The 8 Benefits of Brand Licensing to Manufacturers and Service Providers | Brand Strategy | Business Branding

1. The 8 Benefits of Brand Licensing to Manufacturers and Service P r o v i d e r s PETE CANALICHIO Access to major national and global brands, and the associated logos and trademarks are significant benefits of brand licensing. The company which licenses a brand gains immediate access to all the positive name and image building that went before it. The licensee takes with them the reputation of the licensor. This “halo” effect can often translate into many intangible and immeasurable benefits: 1. Achieve instantaneous recognition Having the Disney license means immediate and instantaneous global recognition. The value of this recognition will be measured in the ensuing sales of the product. 2. Enhance their authenticity and credibility If a videogame manufacturer can license the FIFA World Cup trademark they stand to gain immediate legitimacy and authenticity to their game. If manufacturers had a recognized brand, many retailer buyers would issue a purchase order. Licensing specific car brands such as Toyota or Ford establishes in the consumer's mind that a manufacturer’s products will work seamlessly with the cars of the parent brand. Purchase of “branded” products by automotive distributors, service shops and the brands owners drives substantial incremental revenue. 3. Reduce in-house costs A manufacturer or service provider which acquires the rights to license a brand often gains the licensor's preferred pricing by its suppliers. Licensees obtain access to the licensor's style guide. PHOTO Benefits of having the style guide Assists the licensee with design time Streamlines the approval process and Ensures their products have the same look 4. Gain access into new distribution channels Taking on a license can help manufacturers and combat a rival in a category core to their business. service providers gain access to new distribution channels. A manufacturer may have an established private label business selling into the mass merchandise channel. They could gain access into department stores and double their revenue by licensing. 5. Enter new regions A door mat manufacturer based in Germany may be able to enter the US market by licensing a major household brand like Better Homes & Gardens. The Better Homes & Gardens brand can give them entry into the channels they currently are selling other categories of product. Licensees may pool their products to create an integrated program, which can be appealing to some retailer buyers. 6. Acquire strategic knowledge Licensees gain access to intangibles in areas where they are not proficient. Manufacturers and service providers can benefit from the licensor's databases and libraries. As true partners, licensor and licensee can identify where each other's strengths are and tap into them. 7. Obtain other licenses more easily A licensee will almost automatically gain approval from other brand owners wishing to extend their brands into new categories A pin licensee of Major League Baseball (MLB), will have an easier time acquiring the rights to the National Hockey League or the National Basketball Association The brand owners know the licensee meets the standards for MLB and already has an understanding of the licensing process. 8. Add value to the business Gaining the rights one of the world’s great brands can add instantaneous value to an organization. This could be an important consideration when the owners are considering selling the company. More and more brand owners require approval of the new management before automatically authorizing the continuation of the license. The brand owner may require a payment recognizing the increase in value upon the sale of the company. The diagram below illustrates the different stages that are a part of the Licensed Product Process Flow: Licensees develop concepts, prototypes and final production samples and submit to Licensor for approval Licensees sell approved licensed product in authorized channels to retailers Licensors or its agent finals and negotiates a license with best licensees Licensors picks the product categories to be licensed Licensor approves licensed products for sale Grab V aluable Resources from Brand Licensing Experts for 100% Free Today Are you interested in extending your brand’s influence, strengthening consumer relationships, and generating unlimited revenue from guaranteed royalty payments? Get Your FREE Membership Today PeteCanalichio.com/fast-track PETE CANALICHIO