The toys are exported throughout the world so that the toys are made more accessible to the people. This brand extends to the overall company, which has established strong partnerships with the education industry. LEGO responded in 1999 by refocusing its innovation efforts on revolutionary products that would reinvent the nature of play. The toys are generally targeted to the kids or middle and upper-class families. 4th Module was little bit confusion although it was a great time doing the course. Lucy Handley @lucyhandley. However, unlike its ventures into a more technologically-dominated market in the early 2000s, this time around the central heroes both on-screen and on store shelves remained its basic bricks and mini figures. The mission of the MIT Sloan School of Management is to develop principled, innovative leaders who improve the world and to generate ideas that advance management practice. Moreover, if someone looks at its surroundings and its (social) networks as well, there is a tremendous amount of LEGO-related user-generated content which also continuously validates that this toy is, maybe, one of the healthiest, most educative, and most beneficial addictions of its life. Furthermore, due to . The answer lies in going back to the basics. Step 5 - Sustaining Value through Post Purchase Services. Bel has a background in newspaper and magazine journalism but loves to geek-out with Attest consumer data to write in-depth reports. Copyright 2020 Foundation of Student Communications, national geographic, exploration, documentary, film, ceo, gary knell, nat geo, free solo, Chai Vasarhelyi, oscars, npr, sesame workshop, disruption, legacy, online magazine, interview, geography, china trade, Instagram, social media, academy awards, magazine, future of magazine, print, print media, future of magazine industry, the hot zone, leadership, central america, climate change, agriculture, crops, crop yields, immigration, emigration, factors of immigration, climate change effects, family migration, migration, food insecurity, forced migration, food instability. Lego's new brand growth strategy paid off - they returned to growth again in 2018, with profits and sales both increasing by 4%. Among the innovation lessons to be learned from those firms: Have a variety of tools in the toolbox and dont be afraid to use them, listen deeply to your customers, and prepare for a steady diet of continuous reinvention to remain relevant, even as an iconic brand. The company produces toys for children that are consisted of interlocked colorful plastic bricks that make an array of gears, mini-figures, and many other pieces. When the big box stores took over from its ecosystem of small toy stores, LEGO lost an important channel for getting reliable customer feedback. Lego has also offered toys based on popular characters as a part of its physical toys. Define a more specific target market: In marketing, strategic positioning lets you claim a unique functionality or benefit and target your goods and services accordingly, giving you the appearance of being an expert in the field. You will be able to: The brand also offers books and magazines like The Ultimate Book, Star Wars etc. Become a lumbering beast, and its not easy to change course when you see the landscape changing. Lego marketing strategy helps the brand/company to position itself competitively in the market and achieve its business goals & objectives. LEGO`s Strategy. Its always been a towering giant in the toy industry but in the last couple of years,the company has had to radically rethink its brand growth strategy to compete with challengers in the space and digital offerings. LEGO Business Strategy. This was widely seen as an attempt to appease an increasingly online and electronics-focused target audience. Through trial and error and a number of failed digital-only initiatives, LEGO discovered customers wanted digital experiences that complemented core offerings, rather than replaced them. It can be assembled and disperse as many times as one wishes. We have now come to a point where we are really active to the new wave of growth. due to the Lego set Group's temperament to enter new marketplaces, diversify its merchandise, and embrace social media promoting, their product lines area unit higher suited to adapt in useful ways . In this post, we're going to look at some of the bestselling toys for kids, and what their product marketing strategies can tell us about creating a product that's perfect for your customers. The LEGO brand created a desire among the consumers to find new ways to invent solutions and design products in a more sustainable manner. Apart from that, Lego also came up with the idea of theme parks named Legoland Amusement Park. In the 21st century, LEGO remains a thriving, highly adaptable company. Just released figures for the first half of 2019 show steady progress with a 5% increase in global sales, including double-digit growth in China. According to Forbes, it was ranked as the worlds 91st most valuable company in 2018, with a valuation of nearly $7.8 billion. Privacy Policy. Legos new brand growth strategy paid off they returned to growth again in 2018, with profits and sales both increasing by 4%. We have added complexity into the organisation, which now makes it harder for us to grow further. It also had a premium account which had more privileges than the normal account. Current Strategy LEGO's