MINOR PROJECT REPORT

FEASIBILITY OF ENTERING THE CONTEMPORARY FURNITURE MARKET FOR

IKEA
Submitted by
Trishala Kumar
A0101913042
MBA Class of 2013-2015
Under the Supervision of
Ms.Bandana Chadha
Assistant Professor
Department of International Business
In Partial Fulfillment of the Requirements for the Degree of
Master of Business Administration (General)
AMITY BUSINESS SCHOOL
AMITY UNIVERSITY UTTAR PRADESH
SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA



2

DECLARATION

The title of Minor Project is
Feasibility of Entering the Contemporary Furniture Market For IKEA
I declare that (a) the work presented for assessment in this Minor Project is my original work,
that it has not previously been presented for any other assessment and that my debts (for words,
data, arguments and ideas) have been appropriately acknowledged; (b) work conforms to the
guidelines laid by the University, and (c) Plagiarism for this report has been checked using small
seo tools software and is 91 % unique. The summary of report is attached along with for
reference.
Date: 20
th
March 2014
Trishala Kumar
A0101913042
MBA General (Class of
2013)





3

CERTIFICATE
This is to certify that Trishala Kumar student of Masters of Business Administration General at Amity
Business School, Amity University Uttar Pradesh has completed the Minor Project on Feasibility of
Entering the Contemporary Furniture Market for IKEA, in Partial Fulfillment of the Requirements
for the Degree of Master of Business Administration General under my guidance.
The report has been checked for the plagiarism and it is acceptable.

Ms. Bandana Chadha
Assistant Professor
Department of International Business













4

ACKNOWLEDGEMENT
I would take this opportunity to express my sincere thanks and deep gratitude to my program
leader and mentor Ms.Bandana Chadha who extended her wholehearted co-operation and has
helped me in completing this company report on Feasibility of Entering the Contemporary
Furniture Market for IKEA, successfully.
I would like to express my gratitude towards my mentor, who guided me throughout the creation
of this minor report by clearing our doubts and providing full co-operation regarding the
meetings and communication. Her guidance assisted me in every way possible and hence there
was no confusion regarding the submission of documents and reports till the end.
In all I found this experience enriching and informative. This is all because of the industry
specific curriculum designed by our respected Director Dr.Sanjeev Bansal sir and the senior
management at ABS.

Compiled By: Guided By:
Trishala Kumar A-20 Mentor
MBA General 2013-2015 Ms.Bandana Chadha
ABS Asst.Professor
Amity Business School








5

TABLE OF CONTENTS

ABSTRACT ...................................................................................................................................................... 6
IKEA ENTERING INDIAN MARKETS .................................................................................................... 6
INTRODUCTION ......................................................................................................................................... 7
ABOUT IKEA ....................................................................................................................................... 7
TRENDS IN THE RETAIL INDUSTRY : FDIs IMPLICATIONS ................................................................ 8
THE FURNITURE SECTOR IN INDIA: CURRENT SCENARIO .......................................................... 9
FACTS ABOUT THE INDUSTRY ................................................................................................ 10
RATIONALE .............................................................................................................................. 11
LITERATURE REVIEW ................................................................................................................................... 12
CONSUMER PERCEPTION ...................................................................................................................... 12
IKEA ETHICS IN THE BUSINESS .................................................................................................................. 14
RESEARCH METHODOLOGY .................................................................................................................... 16
RESEARCH OBJECTIVE ........................................................................................................................ 16
TYPE OF RESEARCH .......................................................................................................................... 16
SAMPLING TECHNIQUE ................................................................................................................. 16
QUESTIONNAIRE DESIGN ........................................................................................................... 17
PROCEDURE USED .................................................................................................................. 17
DATA ANALYSIS ........................................................................................................................ 18
DESCRIPTIVE STATISTICS ................................................................................................................. 18
INDEPENDENT SAMPLE T-TESTS ....................................................................................................... 44
CROSSTABULATIONS ................................................................................................................. 48
CONCLUSION ............................................................................................................................................... 62
FINDINGS ........................................................................................................................................... 58
RECOMMENDATIONS ................................................................................................................. 62
REFERENCES ................................................................................................................................................ 63
APPENDIX .................................................................................................................................................... 65
QUESTIONNAIRE ............................................................................................................................ 65

6

ABSTRACT
IKEA ENTERING INDIAN MARKETS
Anand Sharma, Indias commerce and industry minister met with the Swedish home-
ware company IKEAs CEO M Ohlsson in St. Petersburg in the month of July 2012. Theyre
agenda: to discuss the investment prospects of IKEA in India after the news about the relaxation
of rules that had been guiding FDI in single-brand retail.
The government of India had increased the FDI cap for the investments in single-brand retail
from 51% to 100% last year, which was subject to the clause that 30% of the sourcing had to be
from the various domestic , small and medium enterprises (SMEs) (and up to $ 1 million
investment was to be made in plant and machinery).
After stalling its India-entry plans due to the 30% local sourcing clause that was defined by the
Indian government, IKEA will now finally enter the Indian retail sector with an investment of
1.5 billion. This deal makes IKEA the largest foreign investment in Indias retail sector and gives
the country a much needed boost in investor confidence that has been quite low due to the lack of
important reforms by the government to handle the various failings in the Indian economy.
This research will determine the feasibility of a brand like IKEA, in the Indian retail furniture
sector. IKEA has already been sourcing many products from India and has been a major source
responsible for the growth in Indias exports in this sector.
This study will help identify the major factors that affect the consumer perception towards a
contemporary brand like IKEA. It will also focus on the competitive advantage that IKEA has
over its Indian counterparts and how does its future look like with the entry of various Indian
companies into the furniture store concept for home dcor.
Does it have what it takes to attract the Indian customer base with so many options to choose
from? What is the target market of IKEA in India? All these questions will be looked upon to
search for a broader answer that can focus on the companys strengths and weaknesses in a
volatile market like India.





