The humble Lego brick is celebrating its 60th anniversary this year. CNBC looks at how marketing has kept it at the top of children’s wish lists, in spite of poor 2017 results.
When Julia Goldin found out she’d got the job as chief marketing officer (CMO) at Lego, the world’s most valuable toy company, she bought her sons a Lego Big Ben set. “I put it on the table and (said) ‘I have news. I have a new job, and we’re going to move to London’,” she told CNBC by phone. It was 2014, and the family was living in the U.S., Goldin having worked as beauty brand Revlon’s global CMO based out of New York.
Everyone has their Lego story, says Goldin. “Every time I meet anybody and I tell them that I work at Lego, I get a big smile because everybody has a personal story to tell. They remember their first set, they remember the first time they gave (it) to their child (or) something that they built.”
But Goldin’s Lego story isn’t one from her childhood. She grew up in Russia, a world without the famous plastic bricks (Lego as we know it today was first made in a small Danish town in 1958), and it wasn’t until she relocated to the U.S. as a mother to a four-year-old son that she fell in love with Lego. A move to Japan followed when he was six, but the bricks weren’t well-known there either.
“In Japan at that time, you didn't have much Lego. So I used to go back to London to shop in Argos. And one of the sets that I bought for him, because he really wanted it, was the Millennium Falcon (a starship in the “Star Wars” franchise), (so) that's my Lego story.”
Lego Group is worth $7.57 billion, making it the world’s most valuable toy brand by far, according to consultancy Brand Finance. Its brand value measurement is made up of factors including business performance and the value of the brand if it were to be licensed.
There have been various versions of the Millennium Falcon and the latest, launched in October, was one of Lego’s hits of 2017. Selling for nearly $800, it has 7,500 pieces, making it the largest version of the spaceship the company has created. But it was an abundance of bricks that contributed to last year’s poor results: Too much stock was held in warehouses in 2016 and had to be sold off cheaply, contributing to an 8 percent decline in revenues for 2017.
Speaking at its results presentation in March, CEO Niels. B Christiansen said there would be “no quick fix” for the company and that more efficient marketing would be one priority for 2018. Goldin plans to make sure there are fewer hierarchies in her teams so that decisions can be made more quickly, and will also focus on data analytics to measure the impact of campaigns.
Goldin spoke for 20 minutes at its March results day and while it is unusual to see a CMO make a presentation at such events, she says marketing is a central part of how the privately-owned business operates, so Lego’s success depends on it.
“In many companies, the chief marketing officer is only the marketing. I don't just do marketing. You know that's actually only one small portion of the job. What my team does is the whole product portfolio, product experience, communication, content, social channels. So it's really core to what we put out there in the market place and that's why we want it to be part of the presentation,” she explained to CNBC via phone.