GLOBAL MARKETING AND SALES MANAGEMENT ASSIGNMENT SAMPLE 2022

 

 1. Introduction

A global marketing strategy is extremely important as it helps the company to retain its growth as well as development in the highly competitive market in the age of globalization. There are different types of analysis such as macro-environmental analysis, micro-environmental analysis, market entry strategy and many more which help the reader to understand the contemporary situation of the country and whether the condition is favourable or not.

On the other hand, marketing mix is recognized as a crucial part of marketing strategy and the company may gain ideas regarding the market as well as its shareholders with the help of marketing mix analysis (Wichmann et al., 2022). For the past few years, there has been a dramatic change in the international market due to the implementation of technology, environmental challenges, and geopolitical as well as socioeconomic shifts.

Moreover, Political, Economical, Social, Technological, Legal, and Environmental (PESTLE) analysis, competitor analysis, and consumer analysis provide support to the company in determining strategies to expand the business in foreign markets. In this report, the analysis of the business environment of the United Kingdom (UK) and India will be elaborately discussed as the way it helps Lego to expand business in these two countries.

2. Overview of the company

Lego is a company which is based in Denmark and the company has dominated the international market for almost 90 years since it was established in 1932. Lego stands for ‘leg got which means ‘play well’ and the company follows this as their ideal whereas the company is recognised as the ‘toy of the century (Lego.com 2022). The company offers an extensive range of toys and the Lego brick is the most important product for the company with which the company helps to enhance the imagination ability of the children.

In 2021, the company earned 55.3 Billion DKK and the overall profit for the company is 17 billion DKK which depicts a good position of the company in the comparative global market. Nearly 24,000 employees are supporting the company to strive for success as well as maintaining success for almost 90 years and the vision of the company is ‘to be a global force for learning through play. According to research,

Lego has transformed from a local company to a global company and innovation is the main strategy of the company which helps to differentiate its position from rival companies in the international market (Zou, 2022).

Lego has adopted digitalisation as another strategy since the late 1990s and the production of the company is concerned with digital games as well as interactive websites which strengthen the relationship with the consumers. Along with that, Lego operates business in different countries such as Korea,

the United States, Brazil, Switzerland, China and many more where the company has a large number of competitors. The competitors of Lego are Bandai Namco, Barbie, Mattel, Hasbro, New Bright, Hot Wheels and so on therefore, the company needs different marketing strategies to retain its growth and development in the international market.

3. Analysis of the market environment of India and the UK 

a) Macro environment

United Kingdom Condition Risks
Political 1. Political stability of the UK is strong due to the Brexit policy

2. Powerful political systems with modern parliamentary democracy (Shore, 2018)

3. The UK is a globally powerful system of culture and finance in terms of political power also (O’Brien et al., 2019)

Low
Economical 1. The UK, is one of the largest economies in the world (Alola et al., 2019)

2. The inflation rate, in 2021 is 2.6% (Statista. 2022)

3. GDP of the UK in 2022 is £ 569,182 million (Ons.gov.uk. 2022)

Low
Social 1. Middle-class family prevalence with flexible social mobility

2. Diversity of cultures in the UK

Low
Technological 1. Technologically advanced nation offering opportunities for business Low
Environmental 1. Imposition of government measures for maintaining environmental sustainability High
Legal 1. The Employment protect Act 1996 has been imposed by the UK government (Crouch, 2019) Low

Table 1: PESTLE OF UK

(Source: Self-created)

India Condition Risks
Political 1. India is one of the largest democracies in the world (Repucci, 2020)

2. India holds strong political relations with neighbouring countries such as Bangladesh, China

Low
Economical 1. India is one of the largest economies in the world (Cherunilam, 2020)

2. GDP of India in 2020 is 3.17 trillion rupees (Data.worldbank.org. 2022)

Low
Social 1. India is a country having vast diversity with multi-cultural, multi-lingual

2. India has a gigantic consumer market with a huge population creating opportunities for business success

Low
Technological 1. Highly technological advance nation Low
Environmental 1. Less rigorous maintenance of environmental laws in the country Low
Legal 1. Indian companies are governed by the Companies Act of 2013 (Kumar, 2019) High

Table 2: PESTLE of India

(Source: Self-created)

b) Microenvironment

Competitor Analysis

In India, the competitive point of Lego may be stated as the cheaper alternative of toys produced by the company which may be more attractive to the consumers in the market. In India, the major competitor of Lego is the Sluban Company which has been one of the pioneers of building blocks in the Indian market with manufacturing processes within India (Sluban. 2022).

