Understanding the ins and outs of a licensing agreement is absolutely imperative for any brand considering venturing into the licensing playing field. This seminar covered why a brand or compnay would want to license, how to determine if your brand is ready for licensing, and how to make sure the license is successful.
Brooke Bridges- Associate VP, Business Development and Marketing, Beanstalk
Scott Bannell- VP Corporate Brand management and Licensing, Stanley Black & Decker, Inc. Ron Feinbaum- Senior VP/ General Manager, Consumer Products, Scripps Networks- Home Category
The first question to ask yourself is Why license? What are the benefits?
When done well, licensing benefits all part of the equation.
- For a Licensor- it takes a brand and extends it into new categories, new distribution, the ability to reach a new consumer demographic, provides additional revenue streams.
- For a Licensee- it expands the product, helps reach new consumers, increases the revenue stream, helps differentiate from competitors.
- For the Retailer- it creates a point of difference, creates a destination, gives access to new consumers, offers variety in terms of the assortment strategies.
- For the consumer- it is the consumer that is given another opportunity to establish a connection with a brand in a different, new emotional way.
With licensing you are connecting with a consumer in a new way. It is an integral part of the marketing communications strategy; PR, social media, advertising, product placement. Licensing is arguably just as critical in the marketing communication strategy as any of the areas listed here.
The reason for this is that, by definition, licensing is the consumer choosing to live with and adapt to your brand in their lifestyle. It’s not talking at them but it is them self-selecting to engage with your brand in a new way. There is nothing more authentic than that. It is also the only part of the marketing communication mix that pays you back.
Coca Cola is a master of this. All of their strategies- internet, packaging, sponsorship, public relations, product placement, direct mail, even down to their delivery trunks- is integrated and strategic. And that extends to their licensing strategy, as well.
There are several thing to consider when deciding whether your brand is ready for licensing:
Is your brand healthy?
Does it enjoy a high degree of awareness?
Does your brand have relevance beyond your core category? You often find people who are in love with opportunity for their brand but they forget to have a look at the broader spectrum.
Do you have alignment between business and brand strategy?
Are senior level executives behind the idea
Are there adequate resources to support licensing?
Keys to Licensing success:
Keys to Licensing success:
- High brand awareness: consumer trust
The right tools: comprehensive style guide, consumer research, category selection
Operational readiness: corporate commitment, proactive management
Careful license selection: extensive company research, clear criteria for partner selection
Vigilant program development and management: comprehensive training, well-designed products, stringent approval process, zero tolerance, ongoing program evaluation
10 Pitfalls to Avoid when Licensing:
- Unrealistic goals for licensing program
- Failure to prioritize among objectives
- Lack of objectivity in assessing brand strengths
- Lack of objectivity in assessing consumer permission
- Lack of active involvement and commitment from brand
- Failure to conduct licensee due diligence
- Lack of contractual protections
- Insufficient licensee education
- Cursory product approval process
- Inadequate systems for program administration and reporting