Lego Brand Strategy

1. Introduction On 4th September 2014, LEGO Group announced the news that the company is achieving 11 percent increase in sales for the first half of year 2014, surpasses fellow toy manufacturer Mattel. The company has gone through ups and downs for a few decades, with the strong belief on “only the best is good enough” and persistence on its core values of imagination, creativity, fun, caring, learning and quality; LEGO® managed to become the number one toy manufacturer in the world now (Koch 2014).

The purpose of this report is to audit the actions and strategies of LEGO® from marketing perspectives and provide advice for their future improvement and direction. This report covers 5 key areas from branding perspective, pricing, distribution

Building Strong Brands

2.1 Brand Equity

In building its brand equity, LEGO® went through a series of proper brand building processes from selecting the right brand elements, designing series of marketing activities until leveraging secondary association (Kotler & Keller 2012).

When the company first founded in 1930’s, Ole Kirk Kristiansen, the founder of LEGO Group created the name by creatively combining the first two letters of the Danish words leg and godt, meaning “play well” which coincidently meant “to assemble” in Latin (Bigus 2011). LEGO logo was then invented to represent its brand image. Together with the motto: only the best is good enough has became the strong brand elements differentiated it from the other companies. Fig. 1: Evolution of LEGO logo (Stark

Strengths and weaknesses are based on internal environment; these are mainly the key characteristics that create LEGO® value while opportunities and threats are based on external environments, include economical, political, technological factors and rivalry within the industry. Fig. 2: SWOT analysis of LEGO®

Hasbro, Mattel and Mega Brands are 3 major competitors to LEGO®, their major products and key advantages include

• Mattel – Barbie dolls series for different segments from infant, girls and boys to parents;

• Mega – Mega Blocks and Mega puzzle, emphasizing innovative and creative;

• Hasbro – Board game and online game, high engagement on motion and entertainment experience.

Mattel and Mega Brands are offering their products relatively cheaper than LEGO®. From fan’s loyalty perspective, LEGO® is much more ahead of these competitors, however Mattel Barbie dolls has also been sold continuously through decades and it do pose threat to LEGO®. Mega Brands produced a very identical product to LEGO®; this has given the consumers another cheaper option to satisfy their need in construction toys. Furthermore, Mattel and Mega Brands have entered a strategic alliance which definitely strengthens their market