How Do You Use Brand Licensing to Extend Your Brand?

Editor's Note: Take a look at our featured best practice, Cost Segregation Study: Multiple Property Class Analysis (Excel workbook). Accountants, accounting firms, and real estate property owners can all benefit from this cost segregation study (CSS) template. It makes the estimated benefit easy to figure out and has flexible assumptions for high level or detailed segregation analysis. You get a summary of cost [read more]

* * * *

Few companies use brand licensing to extend their brands into new categories. Those that do, including Coleman, Newell Rubbermaid, and P&G, have successfully delivered millions of products a year into the marketplace by leveraging the competencies, resources and distribution networks of hundreds of manufacturers throughout the globe.

Up until now, licensing has been a nice to have tactic for companies to extend their brands.  With the recent recession and dynamic changes in the retail landscape, it is now an economic necessity for companies who plan to grow profitably in the 21^st century. Before any successful licensor like P&G enters a new category with their brand, they go through a disciplined and systematic process to determine the categories in which their brand should play and what approach–manufacturing, sourcing, acquisition, or licensing–they should employ to enter the marketplace.  Of course, brands owned by Coleman, Newell Rubbermaid and P&G are rich in brand equity, making them desirable by consumers and manufacturers alike, a prerequisite before launching any brand licensing program.

So, have you ever considered extending your brand via licensing? If you have, you may have considered the benefits of brand licensing and felt strongly about taking advantage of these benefits. After all, what brand owners would choose not to connect with their consumers faster than they could organically?  Or, who wouldn’t want to leverage a licensee’s resources to market their brand?  What about the opportunity to protect your brand’s trademark in a particular category that would otherwise be at risk?  That’s important, too. Right? And, of course, the chance to earn royalty revenue to reinvest in marketing or to strengthen the company’s operating income is compelling all by itself.  But, how do you really know whether your brand is ready to be licensed before you commit the time and resources to launch a brand licensing program?

Based on our experience and industry knowledge having extended the world’s greatest brands into new categories via licensing, we have developed a highly facilitated, day-long workshop designed to assist you in getting the clarity you need before moving forward.  We start by determining what categories your brand is ready to be extended into and then utilizing our proprietary evaluation process, we assist you in selecting which of these categories is best suited to be extended via licensing.  As success of any brand licensing program is contingent upon you, we have structured our program to gain consensus amongst your organization’s management and marketing leadership.  That way you can begin implementing your findings immediately.

Our workshop makes certain your brand’s positioning, architecture and consumer perceptions are the focal point in making brand licensing decisions.  We do this by:

• Determining the value of your brand from an awareness and perception perspective
• Identifying and or verifying categories your brand has permission to extend into
• Evaluating which of these categories should be extended through licensing
• Prioritizing the categories to ensure you are capitalizing on your best market opportunities

Specific research is a critical and necessary input to this workshop.  Accordingly, we build the research into the workshop’s pre-work phase so that the workshop can be utilized to build consensus and make key decisions.  The research is designed to answer the following questions:

• What is the awareness level of the brand?
• What are the perceived strengths and weaknesses of the brand, by target segment?
• What new categories does the target segment want to see the brand in?
• What is the market attractiveness of these categories?

We include educational components throughout the day so that all participants are speaking a common language.  For example, we make sure participants understand the brand’s architecture and its components including: product attributes, functional benefits, emotional benefits and higher order brand identity.  We also ensure participants are clear and aligned on their brand’s positioning statement.  Finally, we review:

• What is brand licensing?
• What are its benefits?
• What are the common pitfalls?
• What is the brand licensing process?

The deliverable is a consensus on whether the brand is ready to be licensed into new categories and if so, provides a list of the top categories that represent the best opportunity to extend the brand through licensing. That way you know how to extend your brand via licensing so you can take advantage of this critical go to market tactic.  And, because the brand’s vitality and essence are critical to its long-termhealth we work with the team throughout the workshop to ensure that every category selected by definition reinforces the brand’s position.  While the group can be larger, we generally plan for attendance by 8 to 10 key organization stakeholders, including the organization’s leadership. This workshop is lead by renowned brand licensing expert Pete Canalichio.

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

• Top 100 in Strategy & Transformation
• Top 100 in Digital Transformation
• Top 100 in Operational Excellence
• Top 100 in Organization & Change
• Top 100 Management Consulting Frameworks

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.