lego: a marketing analysis presentation
TRANSCRIPT
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
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.
PSYCHOGRAPHICChildren actively participating in playful learning. Children Fans of Movie Tie-Ins Nostalgic Parents Nostalgic Millennials
• 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.
PSYCHOGRAPHICChildren actively participating in playful learning. Children Fans of Movie Tie-Ins Nostalgic Parents Nostalgic Millennials
• Introducing their children to LEGO Play sets. • Multigenerational appeal of LEGO Toys and
Licensed Products. • Connecting parents to children.
PSYCHOGRAPHICChildren actively participating in playful learning. Children Fans of Movie Tie-Ins Nostalgic Parents Nostalgic Millennials
• 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.
Place
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!