Table of Contents

Question 1 (15 Marks)..................................................................................................................................3

Question 2 (15 Marks)..................................................................................................................................6
Refences......................................................................................................................................................10

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Question 1 (15 Marks)
“Marketing is a total system of business activities designed to plan, price,
promote, and distribute want satisfying products to target markets in order to
achieve organizational objectives.”
Referring to the case study, explain what marketing orientation the Lego Group
has adopted from the stages of marketing evolution. Use the case study to
substantiate whether the Lego Group is applying the marketing concept.

Introduction
Marketing orientation is the business approach that dictates all the processes within that
organization. It outlines how the company’s core offering is presented to its users and
how the marketing teams are empowered. Although marketing teams have a say in the
marketing strategies adopted, the marketing orientation is determined by the priorities of
upper-level management, (Armstrong, et al., 2017). There are five alternative concepts
under which organizations design and carry out their marketing strategies: the
production, product, selling, marketing, and societal marketing concepts

Main Discussion
Lego has adopted the Marketing Concept. According to (Kotler & Armstrong, 2016), the
marketing concept holds that the key to achieving organizational goals consists of being
more effective than competitors in integrating marketing activities toward determining and
satisfying the needs and wants of target markets or determining the needs and wants of
target markets and delivering the desired satisfactions more effectively and efficiently
than competitors.
Thus marketing starts with the market, focuses on customers’ needs, and attains profit
through customer satisfaction with coordinated marketing. It is noted in the case study
that, “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.”

Lego’s marketing management takes a “customer first” approach. Under the marketing
concept, customer focus and value are the routes to achieving sales and profits. As

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noted in the case study “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.”
The marketing concept is a customer-centred “sense and responds” philosophy. Lego’s
job is not to find the right customers for your product but to find its customers’ right
products. It is noted in the case study that “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”.

When companies started achieving the capability to produce in excess of existing

demand, executives realized the need to reappraise marketing in business operations,
( Digital Marketing Institute, 2021). They also started recognizing the significant changes
in the market, in the technology field, and how to reach and communicate with markets.
The case study notes that “Jake McKee, a former social media practitioner at Lego,
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”.

The marketing concept suggests that marketing starts with the customers and works
back to producing desired products in the right amounts and with the right specifications.

Conclusion

Implementing the marketing concept often means more than simply responding to
customers’ stated desires and obvious needs. Customer-driven companies research
customers deeply to learn about their desires, gather new product ideas, and test product
improvements. Such customer-driven marketing usually works well when a clear need
exists and when customers know what they want. In many cases, however, customers
don’t know what they want or even what is possible. As Henry Ford once remarked, “If I’d
asked people what they wanted, they would have said faster horses.”, (Armstrong, et al.,
2017)

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Question 2 (15 Marks)
“The Lego Group uses six distinct personas to categorize their customers based
on purchase and usage rates”. Using purchase behaviour and usage rate is
behavioural segmentation.

Explain to the management of the Lego Group the remaining three (3)
segmentation bases and how they can apply those to the organisation.

Introduction

Companies cannot appeal to all buyers in the marketplace or at least not to all buyers in
the same way. Buyers are too numerous, widely scattered, and varied in their needs and
buying practices. Moreover, companies themselves vary widely in their abilities to serve
different market segments. Instead, like Lego, companies must identify the parts of the
market they can serve best and most profitably. Market segmentation involves dividing a
market into smaller segments of buyers with distinct needs, characteristics, or behaviours
that might require separate marketing strategies or mixes, (Hill, 2016). Explained below
are geographic, psychographic and demographic segmentation.

Main Discussion

Geographic Segmentation
The process of placing your customers into categories based on their locations,
geographical variables like climate/weather conditions, cultural preferences, and
population, (Armstrong, et al., 2017). Many times, consumers' behaviours and
preferences are influenced by geographical factors. For example, Lego is more likely to
concentrate with customers in the developed countries compared with the ones in the
developing countries since they have more money to spend on luxuries for their children.

Also, geographic segmentation provides useful insights that can help you to create more
effective marketing strategies and position your brand the right way. Organizations
depend on geographic variables to determine pricing, product availability, and marketing
strategies, among other things.

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Why Should Lego Use Geographic Segmentation?
Lego may use geographic segmentation to; gain better insight into its target market,
better customer experience and create effective marketing strategies.

Also geographic segmentation have the following advantages which may be enjoyed by
Lego; It is an effective method of identifying different market segments and targeting
market categories that offer the most potential for your product. Geographic
segmentation helps large organizations like Lego to understand user-distribution based
on geographic variables like climate, location, and population, (Yieldify, 2022). It helps
you to cut down costs by providing useful information that influences better marketing
strategies

How Lego Can Apply Geographic Segmentation in Marketing

Rural-urban categorization is another example of geographical segmentation in

marketing. For instance, urban dwellers may have more demand for Lego products, than
rural dwellers.

