lego positioning strategy lego positioning strategy

A slightly premium as well as competitive pricing strategy in its marketing mix is used by the company. This has enabled LEGO to increase profits and allow the company to make good progress in the industry. 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. The PR . Already thinking about how to grow your brand? Diversification is an essential part of the LEGO marketing strategy. Lego is a Danish toy brand that deals with the manufacturing and retailing of products worldwide. There were also competitions held in corporates like Lego Serious Play which challenged the creative thinking capabilities of the team members to build a structure which would portray the identity of the company through the Lego structure. Sometimes knowing where not to innovate is just as important as knowing where to innovate, Robertson said. Unless otherwise indicated, any images used on this site are licensed for use by Attest (on an irrevocable, worldwide, non-exclusive and royalty free basis) via either: In 2016, LEGO reported stalling sales in Europe and North America, but double-digit growth in China. While this line saw LEGO venture out of its typical product and audience range, the Architecture series nonetheless retained a distinctly-LEGO feel that played to peoples nostalgia. Find out how to get started with this free guide. Marketing Strategy of Lego analyzes the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). During our tests, we didnt detect such a tactic at Legos website. The names and other brand information used in the Marketing Strategy & Mix section are properties of their respective companies. Lego toys are not very cheap as a lot of precision and high-quality material goes into the making of such toys. Meanwhile, Lego will invest heavily in e-commerce, ensuring it wont lose sales to online rivals like Amazon, which was blamed for last years collapse of Toys R Us. That creates a lot of hunger in the organisation, she concludes. A nother positioning strategy utilized by the brand to pass a message of visibility to its consumers is the generic strategy where brand Lego used a PR agency to achieve this objective. Thats how Lego established a sound growth strategy and pushed forwards with confidence. If you use gmail, click the button to. The toys are exported throughout the world so that the toys are made more accessible to the people. You try to understand who your customer is, what they care about thats the way we should think about innovation, Robertson said. 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. Brand positioning is the space your brand and products hold in the market and in the minds of 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. It produces clothes for children until the age of twelve. which is the focus of Lego's marketing strategy for content delivery and branding. You will be able to better understand value creation, and capture and learn the tools to analyze both competition and cooperation from a variety of perspectives, including the industry-level (e.g., five forces analysis) and the firm-level (e.g., business models and strategic positioning). . part of the brand's wider strategy to help people understand the creative value of play by instilling a "fresh creative culture" in children. 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. 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. Map & Fire is a brand positioning and customer research agency in Los Angeles, California. Lucy Handley @lucyhandley. 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 . However, with little experience inhospitality, operating these establishments proved to be a logistic and financial strain on the firm, and loss-making continued. So, a brand like LEGO could further increase its revenue, on average, from this automation alone. The world-famous LEGO brick has both propelled the company to its current success, and has laid the foundations for future growth. However, LEGO also has a sizeable adult consumer base who can join its LEGO Ideas online community and become part of its creative process. Lego Architecture is a sub-brand and product range of the Lego construction toy, which aims to "celebrate the past, present and future of . Source: Lego. 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. It also had a premium account which had more privileges than the normal account. 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. 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. Founded by carpenter Ole Kirk Kristiansen, the LEGO Group remains a private, family-owned company based in Billund, Denmark. LEGO Architecture series is currently in the growth stage. They tripled their workforce and tripled the number of lines they offered, and this had left the company over-extended. 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. Lego, when it started off, consisted of just plastic bricks and small figurines which you could use to make small structures. The legacy started in 1949. LEGO Life, a social network app aimed at children under 13, lets users share photos of what they made with LEGOs and leave comments on other peoples creations. It has an official website which provides items, badges, rank, and trophies for certain tasks. - Understand how managers coordinate different functional areas, resources, and systems inside a company and align them with the external environment to enhance overall performance How to setup a benefit-driven Exit-Intent Pop up in ContactPigeon, 2. Among the key lessons that companies with a mature product line can follow to innovate: Respect what made you great. We would rather do the investments upfront to be leading that change.. With almost 300 million kids under the age of 18 in 2023, the Chinese toy market is extremely profitable, and reached a revenue of more than 18.9 billion USD in 2022. Market Segmentation of Lego. One lesson the Legos growth strategy teaches us is how important it is to stay agile. 