LEGO: A Marketing Analysis Presentation

Gosia Adrienne Jacquie

THE LEGO GROUP Introduction to Marketing

LEGO

leg god’t

Play well.

Company History & Background

CompetitiveAnalysis

Marketing EnvironmentMicro & Macro

Target Market& Segmentation

Marketing MixProduct, Price, Place, Promotion

COMPANY HISTORY &

BACKGROUND

Kirk Kristiansen opened a wooden toy making company in 1932.

In 1934, he named it “leg godt,” which means “good play”.

Kristiansen’s descendants still own 75% of the company to this day.

In 1947, they were the first company in Denmark to own a plastic injection-moulding machine, which was innovative in a world where

wooden toys reigned.

The Lego factory began experimenting with interlocking bricks in 1949, with their final incarnation coming to market in 1958.

COMPETITIVE ANALYSIS

LEGO’s Good Performance Can Be Attributed to…

Cross-Generational Appeal

• Parents, who played with LEGO as children, buy LEGO for their kids so they can enjoy playing and creating together.

• Lego strongly values the educational component of their toys, believing that laying with Lego inspires creativity in children and adults alike.

LEGO is both for adults and children. The young and the young at heart!

LEGO’s Good Performance Can Be Attributed to…

LICENSING & FRANCHISES

• Lego has more licenses than any other construction toy brand • Existing relationships with licensing entities ensures that as more franchises for brands

like Marvel and Star Wars are released, LEGO can continue to make new block sets and other products

Marketing Environment

Demographic

• increase in childless families and adults without children• more millennials living at home

• 42% of Canadian millennials still live at home• toy industry to grow over the next few years, but the

growth rate is also expected to decrease due to stagnation.

Technology

• traditional toys declining in popularity and being replaced by digital/ mobile games.

• kid-friendly tablets have become very popular over the last few years.

• many programs for the tablets are educational • are attractive to companies like Nickelodeon,

Dreamworks, etc. • the emergence of 3D printed toys

• Hasbro using 3D printers to allow their customers to design their own toy.

Economics

• Canada has been suffering a weaker than normal economy. • slow GDP growth rate, higher unemployment rates• impact on the toy industry since toys are an elastic demand• traditional toys must compete with the purchasing of digital and

mobile toys.

Nature

• push towards environmentally friendly and sustainable materials • this includes the toy industry

• decreasing the carbon footprint

Cultural

• eliminating gender bias and switching to gender neutrality. • moving away from traditional, binary gender roles, and toys that

relate to those roles. • starting to move away from packaging that targets a

specific gender• toy retailers starting to become aware that gender specific toys

are detrimental to a child's development.

TARGET MARKETING

& SEGMENTATION

Preschoolers & Elementary

School ChildrenMillennials &

Childless Adults Parents

• Pre-schoolers 2-6 would play with LEGO Duplo.

• Ages 5-12 would be more likely to play with licensed toys, play sets and themed sets.

• Members of households with rising incomes.

• High spending power.• Spending more on leisure

and entertainment. • Millennials, childless GEN

X and Baby Boomers. • Rising number of

households without children.

• Having less children. • Have more to spend on

each child. • Decline in birth rates. • Dual income households

with more income to spend on playtime.

DEMOGAPHICS

PSYCHOGRAPHICChildren actively participating in playful learning. Children Fans of Movie Tie-Ins Nostalgic Parents Nostalgic Millennials


• Encouraged in STEM related programs. • Actively participate and create in learning activities.• LEGO Mindstorms NXT is a collaboration with MIT. • FIRST LEGO League Tournament for youngsters

aged 9-16. • Was introduced to LEGO products in school.


• Are big fans of a movie that just came out, and now have LEGO sets dedicated to them.

• Always watch their favourite characters on their parents (or on their own) smartphones and tablets.

• These children demand more licensed products.


• Introducing their children to LEGO Play sets. • Multigenerational appeal of LEGO Toys and

Licensed Products. • Connecting parents to children.


• Have great loyalty to the brands LEGO is licensed with. • LEGO is a luxury product they are willing to spend

money on. • Attached fond memories to characters as children and

so indulge themselves on with their spending power. • Emotional connection = high dollar spending.

GEOGRAPHIC

• Mainly Western Europe and North America

• USA still largest in sales. • In Canada, LEGO Group website

visitors are mainly Ontario (31.9%) and Quebec (22.2%).

BEHAVIOURAL

Active Brand Ambassadors

Consumers of Sought After

Entertainment

• Actively engaged in LEGO group sites. • Participate in LEGO tournaments. • Sharing pictures of their LEGO

Creation. • LEGO Ambassador programme for

AFOLs worldwide. • Networks of LEGO Community.

• Attached to their preferred media. • Mainly invested in content that caters

to their interest. • Focused on content they prefer and

products that satisfy their needs.

The Product

• At present, the LEGO line consists of different products: • LEGO Classic• LEGO Creator• LEGO Ideas• LEGO Duplo• LEGO Bionicle• LEGO Minifigures• LEGO Architecture• LEGO Star Wars, Marvel Super Heroes, Minecraft, Disney

Princess, Angry Birds and more.

• How It’s Made • Moulding Heated Plastic at 232 degrees Celsius. • Injected into 0.01mm moulds at a 25-150 ton pressure. • Only 18 per 1 million are rejects.

• Product Development • Billund Headquarters • LEGO Offices in Los Angelos, Tokyo and Munich. • Diverse set of designers trained from art and design

schools. • 3,900 Elements with 58 Colours

PRICING STRATEGY

• LEGO Pricing Strategy

• Customer-Value Driven Pricing• Aspirational values of playful learning, innovation, and creativity.

• Segmenting Pricing Varies on Complexity of Set • Smaller sets around $6.99CAD • Sets with 150-300 pieces typically $20CAD - $50CAD

• LEGOS for adults typically very expensive. • Millennium Falcon $143CAD or the 10179 AT $8,000cad ON eBAY. • Decline of children per household, decline in birthrate, rise in dual

income households mean that toys priced at a premium are gaining momentum.

PROMOTION

• LEGO’s print and broadcast promotions have been successful in reinforcing their brand image, centered around inspiring creativity in children.

• LEGO’s print and broadcast promotions have been successful in reinforcing their brand image, centered around inspiring creativity in children

• The LEGO movie was hugely successful and caused sales of LEGO to increase 11% in 8 months

• Currently, most of LEGO’s promotional efforts have centered around social media, wherein the brand encourages interaction and user generated content

• YOUTUBE: 2 million subscribers, 3.5 billion views views

• INSTAGRAM: 935 posts, 1.6 million followers, likes per post ranging from 15k-90k

• Facebook: 11.6 million likes

• Pinterest: 46.6 thousand followers

• Apart from being an avenue to showcase traditional campaigns in a digital format, LEGO’s digitized and social promotional material champion user generated content

o Fans make 20% more content than LEGO does internally

o Frequently promote contests to get LEGO users to show off their greatest creations

STRENGTHS • The Lego brand is

associated with creativity, and learning through play, a message that resonates well with parents.

• Brand carries nostalgic elements.

WEAKNESSES • Little product

diversity. • Sensitive to interest

in construction toys.

• Not a major presence digitally.

OPPORTUNITIES • enter toys-to-life

category • produce more

media content • nostalgic millennials

will be likely introduce brand to future children

THREATS • Sales could drop if

they lost their major licenses.

• Rapidly growing toys-to-life category is disruptive to LEGO’s growth.

A Final Overview

Thank You!

LEGO: A Marketing Analysis Presentation

Marketing

Transcript of LEGO: A Marketing Analysis Presentation