Digital marketing in tourism industry - TUI.com

The company I want to study is the TUI.com company. TUI.com – the German travel company which offers travel deals, travel operators for consumers. TUI is active in both B2C and B2B business sector. On the one hand, offers and operates holiday trips directly to their consumers. All of the activities on their E-Business are aimed straightforwardly to the end-users.  On the other hand, TUI is also active in the B2B sector. Beside of operating a travel deal for consumers, TUI also offers hotels, in which their consumers should stay during their holidays, or which airlines company they should take into consideration to get the best price for flights.

Challenges/Risks of E-Business

• Online booking systems must be well-established, user-friendly and able for everyone to book the trip or the holidays by themselves
• Transaction risks including default on order taking/giving and default on payments
• Online presence and corporation’s reputation is highly dependent from customers
• Optimization of online presence und user interface across all devices (tablets, smartphones, laptops, desktop PCs, etc.)
• Follow the trend and forget to study the market strategically to get customers insights
• Limited paying methods discourages buying decision processes
• Foreign exchange risks, interest risks, internet security risks, political and economic policies of countries
• Pricing environment challenging due to competitive market
• Economy decline and impact of customer demand

Benefits of E-Business

• Reach more consumers and business customers from around the world through Internet
• Get a certain number of customers because of 80% of travelers consult the internet when researching a holiday or a trip.
• Expand the market globally
• Expand low-cost airlines
• Using sub-offers or additional offers, such as restaurants choice, hotel and transportation choice to involve planning and buying processes of customers.
• E-Business is a core business of TUI Groups and it compensates for local travel agencies which are no longer effective and reach a limited number of customers
• Speed and efficiency in terms of searching, comparison, transaction
• Have a low transportation and distribution costs. All transactions are get done online
• Earn more income when using their website to advertise the other business partners
• Have a large amount of customer information to arouse interests, raise awareness and retarget interest of customers
• Price transparency and well-established website generate more trust in customers.

Digital Marketing aspects:

Contents: Text and Multimedia web contents

Text: 

• Information about trips, bookings, hotels and transportation choices
• Cstomer service and contacts information
• Recommendation and Inspiration for travel destinations.
• Reviews, evaluations, rankings and feedbacks from company and traveler/ service users
• Special deals and discounts
• Internal links to additional offers, such as hotels, flights, accommodations, transportations, cruises, tour programs
• Information regarding travel insurance, travel policy, newsletter, catalogue, etc.
• Categories for more personalized and selective searching
• Blog and traveling calendar – sharing experience and tips for traveling
• Internet security and customer information security.

Multimedia web contents:

• Animation: GIF images
• Images: photos of travel destinations, landscapes, sightseeing,
• Sound + Video: travel destinations and customer experience

Channel: website, blog, Facebook, Twitter, Instagram and Google+

Customer: End-user and business partner (hotel, restaurant, airlines)

Competitor: other travel agencies in Germany, such as Opodo.de, Ab-in-den-Urlaub.de, ThomasCook.de, dertour.de and other outbound travel businesses, such as Kuoni Travels, Barrhead Travels, The Ultimate travel Company, Cox and Kings, etc.

How the company is managing with them?

Competitor: keep up with them by developing apps reservation and booking holidays

Customer: try to engage with them by various social media channels and offering user-friendly and personalized services.

Company evaluation:

In my point of view, TUI Group has high potential to be successful, but there are some drawbacks which prevent the company from being a market leader in this tourism industry. On the one hand, they understand the new trends in the tourism sector. The TUI.com exploits the digital tools and methods to expand its market and keep ahead of their competitors. On the other hand, the company seems to lack understanding of new trends in the tourism and engagement with their customers.

Although the TUI company offers the customers a wide range of deals regarding travel destinations, flights and hotel choices with a competitive price, there is still a lack of interaction between the company and its customers. Many tourism companies have set their goals as giving the customers information as much as possible. By using digital tools to make relevant information appear directly to the customers repeatedly, many companies think that they can influence the customers’ buying decision and, therefore, make more sales and profits. Tourism nowadays is much more than that. The today customers ask more for conversation, inspiration and entertainment. They want to get involved in anything they want to purchase. 

