LEGO case study: marketing strategy and brand positioning

LEGO-inception and expansion of the toy company
The development of a multinational company often begins with massive investment, franchising, foreign distributorship and large market coverage, at least for most part. But the history of LEGO gives a totally different picture. The history of LEGO trails back to the 1932 at the hands of Ole Kirk who was a seasoned carpenter but struggled with the carpentry production and had to let go all his workers. He remained as the sole employee and proprietor at the same time, and due to limited resources, he decided to start making toys from the best wood that he could get. There being not much work, he was joined by his son and they could manage to maintain the bare minimum production of toys in their small workshop. The workshop never made much money at the moment and the only prospective wholesale buyer cancelled their big order at the last minute after filing for bankruptcy. The production was low key, with only Ole and the son being the ones doing the production using crude tools. Their fortunes were made worse by the fire that broke out during a storm and gutted down the entire workshop with all the products that they had made in the storage, plus the few tools therein. Not ones who lose heart, the duo decided to build the store and reestablish their production.
The first milestone in their production was when Ole decided to buy a wood carving machine in one of the business trips. The machine would help in enhancing the production speed while maintaining the quality. This increased production meant that there was need for more rigorous marketing and distribution networks. Ole decided to sell the toys in his personal car, from one shop and outlet to another. Ole and the son decided to look for a name in order to brand their business. Ole struggled with many possibilities and eventually came up with the name LEGO, a name that was short and easy to memorize for clients. This was one of the first and very important aspect of marketing that was to make a long term impression on the business. The branding of the business, accompanied by the premises of quality, LEGo was making profits even amidst the economic crunch during the second world war. Ole was so focused on creating a brand name for his company and not fleecing customers to make money that he would have toys redone if they were not of the quality he wanted.
The proprietor always looked for new challenges and consulted the son and other players in the industry continuously so as to improve his production process. Notably is the trip he made to Copenhagen and came across a plastic molding machine that that had been brought in. He bought it and improved his production process and started producing plastic toys, charting a new frontier away from the wooden toys. Ole’s son, Godfrey decided to do marketing across the country for the toys since he wanted to boost the sales by not relying on the Christmas sales only but to sell across the your long. The national marketing was a big success and he made enormous sales that helped to further solidify the foothold of LEGO.
The turning point of LEGO came when Godfrey set out on a business trip to India. Aboard the ship he met the head of a big shopping center and they struck a discussion on the toy industry. The businessman challenged Godfrey that the toys had no system hence made the toys not interesting at all. Godfrey came back and was determined to include system in the toys and developed toys that would be popular even outside England. The system was later to be improved by making the different parts to stick together properly, widening the possibilities of the items that could be made from the LEGO blocks, rather referred to as system of toys. One aspect that stands out in this is the continued research on the products of the company products and making the production of the items more efficient with the ever changing demand of the clients and the shifting market dynamics.
The pricing of the LEGO toys was also another factor that was noticeably low in order to attract as wide market as possible without necessarily compromising on the quality of the items. The prices were made make it affordable even to children who were the prime market target and in the process capitalize on massive stock turnover and widening of the market and brand name across England and beyond.
The company knew that the strength of their brand was as good as the distribution network established for the products. Ole and Godfrey often took it upon themselves to ensure they had their items located at each possible outlet shop that they could. They did the distribution personally with the aim of knowing their distribution channels and networks as well as the proper inventory to avoid shortage of their goods in any part of the targeted markets. The distribution hence contributed significantly to the success of the brand LEGO.
Geoffrey had a different personality from his father Ole and had a more outgoing personality than his father. This worked well for the marketing of the LEGO products. The promotion of the company products and communication with potential customers and distributors was greatly improved by Geoffrey. He took up every chance to talk about LEGO brand and the products that they had. This helped in strengthening the brand name and expanding the market niche for LEGO but also showed the confidence he had in their products, in a way acting as a surety to the products, a fact that would make one decide to buy the products.
LEGO was known for their evolutionary approach to their market niche with new products that they introduced frequently. The continued introduction of new products proved that the organization had the knowledge of the dynamic market trends and also invested in the product diversification that helped in spreading of business risks. This helped the company to always revive its operations and become stronger in both cases of fire breakout in their workshop that destroyed most of their products.
The core aspects that kept LEGO on its feet were integrity that saw the maintenance of the quality of production, continuous research and development of the company products, effective and efficient distribution process, effective marketing and fair pricing that looked into the consumer welfare. LEGO grew from the wooden toy making company to the now massive plastic toy producer with the most renown product being the LEGO blocks which essentially were system toys.