Lego World 217
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Transcript of Lego World 217
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Presented by : GROUP 1 Nandini Aggarwal Ankur Arora Prachi Arya Vishnu Bhaskaran Pravin Bokil Hrinya Bose
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Agenda
• LEGO History and Evolution
• Product, Positioning, Segmentation and Target market
• Branding and Advertising Strategy
• Brand Extension & Pricing
• Distribution and Retailing
• Competitor analysis and Future strategies
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INTRODUCTION
• Lego is the world renowned line of construction toys - interlocking plastic bricks
• Transitioned from a carpenter's workshop to a global enterprise• Products have undergone extensive development but the foundation
remains the same - the Lego brick which has been named the "toy of the century" twice
• Infact The name 'LEGO' is an abbreviation of the two Danish words "leg godt", meaning "play well".
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NICHE MARKET…
The niche can be defined in two ways:
• Brick based construction toy within the larger toy industry• Construction toys based learning systems for education
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Development of Lego
• Introduction of themes and wheels• Use of a new non-toxic material : ABS• First Lego-based train system introduced• Lego Land- theme park with elaborate models of
miniature towns built entirely with Lego bricks• DUPLO- larger brick system for very small children
• Ole Kristiansen starts making wooden toys• Company is named "Lego" in 1934• Plastic bricks manufactured first in 1949 and then
with improved design in 1958
1930s-1950s
1960s
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•Focus shifted to young girls - introduction of doll houses!•Mini-figures introduced•launch of the Expert Series
1970s
•Technic series - robot based systems•Educational Products Department was launched•Lego World Cup held in 1988
1980s
•Introduction of movie based Lego themes - Star wars, Lord of the Rings, Pirates of the Caribbean•Books, magazines and Board games introduced•Films based on Lego Land•Business Consultancy - Lego Serious Play!!
1990s-2000s
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SEGMENTATION
Demographic Segmentation• Targets both the genders• Caters to different age groups with the primary focus on 5-12 years of age group
Geographic Segmentation
• Currently has its major presence in developed nations such as Western Europe & North America• Trying to expand its base in emerging countries such as India and China
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The major target of Lego is People with following values
• Imagination• Creativity• Fun• Learning• Quality• Caring
Psychographic Segmentation
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Strengths
Innovation
Quality
Educational Value
Strong brand Image
Weakness
High Price Tag
Single Category
Focus
Weakness
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Opportunities
Feminine Segment
Product Extension
Geographic Expansion
Phone Apps
Threats
Competition
Switch to Virtual Games
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Product• Flagship Product- Construction Toys, Licensed products• Market share: 80% in US, Western Europe, 50% in Japan & Korea, 10% in
India and China and 57% in the world• ‘Only the best is the best’• LEGO products last for 40 years with good care• Licensed products have reaped the rewards
Toys Market$157 Bn
Traditional Toys
$80 Bn
Video Games$74 Bn
Construction Toys
$6.7 Bn
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Positioning• Continuous Innovation• Cannibalize old with new• Brand Loyalty: Quality, creativity and environment friendly design• Market share of 3rd largest company rise remarkably despite of 2008 economic
slowdown, whereas it dropped for its top 2 rivals Mattel and Hasbro• Highest growth in its category during slowdown
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Branding & Promotions
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Bran
d Eq
uity
Brand Logo
Consumer Based Brand Equity
The LEGO brand is synonymous with
imagination, creativity and innovation.
Brand Promise High quality products made of ABS plastics
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Advertising & Promotions
• “Just Imagine” to “Play On”• Simple and imaginative ads. Mostly print advertisings.
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Brand Asset Valuator
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Builders Of Tomorrow
Current Brand Strategy
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Brand Content Empire
• LEGO Click• LEGO Micro sites• LEGO Club Meetings• LEGOLAND• Brickipedia • Packaging
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Brand Extension….Continuous Innovation
Lego is expanding to numerous lines of products without loosing identityHow many LEGO toys a family can buy?• Accessories• Minifigures (pocket money price –a huge success)• LEGO Friends• Games and Puzzles• Thematic/licensed niches Lego Duplo Lego Technic NinjaGo Harry Potter etc.
• LegoLand
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LEGO in Video Games
• Presence since 1997 – released over 40 video games.
1997 2010 2011 2012
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LEGO Eyes Girls with LEGO Friends…
• Category Expansion
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More Product Lines…
• Localized and event driven toys• Minifigures toys• Collectible trends
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• LEGO-Theme based theme parks
• Operated by Merlin Entertainments
• LEGO-themed Rides for younger Children
• Educational Elements such as hydraulophone , Mindstorm etc.
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Pricing• Lego’s Company culture – say no to sacrifice quality for profits.• Charges premium for it’s product.
• www.brickset.com
Rs 325 Rs 73000Rs 47000Rs 19000
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RETAILING AND DISTRIBUTION
• LEGO Brand Store Direct Retailing• Modern retail• Online retail • Distribution is outsourced • Collaborating with competitors- Hasbro distributes Lego
brick toys in India.
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COMPETITION
• Chinese and Korean Lego clones- eg CoCo, Bandai Namco• Unbranded brick toys at fraction of the price• Hasbro has stronger presence in the key India through
Funskool.• Video games
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RECOMMENDATIONS
• Expand presence in India and Latin America• Use LEGO outlets in emerging markets-Successful in Eastern
Europe and Russia• Obtain video game licenses- Target group susceptible to age
compression• Continue innovating- Construction toys for girls, event-
driven toys• Be flexible on pricing and local sourcing
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Thank You