Overview of LEGO and its target market in the United States
The study will analyse the efficiency of social media as an integrated marketing communication tool to motivate the purchase intentions of LEGO between adults in the United States. At first, the report provided a brief overview of LEGO and its target markets in the United States. As a Danish organisation, LEGO is a well-known brand globally. Since its establishment in 1932, the organisation has sold more than $1 billion of its iconic toy building blocks every year. Many contended that the organisation had moved too far away from its core values and more focused on the technology and diversity of its product lines. Using the consumer behaviour theory and traditional values, the organisation creates marketing strategies in line with the preferences and needs of target consumers. Consumer behaviour is a study of businesses, individuals, or groups in disposing of, obtaining, and using its products and services, with the decision process leading this behaviour. Due to constant changes in technology, trends, and fashions, consumer behaviour is influenced by several factors, such as socio-cultural and individual (Greenblatt, 2021). Thus, it is noted that LEGO needs to study consumer behaviour to develop a marketing plan, produce better products, and promote its product more efficiently that provide sustainable benefits in the competitive market.
LEGO is a recognised organisation for producing brightly coloured plastic construction black toys. LEGO now sells its products in more than 130 countries as a global organisation. Over the past 80 years, the organisation has continuously restored its brand by targeting different demographics, expanding into a new product, keeping the high-quality standards, and partnering with celebrities and films in the American market. With an effective mission statement of ‘develop and inspire the builders of tomorrow’, LEGO has helped LEGO become the third biggest toy brand globally. LEGO’s admiration is shown by its extensive usage and demonstration in several cultural works, such as films, artwork, and books. It has been used as a teaching tool within the classroom. In the United States, LEGO Education North America is a joint venture among the educational division of LEGO Group and Pitsco Inc. It is a customer-driven brand because its product offers are made by customers who deliver the most personalised products, inspire customers to add original brick sets according to their visualisation, give them all the decision-making power, and often consider customers provinces and 32 US states. In 2016, 90 LEGO stores were operating in North America in five Canadian provinces. It showcased 103 new products at the annual American International Toy Show in New York City (Einwächter & Simon, 2017).
LEGO has redesigned customer satisfaction as a concept of consumer behaviour. LEGO begins to listen to customers and apply their knowledge of how LEGO has redesigned to stay modern in the US market. While a low-tech organisation with high product quality, it interacted with adult fans based on creations and ideas for upcoming set pieces. Additionally, LEGO targets those who prefer or like to watch LEGO films, games, and content. Currently, LEGO’s concept has sold best from movies instead of buying existing concepts, like Star Wars (Goh et al. 2017).
How has LEGO transformed itself from a business on the brink of bankruptcy to the largest toy company in the world?
LEGO’s success as a global toy brand
LEGO found itself on the brink of bankruptcy just 10 years ago. In the face of increasing global economic competition, video game players and the widespread use of the Internet, LEGO has applied some unspecified innovation strategies. Also, one strategy is to hire a team of young European designers who do not have the skills to create toys. The outcome was a dramatic increase in the number of blocks, which quickly reached 6,000 to 12,000 and led to the nightmare of expanding infrastructure, logistics, and storage without the same sales results. Under new leader Jørgen Vig Knudstorp, the organisation was working to tackle increasing business competition, executing many operational enhancements that allow its organisation to grow:
Innovation within reasons: The organisation prides itself on making exceptional approaches to reach customer needs through design thinking and field research advances. During blunder situations, without any cost or potential limit, the team known as Future Lab has been tasked with creating compelling ideas for the organisation, although many have never been launched. However, at the conceptual level, the organisation ensures that the cost of innovation is obvious to designers. Additionally, LEGO has created rules for creating new shapes, colours, and new materials. It is stated that LEGO has set strict guidelines to restrict the chance of making loss leading toys (Einwächter & Simon, 2017).
Streamlined Product Line: LEGO launches new product each year but knew the cost of that innovation. Besides, the leadership team has decreased the number of LEGO bricks manufactured, removed costly bricks from the source, created design standards, and improved the team’s capability to respond more rapidly to customer tendencies. Also, the organisation has decided to sell its business lines that are not original and are not performing less (Greenblatt, 2021).
Some suppliers: LEGO selected to work with the narrow supplier to strategically stabilise prices. Hitherto, engineers had one-time interactions with suppliers, sent specific product messages from different vendors, and kept expensive waste within the system (Bican & Brem, 2020).
Near production facilities: The organisation has developed its production facility near enough major marketplaces so that LEGO products can quickly reach shelves and respond to end-to-end demand. Currently, the organisation has factories in Denmark, Hungary, Mexico, and the Czech Republic, established facilities in China. LEGO used financial strength to make physical barriers for signing up for early-stage competitors.
