Tag Archives: playing at business podcast

Growing An International Board Games Business With Emile Kalis, Co-Founder of Identity Games

Growing An International Board Games Business With Emile Kalis, Co-Founder of Identity Games

Episode 13 of our ‘Playing At Business’ podcast just went live.

In this podcast episode we interview Emile Kalis, co-founder of Identity Games. The company was founded in The Netherlands in the 1990s, and has since established international reach with numerous great games achieving sales success across multiple markets. In this podcast Emile talks us through his journey in the board games business, and shares key insights he learnt along the way. A fascinating listen for anyone interested in the board games business. We also find out what the difference is between The Netherlands and Holland – we’re always trying to do our bit to raise cultural awareness!

You can listen to the podcast on this link:

https://playingatbusiness.libsyn.com/growing-an-international-board-games-business-with-emile-kalis

To check out other episodes of the Podcast, please click here: https://playingatbusiness.libsyn.com/

 

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Playing At Business Podcast – Episode 12 – Marc Fayad, Splash Toys

Playing At Business Podcast – Episode 12 – Marc Fayad, Splash Toys

In case you haven’t checked out our PLAYING AT BUSINESS podcast, you can find it here: https://playingatbusiness.libsyn.com/ 

The podcast is all about the toy & games business. In the first episodes we reviewed toy product categories and looked at trends and consumer insights. The next series of episodes will feature interviews with interesting people from across the toy & games business.

In Episode 12 of the Playing At Business podcast we interview Marc Fayad of Splash Toys. In the interview we talk about Marc’s own journey in the toy business, we find out more about Splash Toys and we hear all about their new product launch: Sneak’Artz. To listen to Episode 12 of the Playing At Business podcast, just click below:

https://playingatbusiness.libsyn.com/playing-at-business-episode-12

Action Figures & Fashion Dolls – Trends, Challenges & Opportunities

ACTION FIGURES & FASHION DOLLS – TRENDS, CHALLENGES & OPPORTUNITIES

Action figures and fashion dolls are depictions of (normally popular) characters. In the past ten years or so we have seen a significant shift in  what these characters portray, this is partly due to the changing societal narrative around gender and partly due to Hollywood movies pushing their own boundaries.

These two categories more than ever reflect the prevailing times in terms of the role models children will have, and there is no doubt that these role models are somewhat different to what they were twenty or thirty years back. We actually have ‘fashion dolls’ and ‘action figures’ instead of just ‘dolls’ because the original action figure – GI Joe – was thought to have a better chance of success if it launched with the label of ‘action figure’ and not ‘doll’. It will be intriguing to see if the distinction between these two categories of figure/doll toys disappears over the next decades – personally I can’t see it, but makes for interesting speculation!

We’re also seeing a significant trend of adult collecting of figures based on mainstream and less than mainstream licenses. While adult collecting has been a ‘thing’ for as long as there have been figures/fashion dolls, we have a large scale sub category of stylised collectable figures driving the success and stock market flotation of Funko in particular.

All this and more is discussed in depth in Episode 11 of The Playing At Business podcast. To listen, just click here:

 

 

 

Not Bored Of Board Games

NOT BORED OF BOARD GAMES!

For those who have been around long enough to observe the board games category over time, one of the most frequent topics for mainstream coverage of board games is that board games are ‘making a comeback’.

Of course the truth is that board games never went away! Consumer culture in traditional board games markets has not changed so fundamentally that key board game playing occasions ever disappeared e.g. kids playing with other kids, kids playing with parents & adults playing with other adults. For sure we have seen the development of vastly more media/home entertainment options, as well as massive growth in screen time on personal devices. But the fundamental drivers of board games have never gone away.

In fact, you could easily argue that the board games category has not ever been as healthy as it is today, in the sense that there is a certain kudos to board game playing among some groups of young adults, and the type and breadth of games available to market with comparatively recent fragmentation of retail & marketing is broader than ever before.

In the latest edition of our Playing At Business podcast we take a look at the timeless board games category in greater depth, look at key trends and the future for the games category. To listen:

 

To listen on iTunes: https://itunes.apple.com/gb/podcast/playing-at-business-podcast-with-steve-reece/id1389778170

 

To listen on Stitcher: https://www.stitcher.com/podcast/steve-reece/playing-at-business/e/55398229

 

To find out more about our Toy Consultancy business, please go to: www.KidsBrandInsight.com

 

 

Play-Doh: The Epitome Of A Strong Brand

PLAY-DOH: THE EPITOME OF A STRONG BRAND

Play-Doh is absolutely the epitome of what a storng brand should be.

This product category i.e. dough that you play with is as close to being a classic ‘commodity’ product as you can get. In the simplest form this kind of dough is basically made up of flour, water and salt. You could go and make your own version of dough that you play with right now, but you would absolutely struggle to get that product listed, and you would have to compete in a heavily prive driven environment. Unless you are Play-Doh, in which case you are effectively THE brand in this space, the only shop in town from a brand perpspective. Play-Doh is the only brand in this space which can command a price premium on brand alone.

For sure, there are probaby some patents & proprietary ingredients involved to make Play-Doh dough as good as it gets, but there are many other formulae out there for similiar products. There is only one brand! Kids and parents love Play-Doh, and for very good reason.

You may not know that Play-Doh started life back in the 1930’s as a wallpaper cleaner, before becoming a leading educational toy brand. From these seemingly random beginnings Play-Doh is as protectable and strong a brand in the dough category as Coca-Cola is in the carbonated cola drinks category.

In Episode 4 of the Playing At Business Podcast, we take a look at how Play-Doh got so strong, and how it compares to the Coke brand.

