Here at brandchannel, we love the idea of brand licensing. Indeed, after all the work of building a strong, championed brand, why not leverage it a little?
The key is "a little." All brand owners dream of seeing their brand cross that line where consumers begin to willingly self-identity with it, whether that's by wearing a t-shirt or using a brand-licensed credit card.
Consider Trump licensing his name in India, or Everlast licensing to Sears. Everybody's doing it. One category of brands making substantial changes to the brand licensing approach is the automotive sector.
Ford and Lamborghini just launched online marketplaces to sell their merchandise in addition to already established relationships at retail outlets.
Intrigued to find out more, we interviewed Michael Stone, founder and CEO of brand licensing specialist Beanstalk, which has worked with Ford, Harley-Davidson, Land Rover and Stanley, about the benefits and pitfalls of brand licensing as a marketing tactic.
BC: Will Ford and Lamborghini’s online marketplaces cannibalize the market and upset their other licensing partners?
Michael Stone: No. Ford licensee partners who distribute through brick and mortar retail also participate in the Ford eBay motors online store. The added distribution channel benefits licensees and the overall program. The online store pulls the entire product together so consumers can shop at a "store-within-a-store." This is yet just another retail outlet for Ford licensed products.
BC: Harley-Davidson legendarily "embraced" licensing like Lenny would have embraced the rabbits. Harley-Davidson perfume? Is there a warning light over-licensed brands should look for?
MS: Are you comparing Harley-Davidson to Lennie from Of Mice & Men? Have you watched Sons of Anarchy? That’s probably not a good idea.
We represent the brand in Europe where our focus is the youth market and working towards cultivating the next generation of Harley-Davidson enthusiasts. In fact, Harley-Davidson is very careful to consider all licensing opportunities through the brand lens. Every product must pass through a brand filter, ensuring that each product is aligned with brand objectives.
If you have ever been to Sturgis or Bike Week you would know that Harley-Davidson’s brand loyalists are more like brand ambassadors. With that level of engagement brand owners are able to stretch themselves and take more chances.
Ultimately, the most successful licensing programs extend into categories that are closely aligned with the core product and the brand's equities. The Harley-Davidson cologne may have been a stretch to the marketing world, but it was likely received well by Harley’s gang of brand ambassadors.
BC: What is the most misunderstood benefit of brand licensing as a marketing tactic?
MS: The same reality applies to licensing as it does for most marketing disciplines. Realistic expectations need to be set for brand owners as to what licensing can achieve. Done correctly, licensing should help build brand awareness, increase consumer touchpoints and provide new ways for consumers to express their affinity for the brand. Licensing should support the core brand's strategic initiatives but cannot single-handedly reposition a brand. In short, licensing follows fame, not the other way around.
BC: Even Playboy licensing...?
MS: Are you saying that you’ve never had a pair of fuzzy dice hanging from your rearview mirror? Or haven’t aspired to the “Playboy” lifestyle? Come on!
Playboy’s program, which has gone in several different directions over the years, is currently a $900-million licensing program and bright spot in their earnings report.
While the publication, which was once at the core of its business, has fallen on hard times along with the majority of the magazine industry, the brand has done well maintaining its relevancy through other entertainment channels and marketing efforts. I agree with their current leadership that the company’s future is in the iconic bunny logo and the equity within the Playboy brand.
The brand is making a strong push toward female audiences and expanding globally. Like any other program, I’d caution them to be careful not to over-saturate the market and continue to make investments in their publication and television properties to remain relevant.
If a success, the reopening of “Playboy Clubs” in target markets will allow new and younger audiences to experience the brand and fuel future success of the program.
BC: Are there any industries which should avoid brand licensing?
MS: I am sure there are individual brands (e.g., certain reality TV stars and celebrities) that the general public would rather not see venture into the licensing business. However, there are no industries as a whole that should avoid it altogether. Although, right now, in this environment, I wouldn’t suggest that banks venture into licensing. Also, industries that are primarily business-to-business industries (e.g., heavy medical equipment) are probably best not going into licensing.
BC: What is a brand you see as ripe for licensing that isn't taking advantage?
MS: Looking at the success of restaurant brands like California Pizza Kitchen, TGI Friday's and PF Chang's, Chipotle would be a fantastic brand to license for frozen, ready-to-prepare or fresh Mexican meals at retail. And there are other restaurant chains as well who, for whatever reason, have declined to take advantage of the trend in restaurant licensing that is going on right now.
On the luxury retail side, I could see Judith Ripka extending into fragrance and fashion accessories such as handbags, leather goods and eyewear. And, again, there are other luxury brands that have failed to extend their brands, however cautiously, through licensing.
Top image via the Hooters store.