LEGO Company: Sales and Marketing in Digital Age

Introduction

Nowadays, the world of business undergoes considerable changes day by day. It is important for companies to stay competitive and involve as many customers as possible. It is not enough to take many internal factors for business development into consideration, but it is necessary to understand the impact of the economy on organisational success (Tullman 2016). In a digital age, marketing may become a real challenge for many organisations, as well as a solid benefit for companies. This report aims at developing of a digital marketing audit of LEGO Company, its digital marketing mix and strategy, and a digital marketing plan and performance evaluation to clarify what recommendations may be given to improve its marketing effectiveness and its readiness to compete and grow in a digital age.

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Digital Marketing Audit

Company’s Background

LEGO has a long and interesting history. Being founded in 1932 by Kirk Kristiansen, this company continued its development year by year introducing new approaches, products, and details that impressed people of a different age around the whole world (The LEGO group 2017). At the end of the 20th century, the company made a significant step and opened its shop online proving its readiness to compete in a digital era (The LEGO group history 2017).

Within a short period of time, the use of social media and online services made this company popular around the whole world and its services being available to millions of people. During the last decade, its revenue has been increased by 25%. More than 100 million children have already used LEGO sets, and it is hard to guess how many people want to have at least one set at home.

SWOT

LEGO serves as one of the most outstanding examples of how it is possible to stay popular and be in demand for more than 80 years with its main goal to inspire the builders of tomorrow. The last five years were crucial for the company. Graham Charlton was one of the developers of LEGO’s online strategy with different social media sources being used to improve the general affection for the brand (Ratcliff 2014). SWOT is a tool with the help of which LEGO’s performance through social media can be evaluated.

Strengths
  • Strong and easy to remember the brand name
  • Easy market reach
  • Free and active communication
  • A variety of channels being used, including Facebook (2 million fans), YouTube, Twitter (200k followers), and Instagram (Link Humans 2017)
  • Introduction in different regions with a number of languages being available to customers
  • Thematic movies and advertisements to increase public awareness
Opportunities
  • Education of children
  • Promotion of new discounts, sales, and services
  • New geographical market penetration
  • New partnerships
  • New customers
Weaknesses
  • Intense competition online
  • The necessity to introduce new ideas regularly
  • Responsibility for communication
  • Social responsibility
  • Social security expenses
Threats
  • Unpredictable macro factors
  • Unstable political and economic situations in different countries
  • Advertisement blockers
  • Local developers and producers

Competitors’ Evaluation

Recent research proves that not many companies are able to compete with LEGO due to its worldwide recognition, options, and social media services. Still, there are several companies that may be called as compatible with LEGO. They are Best-Lock (the UK construction toy company) and Mega Bloks (a Canadian toy company).

Factors/Companies LEGO Best-Lock Mega Bloks
Advantages
  • Brand recognition
  • Product variety
  • Customer orientation
  • Popular characters
  • Building through play
  • Family-oriented atmosphere
  • Customer-oriented services
  • Communication with clients
  • License
  • Brand name
  • Safe and high-quality products
  • Global distribution
  • Education through play
Disadvantages
  • High price
  • Too high standards
  • Poor marketing campaigns
  • No evident mission statements and goals
  • Weak products’ variety
  • Weak marketing
  • Frequent lawsuits
  • Few interesting thematic products
Though social media sources are used, they are poorly developed worldwide.

Customer Groups

LEGO offers its services to different people and organisations. There are many customer groups that may be defined in this case. Still, two major customer groups are families and childcare centres.

LEGO

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There is a family with several members who may be involved in different spheres of life, have various interests, and follow specific traditions and beliefs. It is hard to predict what kind of game is more interesting to a family, and LEGO has to develop the sets for multiple purposes, various age groups, and both genders. On the one hand, LEGO sets may be interesting to a whole family with a number of elements being involved like in such sets as LEGO Friends or LEGO Duplo.

LEGO movies, as one of the most effective social media technique, can gather all family members and make them go to the cinema. On the other hand, LEGO introduces interesting sets where one person only may be involved in its construction and play. Therefore, a family is a perfect customer group for this company.