7

INTRODUCTION
ABOUT IKEA
IKEA was founded in Sweden by Ingvar Kamprad, a man who was known for never showing off
his money and not spending it on unnecessary products to attain a materialistic lifestyle. Such
was his dedication towards the optimization of resources. Ingvar Kamprad shaped the value
system of IKEA.
Since its 1943 founding in Sweden, its business idea is "To provide a wide array of well
designed and functional home furnishing products at prices so low that as many people as
possible will be able to easily afford them. The IKEA concept is based on their market
positioning statement Your partner in better living. We do our part, you do yours. Together we
save money.
Anderson Dahlvig, former CEO of IKEA, wrote in his book The IKEA edge that in all the
countries and social systems be it in the eastern or western region, there is a very large part of all
resources that are being used to satisfy a small part of the population. He said that in their line of
business for instance there are too many new and beautifully designed products that only a small
group of people with some particular standard of living can afford.
IKEAs aim has been to change this kind of situation. The company has been trying to eliminate
all the status symbols and thus create a trustful and worthwhile relationship between its
employees and managers. This has made a considerable difference to many workers and it has
helped to entice them to stay with the company even when other firms offer them more.
IKEA might use a lot more of its Indian vendors for its various global needs. In Russia for
instance, around 40% of all IKEA products that are sold are produced in Russia. Another case
where more than 50% of the units sold in China are produced in the country itself. This can thus
be seen as a pointer to IKEAs India operations and its strategies here.
Though India is not very rich in its resource of natural wood, IKEA could help form new non-
wood categories like outdoor patio furniture, garden range etc. A huge number of these vendors
will be small and medium sized enterprises. This will therefore help in creating many
manufacturing jobs at the bottom end of the pyramid. IKEA has been one of the most trusted and
ethical retail brands in the world. It has been designing and delivering products that help improve
the lifestyle of the many and has combined this power with sustainable job creation to devise the
best way to tackle poverty.
8

TRENDS IN THE RETAIL INDUSTRY FDIs IMPLICATIONS
Emergence of organized retail
Increased expenditure capacity of youth of India.
The per capita income of Indian citizens has doubled between 2000-01 and 2009-10
resulting in improved purchasing power.
Change in the mindset of traditional customers
Easy customer credit.
Higher brand consciousness

FIGURE 1

1



1
Source: Deloitte Retail POV
Indian Retail Report Changing
with the changing times;
IBEF report;
9

THE FURNITURE SECTOR IN INDIA: CURRENT SCENARIO
Generally the need for furniture is mostly these four areas:
Domestic
Office
Hotel
Furniture parts

India, as we know is the land of marvelous cultural artistic works. It is also named for its
tradition and handcrafts. It has established its reputation and strength in the field of wood crafts
and furniture and the companies in this sector are utilizing this strength rapidly. The antique
works with the keen designs and the sculpting works are the lead that has fast established its part
in furniture and wood works.
FIGURE 2

2


The furniture industry in India is mostly considered as a non organized sector, with handicraft
production accounts for about 85% of the furniture production in India. The industry is set to
grow by 20 percent in the near future. The furniture industry has transformed itself to a great
pride for the nation as it holds a magnificent impact for its fine arts and marvelous works.



2
KPMG Analysis
10


The furniture industry in India is both an organized and a non-organized sector. The furniture
segment comprises of 65 percent of the home market and 35 percent of institutions. The whole of
the home dcor category furniture accounts for about 68 percent of the share while the remaining
32 percent comprises of furnishing and home investments.

FACTS ABOUT THE INDUSTRY
The market share of the wooden furniture market in India is around Rs 60 crore (Rs 600
million).
The world home furniture market share is worth Rs 20,000 crore (Rs 200 billion). It has
been seen that during the past three years, it grew steadily by 20 per cent a year.
Manufacturers present in India are generally using a three-tier selling and distributing
structure that is comprising of the following :- the distributor, wholesaler and retailer.
In India, the current imports are mainly from Italy, Korea, Malaysia, Indonesia, Germany,
Spain, China, the Philippines and Japan.
The furniture sector in India is primarily concentrated in A, B and C cities around 589
in number.
It has been anticipated that the main 784 urban centers contribute around 41 per cent to
the total consumer furniture market share. The A and B type cities together comprise of
33 per cent of the total market.
The furniture sector in India only makes a minor contribution to the development of
GDP, representing just a small percentage (about 0.5%).









11

RATIONALE

Conventional market research study is extremely dependent on prejudiced consumer report. That
is, the information that advertisers, marketers, and publishers get to know about the consumers is
based on what the consumers say. Consumers talk about what they are feeling, thinking, and
doing with regard to the many brands. However the customers may not be conscious of all that
they are thinking about a brand. Hence Consumer Perception about a new furniture brand like
IKEA with high international standards and an all together different perspective would be
something new to analyze and study.

This research focuses on the feasibility of a contemporary brand like IKEA in Indias market. As
there is a demand for branded furniture by the modern citizens, a one stop furniture store with
high quality assurance may attract the Indian consumers. Design, appearance, and quality apart
from the price are the main competitive area for the companies. Therefore, while considering the
strategies of IKEA in India, it is always a dilemma to what extent their homogeneous product
could be offered unaltered and whether the company needs to be able to adapt to the local market
tastes.























12

LITERATURE REVIEW
CONSUMER PERCEPTION
The purpose of this research is to determine how the IKEA Indias entry into the market will be
welcomed by the customers and how will they react to this new concept of furniture retail. More
significantly, it will try to analyze how the customers will perceive the IKEA concept of
furnishing stores, the service that they will be given and the products they are presented.
The definition of perception can be defined as the process by which an individual selects,
organizes and construes stimuli. Perception is the ability to take up something through the many
different senses. It can be through any of the following i.e. hearing, seeing, touching or smelling.
The sensory urge of the human system deliberately registers an event in the human memory.
These stimuli are filtered and attuned to become an individuals own view of the world.
Even though exposed to the same thing, in the identical environment, two people will never
experience the same. (Schiffman and Kanuk, 2000). We reside in a world presently, where we
are daily exposed to millions of dissimilar stimuli, unusual sounds, tastes, sights smells, and
textures. Our brain can only take in and processes a very small number of all these stimuli.
(Solomon, Askegaard , Bamossy, and Hogg, 2006)
Zeithaml (1988) said that perceived value is very subjective and individual and it is poles apart
from one customer to another. After consolidating four consumers' terminology of value, she
defined perceived value as a customers on the whole assessment of the usefulness of a product
based on the perception of what is received and what is given. A customer may also evaluate the
value aspect of the same product differently with respect to various different occasions
In simple terms, value can be and has been referred to as the difference between perceived
benefits and costs. However, whatever constitutes value appears to be vastly personal,
distinctive, and may be different in a significant way from one customer to another (Holbrook,
1994; Zenithal, 1988). Research evidence suggests that those customers who perceive that they
have received value for money are more content than the customers who did not perceive that
they received "value for the money" (Zeithaml, 1988)
However, Anderson, Fornell & Lehman (1996), on studying the relationship between customer
satisfaction, profitability and market share, proposed that value will have a direct impact on how
satisfied customers are with the suppliers. Similarly, Fornell, Johnson, Anderson, Cha & Bryant
(1996) used the construct perceived value as the supposed level of service quality relative to the
price that is paid.

