. Licensing means renting or leasing of an.
A strong brand name is an invaluable asset; managers must know when to exploit it, when to protect it, and how to tell the difference between the two. Because using an established brand name substantially reduces new-product introduction risks, there is an almost irresistable pull to “extend” brand names to new products.
It is a process of creating and managing between the owner of a and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory. Licensing is used by brand owners to extend a or character onto products of a completely different nature. Examples of intangible assets include a song ('Somewhere Over The Rainbow'), a character , a name , or a brand (The ). An arrangement to license a brand requires a licensing agreement. A licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor). Contents.
History Brand licensing is a well-established business, both in the area of and trademarks. Trademark licensing has a rich history in American business, largely beginning with the rise of mass entertainment such as the movies, comics and later television. 's popularity in the 1930s and 1940s resulted in an explosion of toys, books, and consumer products with the lovable rodent's likeness on them, none of which were manufactured by the Walt Disney Company. This process accelerated as movies and later television became a staple of American business. The rise of brand licensing did not begin until much later, when corporations found that consumers would actually pay money for products with the logos of their favorite brands on them.
Play food, T-shirts and even ghastly Halloween costumes became commonplace. Later made the brand licensing marketplace much more lucrative, as companies realized they could make real dollars renting out their equity to manufacturers.
Instead of spending untold millions to create a new brand, companies were willing to pay a royalty on net sales of their products to rent the product of an established brand name. Auto vacuums, yogurt, frozen appetizers, and nail polish are only a handful of the products carrying well-known brand names which are made under license by companies unrelated to the companies who own the brand.
Reasons for licensing A company may choose to license its brand(s) when they believe there is strong consumer acceptance for or products. For example, when launched the iPod there was an immediate need for accessories such as headphones, charging and syncing stations and carrying cases. Apple decided not to manufacture these products and instead chose to have a make the products. By doing so, Apple could offer branded 'Earbud Headphones', 'iPod docking stations' and 'iPod socks.' Each is made by a separate company but together offer the consumer an elegant solution. All of these accessories are sold by licensees. Apart from benefits to licensors, there are benefits to licensees as well.
Licensees lease the rights to a brand for incorporation into their, but do not share ownership in it. Having access to major national and global brands, and the logos and trademarks associated with those brands, gives the licensee significant benefits. The most important of these is the marketing power the brand brings to the licensee’s products. When brand managers enter or extend into new product categories via licensing they create an opportunity for a licensee to grow their company. Below is an example of the licensed product process steps:. Licensor chooses the product categories to be licensed. Licensor finds and negotiates a license with the best licensees.
Licensees develop concepts, prototypes and final production samples and submit for approval. Licensor approves licensed products for sale. Licensees sell licensed products to authorized retailers Licensees expect that the license will provide them with sales growth. This sales growth may be in the form of growth within existing market or the opportunity to enter a new market.
To achieve this, licensees expect that the brand they are licensing has significant brand preference, that it will open doors and ultimately help them meet or exceed their business objectives. The licensing contract forces the licensee to achieve certain sales targets and royalties; therefore, the goal of the licensee is to quickly meet their business objectives, thereby achieving their contract obligations. Are the monies paid to a licensor by the licensee for the right to use the licensed property. It is calculated by multiplying the Royalty Rate by the Net Sales.
Global brand licensing industry The main international for brand licensing is the, which sponsors the annual Licensing International Expo. The Society of Product Licensors Committed to Excellence (SPLiCE) is a Licensors Community of Practice with the vision to continuously improve brand licensing. The mission of SPLiCE is to act as a community of licensors who share best practices for protecting, promoting and enhancing brand integrity. The SPLiCE Licensors Workshop acts as its annual board of directors and members' meeting. During SPLiCE Licensors Workshop, benchmark findings and industry trends are highlighted in feature panel presentations that are relevant to the community at large. They engage a creativity philosophy of divergence and convergence to sustain unique idea implementation on best practices. The vision for SPLiCE Licensors Workshop is to provide best in practice licensing education through sharing educational best practices through benchmarking initiatives, task force collaborations, committee reports, and guest industry speakers Each May, License!
Global magazine publishes an annual list of 'The Top 150 Global Licensors'. For 2017, the leader was with $53 billion in retail sales of licensed merchandise, followed by with $23.2 Billion and with $18 Billion. According to the International Licensing Industry Merchandisers' Association (LIMA), global licensed merchandise sales was $272.2 billion in 2016, versus $262.2 billion in 2015. Brand licensing in India. This section does not any.
Unsourced material may be challenged. ( June 2013) The liberalisation of the Indian economy in 1992 brought a slew of international brands to India. Many of these brands have been licensed to Indian companies. Represent Arrow, Cherokee, ELLE, Nautica, USPA, AEROPOSTALE, CHILDRENS PLACE, Ed Hardy, GAP and Kipling. The is the licensee for Calvin Klein Jeans, FCUK and Tommy Hilfiger. Beverly Hills Polo Club (BHPC) is licensed to Spencers Retail.
Character Licensing is another big licensing segment of brand licensing in India. The big players in the character licensing industry in India are,. Characters licensed out by Disney India include. Viacom has brought in popular characters from like. Cartoon Network boasts of a portfolio including characters such as,. Brand licensing in Italy. This section does not any.
Unsourced material may be challenged. ( October 2013) Brand Licensing in started in the seventies with very few Licensing Agencies.
Apart from Disney which had its own dedicated office in the market, all the other big Entertainment majors were represented by independent agencies. One of these companies named DIC 2 (Distribution International Characters), founded in 1973 by Gianfranco Mari contributed to create the licensing business in Italy and set big phenomena as and the Masters of the Universe, characters, and so on. DIC 2 is still one of the biggest independent agencies in Italy, representing different cartoon characters and famous brands.
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