Recently, Lego became the world’s largest toy manufacturer, surpassing Mattel. The family-owned Danish company posted 2016 revenues of 5.1 billion euro (or US$5.54 billion). This included 1.24 billion euro in profit!
So how did Lego build itself into the top toy maker? Experts credit several “bricks”. First, “Lego takes full advantage of its license deals with Disney and DC Comics”. The Star Wars Lego sets, for example, have been especially lucrative. Second, Lego has capitalized on adults who are “nostalgically returning to the toys from their youth”. Third, Lego has diversified into gaming, movies, and clothing, without moving too far from its “core product”.
But perhaps the largest factor is the growth in Lego sales to girls. Although Lego’s original kits were designed as unisex, girls had “long shunned them as a boys’ game”. Lego repeatedly fought to reverse the stereotype through the Scala line (buildable jewelry), the Paradisa line (pastel beach and horse riding sets), and the Belville line (tea parties), all with larger bricks for “an easier build”. But one by one, the lines failed. As a result, girls accounted for 50% of the potential market but less than 10% of Lego players!
Desperate for answers, Lego initiated a four year research campaign with more than 3500 girls. In addition to observing the girls’ playing habits, the company asked extensive questions about what girls want from Lego. In the end, researchers confirmed that girls do prefer more traditionally “feminine” colors. But girls also want real construction sets – challenging sets, just like the boys.
The result was the Friends line, launched in 2012. The line featured vibrant pink and purple bricks (the same size as regular Lego bricks). The construction projects ranged from bakeries to houses to supermarkets. And the Friends set included figurines, built slightly larger to “accommodate accessories” such as purses. All the changes aligned with “what the market research data found to be more appealing”.
Despite a flurry of criticism from feminists, the Friends line was a huge hit. It “exceeded all expectations and more than doubled the initial sales forecasts for its first year in market”. Consequently, total Lego sales in U.S. Girls Building sets rose by 28% and the share of girls among Lego players “increased sharply”. In the words of Lego senior design manager Benedikte Schinkel Stamp, “We had [done] so much research and so much testing on girls that we were never in doubt about the product”.
In sum, by investing in market research, Lego was able to “create the impossible”: Lego products beloved by girls and a meteoric jump in sales. What could market research do for your company? Find out by contacting [email protected]!