Licensing: Help To Grow Existing Product Lines

The attraction of licensing trademarks for business intentions appears to be at an all-time high, mostly in the fashion arena where consumers are buying more licensed products and brand names than ever before. For retailers, licensing opportunities provide them with a point of difference from their competitors.

Licensing is leasing a legally protected property (like trademarked or copyrighted name, logo, likeness, character, phrase or design) to another party in combination with a product, service or promotion. It is a process which lays stress on consumer management, development of brand equity in line with international imagery, providing right shopping ambience and perhaps is less about manufacturing. Licensing is a way of growing with an already established brand. It provides the brand recall benefits, which are not achievable in case one comes out with a brand new image.

There are many types of licensing business like art & design, corporate brands, events, fashion brands, food & drink, institutional, magazine brands, music, personalities, sports and television licensing to name a few.

The advantages of licensing for licensors

The main advantage for a licensor is the facility to use and develop its brand or property.

Licensing can achieve this by:

. Improving its brand existence at a retail or distribution outlet.

. Making further brand perception to support its core products or services.

. Providing and increasing its core values through various links with the licensed products/service or category.

. Coming into new markets (consumer or geographical) which were unfeasible with its own strengths.

. Making new revenue flows, often with little involvement or additional financial resources

The advantage of licensing for licensees

The main advantage for a licensee (particularly manufacturer or retailer) is the capability to considerably upsurge consumer interest in and sales of its products or services.

Licensing can achieve this by:

. Shifting the values and consumer favour towards the licensed product or service.

. Providing added value and differentiation in the competitive market.

. Offering additional marketing support or speed from the core property's activity given by the licensor.

. Attracting new target markets who have not been paid attention in a licensee's product or service.

. Providing credibility for shifting into new market sectors through product extension.

. Attaining additional retail space and favor.

Licensing: The increasing scenario worldwide

Reviewing the year-after-year worldwide retail sales from 2000 to 2004, the licensing business this year has shown an increase. In general, 2004 anticipated worldwide retail sales of licensed business increased 1.5 per cent to $175.3 billion against 2003 $172.7 billion, with the USA making nearly $110 billion (nearly $5.805 billion in royalties) and Europe $34 billion. In UK, the brand licensing industry is worth approximately £7billion in retail and £368million in royalties.