To listen, just click play below:

 

To listen on iTunes: https://itunes.apple.com/gb/podcast/playing-at-business-podcast-with-steve-reece/id1389778170

To listen on Stitcher: https://www.stitcher.com/podcast/steve-reece/playing-at-business/e/54784883?autoplay=true

 

If you’d like to appear on our podcast, please feel free to drop us a line via www.KidsBrandInsight.com

 

TRANSCRIPT OF PLAYING AT BUSINESS PODCAST – EPISODE 4 – WHY PLAY-DOH IS THE EPITOME OF A BRAND:

“Playing at business with Steve Reece. The business podcast with a sense of fun. To find out more go to www.playingatbusiness.com

 

Hello welcome to episode 4 of playing at business podcast with me your host Steve Reece. Today we’re going to look at business lessons from the iconic toy brand Play-Doh. We’re going to specifically look at why Play-Doh is the epitome of everything a brand should be, at least in my opinion. So I guess the first thing to do is to define what is a brand, what’s the purpose of a brand. So just searching around on the internet I found a few different definitions. But the first one that I came to and the one that I liked best is that a brand is defined as a type of product manufactured by a particular company under a particular name. Originally obviously branding comes from when cattle would be branded with a particular owner’s name or mark. So I think between those two we can kind of get an idea of what brands are. Obviously in today’s consumer society brands take on all kinds of meanings and values. Often way beyond the the value of the product itself.

 

Now as consumers you know common sense would tell us that own label products are close enough to being the same as branded products so as to make it fine. So a plain handbag will still carry stuff around just like a designer handbag. But it doesn’t have kudos, it doesn’t have status, it doesn’t have all those values that are associated with it. You know you could ask surely pasta is pasta, surely breakfast cereal is breakfast cereal. Well yes and no. I mean at the end of the day how much difference are you really going to notice in the taste and eating experience. I mean that’s probably a debatable point and there’s been all kinds of taste tests around foods to suggest that there’s not as much difference as we might think in some of these areas. But actually it is so much more than that. You know it’s about image, it’s about association with a brand. It is about relevance of the brand. You know you could ask surely cola is cola and I think that the non-toy example I’m going to use in this podcast will be Cola. Because I think the classic example is you know you can have Cola, but there’s only one Coca Cola. There’s only one Coke and at personally I’ve done blind taste testing exercises/projects on colas before. Don’t ask me why but the reality is I struggle to distinguish between the different types. But if you put me in a store I will probably 99 percent the time buy a Coke product and that is mostly about brands.

 

When it comes to products for kids toys in particular parents want to know is this safe, is this fun, and is there some kind of benefit to my child from this. Can this help me to feel like a good and a worthy parent? You know there may also be a degree of the kind of nostalgia like why I played with this when I was a child – now it’s my child’s turn to enjoy the same fun and to create those same memories as I did. so that’s kind of a general note on brands and anyone who listens to this Podcast will soon work out that I’m a huge advocate for brands. I’ve worked on huge brands, I’ve worked on billion dollar brands. I’ve worked on two hundred thousand dollar brands. I’ve worked on toy brands, I’ve worked on brands across finance &  FMCG and at the end of the day the one thing that companies and brand owners can know is that having strong brands with positive associations and good products is a better success formula than just having good products. So to talk specifically about Play-Doh, a long time back when I had a few less gray hairs and probably a few less age lines on my face, I was once the European brand manager for Play-Doh. I say this with some pride but not with any great fond memories in the sense that I wasn’t actually very good at it. So frankly I didn’t last in that role for all that long. However the brand itself has lasted and it’s lasted way beyond my lifetime or the lifetime of most people listening to this.

 

So one of the fun things about looking at something which has so much positive heritage is the amount of fun facts you can find online and I mean I’m not going to repeat all the fun facts I found. Because I’d been going for hours. but a couple of things that I particularly liked that I found out while researching Play-Doh, firstly it started life as a wallpaper cleaner in the USA in the 1930’s and now there’s not that many toys that you know that they come from such a functional, & I guess frankly boring background, but Play-Doh does. Eventually it was used for educational purposes and turned into the toy that we know today. Over time Play-Doh had a number of different mascots and I particularly remember the Play-Doh Pete character from my time working on the brand back in the early noughties. More recently there’s been a use of characterized cans, so the cans or the tubs of Play-Doh themselves come to life in the adverts. One of the funny things about Play-Doh you’ll find is the amount of huge metrics related to it. When I say metrics I mean kind of data or numbers and I’ve seen maybe half a dozen of these and all of them are amazing. So for instance according to Play-Doh’s official website to date there’s being roughly 700 million pounds of it produced, which would wrap around the world 300 times. There is over 100 million cans or tubs produced per year.

 

Now the interesting thing is actually though aside from all these fun facts and really this is the number one reason why I wanted to do a whole podcast episode on what Play-Doh can tell us about brands is that I mean even the Play-Doh official website will tell you that this massive huge global brand with all this longevity is actually the product is primarily made of flour, water and salt. They can’t get anything more basic than that and you can’t get anything that in theory should be harder to create a kind of a huge powerful brand out of. But obviously you know Play-Doh has done that. So I mean my understanding is from online research there is a proprietary formula of some kind with the Play-Doh formula. I suspect there are some patents involved there. But you know the reality is what isn’t seemingly restricted is the use of flour, water and salt. so there are plenty of copycat products out there and in fact if you or I decided tomorrow to make our own version of dough that you play with, we’d probably find it relatively straightforward to A, find a factory that could make it for us or B, to come up with our own kind of formulation.

 

So really the big question is how you make a brand which has meaning, which has life, which has both tangible and intangible value from the most basic ingredients you’ll have in your kitchen. So that’s we’re going to look at next. You know how Play-Doh leads this category. In fact you could even argue it is dominant versus copycats and generic products and all that kind of stuff.

 

So I think the brand is the number one differentiating factor and the interesting thing I guess is you know it’s a preschool product and normally preschool items have quite basic branding. They tend to use primary colors, because that’s what children, the development stage of preschool children responds to best. But it’s still a strong and clear kind of visual identity despite that. So you know if you look at the logo, I mean it’s a very very simple logo in some ways. But the colors are very striking. They’re very distinctive. The font of the logo is also very distinctive. The color of the writing is also very distinctive. So you’re not in any doubt, if you pick up a product on a shelf and you have a generic version and the official Play-Doh version. You know which one is the official Play-Doh version, because of the branding. But also because of the name. So the interesting thing is you know dough that you play with is one thing. But Play-Doh. It’s not spelt play-dough. Its spelled Play-Doh and because that’s not a natural word or it’s not the word that people would use. There’s some level of kind of distinctiveness and I guess it protects ability within that also and I think the other thing though and this is kind of very common for massive consumer brands. It’s not just the visual symbols that really make these brands stand out. It’s actually also a case of having best-in-class product innovation.

