7BSP1271 Marketing Across Cultures: Lego's Market Entry and Strategies

This report provides a comprehensive analysis of Lego's marketing strategies across different cultures. It begins with an introduction to Lego's business, its capabilities, and product portfolio, highlighting the iconic interlocking plastic bricks. The report then delves into market opportunities and characteristics, emphasizing the importance of understanding target markets, partnerships, and customer feedback. A detailed examination of marketing strategies and tactics follows, including market selection, market entry modes (such as franchising, joint ventures, and direct exporting), and the marketing mix. The report focuses on Lego's expansion into the Indian market, considering the country's market dynamics and consumer behavior. It also provides recommendations for Lego's future growth, considering the evolving global market landscape and the need for adaptation to different cultural contexts. The report concludes with a summary of key findings and insights into the successful implementation of global marketing strategies.

Marketing Across Cultures

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Introduction to business...........................................................................................................3
2. Company capability and product/service portfolio..................................................................3
3. Market opportunities and characteristics.................................................................................4
4. Marketing strategies and tactics...............................................................................................5
a) Market Selection......................................................................................................................5
b) Market entry mode...................................................................................................................7
c) Marketing Mix.........................................................................................................................8
5. Recommendations for the next five years................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing across cultures verifies the marketing strategies that are used in the
promotion of the product. Different cultures process different types of marketing
strategies. Marketing includes advertising, selling and producing the products for the
customers and to fulfil their needs and wants (Contreras and Ramos, 2016).
Commercialism involves all actions of the company that helps to promote the product in
the external environment.
The report will introduce the business organization which is Lego. Lego is a toy
manufacturer which produces toys with immense creativity and skill for the children. The
Lego toys consist mostly of interlocking plastic – bricks. The company's capability and
product/service portfolio is examined so that the organization is best known for its
futuristic goals and the achievable targets that the company as set in making the
gaming zone popular. Market opportunities and characteristics are analysed so that the
business growth and development aspect is known and accordingly the loopholes are
filled. Marketing strategies and tactics will be discussed which will include key markets
and target consumers along with the mode of market entry and marketing mix strategies
which will be applied.
MAIN BODY
1. Introduction to business
Lego is an abbreviation of the two Danish words “leg godt” which means “play
well”.the company produces interlocking plastic – brick toys for the children to play with.
The toys enable different shapes, and features sufficient for handful of children.
Company has come a long way over the past almost 85 years from a small carpenter's
workshop enhanced into modern, global enterprise (The LEGO Group History, 2020).
The Lego brick is the most important product of the organization and is known for its
most popular production and manufacturing of toys.
2. Company capability and product/service portfolio
Lego company has outgrown its business into different types and styles of toy
manufacturing. The company is known for its expansion and creativity in attracting the

younger generation kids to buy its products (Tawalbeh, Riedel and Dempsey and et.al.,
2018). The success of Lego company has lead the organization to enhance their
capabilities and skills by forming different strategies in forming toy structures that are
used by the consumers. Its dynamic capabilities of Lego company helps in analysing
the manner in which the organization acquires its resources to meet its market demands
and modify the resources. Lego serves and grab the resources that are helpful in the
production process and useful in manufacturing of the products and services that are
rendered by the company. Company has a flexible backbone model which is a hybrid –
approach offering low cost messaging as well as support while the deeper collaboration
of the capabilities of the company helps in education, new product development,
logistics etc.
Lego produces and manufactures toys in different shape, size, quality and
quantity. The production of the toys is done with respect to keeping in mind that the toys
do no harm to the children, and they feel comfortable playing with it. The Lego brick is
the most important product of the company. And for preparing such creative toy it has
been named as “Toy of the century” twice. The products of the organization have gone
extensive development and has seen growth in the years but the foundation remains
with the traditional toy that is Lego brick. There are various other toys which has seen
modification and diversification in building of toy structures. The contribution and
creativity which the Lego group has provided to its customers is the availability of
unique type of toys - an initiative taken by the company long time back.
3. Market opportunities and characteristics
There are various market opportunities for Lego which helps in the company
expansion and modification in its products (Matthias and Greiling, 2020). Opportunities
help in analysing the market and will help the company in searching for new trends and
tactics to grow its business on more profitable terms. Some market opportunities are as
follows :
Target market
Understanding of target market is a great opportunity for the company to expand
its business on valuable terms. Different strategies can be helpful to target customers

