Business IA – How has LEGO adopted specific marketing techniques to appeal to more mature audiences through its Icons theme?

Table of Contents 2

Introduction 3

Methodology 3

Exploration

Marketing Strategies 4

Perception Mapping 5

Conclusion 8

Citations 9

Introduction

LEGO is a Danish toy manufacturer founded by Ole Kirk Christiansen in 1932. It is one of the most recognizable brands for children and adults alike, producing brick sets praised for their quality and creativity. Growth over time has led to the company expanding to appeal to a wide variety of demographics. The rising popularity of the video game industry in the 2000’s led to LEGO almost filing for bankruptcy. Through attempting innovation to keep up with market trends, LEGO lost sight of its core brand identity, discouraging sales and confusing potential buyers (Wadavi, 2016). However, market research allowed the brand to realize the potential of previously ignored markets, such as those of young girls and adults (Mark, 2018). Unbeknownst to the company, LEGO already had an active adult consumer base that spent a higher amount of cash per capita compared to purchases made for the average child (Handley, 2018). To appeal to the demands of this demographic, LEGO diversified its product portfolio to include sets in “LEGO Icons,” a theme that includes sub-themes such as the Modular Buildings and Botanicals collections (Wharfe, 2022).

Methodology

To determine how LEGO uses specific marketing techniques for Icons to attract a mature consumer base, the company’s marketing strategies will be analyzed in order to determine how certain strategies were chosen for LEGO to maintain a presence in the adult market as well as the effect they have on consumers. Additionally, perception maps will strive to compare the products specifically marketed toward adult consumers to other collections targeted at different audiences.

Exploration

Marketing Strategies

There are several factors that influence LEGO’s marketing approach towards adult consumers that differ from the norm of what LEGO would usually adopt targeting other demographics. The catalog of Icons products shows that the majority of advertised sets come with stands, highlighting their value as displays rather than interactive toys (Appendix iii, iv). This is due to the differences in the values of the adult and child consumer base, as adults rarely have time to interact with sets after they’ve been built. There are also certain sets that act as household decor, such as the Botanicals collection, which offers LEGO house plants, and hanging pieces of art, such as imitations of real paintings (Appendix iv).

Because of this lesser degree of interaction with the finished product, LEGO instead focuses on the merits of the building process. Icons sets are emphasized for their value as tools for mindfulness. Using the phrase “unplug, unbox, unwind” at the top of their Adults Welcome webpage (Appendix iv), they play up the health benefits of the product, understanding that the majority of the adult audience views LEGO as less of a product of active entertainment, but rather a creative venture to focus the mind, helping to “shift your focus and give you a break from the daily grind” (Appendix iv). 

This strategy has been particularly effective during the pandemic, where it was reported that, “compared with other generations, millennial and Generation Z adults reported the highest stress levels” (Abrams, 2022). Thus, LEGO products advertised as relieving agents garnered the company 55.3 billion DKK in revenue in 2021, in comparison to 39.0 billion DKK in 2019 (Appendix ii). Its pandemic success can also be attributed to LEGO’s emphasis on e-commerce to market towards the adult audience, which is why there is a complete section of the LEGO website, entitled “Adults Welcome” (Appendix iv) that includes FAQs justifying the product for this previously stigmatized demographic.

More recently, there has been a shift in the packaging of the product in order to market the Icons sets as more exclusive and mature, such as adding 18+ labels to their sets meant for adults (Huw, 2020). Additionally, Icons opts for an all-black box to play up the sophistication of the products. Though children may be repelled by such simplistic design, adults associate this sleekness with quality and value, and are more likely to purchase the product. The same minimalist yet elegant design is upheld in their catalog and webpage design, which projects the same impression (Appendix iii, iv).

Perception Mapping

This perception map will evaluate price versus complexity (of assembly) of popular themes in comparison to Icons. In order to make an objective judgment, each placement followed a set procedure. The LEGO webpage for each theme was observed, and frequency of a product showing up in the price ranges listed ($0–25, $25–50…$100+) was recorded to make a determination of where the theme would lie in terms of price. Then, frequency of the product showing up in a specific age category listed (4+, 6+…18+) was recorded to determine where the theme would lie in terms of complexity, with the assumption that a higher age listing would indicate higher complexity and vice versa.

Fig 1. LEGO themes perception map (graphics taken from LEGO’s Website)

As can be seen, Icons lies on the high price, high complexity scale. What may be surprising is that relative to the various themes that lie within that quadrant, Icons is on the lower end of the spectrum in both axes. This is due to LEGO keeping up the accessibility of these products to the adult market. Because this is not as much of a niche theme as LEGO Star Wars (which contains iconic Star Wars-based sets including settings, characters, and vehicles), and does not serve any greater educational purpose like LEGO Mindstorms (which teaches children how to code through assembled robots), LEGO maintains a fair to slightly premium price for its Icons products. It is, however, still notable how far apart Icons is on the map from the majority of other LEGO themes aimed at children. As mentioned prior, adults are more willing to pay higher prices for LEGO products, but also possess a higher degree of expectation in regards to their experience assembling the set as well as the end result. In order to meet these high standards whilst also projecting an image of exclusivity, LEGO is able to charge more. Based on this product’s identity, LEGO forms a narrative surrounding the packaging and price, not only promoting the set itself, but the experience associated with it.