The content in TUI’s website shows that there is still a lack of contents which focus on a specific group of customers. Even though the contents are not really “one size fits all”, they are still too informative. So that customers just go to the company because the company might give them an affordable price for the trip, but not because that the company makes them special. However, when people are included and activated, they remember the company’s messages better. 

When we take a look at the trends of tourism, many people say that they want to be travel and experience the place they go as locals, not as visitors. The company should see this aspect as an opportunity to offer the customers more personalised deals.

According to Site Analyzer, TUI.COM only score 64.6/100, and the content aspects need to be improved.   

Controversy in marketing

PBL 7 - Problem: The role of controversy in marketing

Learning objectives:

                                 1. What causes controversy and how to deal with it?

                                 2. Intentional and unintentional controversy

                                 3. Cultural norms in marketing

 

What causes controversy and how to deal with it?

Among a thousand of ads everyday one way to make their ads remain in consumers’ brand is to be different, interesting and controversial. A shock advertisement will provoke discussion on its products or services as it gets everyone talking on social and; therefore, increases the chance they will be repeated and discussed in public. The controversial topics are generally more interesting than other conventional issues. People love to talk about interesting or recent topics as it makes them look good and trendy to others.

However, it could be a downside when a company is trying to court their products publicity in controversial ways. A controversial topic is somehow uncomfortable to talk about and; therefore, decreases the likelihood of discussion.

The controversial topics are mostly related to politics, religion, discrimination, gender equality/inequality, etc.

In order to deal with a controversial advertising:

 + Advertising must reach on an emotional level

+ The content must tie to the core message of the campaign, only be shocking is not enough

+ Recognise the different forms of controversy (Lehr, 2016)

• Shocking or unexpected campaign: the content focuses only on delivering surprising results.
• Taboo campaign: the content focuses on issues which are not often discussed publicly ( Sexually suggestive emojis campaign  -  https://www.dred.com/uk/sexually-suggestive-emojis/ )
• Debatable campaign: the content shows the data or facts from different both sides of arguments and gives readers a chance to drive a conversation or discussion.

+ Rather present the facts than present an opinion. Experience has shown that most of the successful controversial advertising campaign let the data speak for itself. They just give the facts and let the public drives a discussion automatically

+ Conduct research to make sure that you know your content very well

Intentional and unintentional controversy

According to Rogue Creative (2015),

 

Intentional controversial marketing is when a company is aware of the impact of the controversial ads on publicity. For instance, Paddy Power is a king of making controversial advertising campaign, and they are aware of the reaction from the audiences towards their ads, and they create these controversial with a clear purpose to get everyone talking on social about their brand, to get noticed and gain more publicity from the audiences.

With the same goal as the Irish bookmaker – Paddy Power, the Protein World has tried to create a controversial marketing by portraying a topic “Beach body ready”. At that time they were unaware that many other brands are fighting against the image that they are creating. Their unintentional controversial marketing strategy failed completely at that time.

Cultural norms in marketing

Cultural norms are the standard that people live by and they keep people in one particular region or community moving in a similar direction. When talking about the cultural norms in marketing which influence buying decisions of consumers, we take the two aspects of cultures into consideration. They are the dominant culture and the subcultures of the society ("The Impact of Cultural Values on Marketing Ethics", 2014)

 Dominant culture

The dominant culture of a society comprises language, religion, values, rituals and social customs of a country or community

Cultural values of the society generally refer the social acceptance and social rejection towards individual’s behaviour. Different cultures result in different values and expectations. For example, in some European countries, they are more individualistic than in some Asian countries. Therefore, the European will consider their own personal preferences when making any buying decisions. On the other hand, the buying decisions of the Asian consumers are likely based on “group preferences”, in other words, they might consider whether or not a product also meets their family’s needs.

Language is a symbol of cultural pride and a centrepiece when making an international marketing campaign. While some countries are quite open (-minded) and easy to adapt other cultures, others might stay on their own cultural heritage and barely adapt different cultures. Hence, when a company decides to make the message global, they should consider the cultural contents and the translation of their message in different languages which are also critical.

Subcultures

Many marketers often think that studying the dominant culture is enough and overlook the subcultures of the society. Subcultures refer to groups of people within a culture which differentiate themselves from the culture of society. It could be material cultures, belief systems, religious and political differences.

