Lego a Brand Case Study

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  • Topic: Brand, Lego, Marketing
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Symbiosis Institute of Media and Communication, Pune

Brand Management

Prof. Atul Tandon

Lego Case Study

Lego – The way the world plays
An Introduction:
LEGO Lego) is a privately held consumer product company engaged in the manufacture and distribution of a wide range of toys, video games and online games. A powerful and instantly recognized global brand has been a key feature of Lego’s success. Lego has worked hard to establish this brand through a number of routes. The group organizes its business into four main categories: the core business of play materials, family attractions, lifestyle products, and media. In each of these categories the brand is clearly and consistently applied. At the heart of Lego’s business are its play materials. Here the Lego brands feature across a plethora of offerings. In order to cater for a target age range of 0 to 16 years, the company has split its offerings into nine different product programmes. These include Lego Primo and Lego Duplo sets aimed at 0 to 5-year olds. The 4 to 9-year age ranges can enjoy, amongst others, Lego Basic and the ZNAP vehicle/monster transformation sets. Older Lego customers can collect Lego Technic or investigate Lego Mindstorms, a revolutionary new microchip based system. Losing Its Sheen:

For many today the Lego brand brings back happy childhood memories. The success of world renowned toy manufacturer Lego has always been linked to its physical attributes such as its simplistic but distinctive basic brick design. Its commitment to fostering creative imagination has been its unique brand positioning. Even iconic brands like Lego needs to revitalize time and again to remain relevant and competent in today’s competitive world. Lego has seen a paradigm shift in its product offerings and is finding it difficult to continue its dominance in the toy market. SWOT on Brand Lego:

Strengths:
* Strong hold on European market
* Strong brand name
* Big scale business
* Consistent commitment to innovation
* Quality
* Global retail network
Weakness:
* Coordinating production with demand
* Family Style of Leadership and Management in 2003
* Weak Distribution Networks
Opportunities:
* Developing markets
* e-Retailing and Internet Buying
* Licensing Deals with Entertainment Houses
* Technology Based Product Designs using Augmented Reality
Threats:
* Substitutes from Asian Markets like India and China
* Computer and video games
* Quality Checks (Export Related)- Product recalls
* Shift in children’s taste – Category Killers Preference of Video Games over Physical Toys * Dipping Birth Rate in Developed Markets
Question 1:
There are a few areas Kjeld Kirk Ksitiansen needs to address: * Business Strategies need to be revisited: Understand the changing business environment of the toys industry and identify gaps in the existing markets, explore newer markets (developing countries like BRIC) as some of their primary markets are becoming less attractive due to maturity or showing lesser demand due to inherent environmental problems like lower birth rate. Requires an in-depth PESTEL and Situational Analysis. Hence the company needs to reflect on the expansion of its operation based on market segmentation, appropriate marketing mix, new product design and development, including total quality management for outsourcing new partners. * Understanding Business Disablers: It is important for Lego to identify business disablers. Example - Children are moving away from physical construction toys to computer games. * Identifying the right target audience: When young mothers started preferring Mega Bloks as a better alternative Lego needs to review its strategies on targeting. They seem to be neglecting the age group of 5 years to 9 years (Boys) while they have made attempts to popularise Lego usage amongst girls. * Competitive Strategy:...
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