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Lego was founded as a small carpentry workshop in 1932 in Billund, Denmark.
From its humble beginnings, this tiny company of 10 employees has ballooned into an empire that employs thousands and drives more than $35.8 billion Krone ($5.14m USD) each year.
The iconic bricks can be found in almost every child’s playroom, and Lego is the proud brand name behind countless video games, movies, comic books, theme parks, and action figures.
Furthermore, the company shows no signs of slowing down. It’s this commitment to innovation and growth that will bring Lego deep into the 21st Century.
Here’s how this analog toy company uses marketing and product development to stay modern in an increasingly digital world.
1. Understanding the target market – Lego is Parent-Approved
While kids are the primary target audience of any toy company, smart businesses also market to parents. These are the breadwinners who actually open their purse strings to buy the product.
Understanding this, the creators at Lego brand their products as a creative outlet for kids and an opportunity to grow their interest in STEM. Their website features an Education section with activities to promote learning through the toys, from preschool through middle school.
Outside of the main Lego marketing tactics, there are entire communities that utilize these toys for learning. The STEM Laboratory created a set of 100 Lego Challenge Cards which asks kids to complete logic or math tasks with the bricks.
Today’s parents are concerned about the toys their kids play with. By creating a parent-approved product, Lego makes it easy to access the wallets of its target audiences.
2. Partnerships and licensing – Lego Taps Into Existing Fanbases
Lego’s marketing strategy depends just as much on licensing as coming up with its own ideas. Star Wars is a Disney brand, but still a major revenue driver for the company.
In December 2015, panic ensued over a “Lego shortage,” when stores couldn’t keep their Star Wars sets on the shelves. The company worried that it wouldn’t be able to ship everything before Christmas. 60% percent of Lego’s revenue comes during the holiday season, giving the company a banner year even if some of the toys arrived late.
This creates a third target audience for Lego: collectors and fans who want to buy the merchandise and save it for resale value. Lego isn’t just for kids and parents, it’s for adults as well.
There are multiple blogs dedicated to covering Legos and their value. For example, when Carrie Fisher passed away last year, the blog BricksFans created a dedication to Lego Leia.
3. Creating memorable experiences – Legoland is Following the Disney Expansion Model
A huge sign of success for any brand is moving from books and toys to the world of theme parks. These attractions take years to build, which means companies aren’t likely to invest in a temporary fad.
Not only are Legoland theme parks thriving in Florida and California, but the owners are also planning to expand into Japan, Dubai, and Korea.
Legoland is operated by Merlin, the second-largest theme park operator behind Disney.
Like Disney, Merlin is expanding the theme park experience to start the second family's arrival. Families can stay in Legoland hotels where each room is a new theme, thus opening up a new market to compete with.
Watch out Hilton and Marriott, Lego is coming for your hotel revenue.
4. Tapping into feedback - Lego Listens to Its Customers
In 2014, Lego Batman was named the best-selling superhero video game of all time, after selling 12.81 million copies worldwide. It’s no surprise that Lego chose this character for their big-picture film, knowing that even fair-weather Lego fans would enjoy Batman’s sass and snark.
The Lego Batman Movie is just one example of the company listening to its customers and giving them what they want. Many executives have emphasized this as an important part of the brand’s success.
“The motto of our founder was: Only the best is good enough,” Conny Kalcher, Lego’s VP for Marketing told Marketing Week. “If you are constantly working on improving what you do...you build up loyalty and its transparent to people how what the company says, they do.”
As long as Lego refuses to rest on its laurels, it will continue to create toys that kids and parents will love.