 

So I think one of the interesting things about the toy industry in general is that there’s a huge amount of new products every year. Every major brand is expected to have new products each year and so Play-Doh in particular in a space where you’ve got a very basic dough is exceptional bringing out new versions which add value and increase the purchase price point, which is what the brand owners and the retailer want. But also the play value for the consumer by adding plastic parts. Whether it’s extrusion devices or themed sets. Play-Doh really leads this category in terms of product innovation.

 

But they also need this category in terms of perennial classic products. So back in the early noughties when I worked on Play-Doh briefly, Dr. Drill and Fill was one of the major Play-Doh products. Because it was kind of iconic, it was fun. It uses something that children can relate to, which is a trip to the dentist. Whether that’s the entirely positive association or not doesn’t really matter. It’s just something that they know and they can replicate what happens in the dentist in a playful way. So funnily enough I’m just looking at retail websites as we speak and Play-Doh Drill and Fill play set is still on sale. Nearly 2 decades since I worked on the product and it was one of the biggest products then, and is still in market today.

 

So I think that’s the other thing which brands tend to have is. They tend to have iconic perennial classics and timeless appeal. it’s not just Play-Doh, if you look at most brands they have this. I think the other thing, the third factor I would say that allows Play-Doh in particular to lead the category versus kind of copycats is the best-in-class marketing and advertising. Now the brand owners Hasbro are renowned for leading the toy industry in terms of standards in terms of quality and that sort of thing and also in terms of the marketing and advertising. again generally speaking you know more generic, more kind of ‘me too’ products will tend to have more ‘me too’ type of advertising where as classic brands, major brands will tend to have really really strong branding featured throughout this. But also you know the quality of the creative, the originality is normally category leading as well and that’s certainly the case of Play-Doh.

 

I think the other thing is all those things lead towards I guess the end result. Which is where we are today with Play-Doh which is that it’s about consumer belief in the brand. You know they believe, consumers believe Play-Doh stands for something. They believe it will have product quality, product integrity. You know what they’re getting or at least they think they know what they’re getting. You don’t necessarily get that assurance from own label. You know I may be able to find, well I’m pretty sure I could find cheaper dough somewhere. You know if I went into a discount retailer I would probably find a selection of cheaper products. But I don’t necessarily get that assurance that I’m looking for, especially since I’m about to put a product in front of my children. So if it’s a certain own label you know if it’s a high-end retail brand, then maybe I will get some reassurance because I will presume these guys would not be crazy enough to have a poor quality product. But I don’t necessarily get that if I’m in all forms of retail and obviously you do tend to get that from brands.

 

So I guess the other thing is just to look outside of toys at how this example plays out elsewhere. Actually Coca-Cola again is the classic example. So it’s kind of the same thing with Coke. There were many colas. You know that if you went into any retailer which sells drinks you would probably find different colas. But the reality is there’s only one Coke. Now we could argue all day long and frankly I’m sure the Coca-Cola Company and the brand owners would argue all day long that there’s something fundamentally different. But basically it’s a carbonated cola style beverage. It has a certain type of flavor, perhaps no one can replicate the exact flavor, but it’s a kind of a carbonated drink and we all know what a cola should roughly taste like. But the reason why there’s only one Coke, is all about brands. yeah okay there’s a huge amount of stuff in terms of distribution strength, marketing strength, product pipe line, all those kind of things that I’m not saying that they’re not important – absolutely they are. But at the end of the day the reason why there are many colas but there’s only one Coke is because it’s a brand and it means something to the consumer, it means something to the retailers and you know and therefore the same applies outside of the toy category as well. So in terms of brands, I’m often asked for in consulting for companies. Like what are the characteristics of a brand or actually more often when people tell me they want to build brands and they asked me if their brands are any good, they sometimes fail to have these three things:

 

  1. A brand should be protect-able.
  2. It should be own-able
  3. And it should be leverage-able.

 

This is really important. Because many people think they have brands but actually a lot of the time what they have is products with a logo. So these 3 things are really important.

 

The first factor is protect-ability. So let me preface this section with a declaration that I am absolutely not a lawyer. I have no legal qualifications or legal training whatsoever. Anybody taking anything that I say is legal advice or guidance would be absolutely barking mad. Please don’t do that! This is just what I’ve observed, but take all necessary counsel at all times please. So let’s talk about flexibility trademarks and patents which I guess are one of the fundamental parts of this. I’m not going to go into this in detail, because you can Google what these things are if by any chance you don’t know. But I just want to point out some of the really interesting things, in practical terms about the two brands which I’ll be talking about play-doh and Coca-Cola. So trademarks effectively is about protecting identity. Okay so one of the major kind of protections for a brand like Play-Doh would probably be the fact that the name is quite distinctive, the logo is very distinctive and therefore there’s an identity there which can be trademarked. But it’s more than that as well. I mean you can try and take this to the furthest possible degree. So when I was researching this topic online I found a trademark application had been submitted for the scent of Play-Doh. I’m just going to read this out. The application listed some or at least the report I found stated that the application listed something like a unique scent formed through the combination of a sweet slightly musky vanilla light fragrance, with slight overtones of cherry and the natural smell of a salted wheat based dough. Now I have actually no idea how protect-able that would be. I don’t know enough about a scent, I don’t know enough about trademarks. In fact I probably don’t know much about anything (!), but that’s another point. The reality here is that you know the brand owner has gone to great lengths to try and protect this and obviously the scent being quite a large part of the consumer experience. It is understandable why they would go for that. Patents are probably outside of the scope of this podcast to a degree. But my understanding is there may be patents involved in terms of the formulation and the process of producing Play-Doh.

