Discuss about the Brand Audit for Lego Group.
Brand audit and health evaluation is one of the primary tasks of any brand manager as it helps in understanding the past performance of the brand and accordingly steps can be taken to improve the brand health. One of the key documents which enable any brand manager to improve on issues and problems a brand encounters is the brand audit report. This article makes an attempt to document a brand audit report for the Lego Group which is one of the iconic makers of toys and play materials. There are various aspects of Lego brand and their product portfolio which has been discussed in detail in the ensuing sections with special reference to brand inventory and brand performance.
Lego group is the manufacturer of a popular line of plastic toys consisting of smaller inter-locking bricks which can be used to create any physical structure. The toys are sold under the brand name of Lego and there are several shapes and figures for their toys which come in an array of gears, figures called minifigures. It can be assembled to construct any objects, vehicles or other structures. It had begun its operations in 1949 at Billund, Denmark under the leadership of Ole Kirk Christiansen and now it has ventured into several other businesses like movies, games, competitions, etc. It also entered into theme parks, license business and amusement parks. In its entire endeavor it has maintained its brand image and personality with special focus on building over the legacy of Lego (Hogan, 2007).
History – Lego group was founded by Ole Kirk Christiansen who was a carpenter by profession in Billund, Denmark. It all started in 1932 with wooden toys which were then transformed into stackable wooden bricks made of cellulose acetate. Over the years Lego has gone through several transformations which led to the creation of the strong brand that Lego is today. In 1978 Lego manufactured the first minifigures which became quite popular with children. Lego bricks have also been used in popular culture through many events.
Popular culture – Lego’s popularity and brand strength is demonstrated from the fact that it has been used in several cultural works, art, etc. It is used for the everyday teaching purpose in classrooms and in fact it has ventured into educational domain through a partnership with Pitsco Inc. Lego bricks had found a position in the National Toy Hall of Fame at Rochester, New York in 1998.
Design – Lego spends considerable resources and effort in developing its bricks which lead to the finest quality as serviced by them. Initially there was a notion that plastic toys would never be able to replace wooden toys. However, Lego with its superior quality and product innovation has been able to hold its ground in the toy industry. The precision level in Lego bricks is high since they need to fix properly when brought together while it needs to separate also during disassembling. Therefore the devices which manufacture Lego bricks have a precision level of 10 centimeters. It also takes the help of new technological advancements for its product innovations like 3D modelling, CAD, etc.
Lego themes – Lego has licensed themes since its inception which include space, robots, pirates, trains, castle, etc. Lego city and Lego Technic introduced in 1973 and 1977, respectively are two of the most classic Lego themes which are still quite popular. It has also ventured into licensing cartoon as well as film franchises which include Batman, Indiana Jones, Star Wars, etc. It also has a special range of toys on robotics themes which was launched in 1999 and became extremely popular among children (Mair, 2009).
Related Services – Over the years Lego has built a strong brand and an empire which is envied by its competitors. Some of the other services into which Lego has ventured into include theme parks, retail stores, business consultancy, etc. Lego has six Legoland amusement parks operated by Merlin entertainments and the first one being at Billund, Denmark. In 2005 almost 70% ownership of these theme parks was sold to Blackstone Group. Apart from these they have eight Legoland discovery centers as well. Lego also operates 125 retail chains all over the world from United States to Denmark. In 2000 Lego also ventured into business consultancy wherein the corporates are encouraged to think creatively and come up with solutions through the Lego bricks.
Lego has emerged as the undisputed champion of co-branding since it boasts of sets for every type of consumer. It has theme sets based on numerous characters starting from the Avengers to Harry Potter. Lego Group’s official tagline is “only the best is the best” which implies that they have a strong focus on quality. Moreover they have always strived to be an organization which takes part in the learning process of children through creativity and development of their intellectual power. This theme can also be related to its wide product range wherein they have launched every product keeping in mid their value addition towards children’s growth and development (Mishra and Raghunathan, 2004).