Development in social media

Trigger :" Facebook Live Map"

Learning Objectives:

1. How to adapt marketing strategy from traditional media channels to new media channels?
2. How to engage people on different social media? + find examples
3. Crisis management on social media

1.How to adapt marketing strategy from traditional media channels to new media channels?

According to Patrick (2015), an increasing importance of digital marketing and its impact on the marketing world is undeniable.

Social media is now one of the essential requirements to be a successful business and many companies use social media as the centrepiece of their marketing strategy. However, there are no best media for every company as it depends on the business model, the product that company wants to market and the customers that company wants to target.

For some household products, foods or products which focus on senior people, traditional marketing such as broadcast (on TV, radio or cinema) or print media (newspaper, magazines, and posters) are still effective and has a significant impact on the mass market. There is no complete elimination of traditional marketing but, however, there is no company which runs only ads on some TV channels or radio stations to market their products. The marketing strategy depends ultimately on the products and the target groups of the corporation.

Experience shows that using both traditional and digital marketing is the most effective marketing strategy, and it is even more useful than using only one of them. Now, integrated marketing communication – which combines all media channels together with the purpose of reaching customers as much as possible, is known as a primary requirement for any successful marketing strategy. There are two strategies to integrate a traditional marketing and digital marketing:

• Combination of traditional and digital marketing

+ Include information about brand’s social media presence on print ads

+ Use a hashtag to attract people the brand’s social media presence, inspire them using the hashtag on their personal social media account, and the hashtag will become a trend/ a contagiousness in social media.

• Develop traditional techniques with new techniques of digital marketing (improve traditional marketing based on digital one)

Use the QR Code on print media such as posters, magazines or even in a company’s booth at the fair will connect the audiences to our presence on social media and have the ability to send them a significant content in a short time. An alternative option for QR-code is to put only half of the story or the message on the traditional media (poster, website) and people will use the QR-code to find out what is it all about? A requirement here that company must be a good storyteller of their message.

2.How to engage people on different social media? + find examples

According to Furgison (2014) and Beese (2016):

• A message must be consistent in different social media channels.

• Take a sense of humour and cultural diversity into consideration when a company want to reach customers globally.

• Respond customer’s feedbacks, comments or even complaints nicely and friendly as quickly as possible. People will feel more confident when the company is listening to them. On the other hand, a smart and polite response can create a new positive brand image to the public. 

• Share customer’s stories – the audiences will somehow feel themselves in these stories and feel connected with a brand they are using. The companies can also understand how they perceive their brand and how they use their products and services.

• Use social media to show your social mission (fight for or promote human rights, equality in gender, encourage education/ better life for children in developing countries, etc.) 

• Repetition

• Understand the trend in social media. Before engaging with them, a company has to be them and understand what the customers are usually doing in social media platforms. Keep up with some trends such as #TBT – Throwback Thursday, live streaming video, etc.

• Understand the development of social media techniques such as autoplay video/ads on Facebook, 360-degree photo. For instance, as Facebook did not allow videos play automatically with sounds, many companies came up with an idea to add subtitle in video ads so that people can follow it and it disturbs no one. 

3. Crisis management on social media

According to Affect,

Firstly, we have to understand what is communication crisis and where does it come from.  A social media crisis is a situation in which an online issue has a negative and long-term impact on organisation’s reputation. Social media crisis happens very quickly and changes the attitude and perception of customers towards the company’s brand in a short period.

There are four primary phases of crisis management in social media that the firm should take into consideration:

Readiness – The first step is preparation. The crisis communication management team should have some future scenario beforehand what are possible crises for the organisation and what the company can get prepared to face with these crises.

Response – A social media crisis requires strongly an immediate response regardless industry sector or size of a company. By responding immediately to public, the company will show the audiences that they have acknowledged the situation have had everything under control and they will take all responsibilities. A quick response will save organisation’s life as it will help the company retain customers or get the customers back, while the brand image is being stained.

Reassurance – After having a crisis under control, now it is time to reassure the customers by conducting a research, preparing and running an action plan and letting the public know what the company is doing to fix things.