so for more production (Roos and Victor, 2018). To expand the production specific
market areas should be targeted which will help in analysing the market with customer
base and requirements of the customers towards buying a Lego toy.
Partnerships
For grabbing best market opportunities, Lego can collaborate with new partners
in the same segment which will result in profit making factor and the business becomes
outspoken more in terms of creating varieties of toys . The partnership with the other
companies will help grow Lego know the dynamic market structure and generate
profitable sales and high rise in production.
Disney Expansion Model
Legoland follows the Disney Expansion Model which is generates market
opportunities more for the Lego group (O’Flynn, 2019). For creating memorable
experiences the Lego group has build up theme parks which attracts people. Legoland
is operated by Merlin which is the theme park operator behind Disney. This model has
outgrown the Legoland base into developing it into newer structure altogether.
Customer Feedback
Customer feedback is very important factor for the company to know its market
position to cover any loopholes in the production process. Feedback also creates
opportunities for the company to modify and change the process of working and provide
better results for the customer satisfaction. Thus, market opportunities are more
important when analysed through the perspective of the customers.
4. Marketing strategies and tactics
a) Market Selection
The Lego is one of the oldest and top leading toy manufacturing company and
having huge reputation in this industry. Toy products sell by the Lego group are highly
qualitative. Company has expanded their business in various countries and now they
are looking to expand their business in the Indian territory (Masiero and et.al., 2017).
Headquarter of the Lego is an Denmark and from their they manufacture the toys and
sell through to the world. The Key market of this company are Denmark, US, Brazil and

Korea and till the end of 1997 this company expanded their business all over the world.
They were selling their products in around 130 countries. Sales share of the Lego is in
Us is around 38 percent of whole industry and 18 percent within the Asia & Pacific and
total 45 percent within the Europe, Africa and middle east. The target audience of the
Lego are mainly Children between the age group of 1 to 15.
This can be good opportunity for the Lego to expand their business within the
territory of Indian because their target customers are children and schools in this
country are mostly focused to purchase toys for the children between the age of 3 to 5,
but they also make their product for the target audience between 6 and 15 where quality
and use of products are different and quality is also different. Their product
segmentation according to the gender are both male and female children, and they are
mainly selling product on the online sides like Amazon, Flipkart. India is the country who
imported the toy products worth of $1.4 billion in the year 2018 to year 2019. They are
not manufacturing their own products and instead of that they prefer to buy their product
from the chins, US, Germany and Hong Cong Etc. The manufacture cost of the toys are
higher in the India as compare to the other countries so the small and large retailers
from the India prefer to import toys from their own country more than purchasing loyally.
Exported toys product are cheaper for the Indian retailers and the quality is also higher
that makes them buy product from other country.
Most of the toys retailers in the India import their product from the china but
recent conflict between china and India affect exporting and importing and Indian people
are boycotting Chinese products including toys. (McCombie and et.al., 2017). This can
be good opportunity for the Lego Group to expand their business in India and steal the
India market by producing low cost toy product to the India retailer. It will help them to
show their presence in the Asian market and take competitive advantages within the
new market. Selection of the new market is depended on the availability of the product
and demand of the products in the country. Indian government has also increased their
duties so Indian retailers can build their own product, otherwise they search for the new
retailers who can provide them toys in lower prices with the good quality. This
opportunity can be claimed by the Lego Group, and they are having good market
reputation so the Indian retailers will definitely buy the products from Lego. They will

