Marketing Case Study Essay Example | Topics and Well Written Essays - 1500 words

Marketing Case Study - Essay Example The IKEA products are often referred as ‘start up furniture’ which is bought by the consumers for their first home. It is due to this reason that the company focuses on income level, age, education etc while targeting the market segment. The market has been segmented in the following manner: Segment Age Group Annual Income Level Psychology Education 1 18 - 25 >$ 34500 This particular age group has a tendency of being driven by social trends. They generally do not possess much knowledge about ethical trading. High school and College (education) 2 26 - 35 $34500 - $ 68000 This age group has knowledge related to ethical trading and they remain ready to purchase quality products by paying high prices. College and masters level (education) 3 36 - 65 >$ 69000 This age group purchases products in order to represent their self image in the peer group. Educational level does not have any influence on the purchasing behaviour of this particular age group. IKEA mainly targets the y oung group with lower income level (Business Today, 2013). The affordable price offerings increase the demand of the company’s products in the market. The college students those who belong to the young generation cover wide target market for the company as it mainly consists of those individuals who are planning to purchase furniture for 1st time. Another target segment set by IKEA on the basis of demography is the family life cycle. The company targets new families who require furniture for filling their houses but do not have high money to spend for this purpose. IKEA always provides quality products and services to these young families and they provide stores which are entirely environment friendly. The stores have specially designed playing area where the parents can keep their children at the time of shopping in order to complete it in a peaceful manner. The company targets those customers who want high value for their money invested and opt for quality products with com paratively cheap prices. Thus from the above table, target segments 1 and 2 are the target segments for IKEA. Answer 4 PESTEL Analysis Pestel analysis would help in the environmental scanning of IKEA (Lorat, 2009). Political The level of consumer taxation and corporate tax which is regulated by the political authorities of any particular country has an effect on the after-tax income of any corporation. The corporate tax rate has an impact on the profitability of the organization thereby affecting the after tax income as well. IKEA regional earnings are generally subjected to the regional tax laws. The corporate tax rate of any region has an impact on the business structure as well. The special business structure of the organization plays a vital role in the tax rate. IKEA business structure has a subsidiary model which instructs the subsidiaries of the company to abide by the regional tax rules and regulations. In addition to the corporate tax, the trade barriers such as tariff and quotas also have an effect on the businesses. The major reasons behind imposing tariffs and other trade barriers are: protecting the local employment, retaliation, national security etc. However imposition of tariff increases the prices of the products that are imported in the country. This benefits the local producers in place as they are not forced to raise the prices. In case of IKEA, their higher reliance on the local producers rather than import of the products decrease the extent of influence of tariff and other trade b

Wal-Mart--Are they doing anything unethical Essay

Wal-Mart--Are they doing anything unethical - Essay Example Business ethics should be followed or consequences will result which can be detrimental to all. Machan (2003) lists the meaning of business ethics as "a discipline specializing in the examination of answers to the questions 'How should I act' or 'What standards ought I use to guide my conduct'...Business ethics assumes commerce and business are, as a rule, morally proper." In the quest to maximize profits, some businesses do not act in an ethical manner. It is an ever-increasing problem as business acquire more profits, they tend to behave in an unethical manner. However, a business can still maximize profits, This essay shall focus on small businesses in regards to ethics. Small businesses are more flexible and if they adopt innovative methods and technology, they can increase growth can increase growth capacity (which leads to more jobs), better profitability, and more purchasing power. However, businesses tend to act in ways that are not moral and are unethical in their pursuit to maximize profits. In the beginning, Sam Walton's first Wal-Mart was funded 95% by his own money. Many believe that small businesses that have grown tremendously such as Wal-Mart behaved unethically in order to get where they are. Today the company has grown to 1.3 million worldwide associates and fifteen countries are home to the wholesale clubs. (The Wal-Mart Story, n.d.). They tell of how Wal-Mart has created millions of jobs. A post by Average Joe (2006) states that "Wal-Mart pays billions and billions of dollars in Federal Taxes every year and is one of the only companies in the US to pay the 35% corporate tax rate. They are one of the only companies left in America that doesn't cheat the U.S. government!" Regardless of the job increases and tax payments, many support John's (2004) opinion, "Wal-Mart has destroyed communities in thousands of small towns across America. Check out any small town main street and all you see is boarded up shops and dead, lifeless, streetsnow its coming to Europe and doing the same thing because for every mom and pop store that's thrown on the scrap heap other local jobs are lost as well." Last Name 3 And although Wal-Mart may be creating jobs while it is destroying jobs, the more Wal-mart lowers its prices, more customer loyalty is created. This leads to lower rates of pay in other countries such as China in order to justify for the lower prices. A corporation such as Wal-Mart can pressure to shut down cheap warehouses in third world countries such as Mexico because their workers were making too much. As corporations get bigger especially as huge as Wal-Mart has become, they "are in positions of power that allow them to do greater damage to others when they act immorally or unethically or socially irresponsibly" as Why Bother With Ethics (n.d.), reports. One blogger Eli (2005) posts, "Do you know where all of those cheap products are being producedThose products were OUTSOURCED taking THOUSANDS of jobs