A significant reason adults choose to invest in such an experience instead of seeking other similar ventures that also delve into the realms of mindfulness and creativity, is due to the nostalgia factor associated with LEGO. Research done into the behaviors and motivations of adults who have been long-time users of LEGO (Appendix i) demonstrated the primary emotion felt when interacting with products was nostalgia. This was further elaborated by users clarifying that these feelings arose due to reminiscences of their childhood experiences with LEGO. The company capitalizes on sentimentality by releasing Icons sets that connect emotionally to its users. In its product catalog (Appendix iii), it displays items such as a Beatles wall art collection that are specifically aimed at integrating a sense of the past within its current products. They do the same thing on their “Adults Welcome” webpage under the section “Sports & Games,” where they promote an Atari 2600 set made of lego. Such LEGO collaborations and other thematic sets are also mentioned within the study (Appendix i) to be more attractive to adult consumers relative to classic collections.

Limitations

There are several limitations to the analyses. An indicator of Icons’ success within the section “marketing strategies” was the increased revenue that LEGO brought in during the pandemic. However, this makes the assumption that Icons contributed substantially to this number, which cannot be verified. Not only is Icons not mentioned in the “top themes of the year” (Appendix ii), it is also important to note LEGO’s other revenue streams, such as “video games, television programming and motion picture content” (Cleverism). Additionally, the constructed perception map has a few shortcomings, like the fact that the model makes the assumption that all of LEGO’s products from a specific theme are listed on its website, which is untrue and limits the sample size. Additionally, research has shown that within different themes there can still be large pricing disparities, thus a single position on the y-axis could be inadequate. However, the impact of this limitation was lessened by choosing the median price of the goods offered within the data set (as to lessen the impact of skewed number distribution). The same mediation was also applied to complexity.

Conclusion

Though prior to the 2000’s LEGO was considered a toy exclusively for children, the introduction of Icons has expanded that audience to include adults as well. LEGO only started creating products that took full advantage of the sentimentality, specific interests, and needs of a more mature demographic once they recognized the potential of such a market. Adults require products that are more thematic and complex than traditional LEGO sets, motivating the company to adopt a completely different approach to marketing that places these products in a more refined and premium light. However, the high prices LEGO is able to charge in return render this a very successful venture on the part of the corporation. With revenue only increasing every year, LEGO’s shift towards being a brand that is inclusive for all age groups was a decision that made all the difference for the company.

Citations

Abrams. “High Stress Levels during Pandemic Are Making Even Everyday Choices Difficult.” Monitor on Psychology, American Psychological Association, 2022, https://www.apa.org/monitor/2022/06/news-pandemic-stress-decision-making. 

Cox, Lindsay Kolowich. “Building a Creative Brand Strategy, Brick by Brick: The History of Lego Marketing.” HubSpot Blog, HubSpot, 2 Aug. 2022, https://blog.hubspot.com/agency/history-lego-marketing#question7.

Handley, Lucy. “How Marketing Built Lego into the World’s Favorite Toy Brand.” CNBC, CNBC, 11 Apr. 2019, https://www.cnbc.com/2018/04/27/lego-marketing-strategy-made-it-world-favorite-toy-brand.html.

Huw. “Lego Ditches Creator Expert Branding in Favour of 18+ Marking.” Brickset.com, 2020, https://brickset.com/article/51364/lego-ditches-creator-expert-branding-in-favour-of-18-marking. 

“Lego Group.” Cleverism, 31 Oct. 2017, https://www.cleverism.com/company/lego-group/. 

“Lego Is Now Officially for Adults Too, Thank You Very Much.” Nerdist, 28 July 2021, https://nerdist.com/article/lego-adults-welcome-catalog-grown-ups/.

Mark, Chris R. “Lego- Building a Successful Future through Market Research One Block at a Time.” ChrisRMark, 21 May 2018, https://chrisrmark217.wordpress.com/2018/05/02/lego-building-a-successful-future-through-market-research-one-block-at-a-time/.

“Themes.” Official LEGO® Shop US, https://www.lego.com/en-us/themes. 

Wadavi. “Lego – Market Research as the Building Block to Success.” T1 2016 MPK732 Marketing Management (Cluster B), 18 Apr. 2016, https://mpk732t12016clusterb.wordpress.com/2016/04/18/lego-market-research-as-the-building-block-to-success/.

Wharfe, Chris. “Lego Creator Expert Rebranded: Lego Icons Launching 2023.” Brick Fanatics, 30 May 2022, https://www.brickfanatics.com/lego-creator-expert-rebranded-as-lego-icons/.