Mike Simpson

Brand extensions Toy brand becomes a Hollywood star Lego, the iconic Danish-based toy manufacturer, has enjoyed a stellar start to the new phase of its global marketing strategy with the debut of its first Hollywood 3D animated feature film. C 34 strategicmarketing April–May 2014 Some believe the film is little more than a marketing exercise; audiences seem to think otherwise Lego’s brand-building initiatives include an online community platform, a social network designed especially for children, a magazine and six Legoland theme parks in various parts of the world. It also sells themed books and games. Industry pundits are predicting that The Lego Movie is likely to be the start of a new franchise that will spawn several follow-up movies in the coming years. The story follows an ordinary mini-figure named Emmet who is mistaken for the hero who can save the Lego universe. With the aid of Batman, Uni-Kitty and Benny, among other characters, he must learn to defeat the tyrant Lord Business. As part of efforts to diversify its market, Lego for girls was introduced as T-shirts and computer games. “We [have] become more of a lifestyle brand and I think that’s why the movie will be such a success, because kids just want more ways to engage with us and I think if we get the story right this will be fantastic for us,” he said. In more recent times, Lego has consciously moved away from purely being a maker of plastic building toys, although this remains a key part of the It will deepen engagement with consumers brand and its marketing. It has linked up with other movies like the blockbuster Harry Potter series and created a TV mini-series that ran on cable television in the US and was subsequently made available via the Lego website. It also created the Lego Legends of Chima cartoon that debuted last year on the Cartoon Network TV channel. According to Marketing Week, Lego sales grew by a mammoth 48% in 2010, partly as a result of its partnership with the Harry Potter franchise. Forbes, the international business magazine, observed last year: “Most people don’t realise this, but Lego is such a giant when it comes to brand content, that at times it more closely resembles a media company than a toy company.” According to the magazine, Surprising for some PHOTOS: supplied osting a claimed US$60million to make (small by American standards), The Lego Movie grossed US$17,1-million on its first day alone at the North American box office in early February – a figure the Hollywood Reporter magazine called “stunning”. Then it went on to do even better by raking in nearly US$70-million in the first full weekend of release. It has subsequently been released, or is due for release, in around 60 countries. The South African debut was in mid-March. Lego, which start manufacturing plastic bricks for building-block toys in Denmark more than 60 years ago, is partly funding the movie itself. It also worked with two giants of the movie industry, the Australian company Village Roadshow and Hollywood-based Warner Brothers, to bring the project to fruition. In an interview last year with the British publication Marketing Week, Lego Marketing Director David Buxbaum said the movie was another step towards creating a lifestyle brand for children, adding that it would be used to deepen engagement with consumers through a range of new products such The film’s success has caught some by surprise. “At first glance it looks like something created by marketing executives who are trying to revitalise a toy that may have lost some popularity. The movie can be described Lego has moved away from being toys only as a commercial that runs an hour and a half,” observed one cynical American newspaper, before going on to note how popular it was with audiences. “There seems [to be] no downside to this film concept,” said the Latin Times, a publication serving the large Hispanic community in the US. “Adapting a beloved toy into a movie is a hit. What that means is that Hollywood may start incorporating more products into their films. This concept not only benefits the production team, but the follow-up sales on the merchandise. It’s a win-win.” The Lego company was founded in 1949 and by the following decade had developed a more durable plastic polymer for manufacturing the toys and also trademarked the building-block style for which Lego is still famous. Over the next two decades, Lego’s sales and profits grew steadily but modestly, as the firm focused primarily on its trademark building sets with just a few variations, including castleand space-themed toys. Beginning in 1978, however, the popularity of Lego surged and profits doubled every five years during the 1980s. Lego’s rise came during the peak years of the baby boom and that generation’s children. The firm’s building-block materials continued to appeal to those groups for years, as the company turned out more and more themed building sets and expanded its markets. In 1993, however, sales slowed to a crawl. The Chinese had started manufacturing similar items at a fraction of the cost. Lego added more toys to its product line, but did not sell more items overall, thus inflating >> April–May 2014 strategicmarketing 35 Brand extensions The famous building block design was trademarked in the 1950s manufacturing and delivery costs while not increasing revenues. At the same time, consolidation among some retailers and the phenomenon of superstores and megastores made it tougher for the company leadership to negotiate prime shelf space for its products. 36 strategicmarketing April–May 2014 Further, with the advent of video and computer games, boys – and it was primarily a ‘boy toy’ company – began giving up Lego in favour of more sophisticated toys at an earlier age, reducing the company’s potential market. By 2003 it was virtually out of cash and on the brink of disaster. Then a new management team was appointed and began to introduce innovations such as retail stores, themed board games and straight-to-DVD films. It subsequently broadened out into other products ranging from branded electronics to interactive video games, jewellery, education centres and Hollywood movie alliances. “Yes, Lego has a fantastic product – that must always come first. But it has literally dominated the competition through multimedia storytelling,” noted marketing author Joe Pulizzi on the website of the US-based Content Marketing Institute last year. “As a toy company, no one else comes close to what Lego has been able to accomplish with branded content. Although Lego generates direct revenues from its content (licensing fees for Legoland, cartoons, books and games like Lego Lord of the Rings), the majority of content is created to support its business model, which is to sell more product.” Mike Simpson