current strategy (Appendix B: Value Chain Analysis) is to expand product lines and continue maintaining their market dominance in the toy-building market. LEGO attempted to copy that strategy, cranking out numerous product lines. Grounded. Combine an international MBA with a deep dive into management science. Answer. We use positioning strategy and data to give your business a strong foundation and a clear path for growth. Add the LEGO Pickup Truck to your collection. This falls in the weakness category within the SWOT analysis. On the surface, the Lego Group didn't look as if it was in trouble. The companys long term growth strategy includes a push into India and it has announced plans to open an office in Mumbai. August 29, 2007. Based on years of research and what hes seen at LEGO and other companies, Robertson advocates for an expansive approach to innovation helping customers get more value from existing products by offering innovative complementary products, services, and business models. 3.Toys face continuous threat by the advent of electronic alternatives. The building blocks of Lego's new growth strategy, Building a bright future with a winning growth strategy, Lego has won cases against six copy-cat companies, UK consumers have named Lego as their favourite brand, to use sustainable materials in its products and packaging by 2030, 6 ways to break through the barriers to international expansion. An entrepreneurial atmosphere was fostered by LEGOs Future Lab, which brought together designers from around the world and encouraged them to experiment and, through a trial-and-error approach, create toys that were truly sought-after. As Head of LEGO Retail, Claus Flyger Pejstrup, said: Our LEGO stores are a great tool for building brand awareness and emotional connection with our fans.. The toy trade is all about whats new, so the only way to shift the stock was by slashing the price devaluing the brand in the process. After doing the research and deciding on a positioning strategy, it is important to communicate this to key stakeholders internally in a brand positioning statement and to work with marketing teams . It would put money into opening stores, while shipping less product to retailers in the US and Europe. Top Brand Positioning and Customer Research Agency in Los Angeles and California. Sometimes you get hyper growth for a couple of years, sometimes you get steady growth for longer. . The company has gone through ups and downs for a few decades, with the strong belief on "only the . This mix of time-honored ideals and cutting-edge marketing enables them to adjust to societal changes and grow even through challenging times. The toys have had several themes like space, robots, castle etc. Lego started producing Lego sets which used to have a specific theme attached to it and the bricks and the figurines designed accordingly. By continuing to promote the educational value of their toys and market them as a way to nurture a childs interest in STEAM, LEGO ensures its products are parent-approved. This approach incentivizes parents to keep buying, whichs been key to the LEGO marketing strategy from the start. A 12-month program focused on applying the tools of modern data science, optimization and machine learning to solve real-world business problems. You need to be dating your customer, not fighting your competitor.. STP is a critical strategy and planning tool, featured in our RACE Growth System. LEGO was a small family business that grew steadily until the management reins were handed off in the late 1970s to the grandson of the founder and newly minted MBA, Kjeld Kirk Kristiansen, who quickly unleashed a wave of innovation. When I have taught this case in class, I tried to get students to see that differentiation through innovation is a key selling point for Lego. But the brick was still necessary, because thats what customers expected of the brand. According to CMO Julia Goldin, its been key to improving efficiency and effectiveness, not just in marketing but across the business as a whole. Their attempt to innovate resulted in the creation of product lines that did not cater to consumer demand, resulting in plunging sales. 2758 Words12 Pages. You're now subscribed to our mailing list to receive exciting news, reports, and other Although its core brandoffering its customers a way to develop their imagination and creativity through free playremains the same, it continues to innovate by researching and adapting the LEGO marketing strategy to new digital communications. The number of parts required to manufacture these newlines rose rapidlyfrom 6,000 to more than 12,000which proved to be logistically difficult and expensive. Lego may be the building blocks of the toy industry, but it hasn't always had a smooth ride. There are around seven such theme parks around the world. Knudstorps first decisions included widespread structural and financial reforms. Second of all the brick in a positive way exhibits the core values of Lego's positioning strategy: An innovate, creative and customizable toy for kids (Lindstrom's second and third . Pursuing multiple, complementary innovations that harmonize to create something is much better than any one key alone.. - Process diverse business and industry information to diagnose strategic issues, evaluate strategic alternatives, and formulate a coherent and actionable strategic plan The LEGO bricks can be assembled and . Lego