13

The concept of customer perception is formed by the customer experiences, how they look at the
service they are presented with and eventually by whether they actually are pleased with their
experiences or not. Eventually, the victory of the business is settled by how greatly the image of
the store and the products that the store is selling, meet the consumers expectations. (Porter,
Claycomb 1997)

A Norwegian study by Solvang (2007) discovered that the customer service within the furniture
retail business is of immense importance. Compared to various other retail industries, e.g. the
grocery industry, clothing industry etc, the aspect of service is much more critical for success of
a business within this sector. In furniture stores, customers generally depend much more on the
service and advices provided by the staff than in other kind of stores, which are to a vast extent
self-service oriented. The whole perception process is formed by three stages, the exposure stage,
the attention stage and the interpretation stage. The brain captures the stimuli in the attention
stage and interprets the stimuli according to various filters like our previous experiences and
desires, in the interpretation stage. In the end, these three stages shape our perceptions.
(Solomon, Bamossy, Askegaard and Hogg, 2006)

It is therefore not surprising that the perception of customers with respect to the service and the
image of furniture stores are closely linked to the parameters of customer loyalty and
satisfaction. (Solvang 2007) Attitude towards the customer and a customers perceptions are
always directly proportional and important. By knowing and understanding the customers
perception, how they perceive prices, location, service, products, and cleanliness, customers
contentment and in due course the success of the business can be affected especially in case of
small businesses.








14

IKEA ETHICS IN THE BUSINESS
The IKEA aim is to construct an improved daily lifestyle for the numerous people. This
comprises of doing what the firm can to help create an environment where they can take care of
the earths non-renewable resources, and also each other. The company understands that this
uninterrupted development is a day to day job, and that they themselves are in most cases, part of
the problem. However they have been working a lot to be part of a solution. The unobtrusive,
light weighted designs that the firm has pioneered mean that the amount of materials used in the
creation of each item of furniture is less, while also reducing the amount of emissions generated
in transporting them. As the designs can be easily assembled at home, this also helps in cutting
emissions - by dipping the number of automated assembly lines that IKEA requires. This also
helps in lowering the cost of the manufactured furniture. IKEA as a firm is heading towards
powering all of its stores with renewable sources of energy. It has been working to slash its
power consumption amounts since 2005, though it is yet to create a deadline for their targets.
3
FIGURE 3


3
http://www.IKEA.com/ms/en_US/about_IKEA/pdf/sustainability_report_fy11.pdf
15

IKEA aims to decrease or totally refrain from the usage of chemicals and other harmful
substances that can be hazardous to people and even the environment, by picking out better
alternatives wherever it is possible.
Water-based and UV-based lacquers are the base for IKEA products.
The company has strict limits for the levels of formaldehyde.
It permits the use of PVC only in certain electric leads.
Freons (CFCs) that are harmful with respect to global warming have not been used to make
their products since the year 1992.
The company does not use illegally felled wood i.e. deforestation or any kind of wood from
intact natural forests. This is one of the main conditions that IKEA stresses on its suppliers of
solid wood. The suppliers must be able to provide the origin of their wood. IKEA even has its
own forest specialists. These people are those who work in the field and are close to both the
suppliers and forests. Their most significant chore is to encourage expansion towards extra
responsibly managed forests by spreading knowledge about the ill effects.













16

RESEARCH METHODOLOGY
RESEARCH OBJECTIVE
This objective of this study aims to address the feasibility of IKEA entering Indias market. The
study is to identify the consumer perception towards a contemporary furniture brand. It will look
into how they decide the selection of a store to purchase their furniture. It will also look into the
comparison of such an International brand with the home brands. It will focus on the analysis of
the following factors associated with the success of a brand in a huge market like India:
To understand the perception of consumer towards a contemporary furniture brand like
IKEA in Indian market.
To find out the level of awareness about IKEA among various age groups of consumers.
To determine how the following factors affect the attitude of consumers towards branded
furniture stores like IKEA:

1. Design
2. Price
3. Quality
4. Eco-friendly products
5. Location
6. Brand Image
7. After Sales Service
8. Online presence

TYPE OF RESEARCH
The study was done using descriptive research in which we have quantitative as well as
qualitative data using a structured questionnaire.

SAMPLING TECHNIQUE
In this research, the kind of sampling technique that was used was convenience sampling as the
respondents were chosen according to the convenience by which they can be approached. In this
research a sample size of 153 respondents have been taken into account.

17

QUESTIONNAIRE DESIGN
The questionnaire that was used in the research was created to focus on all the objectives that
had been defined. The questionnaire was a structured questionnaire. The questionnaire
comprised of 26 questions. These were close ended in nature.

