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.