LEGO Brand Audit
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LEGO Brand Audit Melanie Banfield ComStrat 564 2-14-16 Executive Summary LEGO is a family-owned, private toy company headquartered in Billund, Denmark. LEGO was founded in 1932 by Ole Kirk Kristiansen and continues to operate under his motto; “Guided by the company spirit: ‘Only the best is good enough’, the company is committed to the development of children and aims to inspire and develop the builders of tomorrow through creative play and learning,” (www.lego.com). Today, 75 percent of the company is owned by KIRKBI A/S and 25 percent is owned by the LEGO Foundation (www.legofoundation.com), which is committed to programs and research that are “Defining Learning Through Play.” In 2015, LEGO achieved the status as the world’s largest toy manufacturer, beating out its closest rival, Mattel, after increasing its sales in 2015 by 23 percent. The operating profit for LEGO was $700 million. LEGO has come a long way in 84 years from a company that began making wooden toys and step ladders to a company that was named “The Product of the Century” by Fortune Magazine was inducted into the U.S. Toy Hall of Fame and has been adopted by NASA to promote its educational mission (adage.com). LEGO employs over 14,000 people in 28 countries. Their success is due to the consistency and durability of their LEGO brick that allows for hours of imaginative play as well as learning through play. LEGO’s recent global success is in part due to their ability to connect with users through online communities to better understand how their customers use their product, promote their product, and collaborate on ideas. With this new knowledge, LEGO should continue to capitalize on the growing adult market with more products geared toward hobbyists, engineers, and perhaps even consider large scale LEGOs for backyard play construction or patio furniture. The LEGO Foundation should also consider offering annual college scholarship opportunities as well as high school and college contests for building design and engineering. A potential new slogan could be, “LEGO Play, LEGO Learn,” to emphasize the importance of the LEGO Foundation’s work and the value of LEGO bricks, robotics, and programming through learning with LEGO. Introduction Company Story LEGO was founded in 1932 by Ole Kirk Kristiansen in Billund, Denmark. The company manufactured stepladders, ironing boards, stools, and wooden toys. The name, LEGO was formed from the Danish words, “Leg godt”, which translates to “play well.” Coincidentally, in Latin, this also means “I put together,” which epitomizes the way consumers use the plastic building blocks manufactured today. During the 1940s, LEGO purchased a plastic injection-molding machine and started to turn wooden brick toys into plastic brick toys. Soon after, they developed the first “automatic-binding bricks”—the forerunner of the bricks made today. In the 1950s, LEGO started to sell its first “system of play”, which included 28 sets and 8 vehicles. In 1958, they patented the “stud and tube coupling” system. To promote their toys, LEGO opened the first Legoland in Billund, Denmark in 1968 and released a short, marketing film showing off the new park. This was a huge success. 625,000 visitors came to Legoland in its first season. Today there are five Legolands around the world and 16 LEGO Discovery Centers. While LEGO entered into the top 10 world’s largest toy manufacturers in 1990, sales during that decade stagnated and declined and the company almost went bankrupt. However, during this period, LEGO released new product lines that continue in popularity today, including LEGO Mindstorms, which was developed out of a partnership with Massachusetts Institute of Technology, LEGO Star Wars, and LEGO Creator. Under the leadership of CEO, Jorgen Vig Knudstorp, and major restructuring, especially of their supply management system, LEGO started to see profit momentum in the late 2000s and into the next decade. Today, they are the world’s largest toy manufacturer, out-performing Mattel and Hasbro, their largest rivals. They have over 14,000 employees and operate in 28 different countries with 40 different products. Some of their most popular products include LEGO Star Wars, LEGO Creator, LEGO Bionicles, LEGO Mindstorms, DUPLO, and LEGO Friends. LEGO continues to focus on educational programs and partnerships through the LEGO Foundation in order to achieve their mission “To inspire and develop the builders of tomorrow” (www.lego.com). World Wide Locations: Australia Italy Sweden Austria Japan Switzerland Belgium Korea Taiwan Canada Mexico United Kingdom China Netherlands United States Czech Republic New Zealand Denmark Norway Poland Finland Russian Federation France Germany Singapore Hong Kong South Africa