PROCEDURE USED
Secondary Data Collection
The first step was collection of secondary data. The secondary data comprised of the facts and
figures related to the furniture sector in India.
Questionnaire Design & Administration
The design of the questionnaire with respect to the objective that was set up was the next step.
Questionnaire administration was the most important part as the respondents need to be aware of
why they are being asked to answer the survey. The questions were close ended and the
administration was done face to face as well as on the telephone. The region covered was NCR.
The sample size was of 153.
Primary Data Collection
After administration of the questionnaire the responses provided defined the primary data that
was collected. This data would help in providing a picture about the consumers perception
towards a given issue and the various factors that were stated in the objective.
Tool Used
The usage of SPSS tool to code and interpret data was the main part of the research. The tests
included mean and standard deviation of data; cross tabulations and independent sample t-tests








18

DATA ANALYSIS

DESCRIPTIVE STATISTICS
Q1. HOW OFTEN DO YOU BUY FURNITURE IN A YEAR?
How often do you buy furniture in a year?

Frequency Percent Valid Percent Cumulative
Percent
Valid
Once 92 60.1 60.1 60.1
Twice 50 32.7 32.7 92.8
Thrice 11 7.2 7.2 100.0
Total 153 100.0 100.0




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INFERENCE

The data shows that around 60% of the sample purchases furniture only once during a
year.

Around 33% purchase furniture two times in a year and only around 7% prefer buying
furniture more than thrice in a year





































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Q2. WHAT KIND OF FURNITURE HAVE YOU BOUGHT IN THE PAST?

INFERENCE
It can be seen that the mean value for bedroom furniture is 1.38 and living room furniture
is 1.25 as it lies in the yes response section. The standard deviation for bedroom is
0.487 which is deviating from the higher response of no for furniture categories like
outdoor and office furniture is also high showing it is more preferred.

The outdoor furniture has the least standard deviation and highest mean value of 1.88
depicting that the maximum number of negative responses has been received by it.






Statistics

Bedroom Kitchen Living
Room
Dining
Room
Office
Furniture
Outdoor
Furniture
Children's
PRoom
N
Valid 153 153 153 153 153 153 153
Missi
ng
0 0 0 0 0 0 0

Mean
1.38 1.69 1.25 1.68 1.85 1.88 1.76
Std.
Deviation
.487 .466 .433 .468 .359 .331 .426
21

Q3. IS BRAND NAME AN IMPORTANT FACTOR FOR PURCHASING FURNITURE ?
Is Brand Name an important factor for purchasing furniture ?

Frequency Percent Valid Percent Cumulative
Percent
Valid
Strongly
Agree
114 74.5 74.5 74.5
Agree 39 25.5 25.5 100.0
Total 153 100.0 100.0



INFERENCE
It can be seen that 74.5 % of the sample strongly favors brand name as an important
factor that affects purchase behavior of consumer

There are 25.49 % that agree to this point. Thus it can clearly be seen that everyone in the
sample is affected by the brand image during their purchase.
22

Q4. HAVE YOU HEARD ABOUT IKEA SWEDEN ENTERING INDIAN BRANDED
FURNITURE MARKET?

Have you heard about IKEA Sweden entering Indian branded
furniture market ?

Frequency Percent Valid Percent Cumulative
Percent
Valid
Yes 43 28.1 28.1 28.1
No 110 71.9 71.9 100.0
Total 153 100.0 100.0




23

INFERENCE
This tells us that around 72% of the sample is not aware of IKEAs future entry into Indian
markets. Thus the level of awareness of IKEA is just around 28 % are aware of this brand.




















24

Q5. IKEA IS A CONTEMPORARY FURNITURE RETAILER FROM SWEDEN. WILL YOU
LOOK FORWARD TO THE OPENING OF IKEA SWEDEN STORES IN INDIA ?

IKEA is a contemporary furniture retailer from Sweden. Will you look forward to the
opening of IKEA Sweden stores in India?

Frequency Percent Valid Percent Cumulative Percent
Valid
yes 125 81.7 81.7 81.7
no 9 5.9 5.9 87.6
can't say 19 12.4 12.4 100.0
Total 153 100.0 100.0




INFERENCE
It can be seen that although the amount of people aware about IKEA were few, the respondents
who are looking forward to the opening of IKEA in India are a large percentage with 81.7%
responding to yes as the answer.
25

Q6. WILL IKEA'S SHOPPING EXPERIENCE LIKE IN STORE CAFES, WILL ENHANCE
YOUR SHOPPING EXPERIENCE?

Will IKEA's shopping experience like in store cafes, will enhance your shopping
experience?

Frequency Percent Valid Percent Cumulative
Percent
Valid
Strongly Agree
24 15.7 15.7 15.7
Agree 65 42.5 42.5 58.2
Neutral 21 13.7 13.7 71.9
Disagree 38 24.8 24.8 96.7
Strongly Disagree 5 3.3 3.3 100.0
Total 153 100.0 100.0


26



INFERENCE
IKEAs in-store caf experience makes a pretty good factor to enhance the consumers
shopping experience. Strongly agreeing to this factor are around 15.6% of the
respondents

42.5% are agreeing to this factor affecting them. However there is almost 25% of the
sample that is not affected by this kind of shopping experience.




27

Q7. FROM WHICH OF THE FOLLOWING STORES HAVE YOU RECENTLY BOUGHT
FURNITURE?


Frequency Percent Valid Percent Cumulative
Percent
Valid
Durian 5 3.3 3.3 3.3
Godrej 57 37.3 37.3 40.5
Gautier 8 5.2 5.2 45.8
Home Centre- Lifestyle 52 34.0 34.0 79.7
Home Town - Big
Bazaar
24 15.7 15.7 95.4
Style Spa 7 4.6 4.6 100.0
Total 153 100.0 100.0


28



INFERENCE
Godrej tops the responses with 57 followed by Home Centre Lifestyle that has 52
positive responses

Durian has the least preference of only 5 positive responses. Gautier and Style Spa also
have few responses. So here we can see that international brands have a negative
response.





29

Q8.ACCORDING TO YOU WHAT ARE THE MOST IMPORTANT FACTORS YOU LOOK
FOR IN A FURNITURE BRAND?
Design
Discounts & Offers
After Sales Services
Variety
Pricing
Maintenance
Quality

INFERENCE
Here we can see that the mean value that is lying in the lower side of 1.08 and 1.11 due to
yes responses are quality and pricing respectively. The standard deviation is also less for
quality and pricing and is high for variety.

Thus in this case where the major number of responses is for yes, we can say that
variety is not a very important factor during purchase.



