SATISFACTION GAP ANALYSIS RESEARCH Essay Example

  • Category:
    Marketing
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    2
  • Words:
    1413

Research Objectives

For IKEA, achieving customer satisfaction through provision of quality service and products is essential to achieving business success amidst increasing competition in the furniture-making sector. As such, it is important that through their innovation and development department strategize on measures that would enhance their customer preferences and win customer loyalty in the furniture market. In order to do this, there is need for an in depth market research and analysis in order to identify any potential gaps and opportunities that could be used in influencing the customer attitudes towards purchasing their products. Additionally, research into the consumer’s considerations of satisfaction with regards to their products would also go a long way into improving their product quality and efficiency with the aims of increasing profitability. Thus, the following are the objectives of the market research:

  1. To identify factors that influence customer perceptions or determine customer satisfaction in the furniture and household equipment retail sector
  2. To provide comparative data required in analyzing the external forces and competition levels in the sector
  3. To identify the strengths and weaknesses in the sector’s service mix.
  4. To identify the various competitive actions effective in improving the service mix and enhancing customer satisfaction

Information Required

In order to achieve research objectives, it is imperative to obtain information aligned towards meeting each of the objectives (Arvanitis, Deligiannakis & Vassiliou, 2012). In this case, it is important to obtain reliable information in order for the marketing manager to make appropriate and correct marketing decisions.

To begin with, information about demographic and psychographic market details would be useful in understanding the factors that influence consumers purchase decisions (Hague, Hague & Morgan, 2013). As such, these factors would contribute to understanding customers’ needs, perceptions and their considerations of satisfaction. To the marketing manager, this information would be useful in identifying segmenting the market, formulating promotion strategies and improving their innovation and development in order to improve their product value to increase customer satisfaction (Gustafsson, Herrmann & Huber, 2013). Demographic information showing most people have high disposable incomes and psychographic details revealing preference for luxury household items, for instance, would influence decisions on furniture type to offer to the market.

In order to analyse the external forces and competition level in the sector, it is essential to present data and information that would be useful in identifying the forces and making comparisons with IKEA competitors. Three main tools could be used in conducting this research (Hague, Hague & Morgan, 2013). These are the Porters Five Forces Analysis, the PESTLE analysis and the SWOT analysis. The Porters Five Forces Analysis would specifically be done for IKEA while the PESTLE analysis would generally provide insights into the external environment analysis for the industry. The SWOT analysis for both IKEA and its identified strong competitors or potential competitors such as Greycork, Rooms to Go and Ashley Furniture could be used to identify the opportunities in the sector and improve on weaknesses. Additionally, the SWOT analysis would go a long way in helping identify the strengths and weaknesses in the sector’s service mix (Greg & Klymowsky, 2013).

Table 1, 2 and 3 below illustrate examples of the formats and the information and data expectations of such a market analysis.

Table 1: Porters Five Forces Analysis for IKEA

Porters Five Forces Analysis
Results Analysis
Supplier bargaining power To give details about the IKEA suppliers and their bargaining power, whether high or low.
Buyers bargaining power To give details about the IKEA buyers bargaining power, whether high or low.
Substitute products threats Are there any substitute products or services that threaten IKEA core products or value? Is the threat high or low?
New entrants threat How frequent has the market experienced new entrants? Is the threat high or low?
Competitive rivalry levels Who are IKEA competitors? What are their competitive strategies? How is their market voice share? What is the nature of the competition; strong or weak?

Table 2: PESTLE Analysis for the Industry and Market Impacts

PESTLE Analysis
External Environmental Factors Results showing the impacts on consumer attitudes

(Give examples for each case using any company in the industry)

Political How do political factors affect the industry in general? Are there any resultant implications on consumer attitudes regarding the products and services?
Economic Which are the economic factors that influence consumers purchase decisions and how?
To explain the social factors that influence the consumers perceptions and attitudes towards the products.
Technological Which technological factors affect the industry? How do they influence the consumers’ attitudes towards products? What are their impacts on innovation strategies?
How do legal factors impact on the industry? Do they influence consumers’ attitudes towards the products and services in the industry?
Environmental Are the any environmental concerns that influence consumer attitudes and perceptions about companies? Do they have impacts on innovation and development strategies?

Table 3: SWOT Analysis for IKEA and its main competitors

SWOT Analysis
Strengths

The individual company’s strengths that enhance their market performance.

Weaknesses

The individual company’s weaknesses that limit or may limit their market performance.

Opportunities

Any gaps of opportunities that the companies can take advantage of to improve their market performance.

Any threats that the companies face that hamper their success, for example, high competition.

Using information acquired from this three analysis, IKEA would identify the various opportunities, competition levels, external environmental factors among other things that influence consumers’ attitudes and satisfaction levels. As such, they would be useful in planning and implementing competitive strategies for IKEA.

Research Process Considerations

Conducting market research is important in guiding the formulation and implementation of competitive strategies (McGivern, 2013). These strategies when well implemented increase the chances of better market performance in businesses. In cases where the market research aims at identifying the influencers to customer attitudes, perceptions and satisfaction, recommendations may involve implementation of new innovation and development strategies (Arvanitis, Deligiannakis & Vassiliou, 2012). In order to do so, companies are forced to incur numerous costs, hence need for high accuracy in the research in order to avoid unnecessary costs (McQuarrie, 2015). As such, this research would need to be well organized in terms of methodology, results analysis and discussion in order to ensure increased efficiency and reliability of the research.

To begin with, there is need for acquisition of well trained and experienced market researchers who understand their responsibilities and obligations to providing reliable and effective research results. However, the IKEA marketing manager may further need to organize for training schedules with the researchers in order to clearly elaborate their requirement in line with the IKEA market needs. This would serve to provide direction to the market researchers in order to ensure that they are not only conduct thorough research but also effective research according to the IKEA expectations.

Additionally, the marketers need to design effective data collection methodology in order to ensure that most of the data presented is reliable, effective and relevant to IKEA needs. Collection of the data, for instance, would be controlled by clearly segmenting the market based on various basic demographic details such as age. Evidently, most furniture purchase is done by youths who have completed schools and parents and very few or none of the school going age. As such, collecting data from people aged between 16-23 years, for example, would be wasteful and mostly provide unreliable data that may result to wrong conclusions. Moreover, the researchers need to identify and used effective data collection methodology such as questionnaires, interviews and online surveys as well as design tools and frameworks to use for analysing the collected results.

Through these considerations, IKEA would benefit from effective and reliable research free from potential errors irrelevant data and information, hence, identifying the gaps required in order to improve their market performance.

Reference List

Arvanitis, A., Deligiannakis, A., & Vassiliou, Y. (2012, October). Efficient influence-based processing of market research queries. In Proceedings of the 21st ACM international conference on Information and knowledge management (pp. 1193-1202). ACM.

Gregg, A. P., & Klymowsky, J. (2013). The Implicit Association Test in market research: Potentials and pitfalls. Psychology & Marketing, 30(7), 588-601.

Gustafsson, A., Herrmann, A., & Huber, F. (Eds.). (2013). Conjoint measurement: methods and applications. Springer Science & Business Media.

Hague, P. N., Hague, N., & Morgan, C. A. (2013). Market research in practice: How to get greater insight from your market. Kogan Page Publishers.

McGivern, Y. (2013). The Practice of Market Research: An Introduction. Pearson Higher Ed.

McQuarrie, E. F. (2015). The market research toolbox: a concise guide for beginners. Sage Publications.