The key to building a successful brand licensing arrangement is synergy between the licensee’s product and the licensor’s brand identity.
Entertainment/character is the leading category in the vast global brand licensing landscape (earning more than US$270bn in 2017). Because most licensed entertainment/character products are marketed toward young consumers, synergy is less important than overall consistency.
Entertainment/character includes everything from toys to dinnerware and apparel that have been branded with famous and instantly recognizable characters and logos. The category still accounts for roughly 45% of all licensing sales around the globe.
However, other categories, with more exciting and finely delineated brand licensing strategies, are growing in volume, value, and sophistication.
High-end art galleries and cultural centers are increasingly entering deals with fashion producers and retailers.
Creative brands appeal to both aesthetic and cultural tastes, opening the door to unique cross-promotional opportunities. Garments and accessories that incorporate prints from the gallery collections or feature highly recognizable gallery logos are useful in creating eye-catching retail displays and promotional material, including glossy magazine advertisements and feature-length articles.
Conversely, a fashion range may promote awareness of the gallery and extend the brand’s reach beyond its traditional audience. Meanwhile, the gallery's own promotional material is a perfect place to advertise the fashion range.
Reciprocal incentives, such as discounted gallery entry or membership with fashion purchases are also an effective marketing tactic.
While the majority of sporting clubs and associations have struggled to connect with high fashion, outside of officially licensed merchandise and apparel, many horse racing clubs in major cities have found ways to join their highly recognizable and prestigious brands with high-end garment manufacturers and retailers.
The more niche the category, the more finely defined and perfectly matched the points of synergy need to be.
Celebrity branding is a popular brand licensing tactic which has been used to market everything from beauty products to beverages and health and nutrition supplements.
Celebrity chef branding has gained popularity in the cookware and tableware categories. We refer to this as an ‘image fit’, meaning that it feels natural to consumers who find the celebrity credible, even though, beyond the licensing agreement itself, the licensor has no significant involvement in the design, manufacturing or retailing of the product range. The licensee uses strong visual display images of the celebrity chef in the retail environment, including purpose-made video promotions of the chef using items from the product range.
A clearly defined licensing agreement is the key to a successful brand enterprise.
It is essential that your brand licensing agreement specifies what is expected of each party, related timelines relevant territories and schedules. Be sure to include the advertising or promotional expectations of each party as well as the scope of product development input from the brand owner, beyond the necessary quality assurance checks and brand oversight.
Given the reciprocal benefits for the licensee and licensor, it is not surprising that brand consistency oversight entails rigorous specification and meticulous pre-production testing of adherence to all elements of the brand’s style and identity.
Most licensing agreements are initiated by a product developer approaching a brand owner to gain access to marketing power and distribution networks.
Major brand owners may also actively seek developers or manufacturers of compatible products with brand affinity, to satisfy previously identified unmet customer needs.
While some brand licensing agreements are long-term staples, others are short-term deals with a strictly defined design and production period, particularly when the branding is related to a major film release or highly-anticipated game release.
One highly successful example included a pop-up shop styled around a movie’s images. The event was successful due to meticulous planning and project foresight, despite the short time frame for execution.
Where the licensed branding will predictably involve relatively short popularity, it is essential to include restrictions on excessive discounting of unsold product in terms of the agreement.
Successful brand licensing examples anticipate and account for all contingencies.
Because of the relatively short ‘use-by’ or expiration date of brands based on current movies or other popular but short-term fad-based brands, some licensees have calculated the advantage of acquiring the rights to use a portfolio range of less expensive but classic character-based brands.It can take several years and millions of dollars to create a highly recognized brand with strong consumer confidence and appeal. For example, there is a new flavored beverage concept that has the potential to occupy an unfilled niche on supermarket shelves. However, it won’t get stocked in a supermarket gain any product attention until it is branded with a well-recognized and trusted brand identity.
Great brand licensing examples are never about short-term gain. Successful licensing programs pair high-quality products and brand innovation to promote products that might not succeed without branding and to enhance the brand’s perceived value. For the brand owner, carefully vetting the proposed licensee’s product range, brand affinity, past profile, and competency to deliver on the agreement are necessary steps to ensure success.
From the licensee’s perspective, the match must be based on well-developed synergy, not just short-term expediency.
From the brand owner’s point of view, it’s important to analyze the long-term effects of each deal. A single misstep can harm the overall brand licensing plan.
While royalty payments for the use of the brand and its associated intellectual property are a major incentive for brand owners, licensors should always be aware of opportunities to further enhance their brand’s existing identity and increase its exposure and market penetration.
Whether you are a retailer, supplier, new product developer or the owner of a registered brand, seeking out a mutually beneficial brand licensing opportunity and considering some of the best brand licensing examples is a great investment of time and effort.
To achieve the best outcome work with a brand licensing agency that has the skills, experience, and networks to connect well-matched licensing partners with one another for a mutually successful outcome.