Impact of New Technology and Internet Influencing Marketing Mix. LEGO Company - Assignment Example

?MKT3017 Principles of Marketing Management Table of Contents Impact of New Technology and Internet Influencing Marketing Mix 3 Marketing Mix 4 Impact of New Technology and Internet 8 Future Aspect of LEGO 11 Recommendations to the Management 12 References 14 Impact of New Technology and Internet Influencing Marketing Mix It has been witnessed that the technology is escalating at an advanced pace. It is essential to thoroughly scrutinise the influence of the new innovative technological impact in order to settle on what is the beneficial aspect that should be given prime significance and what all ought to be postponed or discarded. Lack of innovation and advancement of technology would engender stagnation of the organisation. Without an innovative approach and technological progress an organisation would not be able to prolong in the extremely aggressive and competitive era. Thus, an organisation has to be innovative in every aspect. Considering LEGO Group, it splits its eminent innovative efforts into eight divergent parts from development of the products to model innovation. It gives principal recognition to technology and in recent times the prominence of intellect and behaviour had been acknowledged and through a partnership with Massachusetts Institute of Technology (MIT) Robot technology had been pooled with LEGO construction system ensuing in LEGO Mindstorms which allows its prospect customers to construct and design a robot within 30 minutes. LEGO has also a mission with regard to quality assured products. Mindstorm was an outcome of partnership amongst LEGO and MIT. The key idea behind it is to make the children assess the toy. Another remarkable innovative product launched by LEGO is the movie maker which uses the similar proposal which allows the kids to make their own movies through the access to the computers. Marketing Mix Marketing procedures always require necessary attention on part of the management as production of goods would not have any intent unless products are sold in the market. Marketing mix signifies the assimilation of various marketing elements in an efficient way that would lead to the accomplishment of the organisational target in the best probable and desirable way. It is the strategy framework implemented by the marketer to achieve sensation in the marketing field. For being a thriving marketer one should always take into severe consideration the customer satisfaction as it is known that it is not the products that are sold in the market it is the satisfaction in terms of the product that is sold. The four heads under which the marketing elements are categorised are the product, price, promotion and place. Thus, a marketing mix is regarded as the unification of the four chief elements known as the 4P’s. Product refers to a physical and tangible characteristic allied with it for which the consumers are ready to pay for to derive satisfaction whereas services are intangible in nature which is purchased by the customers. Product is considered to be a key constituent for any marketing mix. The various decisions with respect to the product may be regarding the branding, product attributes product service support, product mix, product standardizing, colouring, packaging, product innovation, product modification and development of the accurate product among others (Russell Smith & Taylor, 2004). Price is the second constituent of the marketing mix affecting the sales. It comprises of determination of a pricing object and procedures, profit margins, price fixation, discounting policy, credit policy and concession policy among others. Promotion being the third constituent deals with influencing and drawing the attention of the customers. Promotion implies to the swaying communication about the vivid aspects of the product such as advertising, public relation, personal selling, sales promotional activities, displays and demonstrations among others (Russell Smith & Taylor, 2004). Place, also referred as distribution mix, is blend of decision making with context to location, distribution channel, storage facilities, transportation, inventory level and warehousing (Russell Smith & Taylor, 2004). Marketing environment is another factor which is allied with the product. It entails both the internal as well as the external factors distressing the marketing strategies. Contemporary marketers have a belief on the fact that scanning of the environment is a crucial requisite which would provide them with a consistent communication amongst the customers and the business where they are functioning. The achievement of marketing management exclusively depends on the scrutiny of the environment where it functions. The environment may be inert or dynamic. If an environment does not tend to depict a considerable change it is termed as static or steady environment on the other hand when the major changes are depicted in the environment it is referred as a dynamic environment. At current scenario, environment of the modern business is dynamic in nature because of the constant degree of changes (Kotler & Armstrong, 2008). The marketing environment is comprised of micro environment and