Ch. 17 - Personal Selling and Sales Management

In 2003, the Lego Group had faced its biggest financial crisis resulting in sales collapsed and tight budgets. Since then, the Lego Group realized that in order to sell product and maintain long-term customer relationships, they should concentrate on brand imaging and excellent customer service. One of the essential factors is to listen to your customers' feedback and solve the issue. The Lego Group had partnered with Medallia to address customers inquiries and obtain metrics to determine a plan of action. The Lego Group will send out customer emails and feedback. By this mean, the Lego Group can discover the weaknesses or faults that they would never be able to notice of not listening from the customers. It could also help to make improvement so as to increase customer satisfaction.

On the other hand, the Lego Group has extended its brand by developing multimedia content. For instance, it develops its production lines with Star War and Cartoon Network. The Lego Group creates contents that build on the brand's various storylines. Lego toys are sold as comprehensive multimedia packages. Each Lego toy series has a fictional universe that's supported by microsites, online games and even serialized films through its partnership with Cartoon Network. My LEGO Network social networking site designed for kids with extensive parental and safety controls. LEGO Click allows older hobbyists to display their Lego creations with photos and videos.

All of this success stems from the Lego Group clearly understanding their audience, said Joe Pulizzi, Founder of Content Marketing Institute. "The Lego Club Magazine shows Lego Group's clear understanding of their target audience." said Pulizzi, "Kids still love print. The online storytelling - I'd often catch my oldest son going through page by page on the Lego site to learn everything he can about the characters and their backstories."

Ch. 16 - Advertising, Public Relations and Sales Promotion

The advertising strategy of the LEGO group is always emphasizing on the unlimited possibility of the Lego bricks which could inspire creativity and imagination. The most aspirational advertisement must the following:

The advertisement contains a white Lego brick in the middle and the shadow of the brick is a outline of a ship. The advertisement is simple without any exaggerated words or graphics. Yet convey an aspirational message which even a small Lego brick could be  created into different incredible objects. Ships, planes, buildings, whatever you name it. It also shows the fascinating characteristic of Lego which it has endless possibility. As long as you have the idea, you can create anything out of Legos. With imagination, it could be anything. Here are some other examples express the same idea.

The LEGO group also using outdoor media to promote their brand. In Malaysia, the advertisement agency hired some Lego artist to create the poster with Lego that plays off the surrounding environment. The posters are easily recognized, the concept of the advertisement is fun and eye-catching. It leaves a lingering impression to passersby, also strengthen the brand image to the audiences.

Ch. 14 - Marketing Channels and Retailing

As one of the world largest construction toys manufacturer, the LEGO group often need to seeks of a new way or new strategies to distribute its product, so as to boots its product sales through different channels. 

1. Direct channel
The LEGO group has around 125 self-own LEGO stores operates in Europe, UK and North American. The LEGO stores plays a retailer role to distribute its products to the market. It aims to provide excellent service to customers while offering a comfortable place for parents and kids to shop the variety LEGO collection. For example, the LEGO store in Rockefeller Center has brick specialists there with extensive LEGO product knowledge can assist customers who are looking for the latest LEGO set, picking a gift for friends or even bring in their LEGO fan for a special treat. Moreover, it offers a spacious play section for kids to play LEGO with different scenario each month. There is pick a brick wall at the LEGO store where you can choose the bricks and elements you want in different shapes and color. Each store has different bricks and they will change in a certain period of time. LEGO lovers have another excuses to constantly visit the LEGO stores to find the special pieces to complete their own LEGO set.

Despite its own retail store, the LEGO group has partnered with PFCweb Inc. for order fulfillment from its Shop form Home catalog and online store. Those channels allow customers shops directly from LEGO without bothering to go to any retail store. They could just place an order either by phone or internet. 

In addition, the LEGO group offers affiliate program to expand its retailing channel. Partners of the affiliate program can enjoy 3% commission for each customer purchase. There is no monthly minimums and offers low return rate. It provides a motivation for small business to partner with LEGO. Not only facilitates the product distribution, also helps to expand its existing market and boost product sales.

2.Other retailing channels
The LEGO group also distributes their through other retailing channels such as department stores like K-mart and Walmart. Or you can purchase the LEGO set in the well-known toy store Toys"R"s. The LEGO set are distributed to different retail stores by supply chain and then being delivered to the customers through retailing. The LEGO group could take advantage of the conveniency, frame and popularity of other retailers to spread their product through out the world. 

Ch. 6 - Consumer Decision Making

Although LEGO is one of the leading brand in traditional toys industries, it still facing competition. There is a huge range of choices in the market for consumers to chose, consumers may switch anytime from this brand to other brand. The following are some factors that may affect consumer's decision making on purchasing LEGO products.

1. Social factor
People tend to purchase the brands they are well familiar with partially because most of them have high reputation in the market and could be treat as a guarantee of product quality. Since the information of the brand is easy accessible It is more safe to buy something that are well recognized rather than take the risk to buy something you do really know about. On the other hand, they are more likely to buy toys that have a trend at that time. As everyone talks about it, it helps to trigger purchasing desire of the consumers. For instance, LEGO made a considerable amount of profit in 2015 due to the launch of the new Star Wars movie. According to Newsweek, "The Force Awakens, ... quickly became a box office hit, taking in $1.9 billion worldwide. Along with tickets, fans also bought the toys, propelling sales of the franchise's merchandise and making Lego's replica of the Millennium Falcon one of the brand's best-selling products for the year.

2. Age and Gender factor
Gender or age attraction product- gender or age also plays an important role while consumer purchases a new product. LEGO organization make different product for boys and girls, because wants of every customer is basically different, so they made according to needs. This gender difference starts from the first year of children's. And the same in the age difference, as child grow their purchasing habit and style changes.

