Happy Holidays 2012. I just
had an email from one of my Blog readers that has prompted me to include the
topic of his question in my latest post. At times
a great Brand can hit a crossroads in its life and become “defunct”. It
may be because of a bankruptcy, a patent expiring, product substitutes, fads
ending or years of business mismanagement. The result is that a
Brand that has built up tremendous brand equity over a lifetime is no longer
viable for its own core business. There are plenty of examples of
such “defunct” brands like Sharper Image, Xerox, Polaroid, Linens N Things, Op,
and Starter. When a crisis hits a brand, Brand Licensing should
strongly be considered as a viable option to leverage the huge and
expensive brand equity that has been built up over the brand’s
lifespan. It would be a shame to simply walk away from this
equity. Indeed, companies like Hilco Streambank, Authentic
Brands and Iconix have made a business model out of buying up such brands and
re-launching them to the market via licensing. The important
point is that owners of Corporate Trademarks in crisis mode can use Brand
Licensing to keep their defunct brands alive in the hearts and minds of
consumers and make money off the equity they have built via royalties.
And the best
place to start is to work with a company like mine, Brandar Consulting,
so you can take measure of your Brand’s equity through market research; finding
out what your Brand’s current awareness, opinion and preference
numbers look like in the consumer’s mind today. If your Brand
does indeed remain strong in awareness and equity , you can also use market
research to determine what product categories that customers give your Brand
“permission” to extend into via Licensing. The output from your research
can then be turned around and used to put together a “Brand Selling”
presentation to sell prospective manufacturers on licensing your brand into new
product categories.
There is tension
in success here though. As you build out your program, you
will hopefully find some very successful licensees who are going to
do better a job than you would yourself with your brand if you
entered the same product category. This is part of the reason you license your
brand. You find someone with much more core competency in a product category
than your own company could ever hope to have. If a
Licensee is very successful in a product category it becomes a new brand
building experience for your “defunct” Brand. This is the
holy grail of licensing. It is what you hope for. The
partnership thrives because you benefit from new brand equity and royalty
revenues and your Licensees benefit from borrowing your Brand name because it
is too expensive for them to build a Brand on their
own. While the licensee's operational excellence
is a big part of the success of your licensed products, your brand is also
playing a large role in their success; even if the mother company is now doing
very little to build your own brand. Remember, companies
license the brand equity you have already built through many long years of
brand investment, not the brand equity you are going to build. Here’s
where the tension creeps in; I have seen licensees start to feel like they are
doing more to build the Licensor’s brand than the Licensor actually is. Over
time, this can lead to Licensees deciding they can be a success without the
licensed brand and they part ways and enter the product category with their own
brand or a new licensed brand. The problem with this scenario
is that you the Licensor can always turn around and re-enter the category with a
new Licensee. A good example of this type of scenario is the company
Avenues parting ways with the Wenger Swiss Gear brand license in the Cases and
Backpacks segment.
The best bet to avoid
this scenario as a Licensor of a “defunct” Brand is to reinvest some of your
royalty revenue back into the Brand you are licensing and be very vocal with
your Licensees about what you are doing to support the Brand they are
licensing. The other thing you can do is build a broad-based Stable
of licensees across product categories that are supporting each
other at retail, so the rising tide of your Brand’s licensing program can lift
all boats. Brand Licensing needs to always be treated as a
two-way street. If you maintain this partnership mentality
within your program, even if you start with a “defunct” brand, you will be
successful in the long term.
Managing Director & Owner
Brandar Consulting, LLC
“Helping Brands Reach for The Stars”
email: mike@brandar.com
http://www.brandar.com/
copyright © 2012 Brandar Consulting, LLC All Rights Reserved
This is very interesting blog.You have shared really very good information.If looking for brand license in europe.
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