Concept Description Service Offer and Pricing. Version: 1.0

Concept Description

Service Offer and Pricing

Version: 1.0

Revision History

Date	Version	Description	Author
2007-06-26	1.0-1	First draft	FONT & HSDM
2007-09-12	1.0-2	Revised copy	FONT
2007-09-24	1.0-3	Ready for approval	HSDM
2007-09-27	1.0	Approved	CDG

Table of contents

1     Introduction......................................................................................................... 4

1.1    Purpose.......................................................................................................................... 4

1.2    Scope.............................................................................................................................. 4

1.3    Related Concept descriptions.......................................................................................... 4

1.4    References...................................................................................................................... 4

1.5    Definitions...................................................................................................................... 4

2     Service Offer......................................................................................................... 6

2.1    In-door delivery.............................................................................................................. 6

2.1.1      Definition of service................................................................................................ 6

2.1.2      Handover of goods to customer............................................................................... 6

2.1.3      The Delivery promise............................................................................................. 6

2.2    Front-door delivery........................................................................................................ 7

2.2.1      Definition of service................................................................................................ 7

2.2.2      Handover of goods to customer............................................................................... 7

2.2.3      The Delivery promise............................................................................................. 7

2.3    Pick-up point.................................................................................................................. 8

2.3.1      Definition of service................................................................................................ 8

2.3.2      Handover of goods to customer............................................................................... 8

2.3.3      The Delivery promise............................................................................................. 8

2.4    Resolution...................................................................................................................... 8

3     Pricing......................................................................................................................... 9

3.1    Pricing principles........................................................................................................... 9

3.2    Pricing of products that are not available for Cash and Carry......................................... 9

3.3    Price ladder for delivery service..................................................................................... 9

1  Introduction

IKEA shall offer a delivery service for customers that can not, or will not, utilize our cash & carry offer. The delivery service shall be seen as an extension of our cost efficient cash & carry offer and not as a replacement.

The goal of our delivery service is to increase our customer base and share of wallet and shall therefore be designed and priced in such a way that it will increase our total sales and thereby our absolute bottom line profit.

IKEA sets the basic standards for the delivery service and manages customer expectations in relation to that. We must also secure that the delivery service is professionally executed. Customers using this service must not get a lower brand perception than the rest of our IKEA customers.

1.1  Purpose

To give countries a guideline regarding how to build a Customer Delivery service offer and pricing structure for Customer Delivery that is in line with IKEA’s overall business model and will help IKEA to gain market share and increase bottom line profit.

1.2  Scope

Local and Central Customer Deliveries

Full range

1.3  Related Concept descriptions

Concept description Pick-up point

1.4  References

The IKEA Concept manuals

-   IKEA Genuinely low prices, an essence of the IKEA concept

-  The IKEA Store, an essence of the IKEA concept

-     The IKEA Pricing, Price tags and Price signs manual

The Testament

Customer Order review report

Easy buying process, customer promise.

1.5  Definitions

Customer Distribution Centre (CDC): Central warehouse with its own range and stock dedicated to prepare and organize central customer deliveries.

Primary Marketing Area (PMA): An area around an IKEA store, defined by Inter IKEA Systems B.V., forming part of a territory. The PMA is an area where the IKEA franchisee is obliged to advertise and promote the IKEA store and its sales.

Transport Service Provider (TSP): Service provider contracted by IKEA in order to deliver goods to the IKEA Customer’s home or to a pick up point. The TSP can perform both Local and Central Customer Deliveries

Local Customer Delivery (LCD): IKEA or a Service Provider contracted by IKEA transports the goods from a stock location in a Store or an External handout on behalf of the customer to his/her home or to a Pick-up Point. The stock location used (Store or an External handout,) may only service the Customer Deliveries of one Store. If the stock location services more than one Store it is to be regarded as a Central Customer Delivery.

Central Customer Delivery (CCD): IKEA or a Service Provider contracted by IKEA transports the goods from a stock location in a central warehouse, i.e. CDC or other central point such as a supplier, on behalf of the customer to his/her home or to a Pick-up Point.

2  Service Offer

We offer our customers three standard delivery services; In-door delivery, Front-door delivery and Pick-up point. In-door delivery is mandatory to offer. Front-door and Pick-up points are optional.

All recommendations below are to be seen as the minimum requirement. The requirements are valid for

·  PMAs. (Primary Marketing Areas). Set-ups outside the PMAs should contain as much as possible of the below recommendations but may be altered in accordance with country specific circumstances.

·  Products that are normally stocked in an IKEA store or warehouse. Does not apply to custom made products.

Should any of the recommendation below be in conflict with local regulations, than local regulations take precedence.

2.1  In-door delivery

2.1.1  Definition of service

The order is delivered inside the customer’s home/office to a (one) room of choice. No assistance in carrying should be required from the customer. All needed manpower and equipment is to be included in the price of delivery.

The standard lead-time from order to delivery should not exceed 5 working days. There should also be an express option available for the customer. The order to delivery lead-time for the express service should not exceed 48 hours for stocked articles.

Deliveries should be performed 6 days per week.

The day needs to broken down in timeslots. Timeslots should be max 4 hours long. At least two hours must be outside of standard office hours. The price will be the same regardless which slot and day the goods are delivered to the customer.

If the customer can unwrap the goods within 5 minutes the Transport Service Provider will take the package material with him free of charge.

Packaging of white goods and sofas shall be removed by the Transport Service Provider free of charge unless the customer decides otherwise.

2.1.2  Handover of goods to customer