WHAT IS LICENSING?
Licensing is the method of leasing the rights to a protected, trademarked or copyrighted entity. The entity, known as the property, could be a number of things, including but not limited to, a name, an image, a logo, a signature, etc. Licensing fortifies a brand by increasing its use to products outside the licensor's core categories. The rights to a given property are approved for a specific principle, usually for their products to be sold in retail stores, in which a defined territory is chosen for a defined period of time in return for a negotiated royalty.
The owner of a property is known as the licensor, while the "renter" of the rights is called the licensee. The basic factor of payment is the royalty; generally a percentage of the manufacturer's selling price on every product sold. In addition to merchandise, a property can be licensed for many non-product purposes, i.e. television & films. New product categories achieved through licensing can expand a property’s customer foundation. Many consumers cannot meet the expense of couture or high-end designer products, but can purchase a product that is less expensive but still tied to the same designer. licensing is extremely effective in serving to re-launch or change the position of a brand or property. If a property targeted mainly toward teenagers is being repositioned for younger children, and an unforeseen group of consumers embraces the new category, a licensing effort can be repositioned to reflect that.
ADVANTAGES OF LICENSING
Expand your product portfolio - Relatively risk free and cost effective - Drive new revenue streams through licensing opportunities - Increase your brand’s global awareness - Inspire customer loyalty and build brand equity - Fuel valuable promotional and retail partnerships - Make your brand more modern lifestyle oriented
SOURCE: The Licensing Letter.
Copyright 2009 EPM Communications, Inc