Centering innovation around the brick-based construction experience through new stories, games, and experiences, exemplified by the fan-favorite Bionicle product line, is what drove customers back to the LEGO brand and returned the company to profitability. But the company needs to be careful about how this differentiation affect its cost structure. According to BusinessInsider, the rapid increase in the variety of toys sold by LEGO, many of which were commercial failures, proved to be expensive and moved the company away from its iconic toy brick models at a huge cost. Lego's Competitive Advantage - Term Paper - TermPaper Warehouse Hiring business consultants to advise it on its performance, LEGO started moving away from its core toy brick business. Percent. Read our Ideas Made to Matter. A special opportunity for partner and affiliate schools only. Find out how to get started with this free guide. LEGO also learned from its past mistakes. In fact, it is difficult to find any construction-related toy which is not, or does not relate to, LEGO. Lego is among the major players in this sector, holding over 43% of the market share in the construction toy category as of 2021. LEGO- Niche MArketing. A Childrens clothing called Legowear offers clothes by Kabooki, a Danish company, under the license from Lego group. 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. The brand also offers books and magazines like The Ultimate Book, Star Wars etc. Lego toys are not very cheap as a lot of precision and high-quality material goes into the making of such toys. There are around seven such theme parks around the world. His strategy was a unique mix of innovation and going back to the basics. The promotional strategy of Lego has proved to be the driver of global success. If they tried to do both, how should they avoid the danger of getting stuck in the middle? During the pandemic the companys sales rose by +14%, resulting in ~605 million US dollars approx. The toys are generally targeted to the kids or middle and upper-class families. 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. Lego Brand Strategy. How to look at the impact of things like audience reach, panel diversity, and survey design to help you decide whether your current brand tracker is up to scratch. We have to innovate across the whole experience from product to marketing, the whole value chain, she said. It is manufactured by The Lego Group, Denmark. A slightly premium as well as competitive pricing strategy in its marketing mix is used by the company. Competitive positioning: This strategy involves directly comparing your product with your competitors' to show how yours is better or unique. Our experts will help show how to use our platform to engage with customers today and adapt effectively to the new reality. Featuring the same, iconic brick design that hasn't changed in 50 years, LEGO is not a toy brand; it depicts the childhood of a major proportion of the world's children - being constructed, brick by brick. CEO Niels Christiansen announced that 80 new stores would be launched in China during 2019, adding to the existing 60, and giving it a presence in 35 cities. But unlike other firms, it has chosen to build this foundation using its iconic multi-colored, plastic, and easily snappable bricks. Lego is a Danish toy brand that deals with the manufacturing and retailing of products worldwide. Shops create experiences, promoting the brand in un-Legoed parts of the world, including China, it said in a comment piece. This falls in the weakness category within the SWOT analysis. Get answers and chat with the team. We have now come to a point where we are really active to the new wave of growth. "}}]}. Topics. This focused strategy paid off, as LEGO saw a 4% increase in profits and sales in 2018. 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. Become a lumbering beast, and its not easy to change course when you see the landscape changing. It can be easy to oversimplify the product and product description as a fun day at a Lego-themed park for the family, but this is not necessarily the best marketing approach to . LEGOs turnaround from its existential crisis in 2003 is remarkable. The content on MBA Skool has been created for educational & academic purpose only. You can potentially combine six 2X4-inch LEGO bricks in over 915 million ways. 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. 4.1.Brand Positioning Since its inception, LEGO has focused on the development of the brand beyond the familiar logo brand in order to guarantee LEGO quality and authenticity and to . It had acquired a debt of some $800 million, a negative cashflow of $160 million, and a year-on-year 30%fall in sales. As explained by LEGO, the company does rigorous research to finalize the prices of different pieces in the set and cost of the new unique moulds if they are required and also the cost of licensing new characters from other brands and companies (Help Topics - Customer Service . The companys long term growth strategy includes a push into India and it has announced plans to open an office in Mumbai. While LEGO is already a well-known brand, its popularity on Facebook, Instagram, and YouTube highlight the effectiveness of using social media channels to engage with customers. It provides complete integration same goals, same agenda, the ability to solve problems very quickly and much greater learning across the organisation, she told Marketing Week. Diversification is an essential part of the LEGO marketing strategy. It is not priced very heavily also since it wants the customers to be able to afford high-quality toys and the middle-class families would also be able to buy them. 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. A rigorous, hands-on program that prepares adaptive problem solvers for premier finance careers. 