 

The second thing we need look at is own-ability. So where you’ve got legally own-able brand intellectual property, it can be bought and sold and often for hundreds of millions of dollars. So when I talk to business owners about this topic they are so much more interested in who’s buying what product from them, what there sales are &, how’s the P&L look. But actually in the end if you own brands you have a number of benefits. You can continue to deploy them for your own benefit to continue driving sales. You also actually have a tangible asset that can be sold.

 

So just as one example this is a recent example of the time I am recording, Hasbro recently announced the acquisition of the Power Rangers brand for a reported  (I don’t know if this is entirely correct), but it was reported a price of $520 million usd. Now there are some out there who would look at Power Rangers and say it is a group of martial arts enabled teenagers in brightly colored suits. Okay you could and people probably have made that point. But the reality is Power Rangers is a brand. You know it’s a brand because those brightly colored suits are protect-able, and they are own-able. They are distinctive, they are distinctive to Power Rangers. The style of the weapons used in the fighting scenes are very distinctive. So the reality is there is hard tangible value in owning brands. You know another example to go back to Coca-Cola. Coke paid seventy six million British pounds which I think at the time of recording is around $110m usd. I might be slightly out there. So again effectively that’s a company with consumer products, very good products in my personal opinion. But in the end Coca-Cola could easily have made similar products should they have decided to with all their corporate resources. But there’s significant value in the brand itself and even in the ethos of the company. So there was a business case for them making that acquisition. In terms of the brand owners obviously they build something from being a nice drink to being a highly valuable brand and that’s really my point.

 

Back to Play-Doh ,I would personally very sincerely doubt that this would ever be on the cards in all likelihood, but if the Play-Doh brand was sold today, in all likelihood it would fetch hundreds of millions of dollars. You know as this goes this is a brand which is basically based on a kind of a formula mostly containing flour, water and salt. So brands are really really important for business. The third factor in terms of what brands should be is leverage-able. Or effectively this comes down to brand extension. So obviously launching new products is risky, because most new products don’t really work to the extent expected. It’s hugely expensive to develop them, it’s usually expensive to research them, it’s usually expensive to market them, to buy the inventory and there’s an opportunity cost in terms of your ability to get them onto shelves versus other things you could sell. So it’s very risky…but brand extension offers the chance to take something you already have which is proven and to try and extend it in a different direction to create another new product which will also sell and compliment, at least in theory it should complement the main product that you have and not cannibalize those sales and when you built a brand to the strength and to the reach of Play-Doh or Coke, it can make sense, it can certainly make sense to brand extend. The considerations are to identify a slightly different consumer segment in terms of demographics or the same people with a different need, a different time, different purchase occasion – any of these things can lead towards good brand extension products.

 

Now one of the major observations I would make here is that it’s often a mistake to presume that a brand extension will deliver sales on the same scale as the product or the item that it’s extended from. You know naturally speaking you know if a tree kind of propagates, if it drops seeds eventually what comes from that could end up being the same size. But it’ll take an awful long time. But sometimes brand owners and companies blithely wander in expecting that because it’s from a certain brand. It will sell huge kind of hero levels of products from day one and it’s not always the case.

 

Hopefully this won’t sound too arrogant, but once upon a time I came up with my own lower brand extensions. so Reece’s law of brand extensions is that effectively if you have one parent item you try and extend it, if you expect or if you need the extended product to sell more than one-third of the parent product for it to be a success, you are probably setting yourselves up for failure. I’ve worked on brands where brand extensions have outsold the original. I’ve worked on brands where brand extensions have achieved maybe 5% of the sales of the original. So you know it could be anywhere in between. The reality though is that as a general rule brand extensions should be expected to sell a fair bit less than the main SKU – unless there is a huge latent consumer need or retail demand in a direction which is different from your core product, which you can’t rely on.

 

So as far as brand extensions are concerned you know obviously Play-Doh has various iterations. You don’t just buy the cans on the tubs of dough. You buy various play sets with added characters, with cutters, with big physical play sets. You can buy the work stations or the tables that you might play with Play-Doh on.

 

You don’t just have Coke, you have Diet Coke. You even have Diet Coke with cherry flavor or lime flavor. There you’re talking about a brand extension of a brand extension. I don’t know quite how Reece’s law of brand extensions applies to that. But if you ever wanted an example of how a brand can be successfully extended, Diet Coke is THE example! Coke Zero would be another example. They’re all brand extensions from the core product and brand. As far as Play-Doh is concerned there’s been an app in recent years which actually has the most amazingly catchy line ever. You should you go and listen to this, I guarantee you will struggle to get the jingle out of your head! There is also reportedly a Play-Doh movie in the works which could further build the brand and open up other commercial opportunities and potentially you know hugely enhance the value of the Play-Doh brand.

 

So I guess in summary if a company can make a brand which is effectively based on a mixture of flour, water and salt into a huge highly valuable brand with retail listings around the world, with brand extensions and all the things we expect from a major brand, then you should be able to make a brand out of nearly anything!

 

My key question to anyone listening to this podcast is are you building any brands? Should you be building any brands? What could brands do for you? What kind of brands should you be building?

 

But also what can you learn from looking at how other people have built brands and I think in the end if you take that approach, you’re far more likely to achieve the success which you’re looking for, but perhaps more importantly also the longevity and the stability, because brands tend to hang around for a long time if they’re successful.

 

So that concludes Episode 4 of the Playing At Business podcast. I’ve been your host Steve Reece. For more on us please feel free to go to www.KidsBrandInsight.com  Please do feel free to get in touch and let us know with future topics you might want us to cover. In the meantime thanks and bye.

 

Playing at business with Steve Reece. The business podcast with a sense of fun. To find out more, go to www.KidsBrandInsight.com

 

 

Monopoly – THE Board Game & A Great Business To Boot!

MONOPOLY – THE BOARD GAME & A GREAT BUSINESS TO BOOT!

All puns aside (the more observant of you may have picked up on the Monopoly/boot link, groan!), Monopoly is THE board game that nearly all families buy for and play with their kids. Monopoly is a huge commercial success, and perhaps more impressively that success has been sustained and furthered over many decades.