Recovery – Besides of an action plan for managing the crisis, the company also has to take into consideration the improvement of company’s health and reputation, the re-establishing public trust and customer loyalty. There is no doubt that after one crisis, a company will lose a significant number of customers. Crisis management team is therefore required not only to a plan for the crisis but also a strategy to recover company’s reputation, retain existing customers and gain new customers as much as possible.

References:

Affect,. (2016) (1st ed.). Retrieved from http://prcouncil.net/wp-content/uploads/2011/03/Affect_Social_Media_Crisis_Management_White_Paper.pdf

Beese, J. (2016). 6 Social Media Trends Taking Over 2016 | Sprout Social. Sprout Social. Retrieved 4 January 2016, from http://sproutsocial.com/insights/social-media-trends/

Furgison, L. (2016). How Big Brands Keep Their Social Media Audiences Engaged : Social Media Examiner. Socialmediaexaminer.com. Retrieved 9 October 2016, from http://www.socialmediaexaminer.com/social-media-audiences-engaged/

Patrick, S. (2015). Get More Eyes On Your Content By Combining Traditional and Digital Marketing. Salesforce Blog. Retrieved 4 December 2015, from https://www.salesforce.com/blog/2015/11/combine-traditional-digital-marketing-content.html

Design a communication campaign

Trigger: "Snickers commercial"

Learning Objectives:

1.     How to create a message that has a mass appeal, is memorable, international and persuasive?

2.     What are the steps in designing a campaign?

3.     How to execute a campaign and what media to use? 

 1. How to create a message that has a mass appeal, is memorable, international and persuasive?

The main essential to create an effective communication is based on the 4C’s model. It comprises comprehension, connection, credibility and contagiousness.

Comprehension:

The essential point for creating an effective communication is to build a comprehensive message. Companies should take into consideration if the audience gets the message if they understand the main idea that the companies try to express and if they can play it back. Therefore, it is important to create a clear and straightforward message and repeat them time and time again ( tell the audience what you are going to tell them, next, tell them and then tell them what you told them)

Connection:

Moving people is not easy. It is all about building a connection between a company and its customers and making them believe that they are listened and understood. A connection should be involved in emotions of customers such as fear, excitement, anger, etc. Because emotions provoke actions and the heart-touching message will remain in customer’s mind for a long time. Moreover, to build a real connection with customers, companies should keep asking themselves what problems they are solving for customers, what solutions they offer customers and how will the customers react when they perceive the message. (Example: Nike – “Just do it” campaign)

Credibility:

It is not easy to make people trust. When receiving a message, beside of thinking about its content, people also think about who is saying it and where does it come from. Hence, the corporation’s credibility will decide how the audience perceive the message. On the other hand, companies should take into consideration whether the source or the media that displays the message is trustworthy. As even the message can reach and connect the audience on an emotional level but they could turn around because of the untrustworthy source.

Contagiousness:

Contagiousness in communication is when audiences get the message, feel connected with it, spread it around or even use the catch phrase in their daily conversation. In order to create a contagious content, the message should be energetic, memorable and original.

Furthermore, being honest and simple can gain a huge connection with customers in an international market.

Different cultures result in different expectations and attitudes in customers. However, the same thing remains with customers coming from all over the world is their “persona”. Many companies have run their advertising campaign successfully by using this persona marketing strategy. By recognizing that all people want to express their opinions, to be listened, and to be recognized by others, some big companies such as Dove, Marlboro figured out that the essential way to reach customer’s heart is to be honest and simple. Dove understood the so-called “women’s problem” that every woman is afraid to be getting older, wrinkled, fat, etc. Instead of sending the same message as other companies have done for over many years, Dove decided to run a Real Beauty campaign with a simple but meaningful message “You are more beautiful than you think”.  Dove made people who use their products not only feel more confident, be listened and understood, but also made them recognise that nothing is more crucial than be grateful for their natural beauty instead of spending a lot of time and effort to analyze and fix the things that aren’t quite right.

Marlboro’s advertising campaign in early 1955 also captured a lifestyle which many men aspired at the time. Both of companies created ads that they knew it was sensitive but meaningful to customers and even though a company wants to send a message to the audiences inside national borders or in an international market, stay honest and simple is a key to building a successful communication campaign.