Hungary Spain Customer Story LEGO markets their products to everyone; boys, girls, adults, educators, and businesses. For much of the company history, their advertising and marketing focus was geared toward boys though they did manufacture LEGO Dollhouses in the 1970s. Most recently LEGO can attribute a huge boom in profits to the new LEGO Friends product launched in 2012, and marketed toward girls. It should be noted that in 1963, Godtfred Kirk Kristiansen, son of Founder and then Managing Director, devised a list of product characteristics that included “For Girls and Boys” and “Fun for every age” (www.lego.com). Given these characteristics, one can conclude that LEGO is meant to be a lifelong toy for all ages and genders. The company mission is “To inspire and develop the builders of tomorrow,” which could be geared toward anyone interested in building and using their imagination at any age. In the 2000s, LEGO began to recognize the market potential of adults who had formed online communities dedicated to swapping LEGO ideas (Kolowich, 2015). In 2005, LEGO created LEGO Ambassador Network (LAN) that has fans ages 19-65. LEGO has also created a secondary customer base with educational programs, businesses, educators, and schools. NASA has formally adopted LEGO for their educational mission (Braukus, 2013). Customer Relationship • Enjoys constructing • Enjoys imaginative play and creating worlds but also structure • Curious • Can follow directions and has attention to detail • Self-entertain • Interested in learning more, doing more • Wants something that is evolving, from a static structure to a robotic or powered structure Brand Inventory Brand Promise “Guided by the company spirit: "Only the best is good enough”, the company is committed to the development of children and aims to inspire and develop the builders of tomorrow through creative play and learning” (www.lego.com). “It is the LEGO® philosophy that ‘good quality play’ enriches a child’s life – and lays the foundation for later adult life. We believe that play is a key element in children’s growth and development and stimulates the imagination and the emergence of ideas and creative expression. All LEGO products are based on this underlying philosophy of learning and development through play” (www.lego.com). Brand Personality Excitement- Collaboration with customers by creating new worlds, robots, and replica models of favorite real-life structures, people, and characters. Keywords: “Business of imagination”, robotics, innovation. Sincerity- Committed to sustainability and making a positive impact on the world. Partnering with customers and educators to create and innovate. “Only the best is good enough.” Keywords: Positive impact Ruggedness- The original LEGO brick has been around for 50 years. Adults still have LEGO sets from their own childhood. LEGOs are built to last and to adapt. Keywords: Durable, Adaptable. Competence-84 years of proven excellence and global reach. 2015, LEGO became the number one toy maker in the world. Honored with “Product of the Century” award and “U.S. Toy Hall of Fame.” LEGO Foundation has educational partnerships that inspire engineers and develop sophisticated building systems including robotics. LEGO has expanded into digital gaming and also collaborates with its customers via online communities and with its LEGO Ambassador Network to understand how its customers use and value LEGO. LEGO partners with prestigious institutions like NASA and Massachusetts Institute of Technology. Keywords: Educational partnerships, global reach, sophisticated technology. Sophistication-Lead by the motto, “Only the best is good enough,” LEGO is committed to its values of imagination, creativity, fun, learning, caring, and quality. This is shown through its numerous awards and diverse line of 40 products for people of all ages. Keywords: Innovative, adaptable, award-winning. Brand Elements LEGO is characterized by the its classic red square logo and the capitalization of the letters ‘LEGO’. The LEGO brick is iconic and dates back to the patent of its “stud and tube coupling” system from 1958. The yellow LEGO man represents an iconic LEGO figure from the LEGO Classic set and was the main character in the popular 2014 The LEGO Movie. LEGO is known for many other popular brands, shown above, such as DUPLO, LEGO Star Wars, LEGO Mindstorms, and LEGO Friends. LEGO has always partnered to license character theme sets from popular movies such as Star Wars, Harry Potter, Teenage Mutant Ninja Turtles, and Disney. Brand Products Toy Products DUPLO LEGO Jurassic World LEGO Friends LEGO Disney Princess LEGO City LEGO Ultra Agents LEGO Nexo Nights LEGO Speed Champions LEGO Star Wars LEGO Classic LEGO Bionicle LEGO Teenage Mutant Ninja Turtles LEGO Dimensions LEGO Angry Birds LEGO