(Solved): 4-32 & 4-33Marketing Real Choices at LEGO Understanding market preferences can be as chatenging ...

Real Choices at LEGO Understanding market preferences can be as chatenging as with old-fashioned plastic bricks. When CEO largen Vig Kinudassembling LEGOS 7,541-piece Millennium Falcon-which storp tock over that year, the company was losing 51 million can be youts for only 5799 . The Danish toymaker known for per day: In pursuit of a turnaround, Knudstorp focuised not on its buiding sets made of colorful plastic "bricks" found that adding new product lines but on understanding LEGOs curit needed a variety of research methodologies to determine tomen and what "play" actually meant to them. what their young customers really want. They have also To gain this insight, LEGO did not pursue normal market learned that even the best research does not guarantee iong- research techniques, like wurvers and focus groups. Instend, in term financial success. Founded by Ole Krk. Kristiansen in 1932, the LEGO Group brains, noting which parts light up as they play with different has grown 10 become the worlds largest toy manutacturer by toy. They also ventured into the science of anthropalogy, the sales. However, in 2004, the company was on the brink of study of humans and human behavior and societes Ther goal bankruptcy. What happened? LEGO aggretweely leveraged its was to get to the roots of cuatomer behavon, a process that popular brand by moving into action figures and video ganes, LEGOS consultants ReD Associates call sensemating. LEGOS believing that kids no longer wanted to spend time playing (presumably with their permissiont), and they spent months where LEGOS research found that kids played in very similar interviewing parents and chadren, shopping with them, creat- ways as kids of other nationalities. The company also introduced ing video diaries, and studying toy shops. new products in the digital arena, induding an augmented-reality Through this deeper market research, LEGO learned that app that tres a mobile device or tablet to animate LEGO bricks. chidren were not too busy to spend time building LEGOs. In The company is also spending 5150 million to create LEGO fact, they like to play as an escape from their overly orches- bricks made from plants, not plastic, in order to meet growing trated lives. They not only have the time, but they have the demands for more sustainable products. desire to "achieve mastery" by honing a skill like building their LEGOS recent history shows both the promise of creative creations made of LEGO bricks. This insight on why children market research and its limitations. Effective research is a founplay provided LEGO with a new focus that returned them to dation for the evidence-based approach to decision making you their roots and propelled the company to revenue growth that learned about in Chapter 3. But their recent challenges show nearly quintupled between 2007 and 2016 to 56 bilison. 2017 that research alone even using the most innovative methods - This growth trajectory came to a screeching halt in 2017 guartee business success. Consistent success comes This growth trajectory came to a screeching hait in 2017 does not guarantee business success. Consistent success comes When LEGO saw revenue drop for the first time in 13 years, from asking the right questions, making the right interpre to competition from programmable robotic kits that appeal to kids in an increasingly digital worid. Internal challenges plagued the toymaker as well. Expecting continued growth, LEGO had created an organizational structure with many layers Questions for Discussion that made reacting to changing trends slow and marketing 432. What are some of the sources of information LEGO strategy implementation tedious. More fundamentally, inacsources? Which are primary sources? than needed, leading to a sell off at lower profit margins. 4-33. How could information contained in a marketing information system or a marketing decision support system A new CEO was installed in 2017, and he moved the company back on a positive path with a focus on exanding LEGOS help LEGO make future strategic decisions? 4-34. What additional research could help LEGO in their company-owned retail stores in order to fill a void left by the bankruptcy of Toys "R" Us. Many of these stores were in China,