Lego is still playing, but have the rules changed?
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Nearly everyone around the world knows what Legos are, which certainly isn’t because of luck or happenstance. Lego expanded in to the global market long before other toys manufactures were even off the ground. The Lego brand started with simple blocks that snapped together, they create whatever the child’s mind could image. The simple toy is developmental appropriate from toddler through teens. Most toys on the market cater to a much smaller age group, but not Lego, even adults have been on record as being fascinated with their Legos (Etzel). How does a small red brick, branded Lego become a multi-billion dollar company with world-wide profitability? How can they “stay in the game” when toys are becoming electronic and licensed? Lego is a household brand, but can they stay that way? The History of Lego spans almost 100 years of the existence of a toy that grew from a small wooden playthings in the early 20th century into the center of a vast market of plastic building bricks that dominated the world markets for decades. It is one of the oldest plastic toys in the world. Its manufacturing was started in Denmark, but was eventually replaced by factories throughout the world. Today it is one of the most successful toys and has remained an iconic brand with a loyal (sometimes cult-like) following. The traditional date for the first Lego blocks is 1947, and the toys have continued to be produced with little interruption since around that time (Mortensen).
Even though adults are known fans of Legos, the companies focus is on the children, “Our sustainability and responsibility efforts revolve around children and our passion for play and learning. Every day we translate these objectives into firm steps, so we can help build a better tomorrow” (Morten). The original Legos offer an open-ended sense of play which is important for children to be exposed to. There are very few popular toys on the market today that offer open-ended play. In nearly every preschool, elementary, and even middle school in America you will find a tote or bin of Lego’s. Teens and young adults are using Legos to engineer robotics and create models to move technology forward.
So how as Lego managed to stay relevant in this era of electronic and licensed products? While the majority of Lego products fall within construction toys, the company maintains a diverse product portfolio, with a mix of licensed and non-licensed properties, and different toys. It is no longer just the primary color blocks that lock together. Lego is constantly expanding, in the hopes of maintains the children’s interest while inspiring their creativity. There are Lego themed sets licensed by Star Wars, Teenage Mutant Ninja Turtles, SpongeBob, Disney/Pixar Cars, Harry Potter, Lord of the Rings, Disney Princesses, and many more (toysrus.com). Lego maintains a strong relationship with license owners such as Disney and LucasArts, and uses many licenses on its products. Producing Legos with popular children’s characters helps to ensure the children will want the product, but they will also play with it when they get it home from the store.
The Lego brand works diligently to maintain the safety of their products, which is an important selling point for parents and educators. The foundation of the Lego play experience is derived from the iconic 2×4 brick. To satisfy the Directive’s requirements a single Lego brick goes through detailed safety documentation: an element risk assessment, a toy safety report and for quality: an element approval and a technical drawing must be present. When you include the checks for raw materials this adds up to 10 checkpoints. In printed form, these reports and supporting documents for a single Lego brick fill 25 pages. (Trangbaek). Keeping children safe when playing is an ever constant priority for the Lego, because of this ethic Lego never compromises on the safety of our products. Every year Lego continues to invest significant resources into innovating and maintaining the highest levels of toy safety, and are committed to producing the highest quality of safe products. In general the majority of toy production is outsourced to Czech Republic and China.
However, Lego has retained production capabilities in-house rather than outsourcing to the Far East, focusing on product quality and innovation rather than price (Jensen). This strategy has paid off, with customers proving that they are willing to pay a price premium as long as the product quality is perceived as high Adding to the Brand (and profits) Lego has expanded beyond the construction blocks to include Lego video games (for all the popular platforms), Lego movies, Lego books, Lego apparel, and even a LegoLand Adventure theme Parks. The draw of the theme park compared to a typical six flags type park, is the Lego Park is not only fun, but educational as well. Seems Lego is in every aspect of child entertainment. Which is exactly what the management at Lego wants. With so many different concepts to the Lego brand, should one run stale, the company will not suffer. Another reason why Lego has been wildly successful is because of its accessibility. Lego is on every nearly every retailors’ shelf across the country. From small corner drug stores, to dollar stores, to major changes like Wal-Mart and Target you can buy Lego brand products virtually everywhere. Lego products sometimes come with kids’ meals at fast food restaurants. Lego also upholds their quality standards when it comes to their suppliers. To promote sustainable supply chains, the Lego requires all suppliers and business partners to sign Code of Conduct. The Lego Supplier Code of Conduct covers human rights, labor rights, health and safety, anti-corruption and environment (Vestberg).
Believe it or not, these components are just a portion of how LEGO executes on its content marketing strategy. Yes, LEGO has a fantastic product — that must always come first. But it has literally dominated the competition through multimedia storytelling. As a toy company, no one else comes close to what LEGO has been able to accomplish with branded content. Although Lego generates direct revenues from its content (licensing fees for Legoland, Lego cartoons, books, and games like Lego Lord of the Rings), the majority of content is created to support its business model, which is to sell more Lego products. Lego shows us that, like it or not, we are all media companies today; we all have the opportunity to communicate directly with our audience. It’s how we choose to use that privilege that makes all the difference. Yes, Lego sells toys to children (and sometimes adults), but Lego is also a publisher. Lego creates and distributes content, similar to any media company in the toy space, but the business model behind it is quite unique.
Etzel, Michael J., Bruce J. Walker, and William J. Stanton. “The Field of Marketing.” Marketing. 13th ed. Boston: McGraw-Hill/Irwin, 2007. 51-52 Print. Forberg Mortensen, Tine. “LEGO History Timeline.” LEGO.com About Us About the LEGO Group. 2014 The LEGO Group, 9 Jan. 2012. Web. 06 Mar. 2014.
“LEGO.” Toys “R” Us. 2014 Geoffrey, LLC. Web. 07 Mar. 2014. Rude Trangbaek, Roar. “LEGO®.” LEGO Group Turns 80. 2014 The LEGO Group, 10 Aug. 2012. Web. 07 Mar. 2014. Sandgaard Jensen, Martin Vang. “The LEGO Brand.” LEGO.com About Us About the LEGO Group. 2014 The LEGO Group, 07 Dec. 2011. Web. 06 Mar. 2014. Vestberg, Morten. “LEGO®.” LEGO.com About Us About the LEGO Group. 2014 The LEGO Group. Web. 06 Mar. 2014.