was not just restricted to toys but it also entered a much broader space in the market. Percent. Non-degree programs for senior executives and high-potential managers. Ready to make your business a thriving one? "}},{"@type":"Question","name":"Analyzing LEGOs eCommerce website","acceptedAnswer":{"@type":"Answer","text":"LEGOs main eCommerce website offers many outstanding features in its category, product, and checkout process pages. On a daily basis, she ponders on different ways businesses, big and small, can grow and achieve success. LEGO is a good source of inspiration for companies in Latvia that want to create a strong brand story, thereby increasing their visibility through communication via social media. Let us start the Lego Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies: The product strategy and mix in Lego marketing strategy can be explained as follows: Lego is one of the biggest block toy brand in the world. The LEGO Groups logo was designed in 1973 and has not been changed since. A 2017 report byBrand Finance noted that LEGOs cross-generational appeal and the creative freedom it gives children were reasons why it became the worlds most valuable toy company, outperforming rivals Mattel and Hasbro. Powered by - Designed with theHueman theme, Marketing Strategy and SWOT Analysis of DHL, How To Create A Brand Positioning Strategy, Positioning strategies of Tea Brands, Lipton, Positioning Strategies of McDonalds and Burger King. The LEGO Group (TLG) is a toy production company established in 1932 and headquartered in Billund, Denmark. In doing so, youll develop an understanding of how and why this process is fundamental for sustainable competitive advantage. LEGO demonstrates that companies that have grown large and cumbersome can adapt to rapid change and re-emerge as market leaders; by encouraging experimentation, listening to consumer desires, and staying true to their businesses foundations, LEGO has declared its intention to grow and deliver. Lego Marketing Strategy comprises of not only its Marketing Mix, but also segmentation, targeting, positoning, competition and analysis like SWOT. Lego is present in around 130 retail stores around the world, most of which are present in the U.S. Retail stores are not the only places that carry the selection of Lego toys but you can buy them at movie theatres, amusement parks and popular departmental stores and toy stores. AI-boosted resumes increase the chance of being hired, Intel CEO on bringing chip manufacturing back to US, Women and leadership: How to have a healthy relationship with power. LEGO's famous turnaround strategy came from engaging its expansive customer base. STP marketing as a planning tool. Still, the company continues to thrive after almost ninety years simply because of its willingness to innovate and acknowledge aspects of the LEGO marketing strategy that needed to change over the generationsand which investments needed to be kept stable to sustain a healthy marketing brand. Configure the graphics, the copy and the rest settings of your exit intent pop up. Their Instagram page offers similar content, and posts receive numerous likes and comments, showing excellent user engagement. Browse marketing strategy and 4Ps analysis of more brands similar to Lego. As both young and old LEGO enthusiasts enjoy displaying their skills as master LEGO builders, LEGO Group became involved in official TV show competitions such asLEGO Mastersto build further awareness of their brand. On the other hand, they also acknowledged the advanced digitization in Chinese play that would require them to continue creating their own digital LEGO products. Because we know it works. "The LEGO brand is one of the most recognized and reputable brands in the world and the protection of IPRs is extremely important to us . All Rights Reserved. It will also impact our costs. It also included decisions on commercial activities that Lego Factory would discontinue. Though painful, these actions streamlined a company which had lost its 'dynamism' and entrepreneurial feel during the preceding decade. "}}]}. The classic stuck in the middle problem, and the way the company managers that risk and pursues its dual or integrated strategy without ending up stuck in the middle is its philosophy and system of constraint or guided innovation. This case is about the branding strategy that global toy manufacturing company LEGO Group adopted to restore its brand image and expand its outreach among consumers across the world. Eventually, the traditional plastic LEGO brick was patented in 1958, offering a timeless design that endures to this day. LEGO learned that in a new digital landscape it was no longer enough to offer a box of plastic bricks the brick had become a commodity. You will learn about the two main "generic strategies" that businesses can pursue, which can be complemented by . Being ahead of these trends will allow us to inspire future generations of children, Christiansen told Retail Insight Network. Goldin and her team are now working to position Lego as one brand globally, and are preparing for future growth by creating a holistic, immersive experience for consumers. And despite how devastating the COVID-19 pandemic has been for many in the toy industries, LEGOs salesrose 14%in the first half of 2020 compared to the same period in 2019, with its operating profit rising 11% to $622 million. Lego's marketing strategy has