Background of the Study

Background of the study

“Lego” is the trade name for a group of companies under the “Lego Group” which is a world-renowned toy manufacturer based at Denmark. It is a private owned toy manufacturing company that have built numerous well-known amusement parks for both children and adults all-over the world (Lego.com 2022). The present research under consideration will be exploring the future need in product innovation and development for Lego in order to effectively combat the changing customer preference and to keep up its existing customer satisfaction rate.

Problem statement

The problem statement for the study revolves around the fact of changing customer preference and satisfaction concerning the customers of Lego in next two to five years. There has been no single study conducted in this study area concerning change in customer preference and customer satisfaction of customers of Lego, where the research gap lies which will be investigated and bridged through the conducting of this research.

Research aims and objectives

The aim of this research study is to explore the extent of physical and digital product innovations of Lego appealing to the children in next two to five years. So, the primary objective of this research project revolves around development of a new product which may be a new physical product, a digital product or a blend between the both along with exploration of the factors about the new products which will be most appealing to the customers including their anticipated acceptance rate and satisfaction rate post introduction of the new product by Lego.

• To study the physical Lego products which would appeal to the children in the next five to 10 years.
• To study the digital Lego products which would appeal to the children in the next five to 10 years.
• To study the estimated product development and manufacturing techniques which might suit the production needs and enhancement of customer satisfaction rate of Lego in next two to five years.

Research questions

The research questions which have been specifically designed to solve the problem of the study are as follows:

• What are the physical Lego products which would appeal to the children in the next five to 10 years?
• What are the digital Lego products which would appeal to the children in the next five to 10 years?
• What are the estimated product development and manufacturing techniques which might suit the production needs and enhancement of customer satisfaction rate of Lego in next two to five years?

Research hypothesis

• H01: The physical product innovation will not appeal to the children in next two to five years.
• H1: The physical product innovation will appeal to the children in next two to five years.
• H02: The digital product innovation will not appeal to the children in next two to five years.
• H2: The digital product innovation will appeal to the children in next two to five years.

Product innovation and needs

Product innovation in simple sense denoted introduction of something new to the already developed product or development of an entirely new product line apart from the existing one to boost the sales of the company. So, product innovations are addition of something to the existing products thereby enhancing and improving its quality and features thereby either meeting the changing needs and preference of the existing customers or to enhance the customer base and satisfaction thereby enhancing the revenue and profit for the business for whom the product innovation is being carried out. It is to be noted that product innovation and investing in “R&D” is an integral part of the modern businesses in order to stay alive in this ever-competitive business world (Guo et. al. 2016). This is because every now and then a new business organisation appears in any different industry where the existing the businesses have to continuously develop as well as innovate its existing products in order to live up to the expectations of the existing client base and to meet their changing demands and needs. The product innovation is also important because it helps a business enterprise to continuously reduce the cost of developing the existing product thereby allowing the firm to provide better value to the customers through provision of better and advanced quality products at the most competitive and convenient pricing structure which in turn enhances the overall satisfaction level for the customers in general. This also allows a firm to keep its already established client base intact with inflow and acquiring of new potential customers because “word-of-mouth” by existing customers may act as an inherent catalyst for a business to effectively acquire new prospective customers. Now, before progressing to the needs of product innovation, one must understand the three basic types of product innovation at the first place. The first type of product innovation is the “NPD” or the “New Product Development” under which a new product may be developed within an existing product range which may either be market disruptive or prove to be sustaining for the business in question (Lv and Qi 2019). The second type is the “improvement of existing product” where an existing product is being innovated through carryout of “R&D expenses.” The last type is the addition of new features to an existing product where a few new features may be added along with the consistent existing features just to enhance the value of the existing products to its clients specially to meet their changing demands and taste.

Problem Statement

Now, specifically mentioning about the needs of product innovation, it can be said that there are six broad needs for product innovation for any given business enterprise which are as follows:

Creation and maintenance of a competitive advantage: Innovation of an existing product allows a firm to retain its existing client base along with acquiring new prospective customers question (Lv and Qi 2019). The innovated product may be something which may not be offered any of the competitors of the firm thereby allowing the firm to accomplish a competitive advantage over its competitors.

Delivering better value to the customers: The changing customer needs and preferences are effectively acknowledged and considered during a product innovation which effectively allows for delivering better value to the customers through enhancement of the product features and quality according to the changed needs and demands of the customers at the most convenient prices.

Encouragement of resilience for a business organisation: Innovation is key pillar for companies to stay alive in the market (Guo et. al. 2016). It is to be noted that without proper innovation, a company cannot survive in the market as it could not live up to the expectations of its customers thereby smoothing its way for extinction from the market altogether.