Monopoly is more than just a game though, as well as being a cultural icon it also offers many interesting business lessons, both in terms of the game concept itself and in terms of the business that has been so successfully developed around the game.

In Episode 2 of our Playing At Business podcast, we take a close look at Monopoly from a business standpoint.

To listen in, just click here:

 

If you’d like to find out more about the podcast, you can visit the Podcast website here: www.PlayingAtBusiness.com

 

PODCAST TRANSCRIPT:

Playing at business with Steve Reece. The business podcast with a sense of fun. To find out more go to www.playingatbusiness.com

Hello and welcome to episode 2 of the playing at business podcast with me your host Steve Reece. Today we’re going to be looking at what the Board game Monopoly can teach us about real-life business.

 

Now nearly everybody has heard of Monopoly, nearly everybody has played Monopoly. It’s the ubiquitous board game. According to a quick bit of internet research on my behalf more than 250 million copies of the game have been sold. Although I actually suspect it might be more than that. But anyway that’s the best facts I can find online and it’s also reportedly been played by more than half a billion people. Again I suspect the real number is significantly more than that as well. But still that’s a huge huge set of metrics for what is not the newest of gaming genres. So I’ve counted roughly and I’ve come across at least a thousand versions of the game of Monopoly. Now I can’t think of many things where there’s more than a thousand versions. But Monopoly is obviously one of those and it’s a particularly personal story for me Monopoly in some ways and like most people because I loved playing board games as a kid, and I played Monopoly as often as I could as a kid. I remember playing a two day long game with one of my friends and we would take a break for tea and take a break for supper and then we go to sleep and then we’d wake up and play it. When one of us went out of the room to go to the bathroom, one of us would steal maybe a 500 note or a hundred note and that’s all the fun of playing Monopoly! Later on in life in the early noughties in fact, I was lucky enough to somehow end up as the European brand manager for Monopoly and that was a fantastic job – one of the best I’ve had.

I was fortunate enough to work with some really good people and together we developed & launched lots of different versions of Monopoly, which allowed me to gain a higher profile, to spend quite a lot of money on marketing collateral development and advertising, yeah quite an experience. I also led a team who launched a concept called My Monopoly, which at the time was cutting-edge. We’re talking about I’d say roughly 2001. My Monopoly was a customized Monopoly board game where you would fill in the street names using your own text online and order via the internet. which at that point in time was about as cutting-edge as technology could get apparently, or so the web development agency told us at the time and judging by their fees! It was a great deal of fun to work on that project. In fact one of my most vivid memories in toys was sitting in a room brainstorming the list of words which would have to be screened out, because of appropriateness or being too sweary for a family board game – that was definitely not a dull meeting!

 

So I do have some personal history with the Monopoly board game both personally and professionally. I won’t however be giving away any trade secrets and so my. Frankly not that I really know any that would still be relevant now anyway nearly two decades later anyway! But I will be looking at what businesses in general can learn from the story of Monopoly the brand, and from the game itself.

So just a quick snippet of history. A similar game to what we now see is Monopoly existed around the turn of the 20th century, called ‘The Landlord’s Game’ and it was actually created as a game to show that trying to create monopolies was wrong, I believe from what I have read that the game author thought Monopolies were not a constructive way for society to be organized. So this game was around for a couple of decades actually and then a traveling salesperson called Charles Darrow repackaged/tweaked the formula & changed the emphasis to actually aspiring to a monopoly,  and started to sell the game under the brand name of Monopoly. He started to do pretty well with it and eventually licensed it to Parker Brothers. Now in the height of the Great Depression when money was really tight across America and obviously there was a lot of destitution, I guess money was the national topic during that period. Between Charles Darrow and Parker Brothers they sold more than one-and-a-half million copies in the year which is a phenomenal amount, and by the way that’s just in the USA. So obviously the heritage of Monopoly the game goes a long way back and this is one of the big things you’ll find with a lot of brands which have survived the test of time. Their history maybe started in different times, they have to evolve and adapt in order to stay relevant for today and Monopoly is a brand that’s done that particularly well. So I’m not here to talk about the specifics of Monopoly the board game. Although we could do that. We could look at your best chances of winning. We could talk about how people love to cheat when they play Monopoly. We could also talk about some family arguments when people play Monopoly (!). But that’s not what we’re here to do. We’re here to look at the business lessons from this amazing brand.

So lesson number one for me from Monopoly is you won’t get a more powerful brand than Monopoly in a couple of ways. So firstly, it’s hugely extendable. It’s what I would describe as a platform brand – I guess in a slightly similar way to the Lego brand which we looked at in the last podcast. So you can overlay whatever theme, whatever license, whatever location you like onto Monopoly and the game itself will still work. So in a way you’re not restricted to just one iteration. That’s how you create huge brands by creating something which you can extend sideways and upwards and just stretching in general. I think also in terms of brands,  identifying/ownable factors is a primary consideration. And Monopoly is so distinctly Monopoly in terms of branding and iconography. Which A, makes a brand legally protected for a start. but B, also gives it a kind of consumer recognition in which helps to keep selling products based on that brand or derive from that.  The look of the board, the Monopoly brand itself, Mr. Moneybags the brand mascot are all really good factors which make for a really really strong brand identity and then I guess the other thing which you’d have to say is over time this has had to evolve still. Design has changed, the same Monopoly game that looked right for the times thirty years ago, maybe even a bit longer when I started playing or even 50 years ago.  That same look would not work today. So over time it has evolved and again that’s another indication of a really strongly managed brand.

I think the other thing which is really interesting for me about Monopoly is it is a global phenomenon. Now for those of you who don’t know very much about board games, board games in general are a cultural product. It’s a reflection of some kind of cultural element.  It’s a social experience more than anything and so you do find that board games tend to vary a little bit by market, because the culture varies from market to market. So without getting too geeky on this subject, Germany would tend to have much more in depth more strategic games. UK likes shorter games, especially games based on game shows. There are different gameplay types and genres that work to a degree better in each market. However there are some products and some brands in which seem to usurp all that and Monopoly is definitely one of them. In nearly every market you can find, you’ll find that Monopoly works as a board game and actually one of the more interesting things is to see having rolled out to those few new markets that haven’t had it in the last couple of decades and to see it working even as well there is a new introduction in most cases in the vast majority of countries and the interesting thing is in terms of the brand actually I always talk about purchase pattern and purchase dynamic.

