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

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

These six personas range from consumers who are highly involved with the Lego Group’s products, such as those who help shape product design to those having no experience

with the brand. The persona category of Lead Users has the fewest members, while All Households has the most. However, the first three personas represent the most fertile

ground for social media interaction because of their deeper involvement with the brand.

Indeed, the Lego Group focuses its social media marketing initiatives on the upper three segments by co-creating products online with the Lead Users, and interacting with the

Connected Community and 1:1 Community, using online communities and social networks. By actively engaging these people and giving them special attention, the Lego Group

stands the best chance of encouraging them to be the company’s most ardent advocates.

Moreover, proper customer segmentation and persona profiling enable the Lego Group to concentrate its efforts on the social media platforms with the highest number of brand

active residents. In the words of Lars Silberbauer, the first global social media strategist for the Lego Group, “What platform you use depends on your target audience and the

product you are marketing.”

Result

In 2010, the Lego Group became the world’s fourth largest toy manufacturer, capturing approximately 6.9% of the global market share of toy sales and continues to sustain a high

growth rate, as well as showing a net profit of about 688 million dollars for the year.

According to Jake McKee (now the chief innovation officer of the social media consultancy, Ant’s Eye View), “the Lego Group has never seen such tremendous success as they have

in the past few years, since they began taking advantage of their most valuable resource – their fans. Not only have they received more coverage on the Internet, through the

proliferation of cool LEGO pictures and fan-made viral videos, but have also turned feedback into new products.”

(Excerpt taken from Barker, M., Barker, D., Bormann, N., and Neher, K. (2013) Social Media Marketing, A Strategic Approach)

Questions

1. With which of the three personas does the Lego Group spend the most social media marketing time and effort? Is it likely that different personas will

emerge for the Lego Group over time? Justify your answer

2. What factors may have influenced the Lego Group’s targeting decisions?

3. How do you think Lego’s persona profiling allows it to optimize its marketing efforts? Justify your answer with reference to the case and what you have

studied in the course.

4. What strategies could Lego use to reach its top 3 target audiences? How would these strategies differ by target?

Formalities:

• Wordcount: 1500-2000 words.

• Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

• Font: Arial 12,5 pts.

• Text alignment: Justified.

• The in-text References and the Bibliography have to be in Harvard’s citation style.

Submission: May 14th before 23:59. Week (7) – Via Moodle (Turnitin).

Weight: This task is a 40% of your total grade for this subject.

It assesses the following learning outcomes:

• Understand social media marketing within the context of marketing strategy and IMC

• Describe the different social media consumers and assess engagement strategies;

• evaluate content strategies within the framework of the social media campaign and platforms

• Analyse the social community and application of brand strategies

Assessment Rubrics

Excellent 90-100

Good 80-89

Fair 70-79

Marginal Fail 60-69

Fail

Knowledge

(30%)

Demonstrates exceptional coherence of ideas for knowledge and understanding of the key concepts of social media marketing.

Demonstrates good knowledge and understanding of key concepts of social media marketing at a good level.

The presentation demonstrates a satisfactory level of knowledge and understanding of concepts at this basic level but there is little evidence of research

Demonstrates poor knowledge and lack of understanding of the key concepts of social media marketing. There is no evidence of credible wider research

Demonstrates extremely poor knowledge and lack of understanding of the key concepts in social media marketing. There is no evidence of credible wider research

Critical-thinking

(30%)

There is good evidence of critical appraisal of ideas and concepts of SMM. The insights are outstanding

Evidence of critical analysis is generally weak but is at a reasonable level for this point in Social Media Marketing.

There is some evidence of critical appraisal of ideas and concepts, but the analysis and insights are rudimentary in terms of the SMM field.

There is very limited evidence of critical appraisal of ideas and concepts in SMM, and those that are offered are weak.

There is limited or no evidence of critical appraisal of ideas and concepts in Social Media Marketing.

Application (30%)

Work shows an appropriate and relevant attempt to place knowledge in the context of social media marketing.

The assessment shows some attempt to place knowledge in the context of social media marketing.

There is some attempt to place knowledge in the context of social media marketing.

There is almost no attempt to place knowledge in the context of social media marketing.

There is no attempt to place knowledge in the context of social media marketing.

Communication (10%)

Provides very clear answers, using conventions, vocabulary, and terminology of the discipline with a very high degree of effectiveness.

Provides clear plan answers, using conventions, vocabulary, and terminology of the discipline with considerable effectiveness.

Provides somewhat clear answers, using conventions, vocabulary, and terminology of the discipline with some effectiveness.

Answers are somewhat

unclear. There is a lack of use

of conventions, vocabulary,

and terminology of the

discipline.

Answers are unclear. Lack of use of conventions, vocabulary, and terminology of the discipline.