able to increase their profitability and show their presence in the global market a one of
the top leading company.
b) Market entry mode
There are various market entry modes that include direct exporting, Franchising,
Joint ventures, Licensing etc. All this entry mode can be useful for the Lego Group to
take entry within the Indian territory effectively (Njati and Maguta., 2019). Here are
proper explanation of the three best global entry mode that can be used by Lego that
will help them to take successful entry, and they will able to captures the India market
and tale lead within this country.
Franchising
Franchising is a form of a distribution and marketing of the product and services
in the other resigns, in which the owner of a business system (the franchisor) grants to
an individual or group of individuals (the franchisee) the right to run a business selling a
product or providing a service using the franchisor's business system. Lego company
can use this method to take entry in the Indian territory. This method have higher rates
of getting success, and they will easily able to secure their business and expand their
business easily. Indian retailer are mostly looked for the franchises so it will be easy for
the Lego to businessman who can take their franchise to start their business. The main
benefits from the franchising business is that Lego group will share huge amount of
share and franchises company will put their own amount. It will also help their business
to recognize and company will able to increase their sales of goods. They will able to
show their presence within the Indian market.
Joint venture
Joint venture is almost famous and best way to take entry within the other
country. It is mostly used in the risky countries. It can be good opportunity for the Lego,
if they use this method to take entry within the Indian market. In the joint venture
strategy, companies collaborate within the other local company which is already present
within the country, and they both equal finance and share both profits and liberalities
equally. It is less risky strategy that can be used by Lego organization, if they use joint
venture strategy to Established their business in the Indian market then they will not

have to share their losses alone, other organization who are collaborating with them
also have to pay equally for their losses. Inventing amount will be higher, so they can
spend more on their infrastructure.
Direct exporting
Basically, direct exporting means that the (supplier) of the goods directly sell their
products to the global markets, thorough the agents, friends who live in target country
etc. it is mostly used by the companies to increase their sales and take entry within the
other country. Lego group can also sell their product by visiting the country, and they
have to find local retailer of that particular country (Patidar., 2017). This will help Lego to
sell their product easily, and they will not need to end higher amount. For example-
China also export their toys and related product directly to India through exporting
strategy.
c) Marketing Mix
There are four P's in marketing mix strategies which Lego company follows -
Product – Company Lego is the biggest block toy brand in the world producing
products and services like Video Games, Board Games, Lego, Lego Ninjago, Lego City
Series, Books and Magazines, Children's Clothing etc (Andersen and Ross, 2016).
Price – The pricing strategy that Lego follows is minimal which is set – up for the
product as the middle class and high class families can afford it with the best quality of
commodity (Pogorelova, Yakhneeva, Agafonova and et.al., 2016).
Place – There are various retail stores among which some stores where LEGO toys can
be bought are at film theatres, amusement parks and popular departmental stores and
toy stores. There are 132 retail stores all around the world for distribution of toys. As
Lego is headquartered in Denmark thus it has its major production units in UK, US,
Singapore and China.
Promotion – In promotion strategy Lego captured market through creating different
types of themes. Also, the company has an official website which notifies its customers
when there is anything new in the product line (Wu and Li, 2018).

Thus, marketing mix strategies provides the basic information the company
acquires. It gives a brief representation of the company's products, price, place and
promotion strategies at its best.
5. Recommendations for the next five years
In next upcoming five years, the recommendations to the Lego company through
which it can have growth and development in the marketplace are -
Artificial Intelligence
The Lego company should adopt the Artificial Intelligence technology as now - a -
days or in the upcoming years the world will be more inclined towards developing
different and new types of technologies. Artificial intelligence proves to be the most
efficient and effective way of fast up-gradation and stepping up towards easy work
procedures (Margiono, 2020). This technique leads to development in the intellectual
process of the system that has been endowed in the company for operations. Specific
tasks and works which becomes difficult in this year will not be an issue for the next
years of the company adopts artificial intelligence technique. This will also help in
assessing the strengths and weaknesses of the Lego group.
Setting up social campaigns
Lego should adapt to competing in surging digital era by creating the next Lego
social campaign. This potential initiative which Lego should take is online marketing and
promoting the games on social media. This will not only help in the advertising of the
services that the company provides rather will also help analyse the customer
requirements in such leisure activities. The company should expand its scale on higher
level to keep the employees engaged in innovating something new for the children. This
technique will also increase the traffic to Lego's social media pages. This will not only
lead to creativity but also upgrade the systems of the company in innovating something
new by generating new ideas and focus will regain from nothing to everything
achievable.
Increasing brand loyalty
Lego can also increase its brand loyalty by giving customers chance of attraction
towards something new in the product. Thus, they will be more loyal to the company

