FOUNDATIONS OF MANAGEMENT (PART A)

LEGO Group

Marketing and Operations Management Report

Prepared:

For: LEGO Group

By: Éva Gaál

On: 17 November 2008

Introduction

At the request of the LEGO Company, this report advises the company on the expansion of its operation based on market segmentation, appropriate marketing mix, new product design and development, including total quality management for outsourcing new partners.

LEGO Group is the fifth-largest toy manufacturer of the world and has operated successfully for 75 years; however, it has had some problems in the last couple of years. To solve these problems, LEGO introduced a seven-year strategy plan, which consists of some fundamental changes regarding to the …show more content…

Therefore in the 1970’s LEGO started to launch the Expert Builder sets, which included parts like gears, axles and cogs, which could be used to build working models of vehicles and machines (e.g. cars, trucks, tractor etc.). These products were more advanced, therefore more suitable for teenagers (12+). They were designed to help children learn creatively through play and to improve abilities to solve complex problems. In the 1980s the Expert Builder series was renamed to the Technic series. (Regani and George, 2007). By the early 1990s high-tech toys appeared in the market from other companies. Therefore the LEGO Technic series had to be improved to build robots and other automated or interactive systems to keep up with its competitors.

Price

LEGO’s unique position is based on the high quality, durability and safety of its products, utilizing a premium branding strategy where a higher price is associated, which therefore differentiates LEGO in relation to its competitors within the current market.

The Technic products consist of more complex and special elements, therefore the production cost is higher than the standard bricks. Customers are prepared to pay this higher price to get the added benefits of the special design product of LEGO. However, this higher price (£60-£120) completely fits into the LEGO products price range (£20-£200).

Place

LEGO uses the following channels to provide