Statistics

Design Discounts/
Offers
Pricing Sales
Service
Variety Maintenance Quality
N
Valid 153 153 153 153 153 153 153
Missing 0 0 0 0 0 0 0
Mean 1.27 1.24 1.11 1.60 1.56 1.62 1.08
Median 1.00 1.00 1.00 2.00 2.00 2.00 1.00
Std. Deviation .444 .430 .315 .491 .498 .487 .270
30

Q9. WOULD YOU BUY FURNITURE ONLINE?


Would you like to buy furniture online ?

Frequency Percent Valid Percent Cumulative Percent
Valid
Yes 16 10.5 10.5 10.5
No 75 49.0 49.0 59.5
Can't Say 62 40.5 40.5 100.0
Total 153 100.0 100.0






INFERENCE
The results suggest that around 41% people are confused about purchasing furniture
online and 49% are not interested in buying furniture online. The self examination and
look and feel of a product is more prevalent among people can be the reason.

Only 11% of the people were ready to buy furniture from the online sites

31

Q10. IF YOU HAVE TO BUY FURNITURE ONLINE, WHICH ONE WOULD YOU
PREFER?
If you have to buy furniture online, which one would you prefer?

Frequency Percent Valid Percent Cumulative Percent
Valid
PepperFry 4 2.6 2.6 2.6
FabFurnish 27 17.6 17.6 20.3
Jabong 61 39.9 39.9 60.1
Snapdeal 59 38.6 38.6 98.7
HomeShop18 2 1.3 1.3 100.0
Total 153 100.0 100.0



32




INFERENCE
The data shows that majority of the responses favored Snapdeal with 38.5% and Jabong with
around 40%. Very few people knew about high end online furniture stores like FabFurnish.







33

Q11. LIGHT WEIGHT DESIGNS LEAD TO LESS USAGE OF WOOD IN IKEAS
FURNITURE. WILL THIS ENVIRONMENTAL FRIENDLY ASPECT PLAY A ROLE IN
YOUR PURCHASE BEHAVIOR?


Frequency Percent Valid Percent Cumulative
Percent
Valid
Strongly Agree 4 2.6 2.6 2.6
Agree 23 15.0 15.0 17.6
Neutral 55 35.9 35.9 53.6
Disagree 59 38.6 38.6 92.2
Strongly Disagree 12 7.8 7.8 100.0
Total 153 100.0 100.0


34

INFERENCE:
It can be seen that the majority of the responses suggest that the light weight
environmentally friendly aspect of furniture products by IKEA wont affect consumer
behavior.

Here the data shows that 35.9% people are neutral towards such an attribute and around
39% disagree to such a factor affecting the purchase.















35

Q.11 ARE U READY TO PAY MORE FOR ENVIRONMENTALLY FRIENDLY
PRODUCTS?







Are you ready to pay more for such environmental friendly products ?

Frequency Percent Valid Percent Cumulative
Percent
Valid
yes
23 15.0 15.0 15.0
no 101 66.0 66.0 81.0
can't say 29 19.0 19.0 100.0
Total 153 100.0 100.0

36



INFERENCE
A clear conclusion has been reached as 66 % of the respondents have replied in a
negative way to this question. Thus they are not willing to pay more for environmental
friendly products.

Thus IKEAs image of an environmentally friendly company may not mean much to the
consumers unless the price and quality of products is favorable.



37

Q12. WHAT STYLE OF FURNITURE DO YOU PREFER THE MOST ?
Contemporary
Antique
Traditional
Detachable


What style of furniture do you prefer the most ?

Frequency Percent Valid Percent Cumulative
Percent
Valid
Contemporary 60 39.2 39.2 39.2
Antique 1 .7 .7 39.9
Detachable 27 17.6 17.6 57.5
Traditional 65 42.5 42.5 100.0
Total 153 100.0 100.0


38



INFERENCE :
The data suggests that majority of the respondents prefer traditional furniture style that
accounts for around 42% of the sample.

It is followed closely by contemporary style comprising of 39.2% of the population. So
IKEA can hope for a good enough response. However it may have to incorporate some
traditional element for the Indian consumer.






39

Q13. WOULD YOU TRAVEL TO BUY FURNITURE FROM A MAJOR BRANDED
FURNITURE STORE THAT IS LOCATED IN THE OUTSKIRTS OF YOUR CITY?

Would you travel to buy furniture from a major branded furniture store that is located
in the outskirts of your city?

Frequency Percent Valid Percent Cumulative
Percent
Valid
yes 37 24.2 24.2 24.2
no 110 71.9 71.9 96.1
can't say 6 3.9 3.9 100.0
Total 153 100.0 100.0


40



INFERENCE:
A large percentage of the sample disagreed to the question and was not ready to travel to
the outskirts of the city to buy furniture, as can be seen from the chart that 71.9% said no.

Thus if IKEA plans to open huge stores near highways as the acquisition of land is
cheaper in the outskirts, it may lead to a decrease in the customer base unless the area is
populated enough.




41

Q14. WHICH OF THE FOLLOWING AFTER SALES SERVICE DO YOU PREFER ?
1. Delivery at doorstep
2. On site repairs
3. Guarantees and warranties
4. Easy return policy

Which one of the following after-sales services is most important for you ?

Frequency Percent Valid Percent Cumulative
Percent
Valid
Delivery at doorstep
71 46.4 46.4 46.4
On site repairs 29 19.0 19.0 65.4
Guarantees and warranties 43 28.1 28.1 93.5
Easy return policy 10 6.5 6.5 100.0
Total 153 100.0 100.0


42



INFERENCE :
The delivery at door step service with around 46% yes responses, was most agreed upon
by the respondents as furniture is mostly preferred to be delivered rather than transported
by self in India.

It was followed by guarantees and warranties that made up 28% of the responses.


The least selected option was of easy return policy comprising of only 6.5% of the
sample responses.

43

Q.15 WHAT IS THE MOST APT LOCATION OF A BRANDED FURNITURE STORE
ACCORDING TO YOU ?
What is the most apt location of a branded furniture store according to you ?

