Lego Case Study: Marketing Audit and SWOT Analysis, Marketing Plan

Executive Summary

The LEGO group is a primarily a toy manufacturer which successfully trades globally. Established in 1932, the company’s continued innovation has not only provided a gateway for LEGO to enter into different market segments, it has also permitted LEGO to remain relevant and popular over the decades.

LEGO Education Solutions is a division of LEGO designed for primary schools to provide engaging, hands-on experiences.

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LEGO Education Solutions can be used in education to support lesson plans for teachers, ignite student’s natural curiosity by helping them develop essential communication, creativity, collaboration, and critical thinking skills in a fun and exciting way (Education, 2019).

LEGO Forma are mechanical models that are cleverly designed but simple to assemble. Sturdy rods and parts combine with customisable skins to generate a creative challenge. Currently marketed towards Adults, the LEGO Forma models can be altered for children to aid learning.

The following report will consist of developing a marketing plan for altering the existing LEGO Forma product to be integrated within the LEGO Education Solutions department.

Identify Business Vision and Mission (Section 1)

The LEGO Education segment of the LEGO Group was launched to make the joy of discovery even more accessible to children.

Established in 1984, LEGO Education has been working with teachers and educational specialists to deliver playful learning experiences that bring subjects to life in the classroom and make learning fun and impactful.

LEGO Education resources are based on the LEGO ethos of playful learning combined with curriculum-relevant material.

LEGO believe that expanding knowledge and building academic and 21st century skills will create active, collaborative, lifelong learners. Together with teachers, LEGO aim to enable every pupil to succeed in education and be prepared for future life challenges (Education, 2019).

LEGO Education operates to the following mission statement “We see the world with our eyes; we change it with our hands. Hands-on LEGO Learning is for life” (LEGO, 2019).

Marketing Audit (Section 2)

A Marketing Audit is a systematic review and appraisal of the environment and the company’s operations (Donnelly, Harrison, and Megicks, 2009).

Both the micro and macro environments within LEGO must be explored to be able to complete a thorough Marketing Audit along with exploring the four Ps of Marketing (Product, Price, Place & Promotion) are also known as the ‘Product Mix’.

A business micro-environment comprises of factors that are close to the company and have a direct impact on the organization.

Stakeholders, suppliers, distributors, and employees make up the LEGO micro-environment.

The macro-environment is the state of the economy. One method of examining the macro-environment is using the PESTLE framework.

A PESTLE analysis explores the political, economical, technological, legal, and environmental factors can impact LEGO.

Kotler and Keller (2006) suggest an audit is “A comprehensive, systematic, independent and periodic examination of a company’s or business unit’s marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s performance.”

Exploring the strengths, weaknesses, opportunities, and threats of the LEGO company, (known as a SWOT analysis) gives an insight of the internal and external factors that can influence the LEGO Group.

Table One – SWOT analysis

The positive Micro Environments within LEGO include three of the Product Mix.

The LEGO Products have a strong brand name and reputation. They are globally recognised in the industry with good marketing, channelling and distribution channels (Place & Promotion)

The Pricing of LEGO products are higher than competitors. This falls in the weakness category within the SWOT analysis. Even though LEGO is more expensive than other products available, customer feedback and positive experience of the LEGO has led to repeated business and abetted in the strong reputation held globally.

LEGO has found the price equilibrium, “Where the supply and demand curves meet is the sweet spot where a producer’s willingness to offer a certain amount of product at a certain price matches the consumer’s desire to buy that amount at that price.” (Sheehan, 2011)

Macro-environment

For organizations to be able to adapt successfully to changing conditions, management needs to understand the many factors and forces influencing such changes. Firms should be able to adapt to changes as they occur, or better still, be able to adapt in advance of change by anticipating events. By identifying environmental trends early, management can better determine how they might affect the future of the business (Lancaster and Reynolds, 2005).

The macro-environment is the state of the economy. One method of examining the macro-environment is using the PESTLE framework.

A PESTLE analysis explores the political, economical, technological, legal and environmental factors can impact LEGO.

Table Two – PESTLE chart

Since 2015, the LEGO Group, the LEGO Foundation and UNICEF have been collaborating to improve children’s lives through the promotion of quality early learning through play and through leaving a positive impact on children via the Children’s Rights and Business Principles. Teaming the LEGO Foundation and LEGO Education Solutions, this shows the company takes its social responsibility seriously and puts LEGO in a good position integrate LEGO Forma in to the Education sector.

Marketing Objective (Section 3)

Utilizing the Ansoff Matrix combined with the SMART approach, clearly defined marketing objectives can be determined.

Ansoff Matrix – Table Three

The ‘SMART’ approach is always helpful; you are looking for success criteria which are Specific, Measurable, Achievable, Realistic, and Timely (Roberts, 2011).

Adapting the current LEGO Forma design to make it suitable for the LEGO Education Solutions team is a specific adjustment to a current product.

Success of the re-design product will be measured by customer forums and rigorous testing in line with toy standard regulations.

All toys supplied in the UK must meet a list of essential safety requirements which are set out in the Toy (Safety) Regulations 2011. To prove that these requirements are met, all toys should also carry a CE Marking (Toysadvice.co.uk, 2019).

Prototypes of the revised LEGO Form product will be designed. Prototypes are built to test the concept and design of the product. Prototypes will be given to focus groups to test multiple aspects of the product, including design and ease of use.

The construction time of the products will assist in providing realistic timescale on product deliverability.

Marketing Plan (Section 4)

Marketing planning is the structured process that leads to a coordinated set of marketing decisions and actions, for a specific organisation and over a specific period (Wood, 2017).

A marketing plan is a report that outlines your marketing strategy for the coming year, quarter or month. Typically, a marketing plan will include: An overview of the business's marketing and advertising goals.

