Most Common Pitfalls Licensees Watch Out For - Part 2 | Brand Marketing

1. Most Common Pitfalls Licensees Should W atch Out For PART 2 PETE CANALICHIO

2. Here are most common pitfalls which can really bite you if you are not paying attention. Does any of these pitfalls look familiar to you?

3. LOGO SLAPPING Licensees often do not understand when signing an agreement that the licensor will expect them to custom design the attributes of the brand into their product, and not just logo slap, which means adding the licensed trademark (logo) to the licensee’s already developed product.

4. Licensors often want the licensee to treat the licensed category with the same care they would treat a product category in their own organization.

5. They want the licensee to develop the product from the brand perspective, following the brand’s style guides carefully, and to follow externally a similar protocol to the one that the licensor follows internally.

6. The licensor wants the licensed product to be of a quality that the licensor would be proud to have on a retail shelf next to the internal product.

7. When the licensee does not meet the licensor's requirements, the product often does not get approved and/or needs to be reworked and the licensee loses key sales opportunities.

8. FAILURE TO FOLLOW THE APPROVAL PROCESS Licensees may not fully understand the approvals process designated by the licensor and may not give it proper consideration.

9. The licensee expects that approvals will come relatively easily and quickly; many products are not approved because the licensee has not followed the approval process.

10. The price of missing a ship date can mean the loss of millions of dollars in sales; the price of selling unapproved product can be even higher.

11. If a licensee were to sell an unapproved product which has a harmful substance such as lead paint, it could be devastating to the licensor's brand.

12. NOT KNOWING THE CONTRACT Typically licensing agreements are negotiated by company presidents or CFOs, who are the ones familiar with the contract terms and the licensor’s expectations.

13. If the people who actually execute the program on a day to day basis – such as sales, marketing, product development, design, etc. – are not made familiar with the contract, obligations could get overlooked.

14. For example, these obligations can include social and quality compliance requirements, a commitment to product design that incorporates the brand identity, a detailed understanding of the approval process, and a willingness to invest in advertising and promotions.

15. If the individuals whose job is to execute these job requirements are not aware of them, it can place a strain on the relationship and can ultimately lead to a termination in the contract.

16. After reading these, I hope you will let us know if you fell prey to one of these pitfalls. If you have experienced another, please let us know what happened.

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