Population density increases the demand for certain goods or services. For example
schools which in turn can be target markets for some Lego products.

Geographic segmentation plays a role in the identification of new markets for exploration.
In many cases, businesses leverage geographic segmentation to selectively target new
local territories or regions, (Iedunote, 2022). Some types of toys are in high demand in
certain geographical locations.

Psychographic Segmentation
Psychographic segmentation is a type of market segmentation that pays attention to
consumers' perceptions, thoughts, and beliefs and also utilizes this data to create
customer segments, (Voxco, 2022). It is an important process that bridges the gap
between consumers' psychological dispositions and your product.

The dynamics informing psychographic segmentation are easy and relatable. As with
everything else, you're more likely to make the right business decisions when you not
only know who your customers are; but also have a fair idea of how they think.

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Psychographic variables are the factors that help you to identify and split your customers
into different categories. They include; personality traits lifestyle, social status, activities,
interests, and opinions, and attitudes.

Why Should Lego Use Psychographic Segmentation?

Psychographic segmentation plays an important role in marketing as it helps you to
emphasize the value of your product for different consumer categories. This makes a
product multi-dimensional and as a result of this, you can attract different types of users
and expand your customer base, (Armstrong, et al., 2017).

Lego may utilize psychographic segmentation to create a brand personality that fits into
the perception of their users. With psychographic data, Lego can communicate luxury,
minimalism, and class to its target audience and also create marketing strategies for the
different psychographic segments.

Geographic segmentation have the following advantages which may be enjoyed by Lego;
Psychographic segmentation explores unique personal factors that drive consumers'
purchasing decisions. It is an important tool for discovering the motivations behind
consumers' decision making. With the psychographic data, you would be better equipped
to create targeted marketing campaigns for different customer segments.

How Lego May Apply Psychographic Segmentation in Marketing

Lego toys, appeals to individuals in the middle and upper class who have high
purchasing power; that is, persons whose social class and income levels can afford such
luxury. To identify customers who need this product, Lego would need to carry out
psychographic segmentation. It would identify different psychographic segments using
variables like social status and purchasing power. With this, Lego would be able to
identify high-income customers who also belong to the upper class.

Products like baby toys also have a specific target audience; that is, families and new
parents. These segments can be further categorized using consumer preferences and in
line with the different uses of your product.

Demographic Segmentation.
This is categorization of the target market based on specific variables like Age, Gender,
Income, Educational Levels, Religion, Race, and Ethnicity Occupation or Job-Type and

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Family Structure, (Hill, 2016). It allows businesses such as Lego to be more strategic and
specific with marketing. A one-fit-all marketing strategy will likely not appeal to every
member of Lego’s target market because different individuals have different preferences.

Demographic segmentation helps organizations to categorize their widely varied

customer base into smaller groups of individuals and appeal to their specific preferences,
(Kotler & Armstrong, 2016). With demographic segmentation, Lego can create
personalized brand narratives that easily connect with specific segments of the target
market to advertise and sell their product or service. Consumers easily identify with
personalized brand narratives and are eager to patronize organizations that reflect this.

How Lego May Apply Demographic Segmentation in Marketing

Segmentation by Family: When marketing items like toys and cereals, organizations,
such as Lego may typically create advertisements that appeal to the traditional young
nuclear family structure – father, mother, and children.

Segmentation by Location: If your product is restricted to a specific location, this

information will reflect on your marketing strategy. For example, in crafting ads, you may
use language that is peculiar to that environment.

Segmentation by Gender: Adverts and market strategies are typically gender-specific.

For instance, when Lego is creating an advert for toys other products, it may create
adverts that centre on children.

Conclusion

There is no single way to segment a market. Therefore, the marketer tries different
variables to see which give the best segmentation opportunities. For consumer
marketing, the major segmentation variables are geographic, demographic,
psychographic, and behavioural. In geographic segmentation, the market is divided into
different geographical units, such as nations,

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CTIVE 2

References
Digital Marketing Institute, 2021. Corporate-16-brands-doing-corporate-social-responsibility-successfully.
[Online]
Available at: https://digitalmarketinginstitute.com

Armstrong, G. et al., 2017. Marketing In Action : An Introduction. Torontop: Pearson Canada Inc..

Formplus, 2022. Formplus Coorporation. [Online]

Available at: https://www.formpl.us/

Hill, J., 2016. Fisher College of Business, The Ohio State University. [Online]
Available at: https://fisher.osu.edu

Iedunote, 2022. Iedunote Corporation. [Online]

Available at: https://www.iedunote.com

Kotler, P. & Armstrong, G., 2016. Principles of Marketing Global Edition. Essex: Pearson Education Limited.

Voxco, 2022. Voxco Corporation. [Online]

Available at: https://www.voxco.com

Yieldify, 2022. Yieldify Corporation. [Online]

Available at: https://www.yieldify.com

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