LEGO

BRAND AUDIT REPORT

Report By: M. Irtash Sohail

ID: 20171-22027
Submitted to: S. Aamir Saeed
TABLE OF
CONTENTS
INTRODUCTION .......................................................... 1

Lego Group Mission Statement ...................................................... 2

Lego Group Vision Statement ........................................................ 2

BAND PERFORMANCE ................................................. 3

Brand Finance ............................................................................. 3

Brand awareness ......................................................................... 4

POSITIONING STRATIGIES ........................................ 5

4P’S OF MARKETING MIX ........................................... 6

Product ...................................................................................... 6
Place ......................................................................................... 7
Price .......................................................................................... 7
Promotion .................................................................................. 8
CONSUMER INSIGHT .................................................. 9

Analyzing consumer data ............................................................ 10

Platform used ............................................................................ 11
Occasions for Buying Toys ........................................................... 12

PERCEPTUAL MAPPING............................................. 13

Popularity vs. Purpose................................................................. 13

Price vs. Purpose ........................................................................ 14
Popularity vs. price ..................................................................... 15

LEGO STORES ........................................................... 16

Brick Specialists ......................................................................... 16

Pick & Build Wall ........................................................................ 17
Digital Box................................................................................. 18
Play .......................................................................................... 19
Build A Mini Tower ...................................................................... 20

BRAND COMMUNITY ................................................. 21

LEGO click ................................................................................. 22

LEGO Club meetings ................................................................... 23

CONTENT MARKETING .............................................. 24

Lego Movie ................................................................................ 25

Microsites .................................................................................. 27
LEGO’s miniseries ....................................................................... 28
My LEGO Network ...................................................................... 29
“LEGO Club” magazine ................................................................ 30
LEGO ID .................................................................................... 31
LEGOLAND theme parks .............................................................. 32

SOCIAL MEDIA ......................................................... 33

INTRODUCTION

The name ‘LEGO’ is an abbreviation of the two Danish words “leg

godt”, meaning “play well”. It’s our name and it’s our ideal.

The LEGO Group was founded in 1932 by Ole Kirk Kristiansen. The
company has passed from father to son and is now owned by Kjeld
Kirk Kristiansen, a grandchild of the founder.

It has come a long way over the past almost 85 years - from a small
carpenter’s workshop to a modern, global enterprise that is now one of
the world’s largest manufacturers of toys.

The LEGO brick is our most important product. We are proud to have
been named “Toy of the Century” twice. Our products have undergone
extensive development over the years – but the foundation remains
the traditional LEGO brick.

The brick in its present form was launched in 1958. The interlocking
principle with its tubes makes it unique and offers unlimited building
possibilities. It’s just a matter of getting the imagination going – and
letting a wealth of creative ideas emerge through play.

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LEGO GROUP MISSION STATEMENT

'Inspire and develop the builders of tomorrow' Our ultimate purpose is

to inspire and develop children to think creatively, reason
systematically and release their potential to shape their own future -
experiencing the endless human possibility.

LEGO GROUP VISION STATEMENT

What started as a kind gesture between friends living just outside

Boston, US, is today being rolled out as a global pilot by the LEGO
Group using AI technology the initiative aims to make the LEGO play
experience more accessible for those with vision impairment.

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BAND PERFORMANCE

BRAND FINANCE

Lego remains the toy industry’s most valuable and strongest brand,
with a brand value of nearly US$7.6 billion and an exceptionally high
AAA+ brand rating. Lego remains the world’s most valuable and
strongest toy brand, with a brand value of nearly US$7.6 billion, an
exceptional Brand Strength Index (BSI) score of 90.6 and a
corresponding brand rating of AAA+. Despite this position, Lego’s
brand value actually slipped this year, down 0.3%. Whilst not
substantial, it represents a wider challenge for the brand as revenue
fell 6% in the first half of 2017 and net profit was down 3%.

David Haigh, CEO of Brand Finance, commented:

"Exceptional growth levels, like those enjoyed by Lego in recent years

with revenue going up 25% in 2015 and reaching an all-time high in
2016, are very difficult to sustain. However, thanks to its focused
brand strategy and global presence, Lego retains a competitive
advantage in brand strength. Building on the success of partnerships
with franchises such as Star Wars and Batman that allowed it to
branch out beyond the iconic bricks, and on continued expansion in
emerging markets, especially China where it enjoys double-digit
growth, Lego has substantial potential as a brand."

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BRAND AWARENESS

Lego has gone beyond the brick, creating an array of movies (“The
Lego Movie,” “Lego Star Wars,” “Batman,” and its own story, “Lego
Ninjago”) and video games, plus its YouTube channel — the site’s most
popular branded channel — with 5 million subscribers, plus countless
fan sites.