macro environment. Micro environment implies to the company’s immediate surroundings such as the suppliers, customers, competitors, public and marketing intermediaries whereas the macro environment comprises the economic, demographic, socio-economic, and political along with legal environment (Lowenstein, 2011) The exclusively renowned LEGO Group was coined by Ole Kirk Kristiansen in the year 1932. A family ownership based company located in Billund (Denmark), it deals with development and enhancement of the children’s inventiveness through learning and playing games. The company provides precedence to product safety, play value, technical quality and educational value. The guiding philosophy at LEGO is ‘quality play’ will augment a child’s life. For instance, LEGO is a part of both micro as well as the macro environment. The most prominent factor with regard to the micro economic of LEGO is its sturdy brand name. It has been in the segment of toy market since a prolong period of time which has assisted in generating a brand loyalty in the mind of the customers regarding the product. The product has a unique selling preposition (USP). The toys of the company have aspired to confine an innovative imagination and also have facilitated it to sustain in the market for computer games, dolls and cars. Another optimistic attribute of the micro environment of the company is the variety of distinctive products it put up for sale and its remarkable aptitude to design products for all children irrespective of their ages. This factor is also associated with different products being targeted at different target market in order to ensure that the customers do not discontinue purchasing the products assuming they have grown out for it. The company has expanded the brand exterior to the toy segment. It has launched the LEGO based theme parks in various countries. The company has even penetrated into products such as kid’s wear and shampoo, the effect of which would be an enhanced sales figure for the company. In terms of the macro marketing environment, the predicament faced by LEGO is the growing cultural variations that are taking place in the entire society. It has been seen that children are inclined towards the technical and digital facet. With the overture of media product it has been complex for LEGO to contend with Sony or Apply in product line which target to appeal the children (Lowenstein, 2011). Market segmentation is yet another imperative tool in marketing management. It is a process of attaining utmost market response from minimum market resources with due respect to the distinguished response feature of different parts of the market. Segregation of the market into numerous segments is known as market segmentation. The concept is based on the supposition that two consumers are never indistinguishable in every facet. They are difference in terms of their age, sex, education, religion, social class, style, family life, profession, cultural factors among others. Its aim is to assemble the buyers on the basis of their uniform features such as age, education, behaviour, income, profession among others. Target market of the LEGO Group is specifically children who are enthusiastic about computer games. LEGO Duplo was initiated with the intention of extending LEGO fun to the children. LEGO Duplo bricks are twice as elongated, elevated and broad as regular LEGO bricks–and hence easier for the hands of children to manoeuvre. Consumer behaviour is another tool for marketing management as it consists of both mental and physical activities. A meticulous study of consumer behaviour helps a marketer to identify consumer needs. Scrutiny of consumer behaviour is essential in taking decisions regarding quantity, quality, packaging, branding, pricing the product, advertising, sales promotion and selection of distribution channel. The behaviour of the consumer tends to vary with their change in tastes and likings. With reference to the LEGO Company it has been known to have a massive competitive benefits as the brand is prominent worldwide and is among the ten most recurrently visited website for children and it also involve its customers in the product development and its promotional campaigns. It endeavours its best to improvise its relationship with the toy dealers by filling towering percentile of orders and creating superior in store demonstration. Through LEGO, the world of children has altered to a large extent when compared to the past. Consumer’s demographics are varying, spending ability is enhancing, families are turning out to be nuclear and the demand for the children is escalating on the basis of choices. Conservative forms of entertainment are rapidly changing and latest innovative toys are now entrenched with the upgraded technology. In the present scenario, the consumers are apprehensive; the noticeable changes have happened in product development. Latest products as well as product lines have been focussed on the traditional product idea, the LEGO brick–and everlasting themes such as City, Castle, Pirates and Vikings have got a new charter of life (Dahlen & Et. Al., 2009). Impact of New Technology and Internet Internet plays a vital role in today’s advanced era. It is significantly changing