Licensing Overview

Benefits of Licensing

Brands are extremely valuable properties. Backed by substantial marketing muscle, they are well known and trusted by consumers. Licensing is a dynamic business tool that can propel a brand to unprecedented levels of success by leveraging the brand's equity to other appropriate products, increasing not only the size of the brand but also the brand's relationship with consumers.

Licensing is a $70+ billion business, and trademark licensing continues to be the largest segment-exceeding entertainment properties in retail sales for the past five years. This growth proves how licensing can be an effective marketing strategy. For corporations, it offers tremendous opportunities to expand a brand beyond the core business with minimal internal resources. For manufacturers, it adds value by marketing products with well-known, proven consumer brand names.

Value of Licensing

For the Licensor:

Builds brand awareness and extends the brand beyond core products
Enter product categories more quickly with limited internal resources
Obtain exposure in new distribution channels
Quicker market entry leveraging licensees' expertise and resources, therefore, keeping focus on core business
Build consumer loyalty by creating new experiences with the brand
Drive sales of core products
Create more consumer impressions
Generate incremental royalty revenue and consumer impressions

For the Licensee:

Instant brand recognition and awareness of established brand names
Adds value and differentiation
Target a new demographic
Retailers want brands!
  » Less risk
  » Better price-value
  » Increased trial with branded products
  » Increase sales of products

Keys to Success

Setting reasonable objectives and expectations
Conduct necessary due diligence about the brand and the licensee
Negotiate to win for both parties
Effective licensing strategies
Ensure good fit between brand and product-proper equity translation
On-going communications
Comply with the license agreement