Deep into a video-game era, Lego should have long ago seen its empire of bricks reduced to heaps of multicolored plastic rubble, and apocalypse did almost come to Legoland. In 2004, losses totaled nearly $300 million, as the Danish company was caught between a past where children's playtime was all about using imagination and a present of "Rock Band," games, movies and TV shows that don't allow for stretching the imagination. Yet, in a relatively short time Lego has bounced back. Going against the grain of a toy industry in decline, Lego saw sales spike 18% last year and, in the first half of 2009, sales were up 23%. Success has come along multiple fronts. First, Lego slashed the amount of time it takes to develop new toys and, more importantly, the toys it already makes, to gel well with contemporary culture, linked then to popular movies such as "Star Wars" and "Indiana Jones." That means Lego's owners had to overcome a long-held resistance to creating movie-themed sets that often had violent accoutrement such as guns and knives. Now, by some estimates, licenses make up more than half of sales.Ad Age also featured these comments from readers who voted for Lego: By Rodney33, FRISCO, Texas: Lego is the only product on the list that is not favored by prevailing economic and technological trends. It has also shown the most adaptability and the most market-leading use of communication technology. Of all the brands listed as finalist, Lego is the most attuned to where marketing is now and where it's headed over the next 10 years. Its platforms are on mobile, viral video, digital games, social networking, experience, shopper marketing and CRM. Video games, which were not only counter to their business model but their biggest threat, have become a franchise growth engine. By mtalbott, Dallas: I have to vote Lego -- for continuing to provide a top-quality product in line with their brand, staying relevant and using new technologies to create new customer experiences in a kids' toy market that's moving away from brands with a "low-tech" heritage. This is a company that inspires others to a higher standard. Who can vote for a company that continues to drive quality down to get to a cheaper price? In a sidebar to today's story about Hyundai, Ad Age also noted that "Lego never outsourced manufacturing to China. That means it avoided the lead-based-paint scare of 2007, which hurt many rivals." Lego did pursue an outsourcing strategy for a while (but not in China), although last year the company reversed course and said it was ending a 2-year agreement with Flextronics International Ltd. to mold its products. The strategy seems to be paying off. Congratulations to Lego for its marketing -- and manufacturing -- efforts.
Ad Age honors Lego marketing efforts
Advertising Age, a sister publication to Plastics News, recently honored Danish building block maker Lego A/S by naming the firm one of five finalists for its 2009 Marketer of the Year award. Ad Age readers voted for the winner, carmaker Hyundai, which got 40 percent of the votes. Still, it's noteworthy that Lego made the final cut, and won 10 percent of the votes. In addition to the winner, Lego was up against Wal-Mart (which got 30 percent); McDonald's (14 percent) and Amazon (7 percent). Here's part of what the Ad Age judges liked about Lego:
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