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LEGO Builds Toward Sustainability

While the latest recession hit the toy industry hard, Lincoln Armstrong M’93, of LEGO Americas Brand Marketing, said his company has experienced tremendous growth.  LEGO’s secret to success, Armstrong said, was a focus on core customers bolstered by innovative marketing campaigns.

Armstrong’s talk, entitled “Innovation in Brand Marketing:  The LEGO Experience.” was delivered to a room full of alumni and current MBA students.  The event was sponsored by Babson’s Consumer Products & Retail Career Affinity Group.

Armstrong said LEGO’s recent triumphs come in stark contrast to the series of failed initiatives in the late 1990’s and early 2000’s, including the Galidor action figure line, the Clikits line targeted at girls, and Lego Sports.  By 2004, the company found itself having to carefully manage its cash.

Then came the turnaround, which Armstrong attributed to five factors:

• LEGO’s renewed focus on key retailers
• Changing consumer dynamics that placed an emphasis on value
• High parental nostalgia and marketing specifically to dads
• Compelling product development
• Marketing Innovation, including LEGO video games, comic books and captive audience marketing before selected movies and during video game downloads

The result? LEGO sales took off in the last few years while the rest of the toy market has suffered through the recession.

“In 2008 we grew in the U.S. market over 36 percent,” Armstrong said. “Thirty-six percent in an established marked in unheard of.”

The campaign was successful because it leveraged LEGO’s connections to its customers, and found new ways to keep them interested.

“It’s about trying to find a way to get our message out there in a way that we can control it, that increases interest in our products,” Armstrong said.

Throughout LEGO’s turnaround, Armstrong said LEGO operated using four guiding thoughts on marketing innovation:

• Innovation is not always a brand new idea. It can be a subtle change to an existing idea.
• The media landscape is changing quickly, so look for ideas that are relevant to your consumer, not just the latest trends.
• Do your research and follow results that meet your objectives.
• To implement big ideas, look for the “Home Run” but have a backup plan in case you strike out.

– By Andrew Lightman M’11