maintained its position into the 21st century modifying its voice to match it's ever changing customer relationship. If they tried to do both, how should they avoid the danger of getting stuck in the middle? The course and the Professor was really having a high practical approach. This is something that no other brand has ever achieved. Reaching saturation point can come as a surprise, like it did for Lego, and then you may be faced with suddenly having to start from scratch in a new market to secure sales. Module 4: Strategic Positioning and Strategic Renewal. Shops create experiences, promoting the brand in un-Legoed parts of the world, including China, it said in a comment piece. David Robertson teachesInnovating in Existing Markets: Reviving Mature Products and Services, a live online course from MIT Sloan Executive Education. It consists of interlocking bricks, figurines, and various other pieces. The Pricing of LEGO products are higher than competitors. But actually, the brick itself is easy to imitate now. And with a new flagship store in Beijing, featuring attractions like Lego replicas of the Great Wall of China and Forbidden City, it looks like the toy brand will soon be equally loved by Chinese consumers. It became a medium of creative play and enhanced critical learning abilities amongst children. Like a home, companies need a solid foundation to ensure they can withstand the test of time. The company was on the brink of bankruptcy. You might think that Lego is interlocking system of play and the backward compatibility of Lego bricks creates a built-in market for Lego. Learning is about being curious, experimenting and collaborating - expanding our thinking and doing, helping us develop new insights and new skills. Module 4: Strategic Positioning and Strategic Renewal. We use positioning strategy and data to give your business a strong foundation and a clear . To say it in another way, Phillip Kotler, marketing author and professor, defined brand position as "the act of designing the company's offering and image to occupy a distinctive place in the mind of the target market." What do you want your customers to think of when they hear . WhenLEGO set its sights on China, it entered the market by putting money into opening LEGO stores in major cities as well as cities that showed demand and interest for their products. You will learn about the two main "generic strategies" that businesses can pursue, which can be complemented by . Lego toys are not very cheap as a lot of precision and high-quality material goes into the making of such toys. Its important to nurture a culture thats able to shift gears if traditional methods don't deliver desired results. The promotional strategy of Lego has proved to be the driver of global success. Global supply chain meets isolationism. Outside of work, Joyce loves reading, traveling and exploring her new found home in the ancient city of Athens. As China continues to develop a very affluent middle-class numbering in the millions within the coming years, it represents a significant opportunity for LEGO and its market position. I hope you really enjoyed reading about and working on this case about Lego Group. Stock was piling up in warehouses because Lego had too many product lines, and there just wasnt enough room on the shelves in toy stores. Lego's very close to failing as a company in the early 2000s but managed to strategically renew itself through great leadership and through its dynamic capabilities. They became convinced that if all they offered was another box of bricks, they would become a commodity, Robertson said. Engage with an activity that combines creativity, problem solving, and a tactile experience, Gets kids engaged with a toy that encourages creativity with non-digital play, Teaches important lessons around problem solving, following directions, and spatial relations, Offers fun connections and integrations with many other brands and properties to spark the imagination. "Unlike people in developed markets like the United States and Europe, people in . As theFinancial Review writes, it started rapidly expanding its product line to better compete with companies likeHasbro, which sold a wide range of toys fora varied target audience. Step 2 - Segmentation, Targeting & Positioning Decisions. Go to Onsite widgets tab and click the Dynamic pop ups option, 4. In this course you will learn how organizations create, capture, and maintain value. And while these foundations have slowly been built up, in the early 2000s the company was in a state of near-bankruptcy. It also underlines how vital it is to go after international expansion to secure long-term growth (alongside research to back up your plans). Earn your MBA and SM in engineering with this transformative two-year program. Fill in your email and well drop fresh insights and events info into your inbox each week. Step 1 - Marketing Research & Analysis. LEGO products are in 130 countriesbut the company is always looking to expand its operations. So innovation and differentiation through innovation is central to Lego success. In the rush to innovate, the firm lost sight of its core physical construction-based play. It is manufactured by The Lego Group, Denmark. To reveal the advanced rules section go to Edit additional conditions, 7. To put it simply: Throughout the everyday life of an average kid raised in advanced countries of the world, its parents, its