 

I think a lot of businesses forget that you’re looking for a replicable formula. okay so if you’re selling, I don’t know if you’re selling soft drinks you have a particular consumer and you have a particular purchase dynamic and you better know what that pictures dynamic is if you expect to be able to sell more to them. If you expect to know what the right messages are for your communications and I think one of the interesting things with Monopoly is the nostalgia factor. So parents tend to introduce their kids to Monopoly because they played with Monopoly when they were kids themselves and so you get this rose-tinted spectacles perspective.  I remember the game I mentioned where I played it for two days with a friend of mine. I mean that’s like a gold memory and so parents will introduce the game to their children from this frame of reference with a real sense of reverence & this is something special I’m about to introduce to you. Therefore it’s quite a strong emotionally driven purchase and also experience to introduce your child to the Monopoly board game for the first time and I think that’s the biggest thing you’ll find about most successful brands in whatever industry. If you look at apple, if you okay Coca Cola, if you look at fashion brands. It’s actually that emotional reaction, the affinity that people have which tends to guarantee huge sales and also longevity.

So moving on to the business of Monopoly, it’s no secret that Monopoly is one of the top-selling board games if not the top-selling board game depending on how you define board games.. I think the other interesting thing though which a lot of people would not necessarily know is that there are numerous multi-million dollar companies around the world whose core business model is producing Monopoly versions under license from Hasbro, the brand owner. So effectively Hasbro is gaining revenue from niche items that they wouldn’t otherwise necessarily get around to looking at.  It doesn’t make sense for a major global company like Hasbro to look at very small sales opportunities. but perhaps it does make sense to bundle all that up into a partnership for North America or for the UK, or Germany etc. Hasbro and their partners have clearly & reportedly done really well with that business model.

 

Lesson number two from this podcast is that successful companies build and leverage brands.  They don’t just sell products. They build brands and then they leverage them and if they can’t find good ways to exploit opportunities themselves, they find third parties to help them do it to help them monetize the brands. So with Monopoly in particular you would be able to find a multitude of digital versions. You’d find some gaming versions, like I said you find the local edition. So wherever you’re sat right now, the odds are if you’re in a major Western market, there’s a local Monopoly version not too far away from you. so yeah so I think it is really important to acknowledge that sometimes companies can’t do everything themselves and actually the kind of the success factors is to not take on opportunities that A, don’t make sense in terms of the scale of them for your operation. But also that you really can still leverage these opportunities via partnerships and that’s a critical thing in business in general.

The third lesson from Monopoly is that it has already been around for more than 80 years and it kind of has proven its longevity & also its timeless appeal. Even in this day and age of social media and changing consumption of content and just all these things that have changed in the last decade or two, Monopoly is still succeeding.  Today’s generation of kids has complete screen time overload, so Monopoly still is relevant as it ever has been in the sense that today’s parents want to find antidotes to all that screen time for their children and it seems pretty clear that Monopoly will pass through to these next generations and obviously the graphics will need to be changed as design styles evolve and also the themes and the licenses. What we see today may not be the same themes and licenses that will be around in ten or twenty years’ time. But what you can absolutely guarantee is that Monopoly, the board game will still be here. Monopoly the brand will still be here and that’s a huge lesson.  It’s so difficult sometimes to build things up to any scale. So if you build something up for a flash in the pan, it’s a lot of work for a very short period of payback I guess, versus finding a perennial hero like Monopoly.

And then I guess the business lesson which is perhaps slightly outside of the scope of this podcast really. But I think it is worth recognizing is the gameplay premise of Monopoly itself. There are many things that we might want to teach our children and the first thing that Monopoly and also other board games which include money helps to do is to get children used to the concepts of money and to playing with money and to count and to try and understand that people in the world may try to take financial advantage unless you’re relatively savvy. But I think more than that actually there’s quite an advanced lesson in the gameplay of Monopoly in terms of how to invest especially in real estate and to buy property, to charge rents, to manage cash flow versus investments and also to do all of that in a really competitive situation where you can kind of risk losing it all. So yeah that’s kind of the fourth ‘business’ lesson that I would identify within Monopoly.

Just before I move on to the summary, I think one of the questions I have been asked most often is what’s my favorite version of Monopoly myself having interacted with it over such a long period time and I’d have to say there’s a Disney version of Monopoly that I worked on which launched in roughly 2000 or 2001. That was a great product, aesthetically possibly the most beautiful product I’ve worked on, very glitzy and quite an experience. A learning experience for me to work on with a great team and a great success commercially as well. So there you go, for anyone who was interested that’s my personal favorite version of Monopoly! So to summarize now I guess I would say that Monopoly is clearly a global cultural icon, but actually more than that, it’s a thriving business model in its own right and there’s a lot that we can learn from Monopoly. But just to reiterate the key lessons I see, the first thing is the importance for businesses to try or to strive to build timeless brands and to manage them well.  We can learn a lot from how Hasbro have managed Monopoly successfully for longevity despite these changing times. We can learn from how they’ve set up to deliver revenue from their brand intellectual property by a third-party partnerships where it wouldn’t have made sense for them to do it themselves. And of course there’s the final lesson, the embedded lesson in terms of a beginners guide to how to invest in property. So that’s Monopoly. We will be doing more in this series. So please stay tuned. Please give us a review if you like this. If there’s anything in particular you’d like us to cover on future podcasts, please do feel free to get in touch…and that’s all for now. Thanks and bye.

Playing at business with Steve Reece. The business podcast with a sense of fun. To find out more, go to www.playingatbusiness.com  [Music]

 

Lego: A Great Business And The Category Leading Brand

LEGO: A GREAT BUSINESS AND THE CATEGORY LEADING BRAND

Lego is a great business – hugely strong business management practises, and a very highly respected employer.

