Lego Turned Playtime Into Brand Power An Epic Business Tale
Many parents remember playing with Legos, expressing their creativity by building plastic-brick towers inhabited by whimsical, multicolored characters. The story of Lego, a Danish company that grew from a wooden pull- toy maker in the 1930s into the world’s most valuable toy brand, is an epic tale of masterful brand management. The company began as a maker of a wooden duck toy on wheels. After a factory fire nearly destroyed the business in 1942, founder Ole Kirk Kristiansen decided to switch to less-flammable plastic bricks. The rest is history. At the core of the company’s success is its emotional connection with its customers, from a toddler’s joy in imaginative play to an adult’s nostalgia for the creative fun of childhood. Building Emotional Bonds By tapping parents’ desire to prepare children for life, Lego forged strong emotional ties with its fans. Lego bricks were always meant to invite creativity; there’s no right or wrong way to put them together. Throughout a midcentury trend toward “planned obsolescence” products that fell apart and couldn’t be repaired, Lego toys stood out as a model of consistency. The company’s earliest bricks still work with more modern products, enabling families to pass them down. Making Products Relevant Lego has continually found ways to make its products relevant to real life. The company has broadened and deepened the brand’s appeal by
gathering feedback, tuning in to market trends, and embracing new products and licensing partnerships. Early in its history, the company created toys centered on themes such as urbanization and space travel. As powerful pop culture products emerged, Lego secured lucrative licensing agreements with prominent brands such as Harry Potter, The Lord of the Rings, Disney, and Marvel. These partnerships enabled fans to turn iconic heroes from these beloved franchises into brick figures to enact favorite scenes. Fixing Mistakes Fast Intensifying competition in the toy market led Lego management to make a series of strategic missteps in the 1990s and 2000s. In an attempt to shore up profits, Lego diluted its brand identity by making misguided moves into baby products, camping supplies, and even shoes, triggering a 30% decline in sales. But in a swift course correction, Lego brought in new leadership and, within a few years, restored its brand image by refocusing on the core building-block products customers loved. Adapting to Customers’ Desires Lego’s next innovation was far more successful. The company cashed in on its multigenerational appeal by launching new products for the millions of adults who had grown up with Legos and still harbored fond memories of the creative fun they inspired. The company created sets that were more complex and difficult to build, enabling adult customers to create stunning collectibles. Many of them capitalize on licensed characters that trigger a nostalgic yearning in adult fans, helping them de-stress after a high-pressure workday. Lego’s decision to cater to adults sparked a 27% increase in revenue, demonstrating that you don’t have to reinvent the wheel to expand sales. Sometimes, tweaking marketing strategies to appeal to a different demographic or niche market can be just as powerful. Broadening Customer Engagement Lego continues to find innovative ways to broaden and deepen its connection with a broader fan base. Its move into Lego movies took characters into the mainstream, turning its bricks into characters people cared about. And the company continually opens new pathways to engage its fans, hosting conventions and Lego-building competitions to stoke loyalty. Through its Lego Ideas campaigns, the company also invites fans to submit their own new product ideas for potential production.
Taken together, the Lego brand’s history is a remarkable tale of marketing acumen, sustaining fans’ loyalty for more than 90 years.
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