Focus on large retailers: By reducing the distribution to several smaller retailers, the organisation can minimise the fulfilment costs and eradicate orders that include a full brick carton. In addition, the organisation worked with major retailers on product customisation, demand forecasting, and inventory management (Tien, Rivas & Liao, 2019).
Appel et al. (2020) stated that social media marketing is determined as marketing that uses social networking websites as a marketing channel. It is an important tool for economic development because it includes two-way communication and connects and builds customer relations. Furthermore, social media marketing assists organisations enhance their market share and customer buying intention. The rise of social media networks has required a reflective consequence on business strategy and has led to changes in marketing strategy. Best examples include Amazon, Microsoft, Google, and eBay technologies. Thus, social media is the modern marketing drift, and business owners want to learn to generate interest in their business (Baswani, Townsend, & Luse, 2021). Social media has a vital role in the consumer decision-making cycle. Platforms such as LinkedIn, Facebook, Hi5, Twitter, and YouTube make it easy for buyers to post product reviews and reach out to others in the same community. Social media is more relevant in marketing, advertising, and communication. Buyers who have a close affiliation with the business share their interactions with others on social media and recommend its product or service to their friends through positive word-of-mouth (Alalwan et al. 2017).
Consumer behavior and its impact on LEGO’s marketing strategies
Social media communication needs to be examined in detail because it has an appropriate role in creating brand equity and influencing consumer decisions. Social media is available on Facebook, Weblog, Wiki, LinkedIn, Twitter, Podcasts and more. Social media provides a major opportunity for companies to engage their customers individually. Rakoczy et al. (2018) contended that social media is the engagement platform that builds trust, essential for building brand equity. Social media is a practical tool that contributes to organisational marketing strategies and goals for customer engagement, customer communication, and customer relationship management (CRM).
Goh et al. (2017) argued that individuals who behave with the intention of buying a particular product can be defined as consumer purchase intention. The purchase intention reflects customer perceptions and is influenced by external factors such as customer satisfaction, brand image, product quality, and so on. Therefore, customer buying intention is recognized as the effectiveness of social media and word-of-mouth communication because of the online customer experience that influences and motivates the outcome of consumer attitudes. Social media is defined as an influential medium that can influence a customer’s past experience because trusted information and feedback and reviews from the community, family, and friend can change a customer’s mindset that affects a purchase decision. In addition, social media facilitates two-way communication and provides real-time information between consumers and retailers. Therefore, retailers can recognize the needs of customers and serve them more effectively and efficiently through better customer relationship management, customized offers, prolonged product lines, and cost-effectiveness.
Micro-influencer is known to colour their Instagram accounts with their desired lifestyle and make relevant images in the expertise category, which other users find trustworthy and interesting. According to Isyanto, Sapitri & Sinaga (2020), many customers celebrating on Instagram stands out among the big names and the general public to promote themselves as a trusted source for followers. In addition, micro-influencing shows how the greatest or powerful the product or administration is most affected and therefore tries to change the logic of other web-based client lives.
Micro-influencers are more interested in their audience, much smaller than celebrity influencers. Additionally, micro-influencers become more loyal and happier with their followers as feelings of social distance diminish the appeal of celebrities. Standard users can instantly become popular on social media websites like Instagram with a higher probability of engagement. Shen (2021) noted that individuals have a new online performance style that influences others and increases their popularity through many audiences known as micro-influencer celebrities. The direct interaction of micro-influencers with their fans tends to be more interactive and authentic than traditional social media celebrities. While it has less than a million followers, micro-influencers are more profitable to brand because they are trusted and close to their audience. Gupta & Mahajan (2019) found that micro-influencers have a high engagement rate of about 66% with their audience and are affordable for the brand. It makes micro-influencers the first preference for product promotion and expands its consumer base (Zhang et al. 2020).
Because of the advancement of online technology, eWOM provides organisations with an affordable way to recognise customer perceptions and needs and communicate with them. eWOM has become an essential tool for corporate social media marketing. As Yang, Kim & Sun (2019) stated, e-WOM acceptance depends on the source reliability and its associate strength. It has an intermediating role in ensuring that individuals forward information online when they receive it. As the viral intention is not only to like, comment or shares a post but also the intention of a user to follow the brand and suggest it to others, the source credibility is associated with the viral intent of the consumer. Organisations can take advantage of eWOM by encouraging their customers to submit their feedback and identify from those comments effectively. In other words, eWOM may be responsible for organisations because they cannot control these issues. However, eWOM’s harms credibility as information communicators and receivers are maintained anonymously (Kerr, Phaal & Thams, 2019).