Lego is also though the leading proponent of brand management in the toy industry! There is no doubt that Mattel, Hasbro and others have really strong brands and they manage them very well on the whole – but they don’t have a single brand which adds up to top 3 toy companies in the world, but the Lego brand alone is routinely in the top 3.

If you want to look at brand extension strategies, carving out sub niches for your brand or long term brand management you will struggle to find a better example than Lego in any category or industry.

In Episode 1 of the Playing At Business podcast, we take a look at what makes Lego so strong, and importantly what other businesses can learn from Lego’s excellence and long term success. Just click on the ‘Play’ icon below to listen.

 

 

 

To listen on iTunes, just click here: https://itunes.apple.com/gb/podcast/playing-at-business-podcast-with-steve-reece/id1389778170

For more information on the Playing At Business podcast, go here: www.PlayingAtBusiness.com

 

TRANSCRIPT OF THIS EPISODE:

Playing at business with Steve Reece. The business podcast with a sense of fun. To find out more, go to www.playingatbusiness.com

Hi and welcome to episode 1 of the playing at business podcast. The business podcast with a sense of fun. I’m your host Steve Reece and today we’re going to be taking a look at Lego. Now Lego is very much the poster child of the toy industry. It’s one brand, but it’s actually the biggest toy company with that one brand. So all the other toy companies have multiple brands in order to add up to a similar or smaller size to Lego. So in terms of the toy industry, it doesn’t really get better than Lego and there are so many learnings which any business can take from Lego. Not just toy companies but any business and we’re going to run through some of these. The first of which I like to look at is longevity. So I think one of the things that I’ve experienced most in business is the expectation and the push for quick results. You know those managing directors or for the entrepreneurs out there those kind of inner voices, who want instant gratification, instant payback for effort, for resources, for money invested. The reality is that actually most businesses don’t work that way and they don’t grow that way. So Lego started making wooden toys. The founder actually started making wooden toys back in their 1930’s. So whilst we might be looking at the biggest toy company in the world today, obviously it didn’t start from that position and it also didn’t get there overnight. so I think above all when I’ve consulted with companies of all sizes, the number one thing that actually sets them up for failure is the fact that they expect instant results and I think that Lego is a classic example of a company that’s got to the very top of their game. But they’ve done it over decades – actually nearly a century. So I think really the bottom line is you know it’s about growth and it’s about persistence and you know we can very definitely learn some of those things from Lego.

 

Funny enough actually when I joined the toy industry about 20 years ago now at the time of recording, Lego had some pretty big problems. They were at least reportedly supposed to be near to bankruptcy and had reportedly lost their way. so as often happens in these cases new leadership came in and one of the big things that turned Lego around reportedly and certainly observation from what I saw was the Lego Star Wars video games and what this allowed Lego to do was to move from being something that was very much loved by parents, because of all the positive benefits of that kind of play of which there are many. Not least of which is its kind of proven direct path towards the science and engineering careers later on in life. so obviously the challenge was that whilst kids liked Lego at that time and I used to do a lot of consumer research in this area and you would find the parents were very hot on Lego and the kids liked it, but the Lego Star Wars video games made the kids go from liking to loving Lego. Suddenly Lego became cool for kids. Suddenly Lego became an aspirational brand for both kids and parents somehow which is actually a lot of the magic of what they’ve done – managed to maintain their huge parental approval at the same time.

 

It depends on what you’re doing and who are your consumer is in each individual market. but in the toy industry obviously you’re looking at kids and parents and you tend to find you get what we would call pester power driven products where kids are the primary driver for purchase. Because they say you know mom can I have this, dad can I have this. But actually you also get parent different purchases like a board game, a craft kit, something which parents might see as being more worthy and so Lego kind of achieved the holy grail of their segment by getting both of these two parts of their consumer duopoly to love the brand.

So I think there’s a huge amount that can be learned from this and in the end actually Lego becomes one of the best examples of brand management in the business world today. Aside from the toy industry, you won’t find a better example of a brand that is what extended, that uses co-branding, that uses segmentation and that uses multiple platforms. So there’s a lot that most businesses can learn actually from the way that Lego had done this and for those of you who are less aware of the details of what Lego do, I mean it’s effectively a what I would call a platform really more than anything and that it’s a physical brick. You know at the end of the day that’s really the core of what it is and you know these bricks can be used to build things. Now different consumers want to build different things and they have different motivations for building these things and one of the things that’s most clever about Lego is that they are brilliant at creating new sets, new sub brands and new extensions who offer something to all of these different types of consumers. So I’m just going to click through the website and call out a couple of the different kind of subsets or extensions. So Lego architecture, now this would be probably more appealing to kind of certainly older children if not teenage children and also adults. Because it’s effectively creating and building replicas and Lego City which is kind of one of the core building blocks, and one of the core versions of Lego. It has kind of catch-all appeal to all children. Moving through we’ve got Lego super heroes. So obviously here they use licensed characters as brand extensions. So on the website they feature the Superman version. But there are other versions as well. Obviously one of these kind of things appeal to children. We’ve got a Disney range, DUPLO for younger kids against segment, Elves and Friends. Now this is a very controversial area. Because effectively Lego were targeting girls with these sets and I’m not going to go into the rights and wrongs of that…but the reality is that you know predominately those sets are bought by or for girls and so in each of these segments Lego has works out you know what are people looking for. Specifically what they’re looking for Lego to do in these spaces and then they’ve applied their underlying system to this.

Now actually Lego have a modular structure to what they do. So effectively if you’re a Lego designer you know you don’t just get to create everything from scratch. Because they have factories set up to produce certain types of bricks and the more types of bricks they produce obviously the less efficient Lego becomes. so let’s say you’re creating a Star Wars or a Batman or a Lego friend set, you maybe only get a couple of bespoke pieces that you can create from scratch. so everything else you’re doing is with color and maybe is clever design of what you’re doing and then very very purposefully utilizing these couple of extra blocks that you like.

