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LEGO- Niche MArketing


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Niche Marketing analysis - LEGO

LEGO- Niche MArketing

  1. 1. Presented by : GROUP 1 Nandini Aggarwal Ankur Arora Prachi Arya Vishnu Bhaskaran Pravin Bokil Hrinya Bose
  2. 2. 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
  3. 3. 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".
  4. 4. 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
  5. 5. Development of Lego 1930s1950s • 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 1960s • 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
  6. 6. 1970s •Focus shifted to young girls - introduction of doll houses! •Mini-figures introduced •launch of the Expert Series 1980s •Technic series - robot based systems •Educational Products Department was launched •Lego World Cup held in 1988 1990s-2 000s •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!!
  7. 7. 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
  8. 8. Psychographic Segmentation The major target of Lego is People with following values • • • • • • Imagination Creativity Fun Learning Quality Caring
  9. 9. Strengths Educational Value Strong brand Image Quality Innovation Single Category Focus High Price Tag Weakness Weakness
  10. 10. Opportunities Phone Apps Geographic Expansion Threats Feminine Segment Product Extension Competition Switch to Virtual Games
  11. 11. 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 Video Games $74 Bn Traditional Toys $80 Bn Construction Toys $6.7 Bn
  12. 12. 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
  13. 13. Branding & Promotions
  14. 14. Brand Equity 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
  15. 15. Advertising & Promotions • “Just Imagine” to “Play On” • Simple and imaginative ads. Mostly print advertisings.
  16. 16. Brand Asset Valuator
  17. 17. Current Brand Strategy Builders Of Tomorrow
  18. 18. Brand Content Empire • • • • • • LEGO Click LEGO Micro sites LEGO Club Meetings LEGOLAND Brickipedia Packaging
  19. 19. Brand Extension….Continuous Innovation Lego is expanding to numerous lines of products without loosing identity How 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
  20. 20. LEGO in Video Games • Presence since 1997 – released over 40 video games. 1997 2010 2011 2012
  21. 21. LEGO Eyes Girls with LEGO Friends… • Category Expansion
  22. 22. More Product Lines… • Localized and event driven toys • Minifigures toys • Collectible trends
  23. 23. • LEGO-Theme based theme parks • Operated by Merlin Entertainments • LEGO-themed Rides for younger Children • Educational Elements such as hydraulophone , Mindstorm etc.
  24. 24. Pricing • Lego’s Company culture – say no to sacrifice quality for profits. • Charges premium for it’s product. • Rs 325 Rs 19000 Rs 47000 Rs 73000
  25. 25. 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.
  26. 26. 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
  27. 27. 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, eventdriven toys • Be flexible on pricing and local sourcing
  28. 28. Thank You