LEGO

For example, Kelly is a happy 32-year-old mother. She wants to have enough time for her housing affairs and does not want to leave her 5-year-old child Ben without attention. She buys him a Lost Temple set online in several minutes, makes him a present to encourage his latest achievement, and shows that she remembers his passion for pirates.

LEGO

There is also a possibility for childcare centres to be a key customer group for LEGO. This company proves that play is the best form of learning. It aims at inspiring children and promoting their creative thinking and building skills. Childcare centres are interested in providing their clients with the best services and various options. Children are interested in playing LEGO sets. Therefore, childcare centres may become regular customers for the company with an opportunity to use sales and special discounts on time.

LEGO

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Alice, Karl, and Denny are four-year-old visitors of a local childcare centre. They live in middle-income families, and their parents cannot buy new brick sets regularly. When they come to their centre, they are able to learn and communicate with their teacher. However, they are more involved in playing games during their free time, and a LEGO set with Frozen main characters is their choice number one.

Customer Journey

In the flowchart below (Figure 1), a journey of Kelly, a 32-year-old mother, is introduced.

Customer journey map
Figure 1: Customer journey map (Own design)

Digital Marketing Mix and Strategy

The Internet Marketing Mix

It is not an easy task to stay relevant and increasing in a digital age, and LEGO is one of the companies that continue growing and offering new products and ideas to its customers (Barry 2017). Internet marketing can be analysed through the four P’s of marketing, including Product, Place, Price, and Promotion. The recognition of these factors should help the company to avoid significant pitfalls and not to make serious organisational mistakes.

Product

It is suggested to offer LEGO customers a new service that includes online recommendations and guidelines for customers available 24/7. Sometimes, people are eager to buy LEGO products but are not confident about how to make a choice, what shop they may address, or what product is appropriate for a certain child. Potential customers are also afraid to ask questions and be challenged to formulate their needs and concerns. In some cases, people are not aware of how to surf the web and clarify the points quickly. Online support in the form of 24/7 communication, recommendations, and guidelines is a product that should be available to LEGO customers.

LEGO

Place

In this case, an online store is under discussion. Social media, e.g. Facebook, is the place where the chosen service can be offered. There are many regular users from different parts of the world. They know how to communicate using this service and benefit from the options available. No additional instructions on how to contact a LEGO representative via Facebook are required. Customers visit a page and find the answers to their questions.

Price

The peculiar feature of this service is that it is offered to customers for free. A person or a group of people are hired to provide potential customers with the information they may ask for. The company spends its money just to cover the work of new people who perform the function of advisors.

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Promotion

In this service, it is necessary to provide people with enough explanations of why online communication can be important and what is so special about these 24/7 Facebook guidelines. Customers have to understand that this help is for them, not for the company. Sometimes, it is not easy to make a choice and evaluate all pros and cons of the situation. LEGO takes care of all its customers and buyers. Direct communication is what the company offers this time. It is now possible for people to contact a company’s representative and receive help or recommendation. LEGO aims at supporting the builders of tomorrow and building strong relations today.

Digital Marketing Strategy

RACE is a digital marketing framework that is going to be used to introduce a new online service to the customers of LEGO via Facebook. RACE summarises the key marketing activities that have to be taken by the company online, including the necessity to reach (increase public awareness of a product), act (encourage interactions), convert (conversion to sale), and engage (the development of long-term relations with customers and promotion of customer loyalty and confidence) (Chaffey & Smith 2017). LEGO has to be ready to take four main steps regarding this strategy.

First, it is necessary to reach, investigate Facebook pages of other famous brands and companies, observe what kind of work can be done online, and evaluate what steps can be taken by the company at the moment. The main KPIs at this stage include the number of visitors, revenue change, and followers’ feedback. It is expected to increase the number of customers by 5% in one month.

Second, the action is important. Audience interaction is an integral issue of this strategy. People should be eager to learn more about their options with LEGO, ask questions, and make their final decisions to buy a LEGO product. The KPIs are the length of visits of customers on the Facebook page and the number of direct talks with customers. In one month, at least 10% of visitors should buy a product.

Third, this strategy should help to achieve a successful conversion and increase the number of sales. Direct communication with people online is a chance to persuade more people focusing on LEGO products. The KPIs are high revenues and up to 10% increase in online purchases per day.