the life at a rapid rate. It has numerous advantages allied with it as it can be used at residence for personal use as well as at workplace for professional use. Internet technology helps its users to stay updated with the latest news and happening all round the world. Students keep themselves updated by surfing vivid websites to augment their knowledge. Apart from the assistance being provided by internet, other technological aspects such as that of speedy manufacturing and innovated designed products also add up towards the value of the firms. In terms of decreasing the lead time associated with a product manufacturing process, new and innovated technology plays an important role. In the past, for example, for developing a new product, the designer would have to first put in place several designs in sketch forms. The sketches would be afterwards utilised by the developers of products for transforming them into prototype and then these would have to be tested in terms of robustness, cost and performance. After the product gets passed throughout the several stages and especially the last stage, the management would then take up the decision regarding launching of the product. It is due to the boon of the new technology that this long- term process of bringing a new product into the market has got reduced into a short-term cycle of production. This is because the entire process, at present, is carried out by the technology. It is noteworthy to mention that the new technology provides assistance to the firms in terms of enhancing its internal strengths and internet provides assistance to the firms in reaching out effectively to the target customers and thus enhancing the external environment. This is true for LEGO as well which has comprehensively made use of these aspects of the modern world for reaching up to a level in the market desirable by every firm (Daily Source, 2011). LEGO took assistance of internet with a motive of varying the way it develops its product. Through internet, in the year 2002, LEGO introduced LEGO direct and LEGO digital designer, because of which many children started to visit the website i.e. LEGO.com from all over the globe in order to share their creation with the rest of the world. LEGO has consistently sustained to innovate with latest products and its online services. An aspect of the LEGO community is the 40,000 ‘Adult admirers of LEGO’ who comprise of about 5% of LEGO’s sales. By way of this group in 2006, LEGO co-developed a latest edition of its Mindstorms product and, this laid to customer centric approach steadily on the international innovation map. Hundreds of external software engineers and architects performed virtually with LEGO to build a new product that was a pioneering step for the market. Mindstorms NXT has been an enormous smack and has grabbed huge media exposure (Innovation Leaders, 2011). LEGO learnt from its failure in the competition of attracting children towards video gaming and other internet related attractive gaming activities that it is essential to incorporate the aspect of direct consumer marketing for gaining strong hold upon the competitive market. The necessity of the company at certain point of time was to generate incessant process of interaction with the consumers. Thus, it strived hard to get itself transformed into a global market and in this process of creating itself as a global brand, the company also realised the importance of directly reaching out to its targeted segment of the market. This aspect of direct linkage with the consumers has been viewed as a success strategy for the firm. With this view, LEGO developed its divisions of Education, Direct and Community for generating and enhancing a form of premium value towards its entire group of stakeholders through recognition, development and execution of opportunities lying into the newer forms of businesses. This move of the company was aimed towards enhancing and deepening the sense of affectionate belongingness among the consumers towards the company. This plan of the company has been executed through creation of fundamental and exclusive experiences for the consumers in each of the Touchpoints of LEGO. The effectiveness of this strategy of LEGO is evident from the company’s operational success that resulted into near about doubling of visitors to the website of the company. Another successful impact of new technology and internet upon the marketing mix of LEGO is visible in the number of creative products of the company available on the Flickr which stood at an enormous number of 250000. Along with this, the number of movies available on YouTube increased to around 100000 after the implementation of the innovated strategy. Future Aspect of LEGO The strategy adhered at LEGO is referred as shared vision and aims to rebuild the company and revitalise the LEGO brand. The company focuses on creation of value for their prospect customers and their sales channel. They also opt to increase their functional excellence. The strategy of the company until 2010 had been laying emphasis on constructing a profitable and gainful stand for the future sustainability of the group. The entire arena of the company’s strategy in terms of utilising new technology and internet will