Indian Institute of Technology-Jodhpur

International Marketing
End Term Examination
MBA 2020-22
Max Marks: 50 Time: 2hrs

Read the case and answer the questions in the space provided.

LEGO’s claim to fame goes well beyond its famous interlocking plastic bricks. Since the
company’s inception in 1932, LEGO has diversified into movies, video games, television
shows, popular social media channels, and amusement parks. And despite the COVID-19
pandemic and its impact on sale of toys, LEGO’s sales have been increasing and grew by 14%
in the first half of 2020. The popularity of LEGO lies in its marketing strategy, which embraces
digitalization and emphasizes knowing its customers. It has used modern marketing tools to
strengthen its brand identity and remain relevant during the pandemic

The history of LEGO

Founded by carpenter Ole Kirk Kristiansen, the LEGO Group remains a private, family-owned
company based in Billund, Denmark. While Kristiansen originally produced wooden
interlocking bricks, the company continued innovating and experimenting with new designs.
Eventually, the traditional plastic LEGO brick was patented in 1958, offering a timeless design
that endures to this day. Over the years, LEGO bricks have grown in popularity and have been
named “Toy of the Century”—twice.

Lego history in Minifigures.

Although the LEGO brick remains their trademark product, the company experimented into
new ways of making toys and marketing during the 20th century. LEGO designed its new
playsets to appeal to both boys and girls and released more complex products to challenge older
children. Realizing their customer segments included children and adults from older, nostalgic
generations, LEGO adjusted its marketing to communicate with its audiences. Lego has been
able to engage its existing customers to influence new product development and nurture an
entirely new consumer segment.

In the 21st century, LEGO remains a thriving, highly adaptable company. Although its core
brand—offering its customers a way to develop their imagination and creativity through free
play—remains the same, it continues to innovate by researching and adapting the LEGO
marketing strategy to new digital communications.

LEGO marketing strategy

This growth is the result of six key factors in the overall LEGO marketing strategy. LEGO
Group’s willingness to enter new marketplaces, diversify its merchandise, and embrace social
media marketing, and changing their product lines has enabled the brand to maintain its
position. LEGO knows which marketing strategies to pursue and continue, from its educational
partnerships and parent-safe brand, and to use these strategies to develop better customer
relationships.

Marketing strategy 1: Market entry strategy

LEGO products are in 130 countries—but the company is always looking to expand its
operations. LEGO entered China by putting money into opening LEGO stores in major cities
as well as cities that showed demand and interest for their products. LEGO analyzed the new
market, and found that there was no a need to create any Asian-specific product lines as Chinese
consumers strongly valued the traditional LEGO creative play experience. On the other hand,
they also acknowledged the advanced digitization in Chinese play would require them to
continue creating their own digital LEGO products.

This focused strategy paid off, as LEGO saw a 4% increase in profits and sales in 2018. As
China continues to develop a very affluent middle-class numbering in the millions within the
coming years, it represents a significant opportunity for LEGO and its market position.

Marketing strategy 2: Licensing & merchandising mentality

Diversification is an essential part of the LEGO marketing strategy and it has branched out into
multiple mediums to promote its brand.

The LEGO Movie franchise and The LEGO Batman Movie raised the profiles of its licensed
properties while celebrating LEGO’s philosophy of play. LEGOLAND theme parks have
opened in Billund, California, Florida, Malaysia, Dubai, Windsor, Japan, and Germany. These
brand extensions into other categories have helped the brand grow and remain relevant. LEGO,
seeing the growing popularity of digitization, produced video games based on its product line.
LEGO playsets reflect the company’s focus on regular innovation. After research revealed most
of their consumers were boys, LEGO developed their LEGO Friends line aimed explicitly at
relating to girls.
The company also partnered with Disney, Marvel, and DC Comics to create its popular Star
Wars and superhero-themed playsets—which are vital marketing tools since they generate
publicity and drive higher sales. As both young and old LEGO enthusiasts enjoy displaying
their skills as master LEGO builders, LEGO Group became involved in official TV show
competitions such as LEGO Masters to build further awareness of their brand.

Lego collaborates with well-established brands to offer affiliated products, such as the Batman
Movie.

Marketing strategy 3: Social media marketing strategy

LEGO’s popularity on Facebook, Instagram, and YouTube highlight the effectiveness of using
social media channels to engage with customers. LEGO’s Facebook page has over 13 million
followers and regularly updates the page with photos and videos of new LEGO releases and
innovative creations. Their Instagram page offers similar content, and posts receive numerous
likes and comments, showing excellent user engagement.

LEGO is also YouTube’s most popular channel from June 2020, with 10.04 billion views.
Their channel offers promotional, educational, and how-to videos that promote the company’s
brand. Its popularity on social media has encouraged fans to create their own LEGO fan
channels, such as “Beyond the Brick,” a YouTube channel with over 821,000 subscribers who
promote additional awareness of LEGO’s brand independent of the company’s marketing
efforts.

Marketing strategy 4: Integrated customer experience which generates User

Generated Content

LEGO uses its digital platform to provide each segment of its consumer audience with an
integrated customer experience. LEGO Life, a social network app aimed at children under 13,
lets users share photos of what they made with LEGOs and leave comments on other people’s
creations. The online community has over 10 million members, offering an effective way of
increasing brand awareness by enabling younger audiences to engage through social media.

LEGO also has a sizeable adult consumer segment who can join its ‘LEGO Ideas’ online
community and become part of its creative process. This community lets members share their
LEGO creations’ images and offer proposals for new LEGO Ideas sets, where members vote
on for the company to produce. In 2017, journalist Maia Weinstock’s “Women of
NASA” LEGO idea gained the necessary 10,000 votes from supporters, was produced, and
became a top-selling product on Amazon.

On LEGO’s social networks, there is a tremendous amount of LEGO-related user-generated

content which also continuously “validates” that this toy is, maybe, one of the healthiest, most
educative, and most beneficial addictions of its life. This is something that no other brand has
ever achieved. It has been able to create organic customer engagement, which is important
aspect of its branding strategy.

Marketing strategy 5: Strong partnerships with the education sector

LEGO has always promoted its plastic bricks as educational toys that empower children to
become imaginative, engaged learners through play. The brand extends its commitment
through strong partnerships with the education industry. In 2020, the LEGO Foundation
committed $24 million in educational aid for schools, foundations, and educational programs
in multiple countries.
Lego offers a combination of blended, flipped, distance/virtual/online approaches to support
learning.

LEGO’s stand-alone education company, LEGO Education, has been offering schools
educational products since 1986. Its website offers many LEGO-based building products
specifically designed to help students build STEAM (Science, Technology, Engineering, Art,
and Math) confidence in primary and middle school. Other sections offer home-school and
distance learning resources for children learning during the pandemic.

Marketing strategy 6: LEGO remains “parent-approved”

Although kids remain a key target audience for LEGO, the company also understands LEGO’s
marketing strategy needs to appeal to their parents, who are the ultimate decision makers. By
continuing to promote the educational value of their toys and market them as a way to nurture
a child’s interest in STEAM, LEGO ensures its products are “parent-approved.” This approach
incentivizes parents to keep buying, which’s been key to the LEGO marketing strategy.

Q1. Analyse LEGO’s market entry strategies? (15 marks)

Q2. Discuss LEGO’s challenges in marketing its products in China? How does the cultural
environment affect the company’s product strategy? (15 marks)
Q3. Discuss the marketing communication strategies of LEGO in improving brand’s
positioning in different countries. How does standardization of communication strategy help
in building a global brand? (20 marks)