“Beyond The Brick” is one such YouTube channel, with more than
280,000 subscribers and over 120 million views. Brothers Joshua (22)
and John Hanlon (24) started it in 2011 and made it their full-time job
last May.

Such user-generated content is obviously valuable to Lego — the

Hanlon brothers were invited to its Denmark headquarters twice in
2017 — but also to content creators. In an email to CNBC, John
Hanlon said that they expect to make a six-figure sum in 2018, with
around 90 percent coming from YouTube’s ad system and the rest
from ads they sell to companies like Brick Link, a marketplace for Lego
parts. The brothers spend about half the year traveling around the
world to make Lego YouTube videos.

Why do they love it so much? “Regardless of age or ability, anyone can

pick up Lego pieces and let their imagination run wild,” John Hanlon,
founder of ‘Beyond the Brick’

Adult fans of Lego (known as AFOL) are also an important audience for
the company. Last August, TV show “Lego Masters” ran on the U.K.’s
Channel 4, a contest to find Britain’s best Lego builders, attracting
more than 2 million viewers per episode, Goldin says. People not only
got on Twitter to comment, they also shopped: “People went into
stores and wanted to buy and wanted to build,” she said at its results
presentation.

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POSITIONING STRATIGIES

The concept of positioning is about placing a brand for a customer to

understand and connect with the brand. In the case of Lego, its
positioning strategy is the grand strategy which is for Lego to get back
to its roots and for its consumers to perceive brand Lego as a strong
“brand that build legends”. What was the positioning tool used to
implement this strategy? It utilized the point-of-purchase roadshows.
This task was designated to the marketing team as they were best fit
to ensure a successful task. They as well, divided the marketing team
into different department for the road show like sales, advertising,
event management, PR, in-store merchandising and finance using
tools like “targeted”, “laser guns”, “mobile tours e.g. bionic unleashed”
targeted at different age groups.

Another positioning strategy utilized by the brand to pass a

message of visibility to its consumers is the generic strategy where
brand Lego used a PR agency to achieve this objective. The PR agency
is called 360PR. 360PR employed the use of online platform which
involved social networking. This digitalization broadcast or multimedia
message was to communicate to its consumers that the brand was
unique and delivers better value for its consumers. It also
communicated a message to its consumers that brand Lego toy was a
high- quality product with an extraordinary service delivery.

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4P’S OF MARKETING MIX

PRODUCT

Lego is without a shadow of a doubt the brand's core product! The same
included with the pair of colored plastic parts, mini figures and gears.

All pieces can be connected in different ways, building whatever the

imagination remembers.

Along with the free constructions, LEGO also invested over the years in
exclusive releases such as:

 Lego Indiana Jones

 Star Wars
 Harry Potter
 Ninjago
 The island of Lego
 Batman
 Marvel
 Disney

Although these are the best known products, the truth is that LEGO also
produces board games and clothing!

The wide variety of products associated with a world-renowned brand is

what has become the biggest player in its field.

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PLACE

The company headquarters is located in Denmark, and the main

offices are strategically located in London, Shanghai, Enfield and
Singapore.

When we talk about distribution, it is important to consider LEGO has

online and offline distribution channels.

Online distribution takes place through its website, where the

consumer has access to extra services such as product catalogs,
related information and brochures of instruction.

When we talk about offline distribution there are 125 exclusive selling
points around the world. Alongside them there are also several multi-
brand outlets.

PRICE

The target Audience of LEGO are children from 3 to 15 years and

whose families are in a middle / upper class.

Their products have an exceptional quality, mainly because those who

handle them are children!

So, when it comes to price, the strategy is to implement an average

value for high quality products. More Than One price strategy, LEGO is
based on a value strategy.

So the same seems reasonable to your customers, who end up buying.

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PROMOTION

In the context of the communication, LEGO has already carried out

dozens of promotional actions, which aim to increase brand
recognition. Efforts are digital marketing industry, magazine publishing
and store reinforcements!

In addition, LEGO also actively participates in several events that help

you gain exposure.

As part of its promotional activity, My Lego Network. It includes

badges, classifications, projects and items that can be obtained after
completing and completing certain tasks.

As you can see, the Lego marketing is highly diversified and invests
primarily in quality and value for the consumer!

Thus, it is possible to realize that it is possible to be the brand #1 in a

certain segment, without being the one that has a lower price.

In conclusion, the positioning strategy utilized can determine the

strength of a company, in the case of Lego, the positioning was indeed
successful as it used the right tactics and tools to pass its message to
its consumers which was well received. We cannot also forget a key
point of using the right PR agency to boost the reputation and deliver
better value is definitely a necessity.