Frequency Percent Valid Percent Cumulative
Percent
Valid
Malls 120 78.4 78.4 78.4
Local Markets 33 21.6 21.6 100.0
Total 153 100.0 100.0




INFERENCE: Malls stand out as the clear winner with 78.43% of the responses.
44

INDEPENDENT SAMPLE T TESTS
TEST1
Here the dependent variable is taken as the annual income of the respondent. The grouping is
done on the basis of the responses to the question: are you ready to pay more for environmental
products?
Hypothesis:
H
o
: There is no significant difference between the group means
H
1
: There is a significant difference between the group means

Group Statistics

Are you ready to pay
more for such
environmental friendly
products ?
N Mean Std.
Deviation
Std. Error
Mean
What is your annual
income
Yes
23 2.48 .665 .139
No 101 2.21 .804 .080


Independent Samples Test

t-test for Equality of Means
df Sig. (2-tailed) Mean
Difference
What is your annual
income
Equal variances assumed 122 .137 .270
Equal variances not
assumed
38.134 .100 .270
45

INFERENCE:
From the table we can see that the Sig (2-tailed) value is greater than p value (0.05) i.e.
0.137 and 0.100 both are greater than the p value of 0.05.
Thus we can say that there is no significant difference between the group means. That
means we are accepting the null hypothesis H
0
as there is no significant difference
because of income on the readiness to pay more for environmental friendly products


Independent Samples Test

t-test for Equality of Means
Std. Error
Difference
95% Confidence Interval of
the Difference
Lower Upper
What is your annual
income
Equal variances
assumed
.180 -.087 .627
Equal variances not
assumed
.160 -.054 .595







46

TEST 2
Here the dependent variable is taken as the annual income of the respondent. The grouping is
done on the basis of the responses to the question: will IKEAs shopping experience like in-store
cafes enhance your shopping experience?
Hypothesis:
H
o
: There is no significant difference between the group means
H
1
: There is a significant difference between the group means

Group Statistics

Will IKEA's shopping
experience like in store
cafes, will enhance
your shopping
experience?
N Mean Std.
Deviation
Std. Error
Mean
What is your annual
income
Strongly Agree 30 1.70 .651 .119
Disagree 43 2.58 .587 .089


Independent Samples Test

t-test for Equality of Means
df Sig. (2-tailed) Mean
Difference
What is your annual
income
Equal variances assumed 84 .003 -.532
Equal variances not
assumed
72.550 .002 -.532
47



t-test for Equality of Means
Std. Error
Difference
95% Confidence Interval of
the Difference
Lower Upper
What is your annual
income
Equal variances
assumed
.175 -.880 -.184
Equal variances not
assumed
.163 -.856 -.208

INFERENCE:
From the table we can see that the Sig (2-tailed) value is less than p value (0.05) i.e.
0.003 and 0.002 both are less than the p value of 0.05.

Thus we can say that there is a significant difference between the group means. That
means we are rejecting the null hypothesis H
0
as there is a significant difference because
of income on the shopping experience factor






48

CROSSTABULATIONS
CROSSTABULATION 1:
A cross-tabulation among the following questions was performed.
Brand Name an important factor for purchasing furniture ?
Have you heard about IKEA Sweden entering Indian branded furniture market ?

The aim was to find out whether there is a relation between the brand name factor and the
awareness about a brand like IKEA entering Indian contemporary furniture market .

Is Brand Name an important factor for purchasing furniture ? * Have you heard about
IKEA Sweden entering Indian branded furniture market ? Crosstabulation


Have you heard about IKEA
Sweden entering Indian branded
furniture market ?
Total
yes no
Is Brand Name an important
factor for purchasing
furniture ?
Strongly Agree 30 84 114
Agree
13 26 39
Total 43 110 153

49




INFERENCE:
There is no relation to the awareness about IKEA and brand name being an important
factor. It can be seen that all respondents have answered in positive with respect to brand
image.

However the number of people unaware about IKEA is more, that is 110.


Thus even though brand image is an important factor, IKEA turns out to be a brand
people are not much aware of.


50

CROSSTABULATION: 2
A cross-tabulation among the following questions was performed.
IKEA is a contemporary furniture retailer from Sweden. Will you look forward to the
opening of IKEA Sweden stores in India?
What style of furniture do you prefer the most ?
What is your age group?

The aim was to find out whether there is a relation between the taste in style of furniture
and age group as well as the curiosity in looking forward to the IKEA stores to be
launched in India.




51

IKEA is a contemporary furniture retailer from Sweden. Will you look forward to the opening of IKEA
Sweden stores in India? * What style of furniture do you prefer the most ? * What is your age group?
Crosstabulation
Count
What is your age group? What style of furniture do you prefer the most ? Total
Contemporary Antique Detachable Traditional
Young aged
IKEA is a contemporary
furniture retailer from
Sweden. Will you look
forward to the opening of
IKEA Sweden stores in
India?
yes 6

4 4 14
no 2

0 0 2
can't
say
4

2 4 10
Total 12

6 8 26
Middle aged
IKEA is a contemporary
furniture retailer from
Sweden. Will you look
forward to the opening of
IKEA Sweden stores in
India?
yes 29 1 16 6 52
no 0 0 0 1 1
can't
say
1 0 0 2 3
Total 30 1 16 9 56
Old aged
IKEA is a contemporary
furniture retailer from
Sweden. Will you look
forward to the opening of
IKEA Sweden stores in
India?
yes 23

5 31 59
no 0

0 6 6
can't
say
0

0 6 6
Total 23

5 43 71
Total
IKEA is a contemporary
furniture retailer from
Sweden. Will you look
forward to the opening of
IKEA Sweden stores in
India?
yes 58 1 25 41 125
no 2 0 0 7 9
can't
say
5 0 2 12 19
Total 65 1 27 60 153

52


53



INFERENCE:
We can see that the middle aged and old aged people are more into contemporary style as
compared to the young age group that mostly comprised of people between 18-24 years
of age. The amount is less as students and young professionals tend to purchase less
furniture on their own.

