A Recipe for Mature Brand Building Success: Imagine, Play, Rinse, Repeat.
The LEGO® brand isn’t just about building blocks, it’s about reconstructing and developing children’s creativity and imagination through quality toys for all ages, genders and interests. Despite a few roadblocks and problems along the way, LEGO has figured out how to rebuild itself to become more profitable; each time analyzing all their pieces, tearing down a few ideas, constructing new components or building on to the already existing foundations of the LEGO legacy.
The LEGO brand dates back all the way to 1932, when it was founded by Ole Kristiansen, a carpenter who made household tools and toys. After deciding to focus only on wooden toys, Kristiansen embraced LEGO as his new brand name; LEGO stemming from the Danish words “LEg GOdt” which translates to “Play well.” It wasn’t recognized until later that ironically in Latin, the words also mean, “I put together.”
Jumping Ahead
The challenge with many mature brands is that the idea to innovate again doesn’t arise until a problem in the market presents itself, before it’s too late. In LEGO’s case, its founder was miles ahead of his time. In 1946, LEGO showed innovative characteristics by buying one of the first plastic-injection molding machines for toy manufacturing; this machine would change the future of the toy industry. By 1949, Christiansen had started producing the original LEGO building bricks along with wooden toys. Around 1951, the company was slowly starting to phase out of producing wooden toys and focusing more on the production of plastic toys. It wasn’t until about 1954 that LEGO stumbled upon its first real problem. LEGO’s founder Ole Christiansen and his son Godtfred were trying to figure out how to sell more toys year-round instead of only during the Christmas holiday. Producing both wooden and plastic toys just wasn’t enough and Godtfred knew there was more potential within the toy industry.
Image credit: http://imgur.com/xwAsW56
Inspiration Strikes
It was on a ferry from Denmark to England in 1954 that they found their solution. Godtfred was discussing the toy industry with a purchasing agent who expressed that toys “lacked idea and system;” they needed more depth to them. After much thought, Godtfred realized the potential behind the plastic toys and small plastic bricks they were producing. The idea of the LEGO system was born; supply children with the appropriate materials/toys to let them create, build, learn, and discover. This epiphany opened up a whole new realm to the toy industry. The possibilities were endless! Soon LEGO was producing themed brick sets like model cars, big town sets, small town sets, human figures, motorcycles, spaceships, battleships, anything a child could want to build—LEGO created a set for it. They were soon producing building sets for a variety of age groups and genders. LEGO had broken its industry’s barrier. Since then, it’s been known as a toy brand that continues to inspire creativity, imagination, and cognitive development.
LEGO made more advances in their plastic building bricks when they realized that children were having issues with the bricks sticking together during and after constructing their masterpieces. In 1957, LEGO created a connection mechanism by molding studs on top of the bricks, and holes in the bottom to lock adjoining bricks together, which made building models much easier and durable.
Sound familiar? It’s step three in our Ebook, The 5 Gates. We call this “Audience.” If your brand is constantly listening to its audience and implementing their feedback, you’ll always be at least a few steps ahead. So, when was the last time you listened to your audience? What did they have to say about your brand?
Overcoming Obstacles
LEGO grew steadily as a brand and increased production, but in the 90s and early 2000s, they hit a wall and sales were stagnant. Ever the stronghold of thoughtful innovators, LEGO was able bounce back. It isn’t their success alone that we find inspiring, rather it’s how they bounced back that we admire here at Wilson. Each time the group was faced with a deficit, instead of finding the quickest corners to cut cost and boost sales, they rebranded almost immediately starting internally and working their way outwards. In 1998 when they fell into their first decline in revenue, they immediately rebranded with “Just Imagine …” and replaced their logo for the first time in twenty-five years. They began embracing the Internet by creating an international online store, opened up LEGOLand parks all over the world, while also restructuring internally.