LEGO’s innovations strategies
Erkan & Evans (2016) stated that retrieving eWOM information and people search shared on social networks to decrease anxiety before deciding to buy. Users trust eWOM information shared by experienced consumers who have bought products online. It has been seen that trust and brand awareness impact eWOM. Additionally, brand awareness means consumers identify a specific brand from the various brands accessible online so that the user’s trust is tied to that brand. Furthermore, online consumers purchase after checking positive electronic word-of-mouth on social networks. It also has a direct impact on trust among social media users.
According to Tien, Rivas & Liao (2019), eWOM is any negative or positive statement created about a company or a product by a former, potential, or actual consumer that is available to certain individuals and organisations and spreads on the Internet. eWOM concept is closely associated with the implementation of user-generated content (UGC) in “mixed” digital promotion and often overlaps with the definition of eWOM to embrace viral publicising. Additionally, the user-generated content becomes an e-WOM while individuals share content in the online brand communities. Marketers use a variety of tactics to intentionally trigger eWOM. They try to be part of the communication process and involve customers using UGC to achieve their advertising objectives. This is because eWOM has a strong influence on customers’ buying decisions. This strategy is called eWOM advertising. In this strategy, a brand or company invites customers to write product reviews (negative or positive) to help other customers make purchasing decisions (Erkan & Evans, 2018).
Historically, the LEGO business model has been governed by commitment and innovation to quality. The focus on quality and innovation for free leads to mishandling of the operating model, as well as a major downturn in corporate profits. As mentioned above, the operation model of LEGO is now set to create the competitive advantage that LEGO needs to transform its financial performance (Business Advice, 2021).
LEGO implements a modern and traditional marketing channel. Traditionally, it has been dependent on media publishing, magazines, marketing campaigns, and in-store promotions. However, its marketing strategies have undergone many changes over time. In addition, the organisation is using many digital tools to promote its products. Also, LEGO implements digital technologies to engage and connect with people (Erkan & Evans, 2018).
A digital campaign is now a vital part of any marketing strategy. The brand is increasing its investment in advertising. LEGO’s sales and distribution costs, with its promotional and marketing costs, were 2.67 billion Danish Krone in 2018. In addition to their e-commerce channels, websites, and gaming websites, the brand also uses other digital tools for marketing and promotion as an engaged customer (Bonneau & Bourdeau, 2019).
LEGO has been able to stay at the forefront of the competition, largely established at a young age and incorporating modern marketing strategies. Behind the many decisions to buy LEGO products – being the guardian of children, children can be influential and persuasive, but the decision to buy is largely up to the adults. Currently, customers can recognise the difference when buying a product and change their buying habits. LEGO has developed a marketing strategy towards strained adults who have used LEGO sets as meditative entertainment. At this point, the organisation develops a personal relationship with loyal LEGO fans of all ages. Moreover, LEGO has even engaged current buyers to create a new consumer base and influence new product development. Also, LEGO has a significant adult customer base who can join the LEGO Ideas online community and be part of the creative procedure (Yusuf & Busalim, 2018).
Social media marketing as a tool for LEGO’s growth
LEGO uses a social media marketing strategy. The organisation actively uses these channels to engage its followers and increase its customer base. The organisation provides one to two posts per day and usually get thousands of likes. While this demonstrates LEGO’s popularity as a brand, Facebook can be a great customer engagement and marketing channel for entertainment brands and games.
LEGO also uses Instagram to promote its products. The company shares videos and images via Instagram and has reached a significant level via a social networking website through video and image sharing. In this way, the company use a micro-influencer to promote its products among adult customers. In addition, LEGO uses a video marketing strategy to attract more customers to its product. LEGO often publishes videos through its YouTube account. The organisation publishes all types of videos, such as promotional and educational videos, aiming to increase sales, enhance brand awareness, and increase the number of followers and fans (Andersen & Ross, 2016).
Three factors that usually motivate consumers towards LEGO, namely social interaction, power, and achievement. Each of these factors determines how people present themselves. One example is that LEGO has introduced a program named ‘Serious Play’ that goes through management problems using building blocks. Lego Serious Play (LSP) is a structured convenience method used to make strategic decisions and solve problems in the business environment. It aims to encourage creative thinking by using Lego Brick as a metaphor for the experience and organizational identity. Hence, it can be stated that this kind of enjoyment leads to increased willpower through online shopping and ultimately influence purchase intention and customer satisfaction. In a word, it is a great way to entertain and attract consumers towards the product (LEGO 2020).
