Lego’s building blocks to brand diversification

6 May

Last weekend I babysat my cousins two little girls. We played numerous games including one where I was forced to lie down while a 9 year old with surgical gloves put toothpaste on her finger and rubbed around in my mouth and then picked my teeth with a toothpick…. but I digress. Two of their games really caught my attention. Lego Creationary and Lego Harry Potter Hogwarts.

Harry Potter Lego Boardgame

Since when did Lego make board games? Lego was all about building houses and castles and cars for little plastic men with no hair. Did you know that Lego sells its blocks in 130 countries and claim that on average everyone on earth has 52 bricks. Wow!

I also remembered that a few years ago Lego released a video game called Lego Star Wars that was a HUGE hit when I used to work in retail sales. Kids went nuts for that series. Who would have thought that anyone would want to play a video game about Star Wars characters made of lego when you could easily play a video game with normal looking Star Wars people?

Lego Star Wars video game

It turns out that in the last decade Lego has faced some tough challenges and had to shut down a number of their operations as a result of a downturn in sales and bad sales decisions. They turned their sales around by teaming up with the Harry Potter franchise to produce Harry Potter themed play sets of their traditional blocks and grew from there. Read the report below to learn more about this.

A Lego Case study. SOURCE: ADAPTED FROM ‘PICKING UP THE PIECES’, THE ECONOMIST, 28 OCTOBER, 2006 AND OTHER PUBLIC SOURCES

So why did Lego branch right out of its traditional building block sets and into video games and board games?

1. Diversification is one of the marketing growth strategies and has worked well for Lego.

2. The modern market place is so diverse and children are not amused in the same ways as kids were 20 years ago.

3. Having different products with the Lego brand name means that the brand is seen in many isles of a toy store. Brand salience etc.

4. By leveraging off of the success of movies such as Harry Potter and Star Wars, Lego gains collectors item status and a new market of die hards.

5. Lego is seen as a trusted, high quality product that helps to build childrens’ creativity and thought processes. So any products branded Lego are automatically trusted by parents which equals sales. Lego have a retro love cult like following these days so anything with the lego brand should sell well with parents who grew up with it. Lego men look very unique and are now sold individually. I’ve seen necklaces and other items made with them.

Note to self: keep my old Lego very safe because it is worth quite a bit these days.

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