In the UK, the competitors for Lego in the market are in large numbers such as Bandai Namco, Mattle and Nerf, who have extensive market share in the UK industry with excellent consumer value. In the UK, Lego has to utilise extensive and innovative pricing and promotional strategy to win over the competitors in the market to establish consumer value.

Consumer Analysis

In India, after the Covid-19 Pandemic, consumer behaviour towards buying products has changed significantly, which has also impacted the sales of Lego in India. The change in consumer behaviour in India also had an impact on the market share of Lego, which in turn declined the growth prospect of the company in the Indian market.

However, the company utilised consumer analysis to understand the current condition of the consumers economically and also the buying power of the consumers in the UK. The effective consumer Analysis done by the company helped Lego with innovative marketing strategies to hold the consumer value already created in the UK market.

4. Market Entry Strategy

Market entry strategy refers to the process which helps a company to plan distribution as well as delivery of products or services to a foreign market there are different types of market entry strategies such as partnering, exporting, strategic alliances, wholly-owned subsidiaries and many more. Identifying a proper market entry strategy provides ample opportunities to boost the distribution network of the company and to expand the business in foreign markets (Hilmersson et al., 2021).

Lego is a global brand and it may choose acquisition as a market entry strategy in the UK because it helps the company to increase its market share in the highly competitive market of the UK. Considering research, the cross-border acquisition strategy is identified as one of the effective market entry strategies as it helps the company to take competitive advantages in the high-velocity international market (Kiessling et al., 2018). In India, the company may choose another market entry strategy which is a joint venture and it helps the company in the distribution network within the country.

Innovative market entry strategies influence the performance of the company in foreign markets and joint ventures are recognised for their advantages such as sharing expertise and so on (Nguyen et al., 2019).

5. STP Analysis 

Segmentation

Segmentation is one of the crucial marketing strategies as it helps the company to divide the targeted audience according to demographic, psychographic, geographic, and behavioural segmentation.

The response and loyalty of consumers depend on the different segmentation such as demographic and psychographic segmentation and the company implements strategies accordingly (Gajanova et al., 2019).

Targeting

A segmentation marketing strategy provides support to find out the target audience for the company and in this case, the company may focus on demographic segmentation for both the countries such as UK and India. Lego is a reputed company which offers an extensive range of toys the company may target children as its audience and may implement strategies to attract the attention of the consumers.

In the UK, the child whose age is between 0-14 years comprises 9.1 % male and 8.6% female and the company may target them as potential buyers. On the other hand, in India, the children whose ages are between 0-14 years comprise nearly 14% male and 12.4% female and the target audience of the company may amplify the overall sales of the company (Populationpyramid.net. 2022).

Positioning

Positioning depicts the strategy through which the company makes its position different from other rival companies in the highly competitive market in the UK and India. In this case, the company has followed the mission of the company which is to inspire and develop builders of tomorrow which help the company to fuel the pace of progress for the company internationally.

In addition to that, innovative products such as Logo Brick and the implementation of technologies provide support to the company which helps the company to take a competitive advantage in the international market (Refer to Appendix 1).

6. Marketing mix decision for UK and India

Product

Standardisation refers to the process through which the company sets a standard regarding a product as the company considers the international market as a single market. On the other hand, adaptation strategy refers to the strategy through which the company adopts the required strategy to satisfy the consumers of a niche market. In the UK the company may follow a standardisation strategy as it helps the company to compete with the national as well as the international companies of the market.

Lego offers an extensive range of products which consists of interlocking plastic bricks of vibrant colours which are accompanied by gears, figurines and others which help to construct objects, buildings and many more (Lego.com 2022). Apart from that, there are lucrative, attractive designs in the games and the launches of innovative games boost the overall sales of the company.

In the case of packaging, the company provides immense focus on sustainability and LEGO boxes are made up of 75% cardboard which may be recycled in the future (Lego.com 2022). It may be argued that the company still uses plastics in case of packaging whereas the company has taken initiatives to implement 100% usage of recyclable materials within 2025.