In this way, LEGO focuses on customer engagement and sustains an interpretation that clients are the primary creator of the organisational value. Significantly, the development of a new marketing field is a shift from profit to lifetime value and customer marketing opportunities. For example, the LEGO program is a LEGO Ideas platform where customers give ideas and vote for its upcoming products. When the proposed customised set receives 10,000 votes, this is reviewed by its development team. Once approved, it is designed, manufactured and added to its product line. In addition, clients are paid for the ideas they introduce. In this way, the organisation engages its consumers to share ideas they explored when using LEGO products as their primary resource. Using a co-created marketing strategy, the organisation can reuse purchased products for new customers and encourage future designs. This is a way that remains to attract both young and adult clients (Lee, 2019).
eWOM is a process that allows potential consumers to make a purchase decision by reviewing the products they purchase. eWOM is useful for customers and marketers because it demonstrates the efficiency of social media in sharing information. In addition, eWOM enables the organization with an affordable way to identify the perceptions and needs of consumers as well as communicate with them (Andersen & Ross, 2016).
Effectiveness of social media marketing for LEGO’s target audience
LEGO uses eWOM to influence the purchase intention in this way. LEGO is accomplishing this in two different ways. The first is remaining true to their distinctiveness and “LEGO system’ by designing product that is versatile, because they expand with popular theme and culture by tapping new fan base, like SpongeBob SquarePants, Star Wars, and Harry Potter. In addition, LEGO does a stellar job at developing and connecting to online community. LEGO’s official YouTube channel is awesome. It makes many contents that is arranged in playlists, such as superheroes, short-films, languages, and cities. LEGO introduces ReBrick in 2011 – a social bookmarking platform planned for members to share creation and that of other consumers they find across the web. Besides, LEGO created the campaign to promote the new “Marvel: Avengers” film and “Ghostbusters” film in 2016. In this context, LEGO advertise heavily around the Halloween season by offering Lego sets and Halloween costumes. Courtesy the ‘AFOL’ community – Adult Fans of LEGO – LEGO has some professional influencers who communicate with fans and give feedback. Also, LEGO engages such influencers in the product development (LEGO. 2020).
LEGO drives its positive eWOM for innovative products more than do forums or message boards. LEGO tailored its content by audience, generating different campaign and posts for each social media platform to boost more positive consumer engage and induce the purchase intention among adults towards LEGO. LEGO made separate pages on Facebook, like LEGO NinJago, LEGO Batman Movie, LEGO Dimensions, etc. Furthermore, LEGO owns the accounts on Twitter, like @LEGOIdeas, @LEGOBatmanMovie, @LEGO_Group, @LEGOMarvelGame, and so on. It helps interact with fans and recognize similar needs or possible trends on target audience (LEGO. 2020).
Conclusion and Recommendation
LEGO has significantly improved its marketing strategy over the years. The organisation acknowledges that the product is attractive to both adults and children. The organisation now uses social media strategy to attract more customers and train their creativity. Although LEGO uses and employs video games, films, and products to promote its ideas and products, it fails to maintain a social media platform with high-quality content. In this way, the account can be improved to encourage customers to connect with the brand individually.
It has been noted that social media platform is generally open to the consumer over the age of 13, limiting audiences who can reach LEGO. As a result, the organisation needs to consider increasing its social media presence by keeping quality content and clear messages on all accounts. The organisation introduced several campaigns, including The LEGO Movie, LEGO Ideas, and “This Is Not A Brick”. It shows that LEGO can develop marketing strategies that appeal to old and young audiences. The same approach should be used to manage LEGO social media presence.
Consumer attitudes towards a product is the most significant aspects of consumer behaviour, finally affecting what they want to purchase. Therefore, LEGO often spends a lot of money and time understanding consumers’ attitudes toward its products and changing them where suitable. The only way to grow and succeed is to know its customers deeply and deliver what they want. It allows LEGO to influence consumer attitudes, more suited to their aspirations and needs.
Social media marketing and customer relationship development
This study examined the impact of purchase intention on customer buying behavior on social media. Based on the findings, the study concludes that word of mouth, entertainment, rewards, customer reviews, satisfaction, and trust have a positive effect on consumer buying intentions through social media. With the help of social networks, marketers can serve and communicate with customers in a more personalized way than mass media marketing. Hence, it is recommended that LEGO should take advantage of social media and eWOM to recognize consumer buying intention by giving rewards, customer reviews, satisfaction, and entertainment. LEGO should maintain and create relevant content on social media. Because they have the high possibility to lose trusted customers, while customers find their branded products, posts or social networking activity irrelevant.
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