Achievement of diversification: An innovated product may be beneficial for a different set of customers after achievement of a smart product which was not possible if the product was not innovated. For instance, a “Product A’ developed by a “Abc Company” involved in manufacturing of medicinal drugs had a single type of use only such as treating of “Gastro” issues for patients where after innovation, the product can treat “stomach ache” in patients as well along with its original treatment. So, in such a case a new set of customers get generated for the firm after the product innovation thereby generating more revenue source for the pharmaceutical manufacturing company.

Addition of flexibility: Innovation often leads a product to be flexible that is reaching a stage from were moving to any of the desired directions becomes easy for the product depending upon the future perception, taste and preference of the customers (Guo et. al. 2016).

Compliance with legal framework: Innovation leads a company’s product to accomplish the needed compliance with legal framework if needed thereby allowing the business to operate within the established legal framework of the land where the business is operational.

Research Aims and Objectives

According to Mohammed and Rashid (2018), customer satisfaction in general is defined as the process of measuring the sense of contentment, the customers in terms of company’s capabilities, services and products. Therefore, customer satisfaction information comprises of ratings, surveys and customers of destruction information which can help an organisation to determine the best way to improve the changes in services and products. In this manner, the main focus of the organisation should be given on the customers and this is applicable to all the wholesale businesses, industrial forms, government bodies, non-profit organisation and service companies among every subgroup of an organisation (El-Adly 2019). The forces of customer satisfaction involve understanding the opinion of the customers using various tools such as surveys, polling and focus groups (Wikhamn 2019). The important ways of addressing the customer involves performing customer survey, verification of the effectiveness and following up with the customer. In addition to this, in several cases are also involves taking preventive action, and analyse the root cause for either good satisfaction or poor satisfaction (Kurdi, Alshurideh and Alnaser 2020).

Some of the other existing research suggests how the customer satisfaction is based on the process of evaluating the customer satisfaction score through a survey (CSAT score), which is based on the experiences and ratings given by the clients usually from the scale of 1-to-5 or 1-to-10 (Shokouhyar, Shokoohyar and Safari 2020). On the other hand, the old school theorists of customer satisfaction believe in considering a more general satisfaction approach by focusing on the specific aspects such as product feature, contacting customer support and overall purchase experience. The excerpts of review of literature also suggests the use of Customer Effort Score in order to measure the overall experience with the services of an organisation. The customer retention is considered as an important aspect under customer satisfaction and therefore several companies spend more money for the purpose of acquiring customers who truly have a substantial involvement in their growth (Vasi?, Kilibarda and Kaurin 2019; Afthanorhan et al. 2019.).

In some of the other discourse of the existing literature, we are able to identify how customer satisfaction is defined with the percentage of customers, number of customers and the service ratings. This is important for the business as customer satisfaction is seen to directly relate to customer loyalty as well. Customer satisfaction is seen to be measured at an individual level and also considered as an actual manifestation pertaining to the state of satisfaction with the differs from product/service to a person (Pakurár et al. 2019). Therefore, the overall state of satisfaction is seen to be dependent on several aspects of physical and psychological factors which acknowledge the satisfaction behaviours and rate of recommendation (Al-Omari, Alomari and Aljawarneh 2020). Therefore, the customer satisfaction level is also depicted to change as per the options available in terms of existing products and companies in of the same with organisation’s other products. In this aspect, is on the existing studies we are able to find how the quality of customer satisfaction is identified with lower error variance along with semantic differential scales which take into account both utilitarian and hedonic contexts of service consumption (Islam et al. 2021).

Research Questions

According to Hallencreutz and Parmler (2021), there are many different ways to enhance the existing level of customer satisfaction, where the most important ways firstly include a thorough understanding of the customer needs, preferences and perspective. Secondly, there should be a sound knowledge concerning the present level of technological advanceme3nt within the industry of operation. These steps will allow the business to understand the real needs of the customers along with their changing preference patterns and future expectations form the firm. Thirdly, the company should develop new products or innovate exiting products or product line with new products or upgrading the features of existing products as per the changing customer perspectives, needs and demands. Fourthly, continuous investment in “R&D” will ensure product innovation along with ways to reduce the costs along with maintenance of compliance with all legal requirements which will further decrease the operational cost, enhance profit and at the same time enhance the product acceptability to a greater number of prospective customers (Javed and Cheema 2017). The last way is to have a continuous track on the level of customer satisfaction and taking eminent steps towards enhancement of such CSAT at all times. Therefore, continuous innovation will help a business to deliver better value to the customers through provision of better quality and advanced products at the most competitive process which will effectively drive up the customer satisfaction rates.