Middle aged and old aged people are more into furniture purchase for house renovations,
office purpose. Thus it can be seen that most prefer contemporary furniture. Thus 29 out
of the middle aged respondents prefer contemporary style of furniture and these are the
ones who are most looking forward to the opening of IKEA stores in India.

54



Similarly with the old-aged group, the majority of 56 who are looking forward to the
opening of IKEA stores prefer contemporary designs. Thus there is a significant
relationship among the three groups.






55

CROSSTABULATION 3
A cross-tabulation among the following questions was performed.
Which one of the following after-sales services is most important for you ?
Should branded furniture be sold online ?
What is the most apt location of a branded furniture store according to you ?
The aim was to figure out the relationship between the preference of online shopping of furniture
and the location preference of retail stores. The crosstab would also help understand if there is a
relation between after sales services like on site repairs , home delivery or return policies with
the stated preferences.
The table can be seen on the next page.


56

What is the most apt location of a branded furniture store
according to you ?
Should branded furniture be sold
online ?
Total
Strongly
Agree
Agree Neutra
l
Disagr
ee
Malls
Which one of the
following after-
sales services is
most important for
you ?
Delivery at
doorstep
2 32 24 6 64
On site repairs 6 1 4 1 12
Guarantees and
warranties
4 19 10 1 34
Easy return policy 2 4 4 0 10
Total 14 56 42 8 120
Local Markets
Which one of the
following after-
sales services is
most important for
you ?
Delivery at
doorstep
3 4 0 0 7
On site repairs 0 5 8 4 17
Guarantees and
warranties
0 0 5 4 9
Total 3 9 13 8 33
Total
Which one of the
following after-
sales services is
most important for
you ?
Delivery at
doorstep
5 36 24 6 71
On site repairs 6 6 12 5 29
Guarantees and
warranties
4 19 15 5 43
Easy return policy 2 4 4 0 10
Total 17 65 55 16 153


57

INFERENCE :
From the table we can see that
Those who are interested in online shopping and agree to it i.e. around 56 respondents, on
the likert scale are the ones who prefer the delivery at doorstep after sales service the
most i.e. 32 respondents.

Those who prefer local markets are the ones that have least interest in the online
shopping of furniture as compared to those who are affected by the mall culture in India
who is ready to experiment.


Also the easy return policy is the most favored by those who prefer or agree to the selling
of branded furniture online.


58

CROSSTABULATION 4
A cross-tabulation among the following questions was performed.
Will IKEA's shopping experience like in store cafes, will enhance your shopping
experience?
What is your age group?
The aim was to see how the concept of in-store cafes in the furniture stores of IKEA will be
perceived by the Indian consumer according to his/her age group.


Will IKEA's shopping experience like in store cafes, will enhance your shopping experience?
* What is your age group? Crosstabulation
Count

What is your age group? Total
Young aged Middle aged Old aged
Will IKEA's shopping
experience like in store
cafes, will enhance your
shopping experience?
Strongly Agree
14 14 2 30
Agree 8 22 26 56
Neutral 4 6 8 18
Disagree 0 14 29 43
Strongly Disagree 0 0 6 6
Total
26 56 71 153


59



INFERENCE:
Here we can see that the Contemporary design is much more preferred as compared to the rest

60




61




INFERENCE :
It can be inferred that those who agree to the fact that in-store cafes will enhance their
shopping experience are mostly young and middle aged that accounts for around 80
respondents.

Old aged section are the ones that disagree with the fact that this factor will in any way
enhance their shopping experience. The reasons could range from elder children who
would not crave for fast food as well as lesser time being spent to shop.



62

CONCLUSION
FINDINGS
The following results were inferred from the research.
1. IKEA Sweden is not a brand most people are aware of. However most people are looking
forward to the entry of the brand in India.
2. Indians are not affected by eco-friendliness. Going green is still a new concept.
3. The uniqueness of IKEA products i.e. environmental friendliness is not a major factor
that affects the purchase behavior of consumers.
4. Online furniture shopping is still in its nascent stage.
5. We can say that pricing and quality if high, will attract customers to IKEA.
6. Location plays an important factor for any branded furniture store.
7. Ambience of a store is not an essential factor that affects purchase behavior.
8. Brand Image is an important factor for the consumer.

RECOMMENDATIONS
1. If IKEA plans on opening stores in the outskirts due to cheaper land rates, it can have a
negative impact on its target market.
2. In store cafes are a major feature in the IKEA stores overseas. However this wont be
available to Indian consumers due to some restrictions. However IKEA may not be
affected by this as such a shopping experience did not get a very enthusiastic response.
3. Thus IKEAs strategy of not launching an online shopping website is a good decision.
4. If IKEA wants to try out the online section, it may tag up with the popular websites that
most people are aware of like Jabong.
5. Given its low cost pricing and good designs as well as quality, if IKEA includes good
after sales service, it can become a major hit among the Indian consumers.


63

REFERENCES

Aspfors, E. (2010, May 17). Customer perception of service, store image and product . Retrieved
February 05, 2014, from Thesus:
http://www.theseus.fi/bitstream/handle/10024/16719/Aspfors_Emma.pdf?sequence=1
Furniture Industry. (n.d.). Retrieved February 12, 2014, from Economy Watch:
http://www.economywatch.com/business-and-economy/furniture-industry.html
Furniture Market and Opportunities. (n.d.). Retrieved March 02, 2014, from IBEF:
http://www.ibef.org/download/Furniture_170708.pdf
IKEA bargains its way into India. (2013, January 22). Retrieved March 05, 2014, from First Biz:
http://www.firstpost.com/economy/IKEA-bargains-its-way-into-india-what-does-this-mean-for-
the-rest-597418.html
Indian Retail Market. (2011, September). Retrieved February 10, 2014, from Deloitte:
http://www.deloitte.com/assets/Dcom-
India/Local%20Assets/Documents/Indian_Retail_Market.pdf
Kaushik, M. (2012, December 23). IKEA to comply with riders on india investment proposal.
Retrieved February 02, 2014, from Business Today: http://businesstoday.intoday.in/story/IKEA-
to-comply-with-riders-on-india-investment-proposal/1/190414.html
M Gomathi Imaya, D. P. (2013, September). Furniture Market in India - An Overview. Retrieved
March 12, 2014, from The Global Journals:
http://www.theglobaljournals.com/ijar/file.php?val=MjIyMw==
Mookerji, N. (2013, May 16). We've tried to understand India's needs: IKEA India chief.
Retrieved February 12, 2014, from Rediff: http://www.rediff.com/money/interview/interview-
weve-tried-to-understand-indias-needs-IKEA-india-chief/20130516.htm
People and the Environment. (2008, April). Retrieved March 05, 2014, from IKEA:
http://www.IKEA.com/ms/en_US/about_IKEA/pdf/IKEA_SER_08_GB.pdf
64

