Licensing involves granting a third party (a licensee) with rights to use one’s brand (trade marks) in exchange for financial consideration, typically referred to as a royalty (and most commonly based on a percentage of the licensee’s sales).
A brand owner’s intellectual property is arguably its most valuable asset. Licensing the use of one’s IP is a great strategy to adopt to strengthen that asset and make it more valuable. However, brand owners need to ensure that they licence their brands credibly, ensuring that the choice of what, where and to whom they licence is underpinned by proper planning, research, analysis and management.
Licensed brand extensions refer to licensing programmes in which only products/services that credibly align with the brand’s core attributes are developed, so that the connection between the core and licensed offering is seamless in the eyes of retailers and consumers.
The Benefits of Licensed Brand Extensions
Create additional revenue streams from categories that align with the brand’s key attributes, with minimal investment and risk
Allows brand owners to tap into expertise that it may not already possess
Protect intellectual property across key categories and territories
Build brand awareness and distribution, whilst reinforcing brand values
Reach new customers and strengthen brand loyalty with existing customers