Review on brand licensing and celebrity endorsement

2. Brand Licensing
• Definition
• History
• Lisencing includes
• Process
• Benefits to licensor
• Benefits to licensee
• Conclusion
• Related terminologies

3. 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

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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

10. 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

11. 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

12. 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

13. 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

14. • 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.

15. • 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

17. • Definition
• Purpose
• Products
• Models giving insight of celebrity
endorsement
• Benefits
• Disadvantages

18. 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

19. 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.

21. 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.

22. 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

23. 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

24. 3. Model of meaning transfer
• Meaning attributed to celebrity become
associated with the brand in the consumer
• Consumer acquire brand meaning

25. 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

26. • Some celebrity endorse several brand or
Preety zenta endorses Cadbury Godrej TVS
Scooty , Maggie, head and shoulder

27. 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.

28. 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

29. 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