Blog 7: Disesteem customers

Gaining a person's affection is so difficult. Even there is one saying like “得人心者 得天下” in China, which means a man who get one’s affection is a person who get the world. And also if one thing is loved by people, it can lose its love by one mistake. Nowadays, one company was really famous and popular even before it opens the store in Korea, but it lost its popularity by one mistake. This company is ‘IKEA’, a multinational group of companies that designs and sells ready-to-assemble furniture (such as beds, chairs and desks), appliances and home accessories. IKEA is planning to open the first store in Korea in next month, but already there are some anti-consumers because it disesteemed Korean consumers.

IKEA opened their products’ prices in Korea website. Some of their products have really cheap price, less than 1 US Dollar. But the problem is in products which are more expensive than in other countries. For example, ‘Billy Bookcase’ is 99,900 won (about $91.20) in Korea otherwise it is about 85,200 won (about $77.78) in Japan, 88,000 won ($80.34) in US, and 95,000 won ($86.73) in England. But there are also some items which are cheaper in Korea than in other countries. One marketing manager of IKEA Korea said that IKEA set the price not by comparing with other countries, but by researching the reasonable and popular price in the specific country. But it does not make sense because economics in Japan and USA are better than Korea but the price is more expensive in Korea. IKEA is famous to ‘DIY products’, customers should assemble their furniture after they buy. So if customers want for their furniture to be assembled, they should pay more. Assembling the furniture is 29,000 won ($26.47) and the standard delivery fee is 40,000 won ($36.52), on the other hand, they are all free in Korea furniture stores.

Moreover, the annual report of IKEA in IKEA Korea website uses only ‘Sea of Japan’. It is really important problem to Korean. The sea between Korea and Japan is ‘East Sea’ historically, but the Japan government argues that it is ‘Sea of Japan’ as the part of the distortion of history. Although it is really important and sensitive problems to Korean consumers, IKEA did not use ‘East Sea’ or both of them. And it also happened in their real product which is selling in USA and England. It is not sure whether IKEA Korea will sell the product in Korea store.

The reason why IKEA became famous without any special marketing effort was the buzz marketing. Some Koreans who used IKEA furniture while they were living in abroad liked IKEA because they have good quality compared to the price. But it means there is nothing special except the price. If consumers are not ‘smart consumers’, nothing will be problem. But IKEA’s target market, 20-30’s consumers in Korea are very smart. They search about the product carefully, and compare with other stores and even in other countries. Domestic furniture companies are fully ready for IKEA but actually the thing which gave a punch to IKEA is the ‘smart consumers’.

Photos from: http://www.retailsolutionsonline.com/doc/ikea-s-new-app-creates-omni-channel-shopping-experience-0001

http://news.kmib.co.kr/article/view.asp?arcid=0922848834&code=11141400&cp=du