provide three most important prospects for the company’s growth during the upcoming three years. This strategy is firstly aimed towards bringing in transition within the prevailing value of supply chain of the company. The second fundamental prospect of this strategy is to enhance the level of productivity associated with the portfolio of products of the company and thirdly, the fundamental prospect of the strategic move of LEGO is also aimed towards making itself prepared for the future growth. Almost all the toy manufacturers face nearly the similar anxiety from their competitors and consumers. The company meets this requisite with fortitude to bind its customers, retailers and fans close to the concern. The primary principles include development of the children so that they can be able enough to face any upcoming challenge as the company would always work to improve its product line such that its latest innovative products would for all time be prepared to face the tough competition prevailing in the market. Recommendations to the Management Online gaming is the latest trend in game world for the children. Children love to play computer games in gaming zones. Several retailers provide the online gaming facility at affordable cost. The intensifying admiration of Flash and Java guided to an Internet revolution where websites can make use of streaming video, audio, and an entirely new set of consumer interactivity. Through internet, LEGO can promote its latest games worldwide. The promotion should be eye catching and affordable for children who are addicted to computer games. They have to focus on continuous innovation in various aspects of latest games. The company should formulate strategy games, action games among others. They can offer strategy games for minimal monthly subscription on demand. They can set up a few PlayStation’s to draw underdeveloped regions. As they are the market leaders of the UK for traditional toys, they can develop certain additional features to their additional toys to draw the attention of the upcoming generations (LEGO, 2009). However, it is essential for the company that it makes comprehensive utilisation of the associated aspects of the fundamentals of applying new technology and internet into its operations apart from bringing in new product portfolio for attracting and sustaining customers with the fulfilment of the aim of remaining extremely competitive in the present environment. In other words, LEGO should reap up other operational benefits associated with implementation of technology within the firm. The first opportunity or benefit that LEGO should grasp is generation of increased productivity. Technological execution within the production segments of the company should allow for generating 24X7 manufacturing of products with even no breaks for taking either rests within a working day or full holidays. Technology should be utilised by the management of LEGO to enhance its level of production up to an enormous height. In terms of cost aspects, installation of new technology might incur huge amount of fixed cost to the company as this requires purchase of highly valued and expensive equipments for conducting daily operations within the manufacturing unit of the firm. Thus, the company is required to compensate the high cost associated with the installation of the new technology and this has to be done with the maximisation of produced units along with maximisation of sales of those units. Maximisation of production will lead towards reduction in per unit costs of the products and maximisation of sales will lead towards reduction in inventory costs. Lastly and perhaps most importantly, the management of LEGO should be highly concerned about the speedy generation of innovated and developed products which can only be derived through effective utilisation of new technology. For ensuring comprehensive utilisation of this benefit of new technology, the management should be careful about providing complete backup support towards the effective implementation of new technology. For example, management of backup power during times of power failure is extremely required to avoid halts in production process. References Dahlen, M. & Et. Al., 2009. Marketing Communications: A Brand Narrative Approach. John Wiley and Sons. Daily Source, 2011. The Growing Impact of the Internet. About. [Online] Available at: http://www.dailysource.org/about/impact#.TjewhF2I5JE [Accessed August 01, 2011]. Innovation Leaders, 2011. Profile: LEGO. Toys and Games. [Online] Available at: http://www.innovationleaders.net/lego_company_profile.html [Accessed August 02, 2011]. Kotler, P. & Armstrong, G., 2008. Principles of Marketing. Pearson Education Inc. LEGO, 2009. An introduction to the LEGO Group. Company Profile. [Online] Available at: http://cache.lego.com/downloads/aboutus/LEGO_company_profile_UK.pdf [Accessed August 02, 2011]. Lowenstein, M., 2011. Leveraging Informal Communication to Optimize Customer Loyalty Behavior. Slideshare. [Online] Available at: http://www.slideshare.net/lowen42/harris-interactive-loyalty-executive-brief-pdf [Accessed August 01, 2011]. Russell Smith, P. & Taylor, J., 2004. Marketing Communications: An Integrated Approach. Kogan Page Publishers. Read More