Ch. 5 - Developing a Global Vision

Starting from a carpenter’s workshop found in a village in Denmark to one of the most famous toy brand in the world. The LEGO has developed different strategies to remain its dominant position in the toy market, also continuing to grow and expand its business around the globe. In 2014, All LEGO Group market regions experienced double digit sales growth while the traditional toy market in most countries grew by low single digit rates.The LEGO group’s long-term vision and ambition on the global market should claim credit for this unprecedented success.

According to the LEGO group’s Chief Financial Executive – John Goodwin, “We estimate that more than 85 million children across the world had a LEGO play experience during 2014. This has only been possible through an ongoing focus on building our capabilities globally during 2014 from manufacturing to sales, as well as developing great products that appeal to children across cultures and geographies.”

To achieve these goals, the LEGO group has been doing a lot to increase its international influence, either directly or indirectly. When the retail sales of LEGO constantly growing in the north america and Europe market, the name of LEGO started to be recognized around the globe. A benchmarking study revealed LEGO’s global name recognition was on par with industry giants like Disney, the team started churning out new products and ideas to leverage the brand’s untapped value. A line of LEGO-branded children’s wear was created and a division of the LEGO Group was charged with pitching book, movie, and TV ideas. LEGO building sets became increasingly complex with more unique components. Especially the office box success of "The LEGO movie", the reputation, brand image and company values are spread all over the world. To continuously expand its global market, the LEGO group established two main office in Shanghai and London in order to manage and develop overseas market; sales offices in Brazil, Turkey and Malaysia have been added to the long list of local presence for the LEGO Group. They are also strategically building supply chain in Asia to fulfill the local supply needs. The LEGO plant in Jiaxing, China began construction in 2014 and is expected to be fully operational in 2017. The manufacturing facilities will be solely supply the Asian market.

The objectives of the company in the future will focus on its core market of Europe and North America, also building global presence in the industry.

Ch. 4 - The Marketing Environment

Since the day the LEGO group has been establish, the company had been through different challenges in the ever-changing environment. Due to the uncertainty and uncontrollability of the external environment, it may affect the company decision making and marketing strategy.

1. Population
The fertility concept of modern people is currently changing.  Statistics shows that from 2005-2010, the average age of a first-time mother in Britain, Germany, Switzerland and Japan rose by almost half a year. Although wealth and income are rising, they are still less likely to think about having a child. According to a population research done by Max Roser, almost every country is facing a declining birthrate. It is predicted that the fertility rate will be continuously declined in the next  and it already showing effect on the sales of the toys industry. It was found that despite the spending per toy and per child is constantly growing, unit sales are declined. It is concerned that the issue will be harmful for the industry.

2. Gender
Girls could be a potential market for the industry. In 2013, two major toymarkers - Hasbro and Mattel's product sales on boys were dropped, while on girls were significantly boosted. Hasbro had a 29% increased on the revenue gained from girl's toys and had a 17% drop on boy's toy. Similarly, Mattel had a 28% rise of sales on girls, while there was a 9% down on boys. Nevertheless, as what had been mentioned in the previous chapter, 90% consumers of LEGO were boys and the company had experienced one of the biggest success of the LEGO industry after the launch of a girl oriented product line - Friends.

3. Technological factor
As technology advances, kids are having more choices. From physical to electronic, or even digital. With electronic gadgets such as tablet and mobile readily available, video games and mobile games are definitely new challenge for physical toys. In 2012, 45% boys aged over 6 had played video games in the past year. As technology improves, new console and video game provide higher visual quality and immersion, which makes it more addictive. On the other hand, mobile gaming is another emerging competition to traditional gaming. The advantage of mobile gaming is fast, easy accessible and had a wide variety of choices. The game animation is eye-catching, also easy to play. 

Ch. 18- Social Media and Marketing

One of the biggest challenge faced by a log history company would probably be staying young and relevant to the ever-changing society.  In the last few decades, social media has become an emerging marketing strategy to promote, or more precisely "communicate" with the consumers. The new generation are looking for something close to their life which are apposite and evocative. They can find anything they need on the internet, they are not buying traditional marketing which are bored and what we called "hard sell". So how can the LEGO group take advantage of the social media to build customer loyalty, as well as absorb new consumer group? As what Lars Siberbauer, the LEGO group global director of social media said, "it's all about connecting with the consumers and finding out what the social needs are. And then building engagement on top of that."


Here are the few approaches used by LEGO to achieve what they said connecting with the consumers.

1. Facebook
The LEGO official Facebook page was established in 2007 and it now has over 10 million people like on their page. LEGO take good use of the most popular social platform to interact with consumers. It often used to promote the company's new products and updates and most importantly, they will post some interesting photos or videos that are related to recent events. For example, they made a funny video of the Star War Movies.

The Empire is on high alert! #LEGOStarWars #ShouldHaveUsedTheForce
Posted by LEGO on Thursday, February 11, 2016

It also forms a community for LEGO fans to share their collections, their love towards the much-loved childhood toy and they may get response from LEGO, no matter if it is a complaint, question or just a little sharing. It foster interaction and communication with consumers, also cultivate a approachable image.


2. LEGO Idea
Other platforms like Youtube, Instagram, Twitter, etc are performing a similar duties to communicate with their target customers. However, the LEGO Ideas provides the LEGO fans a sense of involvement to participating in the product development. LEGO Idea is a creativity inspiring platform designed to allow LEGO lovers to submit their ideas for LEGO products. If the idea reach more than 10000 votes. It will be forwarded to the head of product development for review and it may has the opportunity to become a actual product sold around the world. Other than just simply purchase a LEGO product, you have a chance to become a LEGO designer. Besides of connecting with consumers through social network, LEGO take it to a new level of engagement that allows consumers to anticipate and be part of the community.