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CONSUMER INSIGHT

What is something that has stayed by our side growing up, and made
a great impact in our childhood? Toys! In addition to serving their
original purpose of entertaining children, toys have also become tools
to educate and engage young minds. Brands like Lego excel in their
individual industries to capture the eyes of children, caretakers, and
even collectors. But with growing conversations taking place on social
media, it can be hard to glean consumer insights without the aid of a
social listening tool.

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ANALYZING CONSUMER DATA

To say that branding is important is a massive understatement,

especially in the toys industry. That’s why brands rely on consumer
insights to deliver the right products and refine their marketing
strategies. Using Signals, our trend-detection platform, we uncovered
the insights that matter.

Lego Group remains in its niche market, with relatively lower volume
and topic velocity (aka growth).

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PLATFORM USED
Lego Group is a solid performer in its niche market. But, has comparatively lower
volume and growth than Mattel and Hasbro.

Almost 70% of the conversation about Lego comes from YouTube

alone. Lego Group is popular almost exclusively on YouTube. Meaning
that audiences on Twitter and Instagram are not as engaged. If
brands want to maximize reach and growth on social media,
Twitter and Instagram must also be a part of the conversation,
in addition to YouTube. Both children and adults with purchasing
power must be targeted, and a savvy marketing strategy should target
both on the appropriate platforms.

Here, a multi-channel marketing strategy is crucial because the

children’s toy industry must appeal to both
children and parents. Children must express interest in the toy, but
parents and adults are the ultimate decision-makers. Although
YouTube is a popular destination for kids, adults with purchasing
power are more often found on Twitter and Instagram.

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OCCASIONS FOR BUYING TOYS

Consumer insights using Context Network map.

Top words included: 2019, new, wheels, kid, fun and even gift and
receipt? Seems like many consumers are looking for toys as
gifts! Therefore, companies should focus on attractive packaging, while
pushing the message that their product will bring joy and value to
children.

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PERCEPTUAL MAPPING

POPULARITY VS. PURPOSE

o Toy and game companies are clearly distinguished from

teaching material companies

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 o Teaching material companies are well-known in the
market.
o Lego has the highest brand perception among all other
firms.

PRICE VS. PURPOSE

o The price of Lego's product is perceived to be very high.

o Lego is obviously categorized as a toy company.

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POPULARITY VS. PRICE

Lego score the highest both in the popularity and price.

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LEGO STORES

Lego stores can be found in Asia pacific, Europe, and North America.
They are well maintained though have a unique experience.

BRICK SPECIALISTS

The best place to shop for LEGO® sets is at your local LEGO Store,
where Brick Specialists with extensive knowledge can make your
shopping trip fun and easy. Whether you’re picking out a gift, looking
for the latest set, or bringing in your LEGO fan for a special treat, Brick
Specialists can help you find a set that’s the perfect fit!

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PICK & BUILD WALL

Visit the Pick & Build wall to choose the bricks and elements you want
in all different shapes and colors. Each store has something different,
and the bricks change all the time! So grab a cup and fill it up with
whatever pieces you choose!

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DIGITAL BOX

With the digital box, you can scan almost any boxed LEGO set and see
the model come to life in 3D! There’s no better way to test drive a set
than seeing the finished product right before your eyes.

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PLAY

Whether you follow the instructions or build by your own rules, every
builder will love the hands-on play opportunities at the LEGO Store.
With new creative building scenarios each month, there are a million
ways to play! Check out this month’s store calendar or find the nearest
location to learn about the play opportunities that are going on at your
local LEGO Store.

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BUILD A MINI TOWER

Let your creativity lead the way at the Build a Mini tower! You
can mix and match from a wide selection of bottoms, tops,
heads, hair pieces and accessories to customize your own
minifigures.

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BRAND COMMUNITY

The increasing use of social media has made it extremely easy for
consumers to interact with each other and share their interests and
experiences about the brand. A brand community is a specialized, non-
geographically bound community, based on a structured set of social
relations among admirers of a brand. (Muñiz and O’Guinn 2001)

Historically marketing scholars have focused on consumer behavior

from the perspective of the individual. In recent years, however,
researchers have highlighted the growing phenomenon of collective
consumer behavior in the form of brand communities.

In 1998, Lego released a new product, called Lego Mind storms. The
product became an instant hit – within three months 80,000 sets were
sold. Within weeks, hackers from all over the world had cracked the
code of the new toy and created all sorts of new applications. Then,
after a year, LEGO started to listen to those unruly users and
attempted to understand what they were doing with the product and,
more importantly, the LEGO brand. Lego identified that these people
have actually formed a community around the LEGO brand that shared
a common passion for innovation.

