Unit III Case Study

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School

Columbia Southern University *

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Course

MKT 5301

Subject

Marketing

Date

Apr 3, 2024

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docx

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Uploaded by MateFlagHummingbird9

RUNNING HEAD: Lego Case Study: Lego Joseph N. Tusa Columbia Southern University

LEGO LEGO may be one of the most recognizable and iconic toys, next to Mickey Mouse, that currently exists on the shelves of stores not only in the United States but across the globe. The thought of a LEGO set unlocks core memories of children and adults alike. LEGO over time has learned to grow and adapt to the changing culture of the market and their consumers and create buyers for generations by learning to account for this change. LEGO has proven that they are constantly evolving with the intention of staying relevant and new while appealing to consumers of all generations. LEGO continues to constantly reinvent their business through market research and growing with the times and trends. It is easy for LEGO to reinvent its business on a continual basis as the foundation of their product does not change. The colored brick remains the cornerstone of the product, the way in which the brick is used is what changes. This makes it easy for LEGO to create new designs each season. Market research is a direct contributor to the success that LEGO has experienced. Their research identified that girls prefer to use their LEGO sets for roleplay whereas boys preferred LEGO sets that had a strong back story and narrative (Chernev, 2021). By assessing the market, LEGO is able to identify trends and current areas of interest and work to develop product lines geared towards those themes. By assessing how their consumers utilize their products LEGO is better able to design products to suit their wants. By identifying that girls prefer to utilize their toys for roleplay they had introduced the Friends line. The Friends line is complete with figures, malls, juice shops and other spaces where girls could utilize their Friend figures to roleplay. In addition to the production of new product lines, LEGO has expanded from the toy industry to the travel/leisure and entertainment industry. LEGO has opened the LEGOLAND resort and the LEGOLAND theme park, identifying interest in the amusement space, LEGO has taken the opportunity to bring their plastic bricks and action figures to life and create an immersive experience for their consumers.

LEGO LEGO has a competitive advantage amongst its competitors…LEGO creates one product..the plastic bricks and from that one product the options are essentially endless. The colored bricks can be sold in a variety of ways including but not limited to individually or, in themed kits which on a larger scale offer a variety of expansion packs. These sets include but are not limited to partnerships with Harry Potter, Nintendo, and Disney. In addition, LEGO has created an immersive experience through its hotels and theme parks where guests can stay inside of their favorite LEGO themed room or amusement park ride. When looking at the LEGOLAND resort website there are options including pirates, kingdom, Friends and Ninja. The competitive advantage that LEGO holds is lasting as they can easily adapt and create new products without having to make large changes in infrastructure. In order to stay on top of the next big thing, LEGO has established the Future Lab, which is a research and development team responsible for creating and innovating for the future. In 2017, LEGO surpassed Mattel, the largest toy manufacturer in the world. However, as we enter an increasingly more digital age, LEGO will need to adapt to combat the lack of interest in physical toys. LEGO has already started to enter the digital market. When entering their website you must choose if you are entering the LEGO store to shop or if you are logging into the LEGO Play Zone where consumers can play games, and watch videos geared towards their favorite toys. A potential ethical implication of LEGO is the sustainability of its products.Specifically, LEGO's products are mainly made out of plastics. Plastics are one of the main contributors to climate change in several ways. Marsiglio et al. (2020) explains that plastics have the potential to release greenhouse gasses when exposed to sunlight and heat, thus leading to an alarming feedback loop. When plastics are dumped into landfills, they take a long time to break down. LEGO started mass-producing plastic toys in 1947. Since then, it has produced large amounts of plastic, with no evidence of them being recycled properly when disposed of my consumers. LEGO is aligning itself with good ethical practices as it sends 93% of all factory waste to be recycled. According to LEGO (2020, September), this includes 100% plastic waste from the

LEGO company's molding machines, some of which are reused in its manufacturing. The company has created a model where its toys are made of high-quality materials that can be reused. Finally the company's Sustainable Materials Program has set a goal by which all of its products should be made from sustainable materials by 2050 In its zero waste and carbon natural operations, the company aims to ensure that by 2023 and 2025, water use drops by 10% and no waste is diverted to landfills. Part 2 Situational Analysis PEST Analysis Political Environment Although not entirely political, the covid-19 era had created a troublesome situation for many businesses as government mandated lockdowns, social distancing and other infection- control techniques had presented never before seen problems for corporations such as LEGO. LEGO had previously focused on driving sales through in-store experience and being able to see and touch toys and models as touch was described by LEGO as being a central element of the in store experience. Now, they had to transition to recreating the same in-store experience in an ecommerce setting (Delesline,Nate, I.,II. (2023). Economic and Sociocultural According to IBISWorld (2023), as a result of the Federal Reserve’s decision to aggressively raise interest rates multiple times in 2022 has caused tighter budgets and decreased disposable income. After the end of covid-19 government stimulus, it is reported that per-capita disposable income had dropped by 6.6% in 2022 alone. When disposable income drops, discretionary spending such as on toys is one of the first areas where many families would start to limit their spending. With a limit on discretionary spending, LEGO sales would be at risk.

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