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IKEA Business Case Study: How to Earn 40 Billion$ Every Year by Selling Furniture? (IKEA Effect)
The “IKEA Effect”: When Labor Leads to Love
It is due to the IKEA effect that an individual perceives the value of self-made products (even though they might be amateurs) equivalent to that of products made by experts. When someone does labor to complete a task, they tend to love and value it more.
This can be understood by an example:
When instant cake mixes were introduced in the 1950’s as part of a broader trend to simplify the life of the American housewife by minimizing manual labor, housewives were initially resistant. These mixes made cooking too easy, making their labor and skill seem undervalued. They completed the task simply but did not value it because it involved almost zero labor.
To counter this, manufacturers changed the recipe and instead added one more step, now to complete the cake adding an egg in the mix was a mandatory step. This small change of introducing labor appeared to be a crucial move that lead to the sales of the cake mixes.
So if you want the magic of the IKEA effect to work you need 3 things1. The task should not be too easy
2. The task needs to have labor
3. The task has to be completed successfully