The market planning process helps a company target the right audience with the right content. A marketing plan aids the impact marketing projects have upon the growth of the LEGO Group.

A marketing plan also describes business activities involved in accomplishing set marketing objectives within an allocated time frame.

An outline marketing plan will now be set out to breakdown the organisation’s goals required to incorporate a variation of the LEGO Forma product into LEGO Education Solution division.

Marketing Plan - Goals/Objectives

The overall marketing objective at LEGO is to encourage customers to purchase LEGO products. This includes existing products, upcoming products yet to be released, and films associated with Lego.

The main segments of the long term marketing plan will be outlined below.

Customer Segments

Focussing on the LEGO Forma range, LEGO Forma is currently a premium LEGO experience designed for adults looking for a fun, engaging way to reconnect with their creative side.

The redesigned LEGO Forma products will be produced with children and education leaders in mind as these will be the consumers of the product.

It is important, however to keep in mind not only the end user/consumer (children) but also Educational purchasers and parents as these will be the customers.

Market Position

Two major features of modern markets are the extent to which they are capable of being segmented (because of growing differences between customers and their demands to be treated as individuals) and the existence of the vastly superior technologies of communication (Hooley, Nicoulaud, and Piercy, n.d.).

Market Penetration is the attempt to increase sales of current products in present markets (Plus, 2019). As LEGO has a prominent position in the Education industry due to the success and longevity of the LEGO Education Solutions division of the LEGO Group. This prominent positioning will compliment aggressive marketing to introduce LEGO Forma to the Education sector.

The introduction of LEGO Forma into the LEGO Education Solution products can also be viewed as a mix of Market Development and Product Development (a current product revised to enter a market that another division of the company currently serves).

There is also an element of diversification as LEGO Forma will be moving from a product designed for adults to a product designed for children.

Marketing Mix

The marketing mix of the amended LEGO Forma product will now be explored.

LEGO has successfully introduced a catalogue of products over the decades and branched into different sectors including the film and merchandise industries.

Even though LEGO Forma is a relatively new product, the strong reputation of the LEGO brand and the affiliations with the Education authorities should prove a positive asset in the launch of the revised LEGO Forma product.

LEGO currently trades globally in many locations including UK, Denmark, Mexico and Hungary. The LEGO Group also have an emerging presence in China and India. The places that the LEGO operate are vast and therefore provides a global platform to market the revised product.

LEGO has found its price equilibrium and has adopted a mid-premium pricing policy for its high-end products. Customer feedback rates the pricing of LEGO products as reasonable and affordable. The pricing of the LEGO products combined with the quality of the products has resulted in maintaining value-based pricing strategy which has assisted in creating further markets and increasing its customer base.

It is argued that the key to business success was simply to supply the right product at the right price in the right place using the right promotion (Hammond, 2011).

LEGO uses a variety of advertising methods to increase brand awareness from modern techniques such as social advertising to sponsoring events such as the Summer Olympics and Paralympics.

Working closely with UNICEF and the established LEGO Education Solutions connection/partnership will have a positive impact on the promotion of the revised LEGO Forma product.

Integrated Marketing Communication Plan

The Integrated Marketing Communications (IMC Plan) ensures that all forms of communications and messages are carefully linked together to promote the product and to also answer any feedback from customers and consumers.

LEGO uses the power of social media to its full advantage, ensuring that it is responsive to feedback. “LEGO runs social channels where it keeps a constant eye on the feeds and is super quick to engage and remain personal to its audience. It has also built a supportive and consistently imaginative community on its LEGO Ideas site” (Ratcliff, 2019).

LEGO has years of experience of successful brand awareness and promotional activity. Mike Zeederberg from Zuni describes the IMC of LEGO as “a master class of content marketing, customer engagement and monetisation, all built around a really good product.” (Zeederberg, 2019).

Zeederberg’s comment highlights the importance that the quality of the product is at the core of the success of the IMC plan.

Conclusion

Taking all the factors noted above into consideration with the correct marketing approach, pricing strategy and making the best use of the current relationships (UNICEF & Education Solutions) revising the LEGO Forma product for the Education sector is both viable and achievable.

It will be imperative that focus groups are used to gather information on consumer needs and expectations of the revised Pro Forma product.

The information received from the focus groups can then be used to create prototypes of the products. These prototypes can then be tested on the focus groups to gain further feedback which will assist in the final design of the product.

Prior to the product launch LEGO can build awareness and excitement through social media, in a similar way as they promote their current products including films.

Advantage of the LEGO Ideas division may also be beneficial to providing further traction with the reformed LEGO Forma Product.

LEGO Ideas is an online platform that was established in 2008 to create a space for LEGO Users to make suggestions on new or existing products of LEGO. If a suggestion gains more than 10,000 votes, will be forwarded to the heads of Lego for possible development. This could be used to encourage children to think of how LEGO Forma could be further innovated, therefore providing fun and empowering creative thinking – keeping in line with the overall mission statement of the LEGO Group.

The LEGO Ideas scheme was launched worldwide in 2011 and has so far been responsible for eight successful products, including this Ghostbusters set (Ratcliff, 2019).

With eight successful product launches through the LEGO Ideas scheme this not only provides motivation and a genuine opportunity for suggested ideas to be turned into products.

References

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10. Sheehan, B. (2011). Marketing management. Lausanne, Switzerland: AVA Pub., p.15.
11. Toysadvice.co.uk. (2019). Toy Safety Standards in the UK. [online] Available at: http://www.toysadvice.co.uk/toy-safety-standards-uk.html [Accessed 25 Jun. 2019].
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13. Wood, M. (2011). Essential guide to marketing planning. p.4.

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