Lego Case Study - Homework Assignment PDF

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Homework Assignment...

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Coby Schmutter

March 8th, 2020

MKT 280-004

1.

How is it possible that a successful corporation such as The LEGO Group (TLG) drifted so far from what its customers wanted? The successful LEGO Group lost their established connection with their customers/consumers due to something known as a Marketing Myopia. This occurs when a corporation/company creates a “short sighted” approach to marketing their products based on the needs of the company, as opposed to tuning into the consumers wants, needs, and desires. According to the case study, the company had “fallen out of touch with its customers” due to the push of digitalized products from other companies. Instead of people purchasing the LEGO products, they now had new wants and desires which the LEGO Group was not fulfilling.

In the beginning, the LEGO Group was very successful, their revenue was over 5.7 billion dollars, and customers were very satisfied. However, in the early 2000’s this changed and left the LEGO Group “losing money at a rate of $1 million a day”. According to the case study, the LEGO Group was following a mantra that had a basis of keeping their products simple. They created sets that were extremely basic, and did not really come with any form of instruction. The sets consisted of bricks, doors, windows, and roof tiles with the assumption that an unstructured building set would help enhance children’s creativity. Originally, the LEGO Group felt this philosophy of “keep it simple” was sufficient, however, once other companies began creating complex

products such as interactive games, video games and other games which were available to children on mobile devices, the simple products were no longer making the cut.

2.

How did The LEGO Group gain key customer insights into the underlying needs, emotions, and brand connections of its toy customers? The LEGO Group gained key customer insights into the underlying needs, emotions and brand connections of its toy customers through the implementation of research strategies including utilizing customer insight-driven marketing research, test groups which included children (both boys and girls) as well as adult fans of the LEGO product (AFOLs). The corporation interviewed families, conducted studies inside of toy stores, and began to conduct research strategies in effort to better understand the needs of the market. The research group spent time studying how boys and girls differ in their play. From around the world girls and their mothers were asked to contribute to the research and development of construction toys focusing specifically on what girls who had previously not played with LEGO or construction toys would be interested in. Ambassador consumers were invited to participate in product development, evaluation and review of designs. These strategies provided The LEGO Group with valuable information as well as the ability to create a market segmentation in effort to reconnect with their customers.

3.

How did LEGO apply these customer insights in the development of LEGO MINDSTORMS and LEGO Friends?

The LEGO group utilized the market research and customer insights to develop LEGO MINDSTORMS and LEGO FRIENDS, each construction toy set focusing on a different group of customers. LEGO MINDSTORMS incorporated hardware and software which is utilized in creating customized robots. This product targets the male consumers, specifically boys and serves a dual purpose, providing a toy building set with the ability to learn early foundations of coding skills and robotics. As well as allowing the LEGO groups products the ability to join the new technology filled market.

The development of LEGO Friends, created to satisfy female consumers, specifically young girls included construction toys and sets which consist of meticulously detailed mini figures. The construction sets were crafted from bright colors, those often favored by girls (green, orange, pink and purple) and focused on friendship and community building themes, providing girls the opportunity to develop role-playing games and activities....