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Brand Licensing

Brand Licensing - Star Brands Consulting Group

Brand Licensing involves leasing a trademarked or copyrighted property for use in connection with a product, service, or promotion. This property might include names, likenesses, logos, graphics, sayings, signatures, characters, or combinations of these elements. Licensing agreements can create significant value by allowing both property owners and licensees to leverage popular brands for mutual benefit.

Why Is Brand Licensing an Important & Powerful Brand Strategy?

Brand Licensing is impactful due to its ability to:

  • Expand Brand Reach: Introduces brands into new categories, areas, or stores.
  • Increase Fan Base: Attracts new customers without the need for major investments in manufacturing.
  • Differentiate Retailers: Provides retailers with unique products that stand out from the competition.
  • Drive Sales: Boosts revenue through licensed merchandise.

With the industry valued at over $292.8 billion in 2019, brand licensing is crucial for enhancing brand presence and generating revenue.

How Do Brand Owners Benefit from Licensing?

  • Increased Awareness: Boosts visibility and marketing for the core intellectual property (IP).
  • Access to Expertise: Leverages the competency of licensees.
  • Brand Extension: Provides an alternative to traditional brand extension methods.
  • Protection: Helps protect the brand across multiple trademark classifications.
  • Consumer Reach: Expands the brand’s reach to a wider audience.

How Do Retailers and Manufacturers Benefit from Licensing?

  • Enhanced Awareness: Gains the consumer recognition of established brands.
  • Cost Reduction: Reduces in-house development costs.
  • Increased Credibility: Adds authenticity and credibility to products.

Examples of Brand Licensing

Here are a few well-known examples of Brand Licensing:

Brand Licensing - Star Brands Consulting Group

1. Disney & Various Merchandise: Disney is one of the biggest licensors in the world. It licenses its characters (e.g., Mickey Mouse, Frozen, Marvel superheroes) to various manufacturers who produce toys, clothing, home goods, and more under Disney’s brand name.

lego and star wars Brand Licensing - Star Brands Consulting Group

2. Lego & Star Wars: Lego has a licensing agreement with Lucasfilm (now owned by Disney) to create Lego sets based on Star Wars characters and themes. This has been one of the most successful brand licensing agreements in the toy industry.

barbie Brand Licensing - Star Brands Consulting Group

3. Mattel & Barbie: Mattel licenses its iconic Barbie brand for a wide range of products beyond dolls, including apparel, accessories, and home décor. This expands the Barbie brand into new product categories.

Ferrari Brand Licensing - Star Brands Consulting Group

4. Ferrari & Luxury Goods: Ferrari, a luxury sports car manufacturer, licenses its brand for various products such as watches, apparel, and even amusement parks (e.g., Ferrari World in Abu Dhabi), creating an aspirational lifestyle around the brand.

Brand Licensing - Star Brands Consulting Group

5. Hello Kitty & Consumer Products: Sanrio, the owner of the Hello Kitty brand, licenses the character for use on various consumer products, including clothing, stationery, and accessories, making Hello Kitty a global pop-culture icon.

NFL Brand Licensing - Star Brands Consulting Group

6. NFL & Sports Merchandise: The NFL licenses its logo and team insignia to manufacturers of sports apparel, memorabilia, and video games (e.g., Madden NFL), allowing fans to purchase branded merchandise and experiences.

Tic Tac Coca-Cola Tic Tac Coca-Cola Brand Licensing - Star Brands Consulting Group

7. Coca-Cola & Lifestyle Products: Coca-Cola licenses its brand name for various consumer goods such as apparel, accessories, and homeware, creating a nostalgic and iconic image that extends beyond beverages.

8. Harry Potter & Universal Studios: The Harry Potter brand is licensed to Universal Studios for theme park attractions (e.g., The Wizarding World of Harry Potter) and merchandise, expanding the brand into new entertainment avenues.

These examples illustrate how brand licensing can extend a brand into new markets, product categories, and consumer experiences.

Top Global Licensors

Some of the leading global licensors include:

  • Walt Disney
  • Meredith Corporation
  • Hasbro
  • Authentic Brands Group
  • Warner Media
  • NBCUniversal/Universal Brand Development
  • ViacomCBS
  • The Pokemon Company International
  • Bluestar Alliance
  • Sanrio

Understanding Licensing Terms

  • Licensing: Granting permission to use protected intellectual property.
  • Licensor: The IP owner (e.g., Disney, Coca-Cola).
  • Licensee: The party granted rights to use the IP (e.g., Funko, Wal-Mart).
  • License Agreement: The contract detailing the terms of use.
  • Royalties: Payments made to the licensor based on sales.

Brand Licensing Verticals

  1. Character and Entertainment: Includes animated TV programs, feature films, characters, and more. Dominates the licensing industry.
  2. Brand and Lifestyle: Encompasses fashion, corporate brands, museums, charities, sports, and more.
  3. Art, Design, and Image: Features artists, illustrators, and image collections, though it represents a smaller segment.

Is Licensing the Right Strategy?

Before pursuing licensing, manufacturers and retailers should consider:

  • The success of similar brands in the category.
  • The openness of the product category.
  • Ideal retail channels and product positioning.
  • Core consumers and property representatives.
  • The approval process and development timeline.

Star Brands Consulting Group can provide expert guidance on navigating these aspects to optimize brand licensing strategies, contact us now.