Rebecka Isaksson, M. S. (2006, June). The IKEA Experience - Bachelor Thesis. Retrieved 10
February, 2014, from Epubl: http://epubl.ltu.se/1402-1773/2006/162/LTU-CUPP-06162-SE.pdf
Salisbury, P. (2011, October 19). Behind the Brand: IKEA. Retrieved February 10, 2014, from
The Ecologist:
http://www.theecologist.org/green_green_living/behind_the_label/1098324/behind_the_brand_I
KEA.html
Sustainability Report. (2011, September). Retrieved February 20, 2014, from IKEA:
http://www.IKEA.com/ms/en_US/about_IKEA/pdf/sustainability_report_fy11.pdf
Troian, D. (2011). Furniture Industry: The consumers furniture preferences in different markets.
Retrieved March 10, 2014, from Academia:
http://www.academia.edu/1502656/The_consumer_perception_of_design.Case_study_furniture_
sector#
Velchev, N. (2012, June). Similarities and Differences in the Image Perceptions of IKEA in the
Minds of Its Current Customers. Retrieved March 05, 2014, from Pure: http://pure.au.dk/portal-
asb-student/files/45793089/THESIS_FINAL.pdf
Welcome Inside 2012. (2012). Retrieved February 01, 2014, from IKEA:
http://www.IKEA.com/ms/en_US/pdf/yearly_summary/ys_welcome_inside_2012.pdf









65

APPENDIX
QUESTIONNAIRE
CONSUMER PERCEPTION ON FEASIBILITY OF NEW ENTRANT LIKE IKEA IN
INDIAN CONTEMPORARY FURNITURE MARKET
1.How often do you buy furniture in a year?
1. Once
2. Twice
3. Thrice
4. More than thrice
2.What kind of furniture have you bought in the past?
1. Bedroom
2. Kitchen
3. Living room
4. Dining room
5. Office Furniture
6. Outdoor Furniture
7. Childrens room
3.Is Brand Name an important factor for purchasing furniture?
1. Strongly Agree
2. Agree
3. Neutral
4. Disagree
5. Strongly Disagree
4.Have you heard about IKEA Sweden entering Indian branded furniture market ?
1. Yes
2. No
66

5. IKEA is a contemporary furniture retailer from Sweden. Will you look forward to the
opening of IKEA Sweden stores in India?
1. Yes
2. No
3. Cant Say
6.Will IKEAs shopping experience like in store cafes, enhance your shopping experience?
1. Strongly Agree
2. Agree
3. Neutral
4. Disagree
5. Strongly Disagree
7.Is Durability of furniture is a major factor that will affect your purchase?
1. Strongly Agree
2. Agree
3. Neutral
4. Disagree
5. Strongly Disagree
8. Which of the following branded furniture stores are you aware of?
1. Durian
2. Godrej
3. Gautier
4. Home Centre- Lifestyle
5. Home Town- Big Bazaar
6. Style Spa


67

9. From which one the following stores have you recently bought furniture?
1. Durian
2. Godrej
3. Gautier
4. Home Centre
5. Home Town
6. Style Spa
10. According to you what are the most important factors you look for in a furniture
brand?
1. Design
2. Discounts and offers
3. Pricing
4. After Sales Services
5. Variety
6. Maintenance
7. Quality
11.Do you prefer international brands of furniture?
1. Yes
2. No
3. Cant Say
12.Would you like to buy furniture online ?
1. Strongly Agree
2. Agree
3. Neutral
4. Disagree
5. Strongly Disagree

68

13.Which of these online furniture sites are you aware of ?
1. Pepperfry
2. FabFurnish
3. Jabong
4. Snapdeal
5. Homeshop18
6. Others
14. If you have to buy furniture online, which one would you prefer?
1. Pepperfry
2. FabFurnish
3. Jabong
4. Snapdeal
5. Homeshop18
6. Others
15.Should branded furniture be sold online?
1. Strongly Agree
2. Agree
3. Neutral
4. Disagree
5. Strongly Disagree
16.Light weight designs lead to less usage of wood in IKEAs furniture. Will this
environmental friendly aspect play a role in your purchase behavior?
1. Strongly Agree
2. Agree
3. Neutral
4. Disagree
5. Strongly Disagree
69

17.Are you ready to pay more for such environmental friendly products ?
1. Yes
2. No
3. Cant Say
18.Does the customer friendly staff of a branded store play an important role in your
buying decision?
1. Strongly Agree
2. Agree
3. Neutral
4. Disagree
5. Strongly Disagree
19.What style of furniture do you prefer the most ?
1. Contemporary
2. Antique
3. Detachable
4. Traditional
20.How important is the location of a Furniture store?
1. Very Important
2. Important
3. Not Important
4. Not at all Important
21.Would you travel to buy furniture from a major branded furniture store that is located
in the outskirts of your city?
1. Yes
2. No
3. Cant Say
70

22. Which one of the following after-sales services is most important for you ?
1. Delivery at doorstep
2. On site repair
3. Guarantees and Warranties
4. Easy Return Policy
23. What is the most apt location of a branded furniture store according to you ?
1. Malls
2. Local Markets
3. Outskirts
24.What is your age group?
1. Young
2. Middle-Aged
3. Old-Aged
25.What is your annual income?
1. 0-5 lakhs
2. 6-11 lakhs
3. 12 lakhs and above
26.What is your occupation?
1. Govt Service
2. IT/Business Professional
3. Own Business
4. Unemployed
5. Self Employed
Please provide your name:
Please provide your location:

71