Lego has operated its business for more than 90 years and the logo of the company goes through extensive changes the company has always emphasised the visualisation of the logo. The logo of the company signified the innovativeness in the marketing approach and the simple logo of the company depicts its unique presence in the international market (Logo.com. 2022). Branding strategy is unique to the company and according to research, the company aims to re-establishing its brand portfolio by following a balanced brand portfolio which helps the company to take competitive advantages in any foreign market (Icmrindia.org. 2022).

Lego provides certification related to the product which helps the company to avoid legal harassment and it helps the company to build the trust of the consumers. Along with that, proper certification of the product also ensures the quality of the product which helps the company to take competitive advantages against rival companies.

The company may implement a sensory branding strategy which helps the company to enhance the brand equity for the company by enhancing the interaction with the targeted consumers of Lego. In recent days, the company has implemented several technologies which help the company in brand communication and the usage of transmedia provides support to maintain desirable brand value in the international market (Plessis, 2019).

 

GLOBAL MARKETING AND SALES MANAGEMENT
GLOBAL MARKETING AND SALES MANAGEMENT

 

Figure 1: Branding helps the company to maintain brand value

(Source: Plessis, 2019)

In India, Lego may implement both standardisations as well as adaptations as it helps the company to attract the attention of the customers during launching a product. Along with that, the company may also implement innovative strategies before launching a product in the market of the UK or India as it helps the company to obtain success in the future.

Price

In the UK, Lego has introduced the product to the market toward middle or upper-middle-class family children, and the toys delivered are not cheap as high-quality products are used in the production. The company also has to make sure that the toys are brought through rigorous quality checks to ensure safety which costs the company heavily (Refer to Appendix 2).

Lego for that reason uses a premium pricing strategy in the marketing mix to cover up all the expenses and cater to the needs of the quality enriched products delivered to the targeted audience in the UK (Rudolph et al., 2021).

GLOBAL MARKETING AND SALES MANAGEMENT
GLOBAL MARKETING AND SALES MANAGEMENT

Figure 2: Increase in Revenue in Lego UK with premium pricing strategy

(Source: Rudolph et al., 2021)

The pricing strategy of the company is focused on delivering toys to upper-class families. On the other hand, the pricing of the products is set as the middle-class families may be able to afford them. This pricing strategy used by Lego helps in gaining consumer value and creating market share in the UK which allows the company to expect repeat purchases from consumers. The pricing of the toys starts from £12.99 to £1900 to cater to the needs of middle and upper-middle-class families in the UK (idealo.co.uk/cat/9552/lego. 2022).

In India, Lego has adopted Stock Keeping Units (SKUs) in the pricing strategy which helped increase its sales in the Indian market. Furthermore, with the introduction of SKUs, Lego also adopted a value-based pricing strategy in India, in which premium quality products are being delivered to the consumers,

and the consumers are sold the products with high quality according to the prices set. In India, to increase the demand and face value of the Brand, the mid-premium pricing policies were adopted in contrast to that in the UK as in the Indian market, the policies included the selling of high-end products making them affordable and reasonable for the Indian audience (Pratap, 2022).

In India, Lego has also maintained the value-based pricing strategy to create further markets in future and also to increase the consumer value of the brand in the Indian market. The pricing strategy used by Lego has helped increase sales in India by 42% in 2018 which has also contributed to an increase in market share in India for the brand (Business Today. 2022).

 Place

In the UK, Lego has partnered up with small independent distributor companies that help in the distribution of the manufactured products directly to malls, and shops to cater to the needs of the consumers. In the UK, Lego has partnered with companies such as MX Wholesales, and Simba Smoby Toys UK Ltd to distribute toys to the merchandise shops as well as wholesale toys to the retailers in the UK (MX Wholesale UK. 2022). Furthermore, in the UK, Lego has one of the main offices in the world and has a manufacturing company in Windsor, England (Fanning, 2021).

In the UK, Lego has also partnered with Argos, which also helps in the distribution of the Lego products all across the Argo stores and sells Lego products on the website in the UK (Argos.co.uk. 2022). The company has a strong distribution channel in the UK, which helps in delivering the toys all across the country along with stable relationships with neighbouring countries helps in an effective supply chain to be maintained by the company.