From 2000-2004, LEGO rode a roller coaster of deficit and surpluses, constantly rebranding and restructuring internally. At one point, the LEGO Universe consisted of LEGO BIONICLE (PC and Nintendo game), a kids clothing line, LEGO DUPLO dolls, LEGO Bob the Builder, LEGO Harry Potter, LEGO Serious Play Alpha Team, Robotic Invention System, LEGO My World (software), instructive CD-ROMS included in LEGO building sets, several LEGOLAND parks worldwide, and they teamed up with the International Space Station to send a robot named “Jitter” into orbit around the earth, (and that’s only naming a few). LEGO was trying to innovate as quickly as possible with as much as possible. Soon, they realized they were spending too much on too many products and details. For instance, instead of making 40 types of individual LEGO man heads with different facial features, they retired 30 of them and began to only produce ten types of LEGO figures and heads. Their costs declined significantly.
Movie Magic
In 2005, LEGO announced profits again. For it’s 75th anniversary, LEGO celebrated in high spirits with no deficits and strong visions for the future. By 2009, LEGO became the world’s fifth largest toy producer and signed on with Disney and Disney Pixar to acquire rights to begin creating LEGO sets based on Disney and Disney Pixar characters and movies. When 2011 came along, LEGO moved up and became the world’s third largest toy producer.
In 2014, The LEGO Movie opened to critical and commercial acclaim in addition to earning $257 million at the box office. Funny, smart, and appealing to kids and their parents alike, the plot of The Lego Movie mirrored the philosophy of the LEGO brand and proved to be a powerful advertisement for its products. The cheerful LEGO people have been brainwashed by an evil corporation to mindlessly accept a prepackaged set of beliefs, including strict instruction-following. It is, as the film goes on to demonstrate through an unlikely hero’s creative approach, the opposite of the free-range creativity characteristic of LEGO toys. The LEGO Movie celebrated individuality and creative play—and increased toy sales by 11 percent within the first six months of its release. A feature-length toy commercial with heart and humor, The LEGO Movie (and its upcoming sequels) is likely the best advertisement LEGO ever created.
Marking Milestones
Fueled by The LEGO Movie’s explosive, Pixar-level success, LEGO squeaked ahead of Mattel to become the most profitable toy company in the world. This is no mean feat when you think about the wide range of product lines Mattel offers—Barbie, Fisher-Price Hot Wheels, to name a few—in contrast to the simplicity of LEGO’s variations on a single toy. Demand for these simple toys is so high in the Asian market that LEGO began building a new manufacturing and distribution center in Jiaxing, China in 2015.
For a mature brand, LEGO has learned what it really means to innovate. Innovation doesn’t mean continuously thinking outside the box. It means that sometimes, if you look inside the box, there are ideas still waiting to be discovered. Great ideas can be born by remembering what used to be good and expanding or focusing on them, adjusting the tweaks here and there. Innovation isn’t always expanding externally either. Sometimes simple is better; simple but significant. LEGO realized that by reinventing themselves and removing individual parts that couldn’t be used in multiple sets was like renovating the brand. Re-innovation from inside the box got LEGO back on track.
Building A Brand Brick by Brick
Mature brands don’t have to create an extravagant masterpiece or idea to remain profitable. They just need to remember the simple building blocks they were first founded upon: What’s the brand’s purpose? Who’s your audience? Why should the customer care? It’s simple, but effective when you deliver your promise with quality every time. LEGO may have broadened its audience a time or two, but they stayed true to their brand’s purpose and promise, creating quality toys that inspire imagination and creativity throughout generations. LEGO Group CEO Jorgen Vig Knudstorp believes that as a privately held company, LEGO doesn’t need to demonstrate anything to markets or shareholders. Knudstorp keeps the company focused on two official objectives: that Lego continue to create innovative play experiences and reach more children every year.
The interest in LEGO has continued to grow, as the Google interest graph above shows. Today, LEGO continues to prepare for future growth by adjusting quickly, persistently seeking revolutionary toy models for all audiences and keeping their toys simple but useful. Despite LEGO’s previous rollercoaster-like deficits and surpluses, one thing is constant; their ability to adapt, rebuild from the ground-up, and innovate with the ever-changing world, like a true mature brand.
Wilson Advertising salutes LEGO for its longevity and its fearless embrace of new media and branding opportunities.
To learn more about how mature brands drive sustained success, check out our ebook, The 5 Gates.
The 5 Gates Ebook
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** This article was first posted on December 10, 2012 by Cate Masters , and updated in 2016.