Essay about LEGO Marketing Actions And Strategies

Submitted By xdewet
Words: 4772
Pages: 20

Marketing Actions and Strategies

by Alexander de Wet
MKT5000 Assignment 2
October 2014

EXECUTIVE SUMMARY

The Lego Group was founded in 1932 by Ole Kirk Kristiansen (Mortensen 2012). Kristiansen, a master carpenter and joiner, initially manufactured stepladders, ironing boards, stools and wooden toys from his workshop in Billund, Denmark. Kristiansen worked under a motto of "Only the best is good enough" which is the same spirit that Lego still strives to work to today. As the Lego business grew from the 1930s until today, Lego has been required to re-evaluate and continuously better their product in order for it to be successful. This report aims to investigate the actions and strategies of Lego in recent times that have ensured the sustained profitability of the company.
The analysis of the actions and strategies are evaluated on the following merits:
Building Strong Brands - The Lego Brand Equity and continuous sustainable promise from the Brand,
Market Offerings - Pricing strategy and pricing objectives,
Delivering Value - Distribution strategy and market logistics,
Communicating Value - Communication with the target market, co-creation and interactive marketing, and
Long Term Growth - Creating and sustaining long term growth

TABLE OF CONTENTS

1. INTRODUCTION .................................................................................................................................Page 1
2. BUILDING STRONG BRANDS .....................................................................................................Page 1
3. SHAPING THE MARKET OFFERINGS ......................................................................................Page 4
4. DELIVERING VALUE ..........................................................................................................................Page 6
5. COMMUNICATING VALUE ............................................................................................................Page 6
6. LONG TERM GROWTH ..................................................................................................................Page 8
7. CONCLUSIONS ................................................................................................................................Page 10
8. RECOMMENDATIONS ...................................................................................................................Page 10
9. REFERENCES ......................................................................................................................................Page 11

1. INTRODUCTION

The Lego brand was branded as the "Toy of the Century" in 2000 by both Fortune Magazine and the British Association of Toy Retailers (Toy Hall of Fame, 2014). Today, Lego is branded as the largest toy company in the world. This is a startling turnaround from 2003 and 2004 when the company operated at a loss.
There is a variety of reasons why Lego has managed to turn the company around from the difficult period they experienced in 2003 and 2004. One of the main reasons was the drive to simplify Lego and to apply the concept to get back to its basics (Ashcroft, 2013). This concept has proved extremely successful and has galvanised the company into a profitable business through the quality of its brand.

2. BUILDING STRONG BRANDS

2.1 Brand Equity

“Brand Equity” is the added value endowed on products and services. It may be reflected in the way consumers think, feel and at with respect to the brand, as well as in the prices, market share, and profitability the brand commands (Kotler & Kellar 2012).

The Lego brand has established itself as a tried and tested product that brings endless creative value to the user. In an interview with Jorgen Knutsdorp (2014), CEO of Lego held by Bloomberg following the announcement of Lego's financial results for 2013, Mr. Knutsdorp answered the question, what Lego is as "the fundamental idea of putting…