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Having an active and innovative user community helps LEGO keep an
eye on trends for new products. More importantly, it helps to develop
marketable product innovations. But about 12% of all user innovations
represented more radical explorations of new functionalities and new
experiences. The LEGO brand community co-constitutes the culture of
LEGO through the sharing of ideas and practices with employees. In
other words, culture extends beyond the boundaries of the firm
through consumers who form brand communities and engage in
creative, unruly and co-producing practices (Martin Kornberge 2010).
Today, Lego has number of natural and artificial communities active in
the market and most of the products and marketing decisions are
focused around them.

LEGO CLICK

LEGO Click is a community platform that encourages fans and fanatics

alike to share their LEGO creation photos and videos, download apps,
and explore LEGO themes through online games and story lines.

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LEGO CLUB MEETINGS

LEGO holds meetings for its “Club” members around the world, where
boys and girls can imagine together (and usually force their parents to
buy something at the end of the meeting).

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CONTENT
MARKETING

Lego has become the biggest toy company on the planet, and it’s all
thanks to a genius content marketing strategy. Most people don’t
realize this, but LEGO is such a giant when it comes to brand content,
that at times it more closely resembles a media company than a toy
company. Here’s a rundown of some of the major components of its
well-integrated and highly effective content marketing program.

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LEGO MOVIE

In the first half of 2014, the company reported that its sales
increased by 11 percent to $2 billion, while Mattel’s earnings
floundered. The rise in sales is credited to The Lego Movie,
which was released this past February and made $468 million
around the globe while kids flocked to the store to grab their
toys related to the film.

As Pablo Smithson of The Guardian points out, The Lego

Movie is the definitive content marketing device for the brand. It
appeals to both children and adults; the kids want to play with
the toys, while the adults connect with the universal message of
the film, which is that it’s important to always have an
imagination, no matter what age you are. The brand message is
much more than, “Buy our stuff.” Smithson says, “It is a huge
coup to persuade adults essentially to be indoctrinated with the
Lego spirit of adventure.”

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Though Lego was on social media and producing content before
February of this year, it wasn’t until the movie came out that
the adult appeal broke into mainstream consciousness. “The
point when LEGO got its marketing strategy dead-on is when it
started treating adult and child one and the same,” writes
EConsultancy’s Christopher Ratcliff. “LEGO’s invitation to its
audience is a catch-all policy: ‘Hey come on in, we’re all the
same here, and we’re just a bunch of people who love LEGO.’”

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MICROSITES

Each LEGO story line has a dedicated micro site that features plot and
character explanations, online games, movies, polls and quizzes and,
of course, retail links. Some great examples: LEGO Star
Wars and LEGO Ninjago.

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LEGO’S MINISERIES

For each storyline release, LEGO produces a serial-style movie that

runs both on cable and, eventually, through the LEGO website. Most
recently, LEGO released its LEGO CHIMA series with a new cartoon
through a partnership with Cartoon Network.

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MY LEGO NETWORK

There is a LEGO social network designed especially for children (with a

high level of parental control and safety measures). Members can
create their own personal pages, win rewards, meet other LEGO fans
(and battle them in game modules), and watch LEGO TV.

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“LEGO CLUB” MAGAZINE

“LEGO Club” magazine is customized by local market and by age.

LEGO originally released it as “Brick Kicks” magazine back in 1987.

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LEGO ID

LEGO asks users to sign up for a free online ID that allows them to
play multiplayer games, contribute to LEGO galleries, and set up a
personal page on the My LEGO Network. This becomes an ideal
subscription strategy for LEGO.

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LEGOLAND THEME PARKS

LEGO partnered with Merlin Entertainments Group to develop

LEGOLAND theme parks around the world (now six full parks and
multiple discovery centers).

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SOCIAL MEDIA

On Instagram, Lego boasts 5M followers. Months before The Lego

Movie came out, typical posts would receive around 7k to 10k likes.
Now, they’re consistently getting 12k to 22k per post.

When it comes to Twitter, numbers are way up as well. Photos

uploaded to the @LEGO_Group account this past July during Comic
Con saw two, three, and four thousand retweets. One year earlier, 56
retweets was considered a high number for the page.

Lego has more than nine million likes on Facebook, and it’s always
done well for itself on the site. When a post is popular now, however,
the numbers are exponentially higher than they were in the past.

For example, a post on July 20, which featured a Bat mobile made of
Lego bricks, received over 48k likes and 13,506 shares. In July of
2013, the most popular post, which showcased bricks of the Royal
couple and their new baby, got 33k likes and 3,999 shares. Since June
of 2013, the page has increased its fan base by more than four million.

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