Subject:
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Re: Juniorization Lives, and comments on marketing strategy
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Newsgroups:
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lugnet.general
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Date:
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Tue, 6 Feb 2001 13:35:01 GMT
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Viewed:
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1284 times
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In lugnet.general, Todd Lehman writes:
> Well, I'm concerned about it from the business angle as well. I mean, it's
> almost as if the folks at the top at TLC have decided that they've become
> bored with the whole show and want to cash out of the business in a few
> years.
>
> Who knows if that's the plan or not, but it's a sad thought. I mean,
> imagine if the ultimate purpose of all of this marketing and branding was
> to make the company's balance sheet look as attractive as possible to
> potential buyers in 2005-2006. Even though brand equity is an intangible
> asset, it's something buyers look at. What would happen to the product
> line if TLC were bought by, say, Disney in 2006?
You're right, TLC at this point seems like a definite target for a takeover.
This is harder since they are privately held, but people in the toy industry
have to see that Lego is a brand and a firm that is struggling. But I don't
think that the executives are bored with Lego.
One strategy they are taking now is diversification into non-brick lines. If
it works it could even strengthen the brick line (the boxes with the Lego
name in the games aisle act as advertising for the boxes with the Lego name
in the building toys aisle). But it is a risky strategy that hasn't worked
for many companies. You need people who really understand the business in
the new areas.
AFOLs would like TLC to stick with its major line - bricks - and strengthen
it. But in all of their press releases TLC is telling us that there is a
fundamental problem with that line. A problem that AFOLs don't want to
believe or want to dismiss. The strength of the line is weakening with the
people that bring in the profits - children.
AFOLs, like all consumers with strong brand preference, pay lower average
prices. TLC doesn't need to generate more sales (what AFOLs are good for by
buying every set in site when they are 50% off), but more profits (what
parents and grandparents are good for by not waiting for a sale to buy for a
birthday, etc.).
I don't believe that TLC just loves spending all the money it takes to
invest in non-brick lines, or in new pseudo-brick lines (ZNAP, etc.).
They're doing it to try to find something that will make children *in
droves* drag their parents back to the Lego aisle whining and begging. I'm
sure we all know of several children who love building sets with 1500
pieces. But for it to be profitable there has to be millions of such
children world-wide. TLC is saying they can't find those kids and they are
trying to find a product line or lines that will attract millions.
Tim, had some good suggestions about using Dacta to reinterest children.
Ideas like that (and less kvetching) are what TLC desperately needs right
now. Ideas for ways that TLC can get kids to play more like AFOLs.
David Zorn
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