Finally, when the company decides to make the message global, they should consider about cultural contents. The company might translate their message in different languages when they want to expand their market in other countries. Therefore, the message must be fit on and relevant for each target country. Effective is rather to create a message which is relevant to more people than a limited group of people or regions. 

2. What are the steps in designing a campaign?

1       Ideation and research
2       Build a vision
3       Define targeted market and customers
4       Determine objectives ( short-term and long-term)
5       Create a plan ( strategy + media use + budget)
6      Forecasting campaign outcome

3. How to execute a campaign and what media to use? 

• Designing a campaign requires a lot of research in order to identify opportunities and potential to realise an idea of a campaign.

• Companies should take into consideration following questions:

• Why a company wants to run this campaign
• Are there any existing things in the marketplace a company wants to change, develop? Or prefer to create a new trend?
•  What is a product all about?
•  What problems they are solving for customers, what solutions they offer to the customer?
•  Why do customers want to use this product or service?
• How will the customers react when they perceive companies’ message?

• Building short-term and long-term objectives according to SMART model. Campaign objectives must be Specific, Measurable, Attainable, Relevant and Timely

• There are two types of media use: traditional and social media

                Traditional media: broadcast media (TV, radio, and cinema), print media (newspaper and magazines) and outdoor media (poster)

·                    Social media:  online media such as websites, online publication, mobiles, social media platform such as Facebook, Linkedin, Twitter, etc.

There are no the best media, but only the (most) suitable one depending on what message and how a company wants to deliver it to customers.

• A plan must comprise tactics and strategies, budget planning and outcome forecasting

• After a period of running a campaign, companies should consider measuring the results

References:

Albanese, I. (2016). How to Make Your Message Memorable for Effective Communication. The Balance. Retrieved 30 May 2016, from https://www.thebalance.com/how-to-make-your-messages-memorable-the-4cs-model-1918478

Lake, L. (2016). How to Plan Your Marketing Campaign in 7 Easy Steps. The Balance. Retrieved 9 August 2016, from https://www.thebalance.com/steps-successful-promotion-campaign-2295836

Brand Strategies - Branding Process

Trigger: "Whole Foods: How Radical CEO Created Grocery Empire" 

Learning Objectives:

1. What is the process of defining a brand?+

2. What are different brand strategies? 

3. How to find the right tools for reaching the desired customer segment?

4. How to recognise growth potential?

 

What is the process of defining a brand?

The three most important aspects in branding process are to define your business, your customers, and your competitors

1. Define your business

One of the essential requirement for a successful brand strategy is define who you are, what you stand for and what you want customers to think of when your brand comes to mind. You should define a brand based on your real ability to be able to fulfil customers’ demands in reality.

2. Define your customers

What does a customer need regarding our competence? What makes them come and come back to us?

3. Define your competitors

Take consideration on your competitor and differentiate from them. Truly define yourself and be honest and enthusiastic with your customers are not enough to be a strong brand in a marketplace. Also have a look at what your competitors offer, what are their strengths and weaknesses and try to differentiate from them as much as possible.


What are different brand strategies?

There are six types of brand strategies:

1. Name Brand recognition

A company with large name brand will use its name to an extent its products. Big companies such as Coca-Cola, Starbucks, McDonaldsv Volkswagen are all iconic, and the name brand speaks for sub-products of the entire company.

2. Individual branding

Some affiliated companies try to be independent of the parent corporation by manufacturing products which feature its identity and the weight of its name.

3. Attitude branding

Attitude branding strategy involves customers' feelings, behaviours and reflects their self-expression.

4. No-brand branding

Companies develop a brand not by emphasising on logo, slogan, and marketing campaign, but by focusing on delivering functional and emotional profits to their customers.
Ex: MUJI - Japanese retail company.

5. Private-label branding

Private-label products or services are owned not by a manufacturer or producer, but by a retailer or supplier who gets its products or services made by a contract with manufacturer under its label.
Ex: Lidl

6. Crowdsourcing

Some of the companies outsource their brand to the public for brand creation. They allow the customers get involved in naming the brand.

How to find the right tools for reaching the desired customer segment?

