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Brand Licensing
• Definition
• History
• Lisencing includes
• Process
• Benefits to licensor
• Benefits to licensee
• Conc...
Brand Licensing
Definition
The leasing of a brand name to a company other
than the owner of that particular brand. As an
e...
Example
After Apple launched the iPod a number of years ago
it created an immediate need for accessories; Apple
could have...
History
Brand licensing is a well-established business, both in the
area of patents and trademarks. Trademark licensing ha...
History
The rise of brand licensing did not begin until much later, when
corporations found that consumers would actually ...
History
Brand extensions later made the brand licensing marketplace much
more lucrative, as companies realized they could ...
Licensing includes:
• It grants the licensee permission to use the property Limitations are
normally established on how pa...
Licensed product process steps:
• Licensor chooses the product categories to
be licensed
• Licensor finds and negotiates a...
The Benefit of Licensing for Licensors
• The key benefit for a licensor is the ability to exploit and
enhance its brand or...
The Benefit of Licensing for Licensees
The key benefit for a licensee (especially
manufacturer or retailer) is the ability...
Conclusion
• Needless to say, the entire process is lengthy
and time consuming. One must also keep in
mind that the goal i...
Terminologies
• Advance or Advance Payment
The initial guarantee paid by a licensee to a licensor, due upon
execution of a...
• Earned Royalties
The Royalties that are owed to Licensor by Licensee
computed by multiplying the Royalty Rate by the Net...
• Audit Rights
The permission for a Licensor, or licensor's agent, to review
Royalty Payment, financial statements, accoun...
• Definition
• Purpose
• Products
• Models giving insight of celebrity
endorsement
• Benefits
• Disadvantages
Definition of celebrity
Celebrity
Celebrities are people who enjoy public recognition by
a large share of a certain group ...
Definition of celebrity endorsement
“A form of brand or advertising campaign that
involves a well known person using their...
Basic purpose of celebrity endorsement
• Generally increase sale
• Attract more attention of customer
Celebrity Endorsemen...
Models giving insight of CE
1. Source credibility and attractiveness
• Source attractiveness refers to endorsers physical
...
2. Match up hypothesis
• Effectiveness depend on the existence of fit
between celebrity spoke man and endorsed brand
• It ...
3. Model of meaning transfer
• Meaning attributed to celebrity become
associated with the brand in the consumer
• Consumer...
4. Multiple brand and celebrity endorsement
• specific brand is endorsed by the different spokesman to
attract diverse set...
• Some celebrity endorse several brand or
Preety zenta endorses Cadbury Godrej TVS
Scooty , Maggie, head and shoulder
Benefits Of Using Celebrity Endorsements
• Attract New Users:
Finding and keeping new customers is hard for some
organizat...
Benefits of using celebrity endorsement
• Influence Consumer Purchases:
Celebrities who are well respected can instantly a...
Disadvantages
• Multiple endorsements
Preety in vatika and head n shoulder
• Brand shifting
e.g. when aishwarya rai and Am...
Brand licensing, celebrity endorsement
Brand licensing, celebrity endorsement
Brand licensing, celebrity endorsement
Brand licensing, celebrity endorsement
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Brand licensing, celebrity endorsement

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Review on brand licensing and celebrity endorsement

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Brand licensing, celebrity endorsement

  1. 1. Brand Licensing • Definition • History • Lisencing includes • Process • Benefits to licensor • Benefits to licensee • Conclusion • Related terminologies
  2. 2. Brand Licensing Definition The leasing of a brand name to a company other than the owner of that particular brand. As an example, a beer company located in Europe could lease its brand name to an American brewer. Read more: http://www.businessdictionary.com/definition/brand-licensing.html#ixzz3LQ5LSUMa The process of creating and managing contracts between the owner of a brand and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory. Read At Law Dictionary
  3. 3. Example After Apple launched the iPod a number of years ago it created an immediate need for accessories; Apple could have chosen to manufacture and distribute these themselves, but decided they were not core to the business and therefore, chose to satisfy the need through licensing. Licensing the iPod brand enabled many companies to produce all kinds of terrific products to make the iPod more user-friendly and enhance the listening experience. Examples include the Bose Sound System with iPod docking station, other products that enable an iPod to be heard through a vehicle's built-in stereo and iPod holding devices that allow users “to take their music with them” when they go running. All these accessories are sold by licensees.
  4. 4. History Brand licensing is a well-established business, both in the area of patents and trademarks. Trademark licensing has a rich history in American business, largely beginning with the rise of mass entertainment such as the movies, comics and later television. Mickey Mouse's popularity in the 1930s and 1940s resulted in an explosion of toys, books, and consumer products with the lovable rodent's likeness on them, none of which were manufactured by the Walt Disney Company.
