Marketing Localization of IKEA in China - Lessons for Western Multinationals

Abstract

The rate of failure of western multinationals in China in consumer industries is very high. IKEA is a classic case of a western multinational that started off with many problems and yet, persisted, adapted and succeeded in the market in China. The level of market orientation which has been deployed by the company is very high. This has been made possible through a long-term view of the market, which was not sophisticated. It had to engage in educating consumers, reposition itself and engage in organic knowledge development, while adopting a long-term view of the market. When it comes to western multinationals, the case study of IKEA shows that they must be prepared to reposition themselves, must develop value propositions that are suitable for the market and implement strategies which will actually work in the foreign market, rather than standardization in a rigid manner, that will surely result in failure. The regional differences within China must also be considered seriously and western multinationals must be prepared to engage in hyper-localization in some elements of the marketing mix.