and will engage themselves in acknowledging the products and services of the
company. The children will incline towards the variety of products and services the
company offers (Törmer and Henningsson, 2020). This will enhance the reputation of
the company in the external market environment and will help compare the Lego
products with the other company products in the same segment of distribution.
Increase in business and sales
It is a proven method of increasing sales for companies in all areas of business,
with a prominent example Frito Lay's, “Do us a favour” initiative which boosts sales. This
initiative can be implemented by the Lego company so that Lego initiates in the process
of summing up their financial statements. This initiative will help Lego to analyse and
measure the sales on the basis of each year’s performance compared to the previous
year's performance.
Supply Chain Management
Supply chain management can be managed on the basis of the quality and
quality of the products so that there are the least number of chances for any default or
wrong action taking place in the distribution of products. Effective and efficient ways of
proper flow in the supply chain of Lego will lead to more enhancement ion the products
and the placement will lead to satisfaction for the customers.
Product development
To experience growth and development in the next five years Lego should create
free to play mobile game services to its customers. This helps in maintaining the
creativity and running in with the technology and profit margins will become
manageable.
Thus, these recommendations will grow the business more of Lego company and
will help in diversifying according to the needs and wants of customers. The fulfilment of
these needs will result in more profit and sales of the company, and they will feel
encouraged to perform better every time. Keeping in mind the improvement these
recommendations will prosper the effects on production and display techniques
implemented for the product to promote it in the market place.

CONCLUSION
Thus, it is concluded from the above report that Lego company being the largest
manufacturers of Lego toys has greatly achieved the market and attracted customers by
serving the best products and services. The marketing opportunities aided in analysing
the external market environment to attract the target market customers in collaboration
with different partnership. The Disney Expansion Model contributed to be of great aid in
the expansion of the business along with the customer feedback points. Market
strategies and tactics assisted in market selection for the company. The data entry
mode included franchising, direct exporting and joint ventures with the company
contributing towards acknowledging the key areas for the benefit and growth of the
business as whole. Marketing mix strategies of Lego provided assistance of the basic
information to be displayed. And lastly, recommendations were provided to look for the
future development to be done in the next five years.

REFERENCES
Books and Journals
Andersen, P. and Ross, J.W., 2016. Transforming the LEGO group for the digital
economy.
Contreras, F.L. and Ramos, M.L.Z., 2016. What is Marketing? A Study on Marketing
Managers’ Perception of the Definition of Marketing. In Forum Empresarial (Vol.
21, No. 1, pp. 49-69). Universidad de Puerto Rico.
Jensen, J.L., LEGO & SENSORY BRANDING.
Margiono, A., 2020. Digital transformation: setting the pace. Journal of Business
Strategy.
Masiero, G., and et.al., 2017. Going global in groups: a relevant market entry
strategy?. Review of International Business and Strategy.
Matthias, J.T. and Greiling, D., 2020. Assembling a Case Management System with
LEGO-like Blocks. Trends St. Cts., p.20.
McCombie, G., and et.al., 2017. Survey on plasticizers currently found in PVC toys on
the Swiss market: Banned phthalates are only a minor concern. Journal of
Environmental Science and Health, Part A.52(5). pp.491-496.