In the UK the company has tied up partnerships with wholesalers and distributors for the Supply Chain Management system (SCM) to run smoothly in delivering the high-quality product to the consumer base.

Lego has been able to establish a strong brand in the global market with efficient distribution partners in delivering premium quality products and toys to the consumers. In India, Lego has partnered up with Funskool with exclusive distribution rights of Lego for marketing high-quality products in the Indian market (Business-standard. 2022). Additionally, Lego in India has tied up with IndiaMart in the distribution of the toys, which also has come with the benefit of selling products on the official website of the company (IndiaMART. 2022).

In India, Lego has speciality stores where the price point of the toys is kept at a minimum, for gaining the attention of the consumers. The distribution channels of Lego have been expanded to the eCommerce platforms such as Amazon, FirstCry, and Flipkart which have specific sections for Lego distribution and retail options for the consumers to avail (Buldeo Rai and Dablanc, 2022).

In India, the effective distribution channels both online and offline have helped the company in increasing sales and the distribution channel in India also made sure that the premium quality of the products is intact for delivery to the consumers (Refer to Appendix 3).

Promotion

In the UK, Lego has used a traditional promotional strategy through advertisement on Television, in newspapers, magazines, however, with the digitalisation of the industry, the company also shifted to a digital promotional strategy. In the UK, to stay relevant to the competition in the market, the company has opted for launching the products through its own social media channels and online stores.

In that case, the company also encouraged the consumers to push the promotion of the products on their own social media platforms and blogs. This promotional strategy was used to create value among the consumers and also gain the attention of potential consumers,

as consumer feedback provided leverage to the company in creating a successful marketing campaign (Leung et al., 2022). In the UK, Lego created online user groups and fan clubs to provide the company with critical feedback, which in turn helped the company to develop a mouth-to-mouth promotional strategy through the loyal consumers of the company.

The company also makes sure to use direct communication in the promotional strategy of Lego, where the consumers may be able to contact the company’s representative directly to help and make recommendations.

This move taken by the company in the form of a digital marketing strategy was also part of the promotional strategy utilised by the company in the UK to gain the trust of the consumer base in the market (Kingsnorth, 2022).

 

The company came up with a promotional strategy to be held through campaigns held on the company’s Facebook page where the promotion of the new launches may be done along with the promotion of consumer loyalty and confidence in Lego.

In India however, Lego has stuck with the traditional promotional strategies such as the use of advertisements in the fields of Television, Newspapers and magazines to promote the launch of new products to the Indian market (Refer to Appendix 4). In India, Lego introduced items such as badges, ranks, and trophies which helped in the promotion of the brand in the Indian market.

Additionally, in India, the promotional strategy used by the company involved print media as well as an online presence through advertisements which went along with the marketing mix applied by the company for the Indian market. Lego, with the partnership with Universal in an exclusive film franchise, also helped in the promotion of the toy products of the company in the Indian market, gaining the attention of the target audience (Pedroza, 2020).

In India, Lego utilised reward programs as a means of promotional strategy that led to earning higher consumer loyalty in the industry, which also included bringing up innovations that differentiated from other brands in the Indian market.

7. Conclusion

It may be concluded that, in the UK, the pricing strategy that is used by Lego is different from that in India, which has mainly focused on a value-based pricing strategy. In India Lego still follows the traditional modes of promotional strategies through advertisements, newspapers and magazines, however, in the UK, the company has opted to digitise the promotional strategy to include marketing campaigns through social media platforms of the company to gain the attention of the consumers in the market.

In the UK for the pricing strategy, the company has opted for the standardisation of the prices which have been set based on global prices. In India, the pricing strategy has shifted to the adaptation of the pricing for the products based on consumer behaviour in the Indian market.

The market entry strategy used by Lego has been different, in the UK a standardised method has been used and in India Adaptation procedure through joint venture market entry has been used, which may have been useful for the company to be used in various other countries to expand the business in the long run.

Though the company has adapted to a similar targeted audience in both the UK and Indian market, the notion of adaptation of target audience preferences if studied by the company in the Indian market beforehand may have been beneficial for increasing the sales.

 

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