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. Lego, the Danish toymaker, first entered the Chinese market in the 1980s and has since grown to 140 stores across 35 cities, but with plans to expand its retail estate to 220 stores by the end of this year it recognises it must adapt to local tastes. To see an example of a full brand strategy / positioning case study, click one of the links below: Nowadays, the LEGO Group is among the worlds most recognizable companies, and certainly the most well-known toy company in the world. It has a flagship product Lego which consists of interlocking plastic blocks and small objects which can be connected to each other and build a structure to your imagination. Product: LEGO Architecture Product Life Cycle The life cycle of LEGO Architecture products is normally 1 year but it depends on specific products and it varies from half a year to 10 years. Eventually, the traditional plastic LEGO brick was patented in 1958, offering a timeless design that endures to this day. Some adults adore Lego toys as well, assembling their collections of characters from movies, games, etc. Read our article to find our assessment for what we liked bestand what we didnt. Step 2 - Segmentation, Targeting & Positioning Decisions. Then book a free retail customer engagement consultation withContactPigeon. LEGO playsets also reflect the companys focus on regular innovation. Other sections offer homeschool and distance learning resources for children learning during the pandemic. Initially, these toys were made of wood. . This focused strategy paid off, as LEGO saw a 4% increase in profits and sales in 2018. November 25, 2022. It suggests that in the time of the ludic turn as discussed by Brian Sutton-Smith, adults are showing increased enthusiasm towards toys. LEGO designed its new playsets to appeal to both boys and girls and released more complex products to challenge older children. I hope you enjoyed learning about Lego Group and analyzing the company's generic strategies. Lego's marketing strategy has maintained its position into the 21st century modifying its voice to match it's ever changing customer relationship. It gives great value to the customer so as to gain market share and create repeat purchase. Last Step! Video Games by Lego Media International Limited include Lego Island, Star Wars, Indiana Jones, Batman, and Marvel Superheroes more recent being a game based on The Lego Movie. We began with shops in the major cities and are now looking to reach more children by establishing stores in more cities as we see increasing interest and demand for our products, said Trangbaek. Besides getting paid, the "company mission" is the most important thing about their work for 25% of employees at Lego Group. 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. The toys allow children to construct varying objects . But in general, you position your brand so that your target market views it as: top-tier; . LEGOLAND theme parks have opened in Billund, California, Florida, Malaysia, Dubai, Windsor, Japan, and Germany. 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. AsWhartons business analysis journal reported, they reduced losses and set the stage for a new period of rapid growth. These blocks are used to interconnect each other and can be used to construct various shapes, designs etc. If youre looking for brand growth strategy examples that you can borrow and adapt, Legos shows you how scaling back can sometimes be beneficial. Click below to learn about the Brand Guidebook process. 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. 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. Back in 2015, it was ranked first in Forbes MostValuable Brand list, which rates companies based off of 'marketing-related intangible assets including names, signs, symbols, logos, and designs.' During the pandemic the companys sales rose by +14%, resulting in ~605 million US dollars approx. 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. 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. If they tried to do both, how should they avoid the danger of getting stuck in the middle? Lego has been delighting kids (and bringing pain to grownups feet) for close to 90 years. Many of these new products included motorized and electronic elements; however, these frequently proved to be more expensive to make than their selling price. LEGOs claim to fame goes well beyond its famous interlocking plastic bricks. This article provides an overview of five different positioning strategies for your company to consider, as well as provides tips for developing your positioning strategy, and showing some examples of brands and their specific strategies. LEGO began to evolve product development practices to support design thinking principles, empowering experts to come up with ideas for new products based on that critical customer input. Today, LEGO regularly engages children in the process of character development, storytelling, and providing feedback on new playset ideas. The company threw itself into a variety of new ventures while still retaining its original products. The company was on the brink of bankruptcy. These business strategies, based on Lego marketing mix, help the brand succeed in the market. Within 10 years, there will be 100 million kids in India living in middle-class families, Christiansen told the FT. They are strong into education and products like Lego are very high on the wish list. Being ahead of these trends will allow us to inspire future generations of children, Christiansen told Retail Insight Network. Apart from that, Lego also came up with the idea of theme parks named Legoland Amusement Park. Lego technic was a complex form of the Lego toys which included building complex machinery. Pick the ideal template or create your own, 5. LEGO is also YouTubes most popularbrand channelas of June 2020, with 10.04 billion views. The price strategy of LEGO contains many aspects of the product manufacturing to its delivery to the customers. You're now subscribed to our mailing list to receive exciting news, reports, and other At the same time, the Global Insights division was created, the purpose of which was to research market trends and find out what parents and children wanted to see. "}},{"@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. So what changed? Maintain a customer-centric development process. 