BCO 223 Social Media Marketing Midterm

COURSE CODE BCO 223 Social Media Marketing Midterm Task brief & rubrics

Midterm Timed-controlled Assignment

Based on the following case, students will deliver a document answering & elaborating on 4 questions from the described scenario:

Lego’s Market Segmentation Strategy

Introduction

The Lego Group provides a prime example of how insightful market segmentation and a fundamental understanding of different consumer personas can lead to successful social

media marketing. By carefully targeting its intended audiences and using the social media platforms where these consumers actively participate, The Lego Group is able to

effectively reach its customers and offer them the kind of online experience that helped win their Lego Brick the “Toy of the Century” award, one of most coveted honors in the

toy industry.

History

The Lego Group began in a carpentry workshop in Billund, Denmark, purchased in 1916 by the founder of the company, Ole Kirk Christiansen.28 However, it wasn’t until furniture

sales slumped during the Great Depression that the company moved away from making chairs and tables to manufacturing toy versions of the furniture. When plastics become

available in Demark after World War II, the company began producing plastic toys.

In 1949, the Lego Group developed blocks that could be stacked upon each other, much like wooden blocks, except the plastic ones, initially dubbed “The Automatic Binding Brick,”

had round studs on top and hollow holes on bottom, which allowed them to lock together, but not so securely that they couldn’t be pulled apart and reassembled in another

configuration. In 1953, these plastic bricks were renamed “Lego Mursten” or “Lego Bricks.”

The company’s line of Lego Bricks continued to expand in both type and popularity in the coming decades, employing innovative marketing techniques, such as featuring building

block contests and tie-ins with Hollywood themes like Star Wars® and Harry Potter®. As a consequence, the Danish toy maker produced double-digit sales gains and swelling

earnings during the mid-2000s, as well as a loyal following of enthusiasts.

Challenge

With the advent of social media, the Lego Group faced the challenge of how to market their Lego Bricks on the social web. Jake McKee, a former social media practitioner at Lego,

recalls that initially, “We as a company were walled off like crazy [from the social web] . . . I always joked that my task was really to hammer holes in that wall.”

McKee eventually was able to help change the culture within the organization, so they could use the social web to build relationships with customers, generate new product ideas

by sharing proprietary information, and better understand their customers.

Strategy

Understanding consumer behavior in regard to its products gives the Lego Group an edge in developing social media strategies. In fact, it enables the toy maker to effectively use

personas to segment its markets. According to Conny Kalcher, a Lego Group representative, the company uses six distinct personas to categorize their customers based on purchase

and usage rates:

1. Lead Users—people LEGO actively engages with on product design

2. 1:1 Community—people whose names and addresses they know

3. Connected Community—people who have bought LEGO and [have] also been to either a LEGO shop or a LEGO park

4. Active Households—people who have bought LEGO in the last 12 months

5. Covered Households—people who have bought LEGO once

6. All Households—those who have never bought LEGO