Executive VP Market & Products, LEGO Group
Which up-and-coming brands do you think will soon compete on a global stage?
It’s hard to name specific brands. Brands within the social media space could be very strong. Overall, some will come and go, but the basic common dominator is that all up-and-coming brands will be those that truly make a difference in people’s lives. Brands that actually matter for people will be around for years to come. I also think the same brands will be able to master consumer to consumer branding, because I believe that through social media and/or something as old fashioned as word of mouth, brands will be able to intelligently build loyalty and spread their messages.
Not too many years ago AltaVista was a key brand in technology. Everybody thought it would remain successful up until Microsoft decided to do something. With regards to web search engines, Google is a clear winner – at least for now. So many of these potentially hot brands will probably come and go, but I reiterate the point that the true winners will be those brands that truly have a purpose and demonstrate that they can make a difference in peoples’ lives.
How do you see the marketing of brands changing in the next five to 10 years?
I see a massive difference from today. Brands will market themselves in a different way. They will question the actual purpose of their brand as well as what it is doing to people. The biggest brands will not be built with the biggest advertising budgets. It’s going to be the brands that master how they get their brand to grow to the point where people talk about the idea and experience actively. Those brands that promote forward thinking, embracing consumers who want to carry and promote the idea will be extremely successful. I am a firm believer that those brands with a purpose and with true substance – where the experience is really at the heart of the idea – are the strongest.
Take Apple, for example. It is a brand that everyone talks about and it has succeeded in making music a better experience in terms of purchasing, storing and listening. Another strong brand that actually delivers is BMW. This is essentially a brand that delivers on performance, design, and at the same time makes, by far, the most economical engines in the premium segment (in terms of mileage). These are both brands that actually deliver tangible and relevant benefits to the consumer.
How do you expect the changing role of digital marketing to influence your brand strategy?
Digital marketing will be fundamental to branding and marketing in general. What we will all need to get used to is that digital will also mean a loss of control. There are great opportunities for brands to appear even more interactive in the way they market themselves. I think marketing and product will melt together into one experience over the next five to 10 years. This will mean that fundamental questions about the business model and where to budget marketing will be key to helping us choose the way we, in the LEGO Group, market to children and families.
I see a profound impact on digital but I also think it is important not to rush it. Many media observers have said that TV is dead as a medium. It’s not dead yet – far from. But I do think that eventually digital will have a massive impact that is much greater than it is today.
What decisions in the last couple years have helped to accelerate brand growth and also ensured that brand values remained clear to employees and consumers?
I think it has been the choices we make where we stick to what we do very well. We have chosen to stay close to the core of the brand. Obviously there are tons of “play” experiences we could have chosen to go forward with or acquire from companies, but we only want to do what we believe is right in terms of our brand mission and purpose. This is what the consumer expects from us. For example, we’ve always said all experiences have to be related to a “system in play.”
The decisions made are fundamental not only to people’s understanding of the brand but also to how the brand values are brought to life. Everybody who has been in the company for more than a few weeks will know that we are adamant about “system in play” and delivering the “world’s best play experience,” be it through digital or physical. The integrity of these beliefs is absolutely crucial to our culture.
But it is also challenging: One of the biggest challenges we face is how to actually bring a “system in play” to a digital world. We have to ask, what does it mean to deliver a creative and fun experience online, in the digital universe? If people go online and buy LEGO Universe access, or a LEGO video game, and say “that has nothing to do with real LEGO play,” then we lose the integrity of the LEGO brand.
Can you provide us with insight on how you have managed to successfully balance a diverse portfolio of brands?
It is about the long-term sustainability of the business, which means that we need truly strategic perspectives when deciding on which new product categories to go into.
Take, for instance, when we decided to enter into new categories like LEGO games, or buildable action figures in 2001. We always aim to do it with a proposition, which delivers on our values – “system in play” – and clearly delivers a better play experience than anything in that category today. If we can’t, we will not enter the category.
Whether we are picking up a new IP, like Harry Potter, or if we are entering a new category like board games or action figures, the criteria are always the same. We always aim to deliver an absolutely stellar play experience and to do it in a way that truly lives up to the LEGO values.
One more important factor is how we aim to explicitly link our values into functions. Questions like: How many play hours versus competitors will children actually get out of this product? Are there true, functional possibilities to be creative with this product or not? So, linking the company values to the functional product benefits is very important.
What points can you share from your experiences that contribute in building a successful brand?
It’s about truly believing in the brand that you have at hand. You don’t try to say that its not strong enough or there isn’t enough potential. Truly believing in the core values of the brand is the starting point. The questions we asked ourselves in our most difficult days were: What would happen if we were no longer around? What would the world miss about LEGO?
These are fundamental questions to ask, because if you have difficulty answering them, you know you are in trouble. What we came up with was that it would be a disaster because children would miss the best play experiences in the world, which are fun, engaging, development-worthy and learning-rich. We had a duty to deliver those values to children.
So what would I share?
- Ensure you maintain your brand values and stay authentic; ensuring authenticity in delivering the brand to all relevant stakeholders
- Have clarity in the brand purpose, and believe in the purpose
- Stay consistent over time
- Dare to deselect. If consumers do not appreciate building and creating something, they can go to one of our competitors.
What advice do you have for marketers at other companies who are facing similar challenges that you face?
I think it is important to really focus on the brand’s essence. We, in the past, had to very painfully kill many of the product lines that we admired greatly. We had a wonderful girls product line which was called Clickits…but it was just not exactly right. It was one of those situations where we had to admit that we might never get it right with that line.
Making bold choices is not just saying we need to be clear about whom we are, or that we need to save money if we are in a crisis. It is also about communicating what we believe in and the core we are built on authentically. We have decided to focus on the core areas that are right for the brand to build a sustainable business. It is vital to know what is right for the brand and then commit to build from there…this is probably the best piece of advice I can give.
How much of a role does corporate citizenship play in managing your brand?
If the brand’s relationship with multiple stakeholders over time isn’t strong, you are in trouble. It’s not just about “doing good” to get buzz. I think it is something that every company needs to embrace. What I am a little concerned about is how narrowly most people embrace the culture of corporate citizenship.
Most people focus wholly on elements like, “What is my carbon emission?” But companies need to think about all relevant contributions, in terms of being a better corporate citizen. We truly balance multiple stakeholders in our decision making. Be it carbon emission, use of natural resources, the learning benefits we deliver to children or charitable purposes.
All of these elements combined contribute to being a good corporate citizen. They are very important aspects for a long-term sustainable business and extremely important to our brand values. It brings me back to my point on authenticity and how we do not want to give money away just to create the most publicity. Instead, we’d rather give where we can truly engage – for example, in such things as supporting education for children who don’t have equal opportunities around the world. It’s not just giving food to the hungry, which is of course a worthy purpose. For us, it is important to stick to what is right for the brand.
Mads Nipper has been Executive Vice President Market & Products, LEGO A/S since 2006 and is a member of the Corporate Management Team of the LEGO Group. Mads works in the Market & Products division, which is responsible for the LEGO Group’s global product development and its marketing and sales to retailers.
Mads joined the LEGO Group in 1991. During his LEGO career, he has held a number of various positions, primarily in marketing and product development. From 1998-1999 he was Global Brand Director. From 2001-2004 he was the CEO of LEGO Central Europe, with responsibility for marketing and sales in Germany, Austria and Switzerland. In 2004 he was the head of global innovation, product development and marketing.