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. The company's pricing strategy is targeted at middle-class families with . An interdisciplinary program that combines engineering, management, and design, leading to a masters degree in engineering and management. . We have added complexity into the organisation, which now makes it harder for us to grow further. All Rights Reserved. The company had rebounded after troubled times at the beginning of the century, and was on an upswing, with innovative new products like the Bionicle line, collaborations such as with . The Strategic Positioning and Strategic Renewal module brings together the internal and external aspects of strategic analysis to formulate an overall strategy for the firm. Segmentation, targeting, and positioning is an audience-focused rather than product-focused approach to marketing communications which helps deliver more relevant messages to commercially appealing audiences. The toymaker recognised the need to expand into markets that were still growing, such as China, but was struggling to do so, said chairman of the group Jrgen Vig Knudstorp, in a press statement. Last modified March 30, 2023. We have the ambition of getting to as many kids as we can around the world, and getting to that means we have to keep gaining market share. As a result Kristiansen stepped down from the chiromancy and deposited a further DKK 800,000 of personal funds into the company. Quizzes test your expertise in business and Skill tests evaluate your management traits. With an 88-year history, LEGO has accumulated some veryimpressive statistics, including: The success of the LEGO Group may seem like a phenomenon. This course is part of Gies College of Business suite of online programs, including the iMBA and iMSM. Is there also a great illustration of how companies need to dynamically evolve and adapt to their environments? The threats in the SWOT Analysis of Hasbro are as mentioned: 1.Cheaper imitations by Chinese toymakers threaten its position. This will not only let your business survive the current pandemic but also thrive for years to come. 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. After all, the practice easily imitable and if the cost get too out of line, it creates an opportunity for low-end competitors to enter the market. But how big would the impact be? Brand Positioning 101: What It Is and Why You Need It | Acquia - Widen You try to understand who your customer is, what they care about thats the way we should think about innovation, Robertson said. Lego has also offered toys based on popular characters as a part of its physical toys. Its how Apple turned itself around, its how GoPro got five years of 90% growth, its how Sherwin-Williams gets twice the price per gallon of paint than other paints that are functional equivalents, explained Robertson, who also teaches an executive education course on the topic. Following from its success in China, Lego is looking to . 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. Thank You! The patents have expired, and many companies can do the required plastic molding even to Lego's very strict specifications. It produces clothes for children until the age of twelve. Add the LEGO Pickup Truck to your collection. By preserving this spirit of creativity and exploration, it has secured its place in our homes for years to come. (PDF) ANALYSIS OF LEGO BRAND COMMUNICATION FOR THE - ResearchGate Then book a free retail customer engagement consultation withContactPigeon. Furthermore, due to . Weve seen this tactic working for far smaller and less famous brands than LEGO. "}},{"@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. In doing so, youll develop an understanding of how and why this process is fundamental for sustainable competitive advantage. What was born as a result was a new line of new products named LEGO Architecture. The toys are exported throughout the world so that the toys are made more accessible to the people. Lego's history goes way back to Denmark in the 1930s. Plus resources for Archetypes, Tone, Messaging, and more. Step 5 - Sustaining Value through Post Purchase Services. Not long after, the company's designate switch to Lego, real if you translate it in English, it means 'play well'. 2015-2023 ContactPigeon. 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 . The company threw itself into a variety of new ventures while still retaining its original products. Step 4 - Designing a Marketing Mix using 4Ps - Product, Price, Place & Promotion. The answer lies in going back to the basics. LEGOs stand-alone education company,LEGO Education, has been offering schools educational products since 1986. Pick the ideal template or create your own, 5. Global Marketing Strategies of Lego - blog.notesmatic . Chief Executive Niels Christiansen said Lego had taken the active choice to bring down operating profits by 16% in order to invest more. Moreover, brand image cannot be easily imitated and offers a firm sustainable competitive advantage even if it requires continuous focus and improvement. Their channel offers promotional, educational, and how-to videos that promote the companys brand. 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. When Lego was suffering financially, it decided to serve the entire Europe and Asia by opening a distribution centre in Czech Republic, East Europe which was supposed to cut logistics costs by 20 percent. However, with little experience inhospitality, operating these establishments proved to be a logistic and financial strain on the firm, and loss-making continued. With the COVID-19 pandemic forcing businesses everywhere to re-evaluate their priorities and marketing strategies, it is more crucial than ever for company owners to be proactive in developing a well-conceived plan. This 20-month MBA program equips experienced executives to enhance their impact on their organizations and the world. This mix of time-honored ideals and cutting-edge marketing enables them to adjust to societal changes and grow even through challenging times. Started with the vision of . 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. 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. LEGO's products can contain hundreds or even thousands of pieces, are very detailed, and can be complex. How Positioning Strategy is the New Positioning Strategy So, a brand like LEGO could further increase its revenue, on average, from this automation alone. LEGO attempted to copy that strategy, cranking out numerous product lines. The LEGO bricks can be assembled and . The company has also partnered with Disney, Marvel, and DC Comics to create its popular Star Wars and superhero-themed playsetswhich are vital marketing tools since they generate publicity and drive higher sales. 