level of awareness, Ikea should position itself rightly for the mid-high income class (therefore, at a relatively mid-high pricing level). Nevertheless, these pricing decisions should only be taken after the qualitative study recommended at the Product section above is to be undertaken. The specific offer of Ikea (flat pack and DIY) might not be very appealing to a large mass of customers, and therefore pricing incentives could be offered. Also, for customers buying more products, some of the additional services (if decided to be offered) could come cheaper or even free. Loyal customers could benefit of price reduction or additional services for free in order to be motivated to repeatedly purchase from Ikea.

Placement:

One of the respondents mentioned that Ikea's physical placement is not an advantage, as many Thai people are used to make their furniture purchases in the center of the town, where all the other competitors have their many stores. For this reason, Ikea has to complement the distance needed to be made by customers to reach its store by strong promotion activities aiming at increasing interest and curiosity of the population. This interest must be kept continuously at high levels and facilitated, by keeping up with the diversity of products, maybe by offering free transportation to the location (in collaboration with the other businesses included in the Mega Bangna Project).

Promotion:

The elements comprised in the "promotion" element of the marketing mix are advertising, publicity, promotional activities, public relations, direct marketing, and so on and so fort. Several of the ideas exposed by our interviewees seem to be interesting and applicable in Ikea's case and therefore they are included in our recommendations:

Investing money in active promotion activities and presence in all furniture fairs in Bangkok, plus continuous advertising in house and decoration magazines such as Living, Casa Viva and Bann lae Suan, other newspaper and even the internet and social media websites represent a "must have" in order to build strong awareness of Ikea brand, due to the fact that main target customers are well educated individuals who read newspapers, enter the internet and use social media. This all should be helped by active and innovative PR actions in pre-launch. The idea of one of the respondents that for the official Ikea launch, a big advertising campaign and tie-in program in major TV programs should be used, as well as using Ikea as location for shooting music videos and entertainment programs seems to be interesting and suitable also. Another opportunity for Ikea to build awareness was suggested: that of Ikea to coordinate with home village / villa companies and do co-business with them

Nevertheless, maybe the most important and with long-term focus, is Ikea's real need of focusing on educating customers to accept the concept of DIY and flat packs, and to embrace it. As this seems to be Ikea's major challenge with regard to the Thai market, the store should position this proposition as something new, exciting, trendy, an occasion to be different and, as one responded placed it, "to be able to build your room in your own style," not being anymore obliged to follow the few available options of sets offered by competitors. Therefore, if Ikea manages to introduce the idea that to build your own room from pieces you are free to choose according to your own personal taste, and that if you do that you are "chic" and trendy, and you use this as an opportunity to have a fun time with your family, it could actually gain more appeal and reduce customer resistance to the idea of DIY and flat pack. This effort, of course, will require high investments in promotional activities and on longer term (probably at least 2 years) but the benefits will be also seen on long-term. In the end, we are talking about changing the customs of a large mass of possible customers.

Given the richness of the interviews, we consider that the data extracted and analyzed offered enough ground information for several important conclusions and recommendations to be extracted and offered to Ikea, in order to count with high success in its initiative of entering the Thai furniture market.