A first step to reach your desired customer segments is to understand your market and to identify who are your customer segments and whom you want to focus on or interact with. We have to profile our targeted segments before we begin our marketing. Profiling the customer segments are based on four essential aspects of segmentations: demographic, behaviour, psychologic and geographic. 

If you a big company, you should think only about how to get more profit, what your customers do in their spare time. But also try to think more deeply who is buying your product or service.
If you know your customers very well, the next step is choosing the right communications channels. Every segment has its communication channel. For examples, when your targeted customers are those who are between 25-35 years old and busy professionals, the best way to reach them is social media platforms. On the other hand, if your desired customer segments are senior people or those who are retired, think about traditional printed media such as newspaper or ads on public transportation. Because this demographic prefer reading, using public transportation and they are not so interested in using social media.

Launching a new marketing strategy is always expensive, so that before making any marketing strategy decision, a company must take its size and budget into consideration. A marketing strategy has to fit a firm size, but also must be targeted, cost-effective, affordable and able to last for a long time. For a small company, traditional media such as radio, newspaper, magazine, TV… are sufficient enough to reach the targeted customers and to make a profit. In contrast to that, a big company will have more opportunities to keep in touch with its clients. Because its budget is strong enough to cover any marketing strategy, especially social media platforms – which are very expensive but they also reach the most audiences.

Whatever communication channels you choose to interact with your customers, evaluate its effectiveness monthly or quarterly to make sure that your marketing activities are working and integrated with other business objectives of the entire company. However, the goal of market segmentation is to make your contents not only reach the right targeted customers, but also engage with them. 

Sources:

https://www.entrepreneur.com/article/226603

http://www.kpmgfamilybusiness.com/recognising-business-growth-potential/

 http://www.cio.com/article/2378748/online-marketing/7-ways-crowdsourcing-can-boost-your-brand-and-customer-loyalty.html

 http://cmgpartners.com/content/types-of-brand-strategies/ 
https://www.prophet.com/thinking/2011/07/43-mujithe-no-brand-brand/

Brand identity and brand repositioning

Trigger: "Old Spice"

Learning Objectives:

• What factors cause companies to reposition brands?
• What is the relationship between brand identity and brand image?
• How to effectively segment market with the same brand?
• Good/bad rebranding - Example.

1. What factors cause companies to reposition brands?

Each company should have a comprehensive understanding of its internal and external business environment, especially, relevant factors that could lead the company to difficult situations.

There are four factors considered in determining the reasons for brand repositioning:

• Environmental factor: political changes, economic fluctuation, globalisation
• Competitor factor: new strong brands
• Consumer factor: changing in taste/ preferences
• Internal factor: change in company’s strategic direction/ establish new business/ acquire new technology/sciences/ current strategy is no longer adaptable, appropriate/  Product range itself has a bad image and needs development.

2. What is the relationship between brand identity and brand image?

Brand identity is the unique set of brand associations that represents what the brand stands for and promises to customers.

In other words, brand identity encompasses of verbal and non-verbal (visual) elements that the company creates as a promise to its customers. On the other hand, these elements together identify and differentiate the brand from its competitors in the consumer’s mind.

Brand image expresses the perception of the marketplace about company’s products or services. The company’s brand image interprets a sum of attitudes that customers have and the feelings that come to mind when they think about your brand.

Comparison between Brand Identity and Brand Image:

Example: McDonald's

McDonald's brand identity

Brand image in my point of view: unhealthy, obesity, unfriendly,  time-saving, affordable price.

3. How to effectively segment market with the same brand?

Segmentation of the market based basically on four essential aspects:

• DEMOGRAPHIC (age, gender, income, education level, interest..)
• BEHAVIOURAL (attitude, belief, opinion towards products and services)
• GEOGRAPHIC (region, climate type)
• PSYCHOGRAPHIC (lifestyle)

4. Good/bad rebranding - Example

What is a good brand repositioning?

