Thursday, February 25, 2016

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. 




Tuesday, February 16, 2016

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.





















Monday, February 8, 2016

Ch. 2 - Strategic Planning for Competitive Advantage


Over the decades, the LEGO group company has been through a several changes to adapt to the changing business environment. At the early stage of the company, they began to manufacture plastic toys to meet market demand and it eventually dominated the half product sales of the company. After the LEGO System of Play being established, it formed the sales model of the LEGO play group.
 

The idea of Lego system of play is that the Lego bricks are sold into different set. Every set has a theme in it. The little bricks can be combined and constructed into variety kinds of themed building and vehicles. The huge success of the Lego system play has formed the marketing planning of the company. By following the mission statement, the limitless possibility of LEGO system of Play inspire creativity to children. The ability to inspire infinite creativity is what sets Lego apart from any other toy retailer. It is also the product differentiate competitive advantage of the company which keeps them remain the leading position in the industry. 

Nonetheless, for long term sustainability, the company is seeking a way to develop new market. In 2009, statistic shows that 90 percent of Lego’s consumer were boys. The construction theme does not seem work for girls and it makes the company start to think how they can get a share in the girls market. After four years of research, the company finally come up with a product line to address the girl market. The Lego friends product line was launched in 2012. A description from Lego website stated: "The Lego Friends story centers on the everyday lives and personalities of five girls in a fictional hometown called Heartlake City. Each of the friends ... has a distinct personality and interests, such as animals, performing arts, invention and design, that are reflected in the models. Building sets reflect different parts of town where the girls' adventures take place—downtown, suburbs, beach, camping grounds and mountains." The result was a pleasant surprise. The launch of Lego Friends came after a $40 million global marketing push and doubled the sale expectation. It was one of the biggest success in the Lego history. Although the establish of Lego friends had cause controversy on gender equality, the Lego company successfully address the company weaknesses and develop a target market strategy to expand market share.