Lego. When I think of Lego I think of endless hours during my childhood where I imagined worlds of fantasy which led to hours of playing. Using those interlocking bricks I could create houses, ships, furniture – practically anything I could think of. And I used to adore those little characters with their locking head and feet components.
This thought process as an adult speaks to Lego’s unique positioning and differentiation strategy that built this strong brand – Lego a toy thats more than just a toy but one that sparks imagination and learning.
Lego History – how the foundation was built
Lego: the name itself is built from two Danish Words (Leg and Godt) which translates to “play well”. The company was founded in 1932 and it offers a unique product which is an interlocking brick that can be used in conjunction with other bricks to create any variation of construction. This is known as the Lego system.
Lego is instantly recognizable with its distinct logo – a thick white font, surrounded by a yellow and black outline and placed on a red background. Once you see it you associate it with one of the largest and popular global toymakers.
But how did the brand evolve into more than just a toy company making plastic building block? How did it become symbolic of our childhood memory? Let’s unlock their differentiation and positioning strategy systematically.
How does Lego positions itself?
Lego is a one product toymaker that offers interlocking plastic bricks used to create and build more toys, and it is sold at a premium price. Due to its long-standing history it is a brand with huge customer loyalty and customers perceive it as long-lasting and quality-made.
How does it differentiate itself?
Despite being a one-toy brand the product itself is extremely versatile. You can use older Lego with newer versions (they still interlock). A purchased set will allow you to build many different toys. The foundation of the toy lies in its educational aspect and encouragement of imaginative and creative play. It’s accessible and allows for hours of fun. It’s extremely durable and one set can last for years. The brand has also expanded into gaming and movies and continues innovating. Amongst these many differentiating factors it also licenses its name to other products to gain more target markets. Think of the recent success of the Lego and Lego Batman movies which allows affiliated product lines. Before that it had a very successful Star Wars themed product set.
Target Market – Babies to teens to adults. Who doesn’t love Lego?
The brand initially targeted young boys but that quickly changed to include girls. Now the market ranges from 1-16years (Lego created Duplo which was a larger brick catering to chunky baby fingers and mouths).
However, it was the brand’s older adult audience who drove the brand’s popularity. Lego took on a cult phenomenon – people started collecting sets, creating fan clubs and building really impressive creations. To them it represents not only a brick but also a future made into reality.
Who is Lego’s Competition?
It’s competition includes all other toy manufacturers and especially those that have developed similar products such as Megabrands, purchased by Mattel and also specializing in construction toys. Other competitors include Hasbro, Mattel and Cobi but most competitors come in at lower price points and offer alternative themes to Lego’s offering. Competitors attack hard in the construction toy market but the perceived quality is not the same. Other competitors in the general toy market include other traditional toys, the internet, games etc.
Lego feelings and emotions
The brand represents the power to unleash what is in every kid’s imagination – they become creators of their very own world of fantasy all in the name of good play. Therein lies the true magical essence of these little plastic toys. It allowed kids to become master builders of their own toys. This aligns with the vision and mission of Lego: Inspire and develop the Builders of Tomorrow and Inventing the Future of Play.
How does Lego Benefit from its positioning and differentiation strategy?
Despite a loss of its patent and ensuing competitor attacks directly in the construction toy market, Lego still maintains a massive piece of the market share. It also increased its revenue significantly. Forays into licensing and movies allows another level of interaction with the brand and also further product extension targeted at both older and younger audiences. Competitors have still not ,managed to overtake the toy giant. This is due to unique product and consumer perception.
It’s still creating its magic of play but in a different format. It will see the brand even more entrenched in the pop culture landscape and appealing to a broader audience.
The Lego Group History: https://www.lego.com/en-us/aboutus/lego-group/the_lego_history
Evolution of the Lego Logo: https://www.logodesignlove.com/lego-logo
11Awesome Lego Facts That Will Make You Want to Break Out the Bricks Again: http://www.huffingtonpost.co.za/entry/lego-facts_n_4862088
How Lego Creates a Lasting Legacy: http://coolerinsights.com/2012/02/how-lego-creates-a-lasting-legacy/
5 Reasons Lego Dominates the Toy Industry: http://brickingtips.com/why-is-lego-popular-5-reasons-lego-dominates-toy-industry/
Lego’s Success Leads to Competitors and Spinoffs: https://www.nytimes.com/2015/11/21/business/legos-success-leads-to-competitors-and-spinoffs.html
Lego Reports Highest Revenue in 85-year History: http://www.telegraph.co.uk/business/2017/03/09/lego-reports-highest-revenue-85-year-history/
Lego Group Mission and Vision: https://www.lego.com/en-us/aboutus/lego-group/mission-and-vision