Dresser

Distress
The Points
Case Studies Fall 2016
 Case
Background
 IKEA Founded in Sweden in 1943

More than 315 stores in 27

Known for its sleek design and countries
affordable prices
 “At IKEA our vision is to create a
better everyday life for the many
IKEA’s Vision people. Our business idea supports
this vision by offering a wide range of
Statement well-designed, functional home
furnishing products at prices so low
that as many people as possible will
be able to afford them.”

Source: IKEA.com
 June 2016

Malm Furniture IKEA voluntarily recalled 29 million

Malm chests and dressers
Recall After the deaths of three small
children and numerous pets

Malm chests and drawers are

IKEA’s most popular design
 Malm dressers and chests are
The Problem unstable if not properly attached to a
wall

Not securing the furniture can result

6 children have been crushed to death in death or injuries
by toppling IKEA furniture

CPSC
Consumer Product Safety Commission
● Concerned with protecting the
public from unreasonable injury
and death from consumer
products
● IKEA is now working with CPSC
to bring safer designs to the
market
○ Stable furniture designs
 ● Social Media
○ Twitter: poor customer service
○ Facebook: poor customer service
● Reviews
Public Opinion ○ Mainly focusing on confusing
instruction
● Informal research
○ Asking consumers thoughts and
opinions on IKEA and how likely they
are to purchase or repurchase
Research
Research
Primary Research Secondary Research

IKEA’s reputation before, during and after Toyota recall

Nonscientific, informal quasi-qualitative Internal audit of how many consumers affected

online survey:
● Do you shop at IKEA? Sales data
● What do you think about IKEA ?
● Have you heard about IKEA’s recall of Malm Competitor data
furniture ?
● After learning about IKEA’s crisis would you
ever purchase furniture from IKEA again ?
● On a scale from 1 to 5 (with 1 as the worst and
5 the best) how would you rate IKEA?
● Do you have any additional comments or
concerns?
c
 Audiences
Internal Intermediary
● Suppliers ● The media
● Employees of IKEA
○ General employees
○ Executives
● Shareholders

External Special
● Affected customers/families ● Competitors
● Customers (not affected) ● Safety activists
● Home furniture buyers ● CPSC
 Audiences
Priority Audience Secondary Audience
● Customers (not affected) ● Employees of IKEA
● The media ● Suppliers
More Likely to ● Home furniture buyers ● Shareholders
Influence

● Affected ● Competitors
customers/families ● Safety activists
Less Likely to ● CPSC
Influence
Objectives,
Strategies
Tactics
 Objective 1:
Improve IKEA’s reputation by 30
percent in one month
Improve IKEA’s reputation by 30 percent in one month
● Strategy 1.1: Issue an apology to every customer who bought
a Malm product
○ Tactic 1.1.1: Send apology email
○ Tactic 1.1.2: Send direct mail brochure with apology and next steps
○ Tactic 1.1.3: Conduct personal phone calls to all Malm owners
○ Tactic 1.1.4: Release official position/statement and feature prominently on
website
Improve IKEA’s reputation by 30 percent in one month
● Strategy 1.2: Restore public perception of IKEA’s dedication to
safety
○ Tactic 1.2.1: Guerrilla marketing game in New York City, Chicago and Los
Angeles
○ Tactic 1.2.2: Launch #WaterFall campaign
○ Tactic 1.2.3: Viral commercials of Malm dressers’ sturdiness
 Objective 2:
Increase Malm customer satisfaction
by 20 percent in one month
Increase Malm customer satisfaction by 20 percent in one month

● Strategy 2.1: Improve Malm dresser design

○ Tactic 2.1.1: Include stable anchor equipment with every dresser purchase
○ Tactic 2.1.2: Place obvious warning sticker on box to prevent excessive force
○ Tactic 2.1.3: Institute mandatory 5-point safety inspection for dressers by
licensed IKEA technician
Increase Malm customer satisfaction by 20 percent in one month

● Strategy 2.2: Improve consumer relations

○ Tactic 2.2.1: Offer free installation of Malm products
○ Tactic 2.2.2: Complementary replacement of recalled dresser with improved
model
○ Tactic 2.2.3: Offer store credit for customers who do not want replacement
dresser
Potter
Model
Is it ethical to not recall a product that has caused
death and injury?
Definition
Don’t Recall:
IKEA has invested a lot in the current
Malm dressers.
Recall:
IKEA needs to recall these dressers
because they are dangerous and have
already caused significant harm.
Loyalties
Don’t Recall:
IKEA needs to preserve itself and wants
customers to know it makes reliable
products, and that these were just freak
accidents.
Recall:
Customers are always right and IKEA is
responsible for the deaths.

Values Principles
Don’t Recall: Don’t Recall:
IKEA’s investments are more important Mills= “What is useful is right.”
than a few accidents. If IKEA does not recall then it will not
lose money on its investment.
Recall:
Customer’s satisfaction and safety are Recall:
more important than losing money on a Judeo/Christian= “Treat others as
recall. you would be treated yourself.”
IKEA needs to treat customers with
respect and care.
 Our Perspective
Potter Model Decision: The Potter Model suggests Judeo/Christian philosophy, “Treat
others as you would be treated yourself.”

Group Suggestions:
● We encourage IKEA to take full responsibility of the issue.
● We believe IKEA should make an official public apology as soon as possible to retain trust in
its publics.
● IKEA must also communicate to employees key points to address to consumers and how to
respond to concerned customers with a consistent message.
○ Key points include full responsibility, a sincere apology and emphasis on improved
safety. IKEA must communicate clearly that it cares about its customers.
● IKEA needs to fix the problem and make the Malm product safer for consumers.
Evaluation
Evaluation
● Improve IKEA’s reputation by 30 percent in one month
○ Success
○ Conduct pre- and post-surveys (qualitative; online) to customers about IKEA
○ Email a five question quantitative survey to customers about the IKEA brand to track consumer
changes in opinion.
○ Monitor the use of hashtags for the #WaterFall campaign

● Increase Malm customer satisfaction by 20 percent in one month

○ Success
○ Offer surveys after each installation to gauge consumer satisfaction
○ Track consumer use of free installation, replacements and store credit
○ Consumer service representatives will call consumers within one week of their free installation to
ask if they are satisfied with the products. This also reinforces positive consumer relations.
○ Those consumer responses will be logged and rated green, yellow or red.
Budget
$250,000
Campaign runs for four weeks

● Guerrilla marketing = $100,000

● TV ads = $90,000
● Direct mail brochures = $50,000
● Sponsored posts on social media
= $10,000
Thank You!
We will happily take questions.