  5. 5. History The rise of brand licensing did not begin until much later, when corporations found that consumers would actually pay money for products with the logos of their favorite brands on them. McDonalds play food, Burger King T-shirts and even ghastly Good Humor Halloween costumes became commonplace.
  6. 6. History Brand extensions later made the brand licensing marketplace much more lucrative, as companies realized they could make real dollars renting out their equity to manufacturers. Instead of spending untold millions to create a new brand, companies were willing to pay a royalty on net sales of their products to rent the product of an established brand name. Armor All auto vacuums, Breyers yogurt, TGI Friday's frozen appetizers, and Lucite nail polish are only a handful of the products carrying well-known brand names which are made under license by companies unrelated to the companies who own the brand.
  7. 7. Licensing includes: • It grants the licensee permission to use the property Limitations are normally established on how partners can make use of the brand name, and for how long they retain the right of usage. This protects the brand owner in a couple of ways. The time limit allows the owner to consider terminating the agreement and going with a different partner if the relationship does not prove to be as beneficial as originally anticipated. In addition, placing limits on how the brand name can be used in labeling and marketing products helps to prevent the brand from being identified with products that are unrelated to the main brand or are perhaps of lower quality • The licensor receives financial remuneration – normally in the form of a guaranteed fee and/or royalty on a percentage of sales in exchange of usage of his property • This approach often makes it possible for the brand owner to receive a portion of the revenue generated by these ancillary products, without having to incur the expense necessary to actually manufacture those goods or services. Assuming that the products manufactured and sold by the entity leasing the brand name are of high quality and meet the standards set by the brand owner.
  8. 8. Licensed product process steps: • Licensor chooses the product categories to be licensed • Licensor finds and negotiates a license with the best licensees • Licensees develop concepts, prototypes and final production samples and submit for approval • Licensor approves licensed products for sale • Licensees sell licensed products to authorized retailers
  9. 9. The Benefit of Licensing for Licensors • The key benefit for a licensor is the ability to exploit and enhance its brand or property. Licensing can do this by: • increasing its brand presence at retail or distribution outlet • creating further brand awareness to support its core products or services • supporting and enhancing its core values by associations with the licensed products/service or category (e.g. association with a healthy food or with a cutting edge mode of fashion) • entering new markets (consumer or geographical) which were unfeasible with it’s own resources or capabilities • generating new revenue streams, often with little involvement or additional financial or other resource implications
  10. 10. The Benefit of Licensing for Licensees The key benefit for a licensee (especially manufacturer or retailer) is the ability to significantly increase consumer interest in and sales of its products or services. Licensing can do this by: • providing additional marketing support or momentum from the core property’s activity provided by the licensor • gaining additional retail space and favor • reducing efforts of licensee for marketing • Trust of customer
  11. 11. Conclusion • Needless to say, the entire process is lengthy and time consuming. One must also keep in mind that the goal is not to achieve the license but to make a success of it and the activities that follow the signing of the contract. These processes, if executed well, on the one hand, can ensure huge success of the program. While on the other hand, if either the licensee or the licensor do not live up to their commitments, it can affect sales, and more importantly the reputation of the brand
  12. 12. Terminologies • Advance or Advance Payment The initial guarantee paid by a licensee to a licensor, due upon execution of a license agreement. Advances are typically nonrefundable and credited against future earned royalties • Guarantee The minimum Royalty Payment, or prepaid royalties that a Licensee is contractually obligated to pay a Licensor. Typically, the Guarantee is computed by taking a percentage of the licensee's estimated Royalties for the entire Term of the License Agreement. Guarantees may be paid quarterly, semi- annually or annually and are typically nonrefundable and credited against future Earned Royalties
  13. 13. • Earned Royalties The Royalties that are owed to Licensor by Licensee computed by multiplying the Royalty Rate by the Net (Wholesale) Sales of all Licensed Products or Articles. Earned Royalties differ from Paid Royalties in that Guarantees and Advances are not subtracted. Earned Royalties + Guarantees and Advances = Paid Royalties. • License Agreement The contract between the Licensor and Licensee that grants the right to use the Licensed Property in a specified manner in exchange for payment; typically a Royalty based on Wholesale Sales. The license agreement lays out the terms of the partnership including: legal, financial and other • Licensing Agent A company that develops and manages licensing programs for brand owners or licensors, and manufacturers or licensees. The primary role of the agent is to bring the two parties together to consummate license agreements in return for a share of the royalties.