 

One of the other really salient points is actually Lego was protected from some competition by a series of patents. Now I am absolutely the last person on the planet who anyone should listen to about legal matters and I have no expertise in that area. But I do know because it was widely reported that Lego had significant protection from patents until relatively recently. Lego was reportedly supposed to really suffer from competition once the patent protection expired because then anybody could make plastic bricks for play of a similar size and look as Lego’s and actually that has happened – there are businesses out there now who are multi-million dollar businesses, with some companies doing tens or even in one case and hundreds of millions of dollars of business based on doing a similar type of product with a different brand on it. Lego was supposed to suffer from all this competition, but they’ve actually gone from strength to strength by better utilizing the brand and more than anything actually, it’s almost made Lego raise their game and really push some of these areas. Because they know that if they don’t get in and own each of these areas you know a competitor could go in there and do it instead of them.

The only area, certainly in my time of knowing and looking at Lego, where you could argue they potentially missed a trick or if not missed a trick, at least perhaps failed to take the right steps would be in the area of digital revolution. Now one of the biggest kind of phenomena in children’s entertainment in the last I guess 10 plus years is obviously the digital revolution, the internet revolution. App games in particular allow for really addictive easily accessible play experiences for the children. so I guess you know if we take ourselves back 10 years, 15 years you know I’m sure Lego had aspirations to own the digital space for brick based building in the same ways they kind of owned the physical one. But actually the predominant player in that space today is actually Minecraft. Minecraft being a 3D block based, open play app game, which can be played on PC as well. Minecraft is absolutely loved by kids and there are several reasons why this is so loved by kids. I mean the reality is firstly let’s get this one out of the way. It is based on a kind of play that is known and loved by both kids and parents like we’ve already said. But I think a second thing and I think this is where you know again we go outside of the toy industry and any business can learn from this is the kind of presumption that you know almost a sort of them being held hostage to one’s existing success. In a sense that you know when you move something to a new platform, to a new format you have to challenge your own perception of what your brands are and what your business are and you know perhaps Lego didn’t quite address that as aggressively as they could have done. I don’t frankly know [12:28 inaudible] the reasons for that. But I think what Minecraft has done is actually given the consumer exactly what they needed in this day and age. Which you know if you think about children of bygone generations, they had actual physical freedom. You know they could run around and play outside and they’d maybe be told to be back home at certain time. Children today in most Western markets tend to have far less freedom than that you know they tend to have more structured routines you know due to stranger danger & all these kind of problems and the recognition and high awareness. So they don’t roam as free as they used to do.

What Minecraft allows them to do is to roam freely in the digital world and I think actually this could have been an existential threat from Lego’s perspective. You know they’ve kind of been both lucky and also effective at mitigating that. Firstly pragmatically they clearly realized that perhaps they’d missed a trick. They licensed the rights to do a physical version of Minecraft in blocks that stops anybody else doing it and taking away market share from them in the physical brick building space. So you can get a Lego Minecraft set. Which as far as I’m aware are very popular. So in a sense they kind of shut off that threat to their business. But actually you know the reality is physical play is not going away despite what you might hear or you might read. So in the end they’re going to be safe and you know more than safe. You know they’re going to thrive because now parents need an antidote to screen time. But actually what Minecraft has done is highlight this classic up and coming opportunity. which is to jump on a new platform and to do whatever it takes to make it work regardless of your brand vision, regardless of existing businesses, regardless of brand guidelines and any of these things. so I think if you had to pick one error, Lego perhaps missed an opportunity to capture another huge base in this whole digital kind of app gaming world. But they’re not doing too badly still so and I’m sure they’re not crying over that spilt milk!

Actually which leads me on to the next point, which is content and specifically I guess movies and what we used to call ‘TV content’. I’m not quite sure what we would call it nowadays and Lego has moved I guess maybe as a matter of learning from kind of missing the boat a little bit in the Minecraft space and they’ve moved towards being more of a true holistic brand management company. So they’re not only focused on their physical play pattern quite to the degree that they were. Obviously the Lego movie series has been very successful. They’ve been co-branded and obviously these drive both the physical Lego products, but also the Lego IP further into the lives of kind of children and people in general. This almost the ultimate brand extension and Lego have probably learnt from the number two toy company Hasbro, who very much moved into the content world and you know created their own content with the help of movie studios, e.g. the Transformers movie franchise which has been hugely successful. So think in a way Lego learnt from Minecraft and are obviously in a really good space now.

 

So, I wanted to start this podcast series with Lego. Because I think it’s the best example of longevity. It’s the best example of the fact that success doesn’t come immediately overnight. it’s the best example of brand management and extension that I’ve seen and as a career brand guy I’ve seen a lot of brands and I’ve seen a lot of people try to extend brands. I’ve worked on a numerous other successful brands. But still really Lego as far as I’m concerned is the kind of the pinnacle of brand management. I think it’s also a learning opportunity in terms of realizing that your business today may not be the same tomorrow and we’re all facing this on a daily basis these days. Because technology is moving so fast and the way that we consume content is moving the way that we interact with businesses, the way that we communicate with our consumers has changed hugely over time. So the fact that Lego who were still on such a high-flying ride managed to not fully take the opportunities that are offered to them in digital world is also a learning for all businesses out there and finally I think the thing I would say which you know I haven’t mentioned so far but in summary I think it would be remiss of me not to mention actually is corporate responsibility. So Lego have the advantage of being a family-owned business primarily. This enables them to take a slightly longer term view on things. It enables them to invest more easily in their own manufacturing with a long term view. They don’t have to chase their quarterly sales quite the same way as publicly listed companies do.  But also you know not all private companies are run as ethically and if you were to look into big businesses and rank companies that run their businesses ethically, I think you find that Lego will be one of the top rated companies worldwide.

So there you go. That’s my take on Lego and what other businesses can learn from Lego. Please keep listening, there’ll be more to come in this series. If you want to find out more about us and what we do and find other episodes of this podcast, please feel free to visit www.playingatbusiness.com

 

Leave a review please where you find this if you find it useful. If there any topics that you would like to be included or like us to cover on this podcast, definitely please get in touch. We won’t be able to do them all I guess, but we’ll try and do some of them and above all, please keep listening!

Playing at business with Steve Reece. The business podcast with a sense of fun. To find out more go to www.playingatbusiness.com  [Music]