What is Licensing?
A business arrangement in which one company (Licensor) gives another company ( Licensee) permission to utilize licensor’s brand to market a product or service for a specified royalty and payment.
Did you know most of the Calvin Klein products you see in the market are produced by licensees. Calvin Klein only produces women’s apparel product lines.
IBM’s corporate sales derived from licensing approximates $1 billion a year.
Successful brands open doors to retailers, communicate quality and reliability to consumers, and through the resources provided by the licensor allow companies effectively gain market share, increase profits and sales volume.
Selecting an appropriate license should be carefully considered before finalizing an agreement. Who is your consumer? their age/ gender? their preferences? economic limitations? Does the brand say anything to your consumer? Does the brand’s story fit local culture?
Licensing allows you to become profitable faster, penetrate markets more effectively and grow your overall business in ways that would take decades with non-branded products.
Licensed products are most effective when advertised; the licensed communication makes instantly recognizable advertising campaign, having more impact resulting in significantly higher sales.
Branded products provide a platform to communicate values, aspirations, and lifestyle… making your product very attractive and sellable.
In a global economy, price sensitive environment, branded products add unique value giving you a strong competitive advantage.read more