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. Marvel Comics turned itself around in the same way.. updates! But innovations run their course., From its inception in the 1930s to its brush with bankruptcy in 2003 and its subsequent turnaround, LEGO tried every approach in the book to managing innovation, some resulting in spectacular success and others in great failure, said Robertson, author of Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry.. Maintain a customer-centric development process. So Lego operates on this knife edge of pushing innovation to create customer value, but also keeping an eye on costs. Innovation leaders need to lean on a range of different approaches for innovation, since tactics will vary depending on the scenario and business goals. LEGO- Niche MArketing - SlideShare Their attempt to innovate resulted in the creation of product lines that did not cater to consumer demand, resulting in plunging sales. The Strategic Positioning and Strategic Renewal module brings together the internal and external aspects of strategic analysis to formulate an overall strategy for the firm. Non-degree programs for senior executives and high-potential managers. Develop a family of complementary innovations to distinguish yourself from competitors. LEGOLAND theme parks have opened in Billund, California, Florida, Malaysia, Dubai, Windsor, Japan, and Germany. Sometimes knowing where not to innovate is just as important as knowing where to innovate, Robertson said. Their Chinese market share was only 2.8%, leaving enormous potential for growth. LEGO's detailed construction plans for their products are the right strategy. Building the LEGO Brand: Brick by Brick|Marketing|Case Study|Case Studies In the rush to innovate, the firm lost sight of its core physical construction-based play. 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. How 8 innovative leaders keep track of ideas, Senior Lecturer in Operations Management | MIT Sloan, How to leapfrog competitors by partnering with xTechs, MIT Sloan research on location-based innovation, Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry, Innovating in Existing Markets: Reviving Mature Products and Services. Store expansion should help secure sales growth. 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. In essence, brand positioning is the core of every digital marketing strategy. It can be assembled and disperse as many times as one wishes. 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 Competitors Analysis - Business Chronicler 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. But actually, the brick itself is easy to imitate now. 2. During these turbulent years, the main drivers of sales within the company were LEGOs licensing deals with multi-million dollar blockbuster franchises like StarWars and Harry Potter. But the brick was still necessary, because thats what customers expected of the brand. Strategy Study: How LEGO Became The Number One Toy Manufacturer Brick 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. Earn your masters degree in engineering and management. Although, he added that the company would not be aiming . * I agree to receive communications from Attest. In 2004 the Lego group was under the leadership of CEO Kjeld Kirk Kristiansen, the company faced a large number of problems including posting a loss for the year of DKK 1,800m despite a group turnover of DKK 6,295m. Positioning Strategy of Lego | The Social Grabber | Course Sidekick Learn more about admission into these programs and explore how your Coursera work can be leveraged if accepted into a degree program at https://degrees.giesbusiness.illinois.edu/idegrees/. 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Inventive. A joint program for mid-career professionals that integrates engineering and systems thinking. Growth strategies are adopted by organizations to either expand to new markets or to introduce new products to already existing demand (Cohan 2017, 21-22). It had started off as stackable wooden blocks which then converted to plastic. Even though LEGO is more expensive than other products available, customer feedback and positive experience of the LEGO has led to repeated business and abetted in the strong reputation held globally. Lego Marketing Strategy comprises of not only its Marketing Mix, but also segmentation, targeting, positoning, competition and analysis like SWOT. The toys allow children to construct varying objects . Although kids remain a key target audience for LEGO, the company also understands LEGOs marketing strategy needs to appeal to their parents, who are the ultimate purchase maker. So what changed? It went further and attached themes to the Lego sets. 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. 1. The interactive program gives participants aset of tools and techniques for mastering new approaches to innovation and astructured framework for applying those tools and techniques within their organizations. This article has been researched & authored by the Content & Research Team. It doesnt have to be supranatural, we just want to make sure we are reaching more kids and we stay relevant and engaging. "They became convinced that if all they offered was another box of bricks, they would become a commodity," Robertson said. The Danish toymakers trajectory from industry trailblazer to the brink of bankruptcy to sustained recovery shows theres more to innovation than sheer luck or a wholesale focus on disruption. 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. Due to its marketing strategy and its ability to perfectly blend with the local cultural background . Introduction On 4th September 2014, LEGO Group announced the news that the company is achieving 11 percent increase in sales for the first half of year 2014, surpasses fellow toy manufacturer Mattel. Throughout LEGO's history, not only have they done a great job generally advertising to their target clients, they have also successfully set up and backed active communities of supporters and . The Product Marketing Strategies of Best Selling Toys Can Make You Get access to bite-sized brand and marketing strategy content right on your phone. Designing a Brand Identity Model for The Lego Group | Vivaldi On the surface, the Lego Group didn't look as if it was in trouble. 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. A non-degree, customizable program for mid-career professionals. In the 21st century, LEGO remains a thriving, highly adaptable company. But in general, you position your brand so that your target market views it as: top-tier; . 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. This focused strategy paid off, as LEGO saw a 4% increase in profits and sales in 2018. Pursuing multiple, complementary innovations that harmonize to create something is much better than any one key alone.. You're now subscribed to our mailing list to receive exciting news, reports, and other