The various types of available choices for research philosophy can be identified with positivism, interpretivism and realism. Among the available options of research philosophy, the positivism philosophy would be most suited as per the research questions and research objectives. In addition to this, the positivism research philosophy will also acknowledge the two-hypothesis formulated for the given study. The positivism philosophy of research is associated with the idea of the presence of universal reality which can be established in a scientific manner. This is essentially the opposite form of research philosophy in comparison to interpretivism. Therefore, the choice of positivism research philosophy will help us describe the outcomes from an objective viewpoint and also ensure that there does not exist any repeatable outcomes. In this manner, the positivism research philosophy will essentially take into account the relations of independent variables and also acknowledge that your abilities which may be present among the constituent elements pertaining to the social world. In addition to this, the choice of such research philosophy will also allow us to work upon previously observed realities and explanations, thereby forming interrelationships. The positivism research philosophy is seen to be embedded in such a manner that there does not exist any ascientific claims associated with such form of research philosophy.

Research Hypothesis

Among the two distinct choices of research approach namely inductive research and deductive research, it is more ideal to go with a deductive research approach as it will allow us to consider the necessary research approach which begins with research on new theory and observations along with the developing of the new theory. Moreover, the study on the possible customer satisfaction begins with formulation of a hypothesis statement, such a research approach would be more appropriate. In addition to this, it is further worth noting how the consideration of different types of primary data will be conducive for proceeding with such an approach of research which will encompass the research questions, research objectives and the variable selected for the study to test the hypothesis. Moreover, the choice of deductive research approach will allow us to take into consideration the quantitative research techniques which would be implemented in the final dissertation.

Typically, there are three different types of research design of models which are applied as possibility of the research study. These are mainly identified with descriptive design, explanatory design and exploratory design. Based on the aforementioned choices, we need to consider the suitable research design as per explanatory research design which will allow us to emphasise on the different aspects of unexplored pattern which exists in the area of how physical Lego products which would appeal to the children in the next five to 10 years, how digital Lego products which would appeal to the children in the next five to 10 years and estimate product development and manufacturing techniques which might suit the production needs and enhancement of customer satisfaction rating of Lego in the next two to five years. In this manner, we are able to discern how the selection of explanatory research design will allow us to explore the relevant theories associated with customer satisfaction in a position with liver products among the children between 5 to 10 years. Moreover, the choice of explanatory research design will also allow us to highlight the necessary details of the research question as well.

The data will be collected only via primary sources from 3000 Lego customers at a global scale. Therefore, we can clearly see how the total sample size for the study will comprise of a total of 3000 new customers. The overall study will consider that the computer customers will be able to act as a guidance pertaining to the appropriate sample size. Moreover, the choice of primary data will acknowledge the previously identified research questions, research objectives, research hypothesis, research philosophy, research approach and research design. Along with this, it is worth noting that the procedure for getting the data will be done via Google Forms.

Literature Review

The data analysis is will be only performed by using quantitative methods. In this context, the data analysis will comprise of using different types of statistical techniques such as descriptive statistics measures, correlation analysis, measures of dispersion, cross-tabulations, regression analysis and conjoint analysis. The dependent variables (DV) for the regression analysis will comprise of Customer satisfaction of children using physical Lego products (DV1) and Customer satisfaction of children using digital Lego products (DV2). Additionally, the independent variables (IV) will include Customer satisfaction of using interlocking bricks (IV1), Customer satisfaction of using Array of gears (IV2), Customer satisfaction of using Figurines (IV3), Customer satisfaction of using Minifigures (IV4), Customer satisfaction of using LEGO Mindstorms (IV5), Customer satisfaction of using LEGO Video games (IV6) and Customer satisfaction of using LEGO Movies (IV7).

The ethical consideration will be taken into account by ensuring different aspects such as informed consent, anonymity, confidentiality, prevention of potential harm and freely communicating the results. Therefore, the participants will be aware of the different benefits, funding, risks and purpose of getting involved with the research study. Moreover, we will ensure that the anonymity or privacy of the research participants is maintained at all times. The confidentially factor will ensure that the information is hidden from all individuals.

Fig 1: Project timeline

(Source: Author)

Conclusions

On a concluding note, we are able to identify how the aim of the research is to explore the extent of physical and digital product innovations of Lego appealing to the children in next two to five years. The existing theories has been discussed in form of product innovation, product needs, methods of enhancing customer satisfaction and concept of customer satisfaction in general. The study will take into account a total sample size of 3000 Lego customers. Furthermore, the data analysis will incorporate statistical techniques such as descriptive statistics measures, correlation analysis, measures of dispersion, cross-tabulations, regression analysis and conjoint analysis.

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