teachers, and its friends will encourage it to play with LEGO. It has not yet introduced toys for children below 3 years because the toys may cause a choking hazard. Although the LEGO brick remains their trademark product, the company expanded into new ways of making toys and marketing during the 20th century. Also read Lego SWOT Analysis, STP & Competitors. Earn your masters degree in engineering and management. Thanks to the LEGO Groups willingness to enter new marketplaces, diversify its merchandise, and embrace social media marketing, their product lines are better suited to adapt in beneficial ways. However, they were too far afield from LEGO's core offering and consumers recognized that, so the non-LEGOs simply didn . The world-famous LEGO brick has both propelled the company to its current success, and has laid the foundations for future growth. In 2017, journalist Maia WeinstocksWomen of NASALEGO idea gained the necessary 10,000 votes from supporters, was produced, and became a top-selling product on Amazon. University of Illinois at Urbana-Champaign, A Comprehensive Guide to Becoming a Data Analyst, Advance Your Career With A Cybersecurity Certification, How to Break into the Field of Data Analysis, Jumpstart Your Data Career with a SQL Certification, Start Your Career with CAPM Certification, Understanding the Role and Responsibilities of a Scrum Master, Unlock Your Potential with a PMI Certification, What You Should Know About CompTIA A+ Certification. At its core is the classic dilemma for many companies, should they try to be cost leaders, or differentiators, or try to do both? Growth slowed in the 1990s for a number of reasons, including a rise in digital play experiences from companies such as Nintendo and Sony, the rise of Toys R Us and other big box stores, the expiration of LEGOs brick patents, and the relocation of production of Mattels and Hasbros products to China, lowering the cost of their competitive toys. At the same time, LEGO knows what marketing strategies to always continue, from its educational partnerships and parent-safe brand, and how to use this to develop better customer relationships. How to setup a benefit-driven Exit-Intent Pop up in ContactPigeon, 2. Some adults adore Lego toys as well, assembling their collections of characters from movies, games, etc. LEGO also learned from its past mistakes. * I agree to receive communications from Attest. Lego is a leading plastic toy manufacturer which specializes in construction toys. Its website currently offers many LEGO-based building products specifically designed to help students build STEAM (Science, Technology, Engineering, Art, and Math) confidence in primary and middle school. Plus resources for Archetypes, Tone, Messaging, and more. The Financial Times believes the LEGO Group now has a robust growth model and that expanding its footprint in China is a smart move. It had acquired a debt of some $800 million, a negative cashflow of $160 million, and a year-on-year 30%fall in sales. And most importantly what that leads to is they are more agile and responsive to the marketplace.. This focused strategy paid off, as LEGO saw a 4% increase in profits and sales in 2018. Below is the pricing strategy in Lego marketing strategy: The primary target audience for Lego is children until the age of 12. But how big would the impact be? Marvel Comics turned itself around in the same way.. The study examines how interest towards toys turns into playful and productive activities at adult age, through actual manipulation of three types of contemporary playthings: dolls, soft toys and action figures. Develop a family of complementary innovations to distinguish yourself from competitors. LEGO- Niche MArketing. Aside from its multiple toy sets, it has also branched out into multiple mediums to promote its brand. Market Segmentation of Lego. Highly recommended course materials. Another way Lego has restructured to be more agile is by bringing its creative agency in-house. LEGO's mission statement is "inspire and develop the children of tomorrow.". Tip: Make sure you preview the widget many times on multiple devices before activating your automations.Tip #2: Remember to be as benefit-driven as possible in order to achieve better than the average CTRs and thus, conversion rates. So, we strongly believe that a brand with so much content and such brand prestige as LEGO, will surely achieve an even higher conversion rate than 1.47%. A doctoral program that produces outstanding scholars who are leading in their fields of research. The PR . New Look: The Marketing Strategy Behind the UK Fas Farfetch Case Study: Analyzing The Strategy of the Why ASOS is the Absolute UK Ecommerce Success Stor Get Ecommerce Insights Right In Your Inbox. We learn through play by putting things together, taking them apart and putting them together in different ways. Thank You! The company also plans to open more than 70 Lego brand stores outside of China this year, including its fifth flagship store in Amsterdam, The Netherlands. The popularity of Lego fan-based . There are several theme parks under the Lego Group which are spread across various countries like UK, Denmark, Dubai, Japan, USA etc. And its not just the analysts who are praising the brand for the second year in a row, UK consumers have named Lego as their favourite brand. It has an official website which provides items, badges, rank, and trophies for certain tasks.