Finally, engagement is obligatory in this strategy. The establishment of trustful relationships with customers is a goal that has to be achieved. Conversions have to be repeated, and customers should leave their positive feedback online.

Comprehensive Sales and Marketing Strategy Plan

A new marketing plan should increase the number of regular and new customers. In most cases, people are in need of additional explanations and reasons for making their final choices to buy a product. At the same time, they do not want online companies imposing their opinions and services. Customers should have an opportunity to address a company on their own without annoying advertisements and phone calls. It is high time to make a customer choose. LEGO is a well-known company worldwide. There is no need to inform people about their services. In a digital age, it is necessary to offer customers as many interesting services and options as possible. The plan of LEGO on Facebook is as follows:

  1. Investigation of famous brands’ Facebook pages;
  2. Creation of 24/7 service for direct video communication with customers;
  3. Clear recommendations and guidelines for customers;
  4. Information about sales, discounts, and options;
  5. Feedback section;
  6. Direct links to online shops.

Digital Marketing Plan and Performance Evaluation

A digital marketing audit and strategy are used to recognise the latest achievements of a company, its readiness for further development and improvement. An audit is an effective tool to analyse the performance of a company. In this case, LEGO is an organisation for marketing analysis in a digital age. Its marketing strategy is based on the provision of online services for people to provide them with free help on how to buy LEGO products online, how to make a final choice, how to place orders, and what services can be used.

Resources for Channel Distribution Approach

The peculiar feature of the marketing plan for LEGO, in this case, is a possibility to introduce a personalised service that can be free for customers and priceless for the company. There is no need to search for numerous resources that can be used in the development of this channel distribution approach. Today, people expect to receive many services online and do not spend their money and time.

Therefore, an idea to create 24/7 video communication with customers via Facebook is a beneficial type of investment. LEGO customers have already got an opportunity to buy products online. They can use Instagram, Twitter, and YouTube to improve their knowledge about the company and its products. Though it is hard to improve the work of the company that has already achieved a lot in its market, this plan is a significant step in its development because it is a chance to improve the mission statement of the company and discover a new aspect of cooperation between customers and the company.

Video communication offers a possibility to use visual elements and convince customers, to observe personal emotions and investigate the environment. Not all people are able to visit real stores and have to make their purchases online. However, it is easy to lose the right way through the offered pictures, prices, and advertisement. Real communication online is what many people strive for. LEGO is able to give this portion of communication to its customers. Its cooperation with Facebook is a good option to rely on. Millions of people like using Facebook and visit their pages regularly. LEGO is waiting for its customers with Facebook online.

Performance Evaluation Framework

Online communication turns out to be an integral part of marketing in a digital age. Some people are ready to spend their time communicating online and improving their knowledge. Many people have some doubts about the necessity to communicate online. In many cases, online buyers just need some options to be chosen from. LEGO is ready to offer a new service to its clients. The following performance framework should be used by the company’s representative to check the effectiveness of the strategy and the appropriateness of the idea offered.

1. More than 100 brand names and companies and their online services have been investigated YES NO
2. An increased number of online purchases in a certain region during the last month has been identified YES NO
3. The customer satisfaction level is increased, and positive feedback is present YES NO
4. More people are eager to cooperate with LEGO and buy its products regularly YES NO
5. Employees’ level of knowledge about customers’ needs, concerns, and expectations is improved YES NO
6. Positive changes in the number of online purchases during the last months are observed YES NO

Reference List

Barry, E 2017, ‘Going Hollywood: how Lego stays relevant in a digital age’, CNBC. Web.

Chaffey, D & Smith, RP 2017, Digital marketing excellence: planning, optimizing and integrating online marketing, Routledge, New York.

The LEGO group 2017. Web.

The LEGO group history. 2017. Web.

Link Humans 2017, How LEGO inspires the builders of tomorrow on social media. Web.

Ratcliff, C 2014, ‘Why is LEGO’s social media strategy so outstanding?’, Econsultancy. Web.

Tullman, H 2016, Sales & marketing in the digital age: you get what you work for, not what you wish for, Blog into Book, San Francisco.

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