SMD101 Segmentation Assignment
“The LEGO Group is a privately held, family-owned company with headquarters in Billund, Denmark, and main offices in Enfield, USA, London, UK, Shanghai, China, and Singapore. Founded in 1932 by Ole Kirk Kristiansen, and based on the iconic LEGO® brick, it is one of the world’s leading manufacturers of play materials.” – About The LEGO Group, LEGO.com
The five segments of the LEGO® market
Segmentation of the LEGO® market was based on primary and secondary research of experiences offered by The LEGO Group–including visits to both Legoland® California and The LEGO Store at the Fairview Mall in Toronto, as well as the LEGO® aisles of multiple Walmarts in the Greater Toronto Area.
The five segments are…
Responsible Parents, Involved Grandparents, Nostalgic Professionals, Innovative Educators, and Independent Alphas, listed from most profitable to least profitable in the short-term.
Since The LEGO Group’s main markets are the United States, Western Europe, and Canada–with a push towards expanding the company’s reach in Asia–the individuals included in the persona profiles below all live in Canada, the United States, and England (home of the largest LEGO Store in the world, in Leicester Square, London). They represent the growing diversity of the wealthy, well-connected, and well-educated audience that The LEGO Group serves.
The segment photos were sourced from the free stock photo websites Pexels.com and Unsplash.com. The photos and the individuals’ names work together with the text descriptions to convey the backgrounds and the personalities of each individual representing the persona.
1. Responsible Parents
Image: “Woman and child touching faces” from Unsplash.com. (https://unsplash.com/photos/eo11MS0FSnk)
Responsible Parents, ages 30-50, are well-educated professionals who live in urban and suburban areas. They have between 1 and 4 children in their home, and they are overloaded with information on the best ways to raise those children.
LEGO® sets help Responsible Parents feel confident about the toys they are purchasing for their children. They are concerned about how much time their children are spending playing on phones and other electronic devices. Buying LEGO® blocks allows Responsible Parents to feel that they are making a healthy choice for their families.
2. Involved Grandparents
Image: Untitled from Unsplash.com. (https://unsplash.com/photos/vectnOQ4U1k)
Involved Grandparents, ages 55+, purchase LEGO® sets for the young children in their extended families. Since they don’t necessarily live near their grandchildren, they focus on finding items and experiences that make those children happy.
Additionally, Involved Grandparents have more free time and more accumulated wealth than the well-educated children they raised. Therefore, they also want to spend that time and money giving their grandchildren the things they may not have been able to give their own children in the past, when the Involved Grandparents were Responsible Parents.
3. Nostalgic Professionals
Image: “Woman in White V Neck Shirt in Selective Focus Photography” from Pexels.com. (https://www.pexels.com/photo/woman-in-white-v-neck-shirt-in-selective-focus-photography-157023/)
Nostalgic Professionals, ages 25-45, played with LEGO® blocks in their youth and want to recreate their experiences as independent adults. These highly educated, high income earners tend to live in urban environments, conveniently where LEGO Stores tend to be located.
Nostalgic Professionals may or may not have children. Regardless, they are primarily purchasing LEGO® products for themselves, including advanced sets with such themes as Architecture, Creator Expert, and Technic™. They also like to interact with other AFOLs (Adult Fans of LEGO®) in online forums and at in-person events.
4. Innovative Educators
Image: “Laughing Man Wearing Gray V-neck T-shirt” from Pexels.com. (https://www.pexels.com/photo/laughing-man-wearing-gray-v-neck-t-shirt-936119/)
Innovative Educators, ages 25-55, purchase LEGO® sets for their primary and secondary students. They want children to discover how to learn beyond textbooks.
Some Innovative Educators spend their own money to acquire LEGO® sets for their classrooms. However, partnerships between The LEGO Group and schools, school districts, and boards of education would create a more stable revenue generator than purchases made one at a time by individual teachers.
5. Independent Alphas
Image: “baby” from Unsplash.com. (https://unsplash.com/photos/wXnaknPMpK0)
Independent Alphas, ages 3-8, are named for Generation Alpha, the grouping of children in 2010 and beyond, who follow Generation Z. As the children of Millennials and Generation X, Independent Alphas have more immediate access to information than their predecessors, including more in-depth details. They also have birthday and holiday money to spend on their own purchases. Buying LEGO® sets with their own money, such as LEGO® Friends or Unikitty!™, makes Independent Alphas feel more mature, like their older siblings and cousins.
Though currently they may not have as much disposable income as their segmented counterparts, Independent Alphas present The LEGO Group with an opportunity to develop their most engaged users, almost from birth, into lifelong consumers of LEGO® products.
LEGO.com Facebook Ad
Image: “Lego dimensions dolls” from Unsplash.com. (https://unsplash.com/photos/P90DzgKdNWo)
This Facebook Mobile ad targets the Responsible Parent segment of the LEGO® market. These are people who care about their children’s socialization, along with the kind of toys their children are playing with.
The image includes LEGO® figures of Wonder Woman, Wyldstyle, LEGO® Batman, Sonic the Hedgehog, and Gandalf. These figures are recognizable by both Responsible Parents and their young children, as most of the figures have starred in recent, popular movies. The figures are placed outside of an out-of-focus home and green grass in the background, implying that your child can actually play outside for once.
Furthermore, the image reflects the positioning of The LEGO Group, who, according to Conny Kalcher, former vice-president of marketing and consumer experiences, has turned “more and more into a media company to tell our story about these bricks.” (https://www.thedrum.com/news/2015/04/15/well-played-how-lego-rebuilt-its-brand-brick-brick)
The caption, “Your kid’s new best friends. 😎 Set up a playdate at LEGO.com.”, suggests that your child can play with these the new friends/educational toys, and you don’t have to worry about what they are doing or watching. A Responsible Parent would set up that playdate/shop at LEGO.com, which is also displayed at the bottom of the ad. The “SHOP NOW” button leads to the LEGO® shopping site, https://shop.lego.com/en-CA/.
“The LEGO Case Study 2014”, https://www.thelegocasestudy.com/uploads/1/9/9/5/19956653/lego_case_study_2014.pdf
“LEGO’s Market Segmentation Strategy”, https://prezi.com/v5oqkig5os2j/legos-market-segmentation-strategy/
“Then & Now: How Fans Changed The Face Of LEGO’s Marketing Strategy” by Megan O’Neill, AdWeek, https://www.adweek.com/digital/how-fans-changed-the-face-of-legos-marketing-strategy/
Lego Numerator Brand Snapshot, http://snapshot.numerator.com/brand/lego
“Well played – How Lego rebuilt its brand brick by brick” by Katie McQuater, The Drum, https://www.thedrum.com/news/2015/04/15/well-played-how-lego-rebuilt-its-brand-brick-brick
“How marketing built Lego into the world’s favorite toy brand” by Lucy Handley, CNBC, https://www.cnbc.com/2018/04/27/lego-marketing-strategy-made-it-world-favorite-toy-brand.html
“Lego reports highest revenue in 85-year history” by Rhiannon Curry, The Telegraph, https://www.telegraph.co.uk/business/2017/03/09/lego-reports-highest-revenue-85-year-history/