Lego’s brand personality is something which can be connected with children or any childish behavior. If one evaluates their products, packaging, marketing communication then it can be identified that it consists of colorful creative contents with exciting pictures which would intrigue an inquisitive mind. Lego minifigures are featured in all of their packaging material which is easily identified by children since they have also now entered their classroom arena. With all these endeavors they have positioned themselves as an exciting and fun brand with children as the primary target consumers (Wellington and Gallo, 2011).
Over the years Lego has also created several sub-brands through extension of the original Lego brand which are Duplo, Lego Friends, and Lego Creator, etc. These brand extensions have been successfully created by Lego which help them in capturing the imagination and interest of different types of consumers. For example Lego mindstorms are used to make mini computers which are targeted at a mature segment who can pay a premium for the products.
Lego has direct competition with Mega Blocks which are into the same market as Lego. However Lego have been able to establish a successful brand because of its superior co-branding initiatives and product innovations which go beyond plastic toys. Creation of amusement parks like Legoland also added to the strength of the brand and helped in the brand recall for its customers (Bell, 2013).
Lego is well known for its products and a brand audit report should include a through SWOT analysis for its products so that it will empower the brand manager to take informed decisions.
- Lego creates toys which can take part in the educational initiatives of children and create a learning platform for them through fun initiatives
- Lego has a strong presence in over 60 countries which increases its visibility
- Product portfolio is very attractive in the toy industry
- It has products which can be positioned as developing problem solving skills among children which are liked by the parents as well
- Lego based theme parks are popular tourist destinations
- Lego has successfully diversified its products through TV merchandising, video games
- Limited use of technology
- Business model is old and there is no scope for further innovation
- There are several competitors in the market which are imitations and it also hurts the brand image
- Because of online games it has lost considerable market share (Jang, 2004)
- Identify new customer base and look for expansion of market share
- Adoption of toys as play material has to be increased
- Technological enhancements in creating new products as well as operational efficiency are the key for improvement
- Supply chain capabilities can be improved to service new markets
- New branding campaigns and exercise can be taken up to penetrate new markets
- Diversification into other segments can bolster decline in toy market share
- Reduction in the purchasing power of customers since the cost of toys are increasing
- Disintegration of distribution networks
- New rules and regulation can balk the growth of plastic toys business
- Video games or online games should be seen as the greatest threat
- Cartoon channels and TV are also eating into Lego’s share of business
- Internet and various entertainments involved with this channel can prove detrimental for Lego’s toy business
This report critically analyzes different aspects of Lego Group from a brand audit perspective and came up with insights through the theoretical frameworks like SWOT analysis. Lego as a brand has several aspects which can be emulated for brand success and there is plenty of opportunity in the toy market. This report has tried to develop a framework for brand audit which can be used for similar other academic purpose.
Bell, A. (2013) ‘Toy safety 2’, Chemistry & Industry, 77(2), pp. 37–37. Doi: 10.1002/cind.7702_9.x.
Hogan, S.P. (2007) ‘Creating parental trust in the children’s toy market’, Young Consumers, 8(3), pp. 163–171. Doi: 10.1108/17473610710780909.
Jang, J.C. (2004) ‘Dynamic SWOT analysis’, Long Range Planning, 27(4), p. 147. Doi: 10.1016/0024-6301(94)90075-2.
Mair, A. (2009) ‘Lego’, the Expository Times, 100(12), pp. 463–463. Doi: 10.1177/001452468810001207.
Mishra, B.K. and Raghunathan, S. (2004) ‘Retailer- vs. Vendor-managed inventory and brand competition’,Management Science, 50(4), pp. 445–457. Doi: 10.1287/mnsc.1030.0174.
Wellington, D. and Gallo, J. (2011) ‘the march of the toy soldier: The market for a collectible’, Journal of Cultural Economics, 5(1). Doi: 10.1007/bf00189208.
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