1. Presented by : GROUP 1
Nandini Aggarwal
Ankur Arora
Prachi Arya
Vishnu Bhaskaran
Pravin Bokil
Hrinya Bose
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. 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. 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. Development of Lego
• 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
• 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
1930s-
1950s
1960s
6. •Focus shifted to young girls - introduction of doll
houses!
•Mini-figures introduced
•launch of the Expert Series
1970s
•Technic series - robot based systems
•Educational Products Department was launched
•Lego World Cup held in 1988
1980s
•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!!
1990s-
2000s
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. The major target of Lego is People with
following values
• Imagination
• Creativity
• Fun
• Learning
• Quality
• Caring
Psychographic Segmentation
12. 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
Traditional
Toys
$80 Bn
Video
Games
$74 Bn
Construction
Toys
$6.7 Bn
13. 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
15. BrandEquity
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
16. Advertising & Promotions
• “Just Imagine” to “Play On”
• Simple and imaginative ads. Mostly print advertisings.
21. 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
22. LEGO in Video Games
• Presence since 1997 – released over 40 video games.
1997 2010 2011 2012
24. More Product Lines…
• Localized and event driven toys
• Minifigures toys
• Collectible trends
25. • LEGO-Theme based theme parks
• Operated by Merlin Entertainments
• LEGO-themed Rides for younger Children
• Educational Elements such as
hydraulophone , Mindstorm etc.
26. Pricing
• Lego’s Company culture – say no to sacrifice quality for profits.
• Charges premium for it’s product.
• www.brickset.com
Rs 325 Rs 73000Rs 47000Rs 19000
27. 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.
28. 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
29. 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, event-
driven toys
• Be flexible on pricing and local sourcing