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. Their Chinese market share was only 2.8%, leaving enormous potential for growth. They believed they needed to disrupt themselves before somebody else did.. Realizing their customer base now included children and adults from older, nostalgic generations, LEGO adjusted its marketing to communicate with its audiences. Get a 10 page workbook on Purpose, Vision, and Values. It started as a toy manufacturing company but it had also become a great marketer. LEGOland, the companys collection of theme parks, was sold for some $460 million. Get a head start with survey templates written by our research experts. LEGO's mission statement is "inspire and develop the children of tomorrow.". This was widely seen as an attempt to appease an increasingly online and electronics-focused target audience. This mix of time-honored ideals and cutting-edge marketing enables them to adjust to societal changes and grow even through challenging times. 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. [4] The goal was to generate customer feedback on a small scale before making substantial investments, illustrating LEGO's . 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. Finally, in some markets the reset entails addressing a clean-up of inventories across the entire value chain.. As a result Kristiansen stepped down from the chiromancy and deposited a further DKK 800,000 of personal funds into the company. Opening its third-largest global factory (in the city of Jiaxing) positioned Lego to supply products not only for the Chinese market, but other Asian markets too, including Japan and South Korea. This growth is the result of six key factors in the overall LEGO marketing strategy. LEGO's famous turnaround strategy came from engaging its expansive customer base. In the 1990s, it had experienced consistent but stagnating growth rates.With the popularization of computers and electronic games, LEGO worried that it would start losing its share of the market if it did not adapt to this new consumer landscape. Lego had even been able to engage its existing customers to influence new product development and nurture an entirely new consumer base. 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. Through intellectual rigor and experiential learning, this full-time, two-year MBA program develops leaders who make a difference in the world. STP is a critical strategy and planning tool, featured in our RACE Growth System. 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. 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. 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 world-famous toymaker, the LEGO Group, called upon Vivaldi to help solidify its brand strategy and build out the brand identity model for the iconic brand. The LEGO Groups logo was designed in 1973 and has not been changed since. and Unsplash So Lego operates on this knife edge of pushing innovation to create customer value, but also keeping an eye on costs. Lego Brand Strategy. a Creative Commons Zero license, Despite the fierce competition and challenges, LEGO's brick by brick brand strategy paid off significantly by attracting over 6.5 million people across the world who appreciated the brand. Module 4: Strategic Positioning and Strategic Renewal. It can be assembled and disperse as many times as one wishes. The brand also offers books and magazines like The Ultimate Book, Star Wars etc. However, they were too far afield from LEGO's core offering and consumers recognized that, so the non-LEGOs simply didn . According to Forbes, it was ranked as the worlds 91st most valuable company in 2018, with a valuation of nearly $7.8 billion. Key marketing strategy #2: Licensing & merchandising mentality A joint program for mid-career professionals that integrates engineering and systems thinking. It goes through rigorous tests to qualify to be sold out in the market, which incurs a lot of cost to the company. Lego reported its first drop in sales and profits in more than a decade in 2017. . Top Brand Positioning and Customer Research Agency in Los Angeles and California. Strategic Management, Business Model, Strategic Thinking, Business Strategy. 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. LEGO products are in 130 countriesbut the company is always looking to expand its operations. In the rush to innovate, the firm lost sight of its core physical construction-based play. 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. LEGO Business Strategy. One of the worlds most recognized companies has seen exceptional growth over the past decade and a half. 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. 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. Inventive. LEGOs venture into the film industry was yet another example of experimentation fused with the classics. It would put money into opening stores, while shipping less product to retailers in the US and Europe. If you see that, you're well on your way to appreciating Lego's overall strategy. By preserving this spirit of creativity and exploration, it has secured its place in our homes for years to come. or any other third parties such as Shutterstock, iStock and Getty Images. Moreover, brand image cannot be easily imitated and offers a firm sustainable competitive advantage even if it requires continuous focus and improvement. The Chinese authorities have been supportive in helping to uphold the firms intellectual property Lego has won cases against six copy-cat companies. Their channel offers promotional, educational, and how-to videos that promote the companys brand. LEGO utilized The Future Lab to develop low-risk, low-cost innovation techniques that led to rapid creation of minimum viable prototypes. Learning is about being curious, experimenting and collaborating - expanding our thinking and doing, helping us develop new insights and new skills. When the big box stores took over from its ecosystem of small toy stores, LEGO lost an important channel for getting reliable customer feedback. The beginners guide to campaign planning. The promotional and advertising strategy in the Lego marketing strategy is as follows: Lego was made popular not just through the conventional media but also through unique marketing strategies. 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.