• Obtain a comprehensive understanding of the market ( competitor, consumer, product)

• New repositioned brand should be able to un-teach its existing customers so that the customers will forget an old brand and believe and accept a new brand. On the other hand, the repositioned brand should create a new target customer group on the market. For examples, P&G -deodorant tried their first time on the new generation target group - the young school kids. A “strong brands must constantly renew themselves, making themselves relevant for each new generation of customers” (David Aaker, 1993)

LEGO 

In between 2004 and 2010 the LEGO’s group got through its historical seven-year rebranding process and became the world’s most powerful brands in 2015 (Brand Finance, 2015). A rebranding process of LEGO’s group is a good example to understand why a company has to reposition its brand on the market place, what factors cause a company to redefine its brand and a corporation’s culture.

Reason - Why did the LEGO’s management decide to reposition the company’s brand?

  

Environmental factors:

One of the most serious problem for the toy industry at that time was a change in trend in child development. “KGOY - Kids getting older younger” which meant that children spent less time on playing conventional games and thinking these games as boring and being more interested in computer games. The variety of online and offline computer games developed with up-to-date technologies made the competition much more difficult for LEGO.

Internal factors: 

The company found itself in a bad financial and operational situation because it had underestimated the marketplace and overestimated its capacity.

The company focused very intensively on the external environment and adapted every new trend on the market which led the company to the hyper-adaptation stage. There were also many sub-brands on the market at the same time such as Logo Technic, Duplo and Primo and the customers were confused and also did not realised that they were all parts of LEGO’s group. This marketing strategy had a negative impact on the company’s culture as the employees were divided into separate groups and worked with different products. As a result, a brand identity was no longer consistent and customers no longer understood the message of LEGO and, therefore, the company lost its competitiveness.

Action - How did LEGO’s management deal with rebranding issue and lead the company out of its crisis?

1. Analyse and redefine a brand

LEGO started to analyse the brand and all its extensions intensively. It turned out that it was so much confusion in customers’ mind in between brands, sub-brands and product range of company (Schroeder and Salzer-Morling, 2006). LEGO talked to its stakeholders and employees to come up with ideas what the brand and the corporation’s culture was. As well as this, the company focused on getting consumer’s attitudes towards the company’s current and future product lines so that the company can offer a better retailer service to its customers. 2. Define consequences of rebranding process on the brand and organisation

LEGO defined results when repositioning a brand and investigated whether or not a rebranding process is necessary and whether or not it fits into an original company’s culture. In this action, there were new roles and responsibilities for managing the brand. 3. Change in brand architecture and focus on brand visualisation LEGO restructured a platform for toys by dividing products into four groups regarding an age group of the customer (children), which make parents easier to choose a suitable product for their children. It also meant that brands which did not fit into company’s categories were abandoned. The company also focused and improved its online market. The company developed design facilities LEGO factory.com and LEGO Digital Designer (3D construction software). The LEGO Factory is an interactive website that allows the consumers virtualise their LEGO. The main site of LEGO offers children the opportunity to choose any bricks they like and build their construction. As a result, the LEGO’s website becomes one of the ten most visited children’s websites (Dahlen, 2009) Result LEGO revived from its crisis and now become the world’s most powerful brand (2015). LEGO’s revenue increased steadily from 6,8 billion euros in 2003 to 35,8 billion euros in 2015. The successful rebranding process led to a significant increase in revenue for the company from 2010 to 2015.

Sources:

Annual Group Report, LEGO Group, 2007
Dahlen, Marketing Communications: A Brand Narrative Approach, 2009
 Schroeder and Salzer-Morling, Brand culture, 2006

http://www.managementstudyguide.com/identity-vs-image.htm
http://www.brandingstrategyinsider.com/2006/08/top_reasons_to_.html#.V9aPOfmLTIU
https://aytm.com/blog/research-junction/brand-positioning-standards-and-practices-part-4/
 https://www.decisionanalyst.com/whitepapers/marketsegmentation/ 
https://www.linkedin.com/pulse/20140518234704-16573298-brand-identity-vs-brand-image-is-there-a-difference 
https://macdovsquick.wordpress.com/2013/11/20/identity-prism-mac-donalds/ 

http://pure.au.dk/portal-asb-student/files/36188558/Rebranding_Lego_Thesis.pdf 
http://brannce.com/images/upload/global_500_2015_for_print.pdfdfina 
http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/11416671/How-Legos-bricks-have-built-a-stronger-brand-than-Ferraris-cars.html