  14. 14. • Audit Rights The permission for a Licensor, or licensor's agent, to review Royalty Payment, financial statements, accounting data, warehouse and inventory, financial systems and procedures, or other pertinent licensing information to verify accuracy • Strategic Licensing Plan (SLP) A document, developed by the Licensing Agent with input and approval by the Licensor that outlines strategies and details of the Licensing Program. A well-written plan includes the targeted list of Licensed Products or Articles, Channels of Distribution and marketing plans. • . Brand Representation Licensing A Brand Owner's enlisting of manufacturers to produce, market and sell approved products bearing its brand name, logo, or Mark and/or its Licensable Assets in exchange for a fee, typically a Royalty, paid as a percentage of Wholesale Sales
  15. 15. • Definition • Purpose • Products • Models giving insight of celebrity endorsement • Benefits • Disadvantages
  16. 16. Definition of celebrity Celebrity Celebrities are people who enjoy public recognition by a large share of a certain group of people and can influence life of people. Celebrities are : • Actors • Models • Sports figure • Entertainer • Pop star • Business man • Politician • Fictional celebrities
  17. 17. Definition of celebrity endorsement “A form of brand or advertising campaign that involves a well known person using their fame to help promote a product or service.” Manufacturers of most of products uses classic celebrity endorsement techniques, such as television ads and launch event appearances, in the marketing of their products. Read more: http://www.businessdictionary.com/definition/celebrity-endorsement.html#ixzz3LV4b7aHD As our obsession with celebrities has reached unhealthy levels, fuelled by media, gobbled up by the masses, marketers have dialed up the idea that consumers are prepared to buy into the celebrity lifestyle more than the product itself.
  18. 18. Basic purpose of celebrity endorsement • Generally increase sale • Attract more attention of customer Celebrity Endorsement Required for products Markets in which advertising coordinates consumer purchases, celebrity endorsements are more likely chosen for products that have either of the following: - • High price-cost margins • Large potential customer pools • The need to coordinate across diverse sets of customers • Specially for young age product as young ages take impulsive decision to buy a product as their need changes continuously as per trend.
  19. 19. Models giving insight of CE 1. Source credibility and attractiveness • Source attractiveness refers to endorsers physical approach, personality, likeability to receiver • Endorser must be trust worthy enough to modify people attitudes toward brand Source Credibility Source attractiveness
  20. 20. 2. Match up hypothesis • Effectiveness depend on the existence of fit between celebrity spoke man and endorsed brand • It say that CE will only change buying behavior if characteristics of product match-up with the image conveyed by celebrity Priyanka chopra and Ranbir kapoor Product Young Stylish Energetic Choice of youth For young people Energetic
  21. 21. 3. Model of meaning transfer • Meaning attributed to celebrity become associated with the brand in the consumer • Consumer acquire brand meaning
  22. 22. 4. Multiple brand and celebrity endorsement • specific brand is endorsed by the different spokesman to attract diverse set of target customer .But it may confuse the customer about brand identity so it should assure that each and every celebrity must possess compatible meanings that are sought for brand
  23. 23. • Some celebrity endorse several brand or Preety zenta endorses Cadbury Godrej TVS Scooty , Maggie, head and shoulder
  24. 24. Benefits Of Using Celebrity Endorsements • Attract New Users: Finding and keeping new customers is hard for some organizations. Using a celebrity to endorse an organization's product or service can entice new customers. • Breathe Life Into A Failing Brand: Celebrity endorsements can help revive a product or service that is losing market share. Celebrities can tout the benefits of the brand and help create new interest from consumers. • Build Awareness: Brand awareness is an indicator that measures how familiar people are with a particular product or service. Celebrities advertising can build brand awareness, according to Supermarket News, a publication covering the food distribution industry.
  25. 25. Benefits of using celebrity endorsement • Influence Consumer Purchases: Celebrities who are well respected can instantly add credibility to a product or service. Consumers may have the attitude, 'If this celebrity is backing the product or service, it must be good.' Consumers might also think 'If the product is good enough for him or her, it is good enough for me.' • Position a Brand: Celebrities can be used to position a brand. Product positioning is a process of convincing the consumers that the product being advertised is the best on the market and all other products are inferior. • Recall brand People recall brand in mind which is associated with a celebrity. • Connect emotionally and quickly As people are emotionally connected with the celebrities so they connect with the product sometimes they endorse
  26. 26. Disadvantages • Multiple endorsements Preety in vatika and head n shoulder • Brand shifting e.g. when aishwarya rai and Amir khan shifted to the coke from Pepsi • Overshadowing • Negative image of celebrity Veena malik • Influence of celebrity scandal and moral violation on brand ( salman khan scandal Thums up drink take akshay face hard) • Celebrity trap Once into a celebrity its hard to get rid of it

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