Internal and External marketing environment of Lego

Introduction- Before the starting this case study I want to glances on the company history. Its history has been going on to last 60 years or more than 60 years with carpenter called Ole Kirk Christiansen. Ole and his some employees were started a wooden toys in a small building nearly in 1932. after that he starting to selling a toys vehicle within the Denmark. It has been grow slowly to forward on the path of progress. Who knew that one day this brand will become a very famous and loved by billion of people. Lego name is came from Danish combined word ‘Leg Godt’ which was first use in 1934. By 1940 they were make a robust and affordable 150 type of product. Today they have looking to create a modern toys for children that people are prefer it. Today the brand sold these product in the worldwide. Its yet the whole lifetime is defined in three stages first were started to make wooden toys than improvement were made in technical qualities and after than resources were used for running the LEGO System of play.

Lego external marketing environment-

‘External marketing environment can be divided into four main groupings, known by the acronym STEP: sociocultural, technological, economic and competitive, and political and legal environments’. (Frances Brassington and Stephen Pettitt p.46,2003).

Today if the anyone want to buy gift anywhere in the world they first remember the Lego product because they making a product according to the children mind that’s why LEGO company explain in their website they are continuously finding a new ideas for children toys which is helping to stablish a good reputation in the consumer mind. Its statement is ‘creativity unlimited…just imagine’.(www.lego.com)the company business most important part is making a play material product they give four main product range to consumer – play material for 0-5,4-9,7-16+ years old child or boys, family attraction, lifestyle products and media. Along with it they also making a product for educational users for 7-16+ generation.

Technology is not only mean, what technology engaged in it. What new design they give to consumer, what High Tech technology they used in the manufacturing on their product. For 0-5 year old children they create a 37 different type of product which has increased motor skills and sense. Lego always be interested in the technology which show in their theme park. The company provide a facilities for consumer not internet only also with extensive information about their product ranges. The company all economy are depend on their product in spite of the poor result they maintained their domination. They continuously

moving ahead and achieve their goals. After the crisis they signed a agreement with other toys companies which is help to giving a more better service and response to customer.

Swot analysis-

Strength- this product is associated with its history along with this also attached with today generation. Its USP is ”creativity unlimited…just imagine”, ”system of play” that all things are strength of this famous brand. A product is only for its subgroups made massive consumer base with a successful line extension.

Weakness- In the Lego line product problem with the coordination with production along with demand as well. And company big weakness when product is return due to the lack of efficiency.

Opportunities- Lego have more opportunity on the media and other business market they don’t need only put focus on the play material market which is very big competitors in entertainment market. Becoming involved in a variety of cooperative agreements to supply license product.

Threats- LEGO has threat to other competitors who are also making a high technological product such as Sony and apple and also economy condition of the company to retail trader or distributors.

Evaluation of decision making process made by the LEGO and effective response after the changes In demand –

There are many influences which is help to decision making when consumer buying a product. The current trends and fashion or status of the particular brand in the society also effect the consumer decision making. Sometimes some family choose those type of product for their children which is very famous in the society or may be if child other friends all of have them the same type of toys. The The Lego company still stand with same rhythm or taste in the growing competition market and be ready to respond the new fashion and trends. Lego gives to consumer four main target age range product which is for 0 years child to 18+ boys. To giving this response to consumers are more attached with the LEGO new trends mostly of the child. Today if anyone want to buy a gift everyone firstly think about Lego. They also make a product for educational learning material. Many of the product are designed according to the boys and girls think of view. Technology is also effect the many of the consumer decision making. What technology they applied in their particular product and what new technology they use in the computer games. Many of the products are solving the child parents problems. For attract the new generation or families or children they make a child park where they invited to children using the all type of technological play toys or enjoy a variety of role playing experience such as chance to learn electronic car, water play area, plor caves and Egyptian tombs also building are design with children mind. This type of activities also help to consumer decision making.

In 1998 company take a dis-pointing result due changes in demand. Now The company must be focus on increasing the efficiency of the business. All over the world company in deficit began to go away from Europe, Asia, Russia. The stock was reduced by DKK 150-200 million in dip sales. Most of Lego lines began to obstruction of the progress or difficulties in co-ordination. And after that they more improvement in the customer focus activities and their production. At the last they understand and realize that they need to more changes in consumer demand. The company are changes inwardly not to show in the market. And opening a new brand stores near to the consumer where they reached easily. And making a new design in girls toys.

Role of innovation on brand positioning and marketing strategy-

Brand positioning!!!!!

Due to high technology innovation or economic changes LEGO company take great effect to this duration. By changing of expectation of children company think fall into what they want from the toys.”They making a new strategies and ventured in new areas, changing culture,Innovation & Leverage Technology,making a new products.”

( http://faculty.insead.edu/adner/PREVIOUS/Midterm%20projects%20May/ANAlysis%20lego.pdf)

After the huge lose to consumer they make a innovation in their Lego line which is more efficiently, help in increasing production capacity. The Lego offering a different type of variety in their product with a new high technology. The Lego product is world famous brand according to the autumn survey 2003 :

‘Every 2-3 years, the independent market research institute Young & Rubicam conducts a comprehensive survey among families with children to identify the 10 strongest brands and Lego got a 6th place.’

(Autumn survey 2003,annual report of LEGO 2003)

This research actually based on the several countries such as Britain, Europe, France, United state etc. Today Lego become a so famous and they making a important place in the new generation children. Day by day Lego hold a massive market positioning in the toys market. Along with the changes in high technology in their products or video games they are join a new Lucas film group Ltd to make a older range star war product with the launched a 25 set of star war toys this is also a make a good position in the entertainment toy market. Lego media product is interested in innovation and this fact is showing in their new media movie which is show that they are fast forward with the new generation and stable a reliable brand position within this competitive toys market.

License Product- after the falling down their economy they are signed a legal agreements which is also a strategy among with other company to maintained credibility. They also impact on the sales.

‘ Licensed products are play themes based on movies or books for which the LEGO Group has acquired the rights. LEGO designers recreate the universe and characters in LEGO bricks so that play can continue on the floor at home’.(www.Lego.com) they are using a license product under the star war and harry potter range in Lego bricks.

Marketing strategy!!!

The Lego adopting a new ideas along with extend the concept and more focusing on the unexplored area where they did to too much attention on these particular area. In other sense it was pretty prime (in other words innovation is very essential for the LEGO company).Whatever situation in the future, Lego always focusing on children and their requirements or continuous to keep command on the toys market and for the children they made a new global institution where children play with new creativity ideas, encouraged the imagination and it will also help learn some more. The best thing is here is supposed to indicate the Lego changing their strategies accordance to the consumer thinks and this assumes the regained their supremacy and be ready the company strategies for the fortunes threats. A The interview with The Lego company marketing Innovation Director Flemming Ostergaard on lastminute.com according to the this research talk there are some points are highlited within this discussion

Using ethnography to understand kids- ”Ethnography is based on detailed observational studies of how children play and is ground breaking work for a toy manufacturer. It remains central to LEGO’s mission of how to capture the child’s imagination. There is a risk that traditional toys like LEGO will lose sales in the face of competition from the attractions of the internet and console games. Ethnography may provide some answers to this dilemma, especially for the 7-9 age range. The technology took place a big role in the toy market and also being a major classic toy provider and thats a challnge. They use cretivite people in their innovation of the product to understand better and creative approach to devloping the new stuff . They think today kids need a privacy and sometimes parents are not like that they regulary innovation in their product. (the lastminute,com )