Why Do Manufacturers License Brands | Brand Strategy | Branding

1. Why Do Manufacturers License Brands? PETE CANALICHIO For manufacturers, the list of benefits from brand licensing is extensive. Licensing offers immediate credibility and recognition, enabling licensees to enter new markets while enhancing sales of their core products. Consider a tee-shirt manufacturer with specialty printing capabilities. One day, they are selling unbranded tee-shirts; the next, they are an official Disney licensee creating shirts with Mickey Mouse and Winnie the Pooh. Licensees also gain authenticity and legitimacy, such as the video game manufacturer that has developed an amazing soccer game. Acquiring a license with FIFA World Cup gives immediate access to the sport’s most popular trademarks in the world’s most popular sport. A maker of automotive parts or accessories will license specific car brands to establish in the consumer’s mind that its products will work seamlessly with the cars of the parent brand. A manufacturer that acquires a major license often gains the licensor’s preferred pricing on items such as raw materials, shipping, and creative. Access to the licensor’s style guide provides them with most of the imagery and artwork they need to design their products. These savings can go a long way to offsetting the cost of the license. At Rubbermaid many of the licensees made products with resin (oil). Rubbermaid bought resin at the world’s best prices, offering their licensees a significant savings they could not otherwise obtain. Brand licensing offers licensees access into new distribution channels. A manufacturer can market a more upscale, high quality line in specialty stores or department stores that wouldn’t carry the lower-end products. For example, the Graco brand sells car seats to Sears, JCPenney and Kmart. Graco might consider entering the upscale channel for their car seats through licensing. They could approach Bugaboo about extending their brand into car seats. If Bugaboo agreed to license their brand, Graco would begin selling car seats in Neiman Marcus and Jacadi. Bugaboo satisfies a pent-up desire for its consumers to buy car seats and Graco gets access to a new channel. Licensing offers licensees the ability to enter new regions. A doormat manufacturer based in Germany may be able to enter the U.S. market by licensing a major household brand like Better Homes & Gardens. The Better Homes & Gardens brand may agree to license their brand if the manufacturer has superior quality and a presence with a global retailer. Licensees gain access to intangibles such as the licensor’s subject matter expertise in areas where they may not be proficient. In addition, they can benefit from the licensor’s databases and libraries, gaining access to market research, manufacturing and product design. As true partners, licensors and licensees can identify where each other’s strengths are and tap into them. For some licensees, acquiring one license will open the doors to additional licenses. For others, gaining access to an important name brand can add instant value to their organization, especially when the owners are contemplating selling the company. Manufacturers and sourcing companies should weigh these benefits as when making a decision to acquire a license. 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