Secrets of Success in Brand Licensing

Title Page

SECRETS OF SUCCESS IN BRAND LICENSING

by

Andrew Levy and Judy Bartkowiak

Publisher Information

Published in the UK by MX Publishing

335 Princess Park Manor, Royal Drive, London, N11 3GX

www.mxpublishing.co.uk

Digital Edition converted and distributed in 2011 by

Andrews UK Limited

www.andrewsuk.com

© Copyright 2011 Andrew Levy and Judy Bartkowiak

The right of Andrew Levy and Judy Bartkowiak to be identified as the authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1998.

All rights reserved. No reproduction, copy or transmission of this publication may be made without express prior written permission. No paragraph of this publication may be reproduced, copied or transmitted except with express prior written permission or in accordance with the provisions of the Copyright Act 1956 (as amended). Any person who commits any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damage.

Although every effort has been made to ensure the accuracy of the information contained in this book, as of the date of publication, nothing herein should be construed as giving advice. The opinions expressed herein are those of the author and not of MX Publishing.

Cover design by www.staunch.com

Foreword

This extremely well written book fills a longstanding gap in the literature of Marketing, which is surprising considering the brand licensing industry is worth around $150 billion.

Although the title and topic may sound somewhat esoteric and a little dry, after a lifetime as a practitioner and teacher of Marketing, I found it difficult to put down once I started reading it – rare indeed for the majority of marketing books, including my own.

My own first job as a Marketing and Sales Director was in a franchise business – Canada Dry – and I wish I had known then what I know now, having read this book.

In the commercial world, successful brands create shareholder value by creating competitive advantage. A great brand continues to shine bright no matter how dark and depressing the economic environment and brings pleasure to people. Licensing successful brands enables this financial success and consumer pleasure to be spread widely around the world. But such licensing takes many forms and can be highly complex. This book steers us through what could be a potential minefield. It is full of excellent practical advice but importantly is also a cracking good read.

Professor Malcolm McDonald MA (Oxon) MSc PhD D.Litt

Emeritus Professor

Cranfield School of Management

Chairman Brand Finance plc

Preface

Brand Licensing is all around us; it transforms ubiquitous products into living breathing brands with personalities and an emotional connection to us and who we want to be. What we buy and where we buy it, give us choices to align ourselves with the brands and characters we love. As brand owners we can tap into this choice by offering consumers the combinations of product and brand that they want to buy. In doing this, we add value to the products such that they command a premium price at retail and we add value to our brands by enabling consumers to experience them in other product categories.

Part 1 of the book is an introduction to marketing, the marketing mix, segmentation, brand extension and brand licensing. Part 2 introduces you to the key players in the Industry; the licensor, licensee, licensing agent and retail.

Part 3 is a series of fascinating case studies resulting from telephone interviews with the people behind the most successful licensing programmes of 2011. Some of these are still growing; others have already proved themselves in the market place. Our contributors have generously shared the secrets of their success, their underlying beliefs about the licensing business and what makes a successful brand.

We cover the marketing tools in Part 4 and then the legal and financial ones in Part 5. These chapters have also been taken from experts in their field so that you have the very latest knowledge based on years of experience.

Andrew Levy and Judy Bartkowiak

About the Authors

Andrew Levy

Andrew has a BA (Hons) Business Studies degree from Thames Valley University (Ealing) which was sponsored by Glaxo Pharmaceuticals. He gained blue chip FMCG experience spending 3 years in brand and product management at CPC Best Foods (Unilever) followed by 2 years at the world’s leading independent licensing agency Copyright Promotions Licensing Group. Subsequently he set up his own business and became the licensing agent for brands including The Big Breakfast, Betty Spaghetty, Animal Ark, Beverly Hills Polo Club and became a licensee of Warner Bros. and King Features.

He then set up and ran the UK office of LIMA (International Licensing Industry Merchandisers’ Association) for 8 years (1998-2006). He currently owns and manages Licensingpages® the world’s leading commercial resource for the licensing industry www.licensingpages.com which he established in 1998 with revenue coming from membership, advertising and recruitment. In 2009 he also set up IPTrademarket® the world’s first independent global trading platform for trademarks, www.iptrademarket.com

Andrew is a keen skier, squash player and golfer and lives in London with his wife and 2 daughters, who have lots of licensed products!

Judy Bartkowiak

Judy runs Kids Brands Europe www.kids-brands.com a Market Research Consultancy whose clients have included: Zapf Creations, Woolworths, Aardman Animations, LEGO, VTech, Little Tikes, Mattel, Entertainment Rights, Marks and Spencer, ITV and Woolworth’s. She has spoken at Kidscreen (US), AQR (Lisbon), Brand Licensing Show Seminar (London) , LIMA Seminar, Advertising Festival (Paris) Kiddie Marketing (Madrid) and The Media Trust. Judy has an MA in International Marketing and Post Graduate Diploma in Market Research. She trained at Taylor Nelson and then with Bill Schlackman, the founder of Qualitative Research in the UK.

Judy has now semi-retired from Market Research and is a writer and NLP Trainer/ Coach. She writes children’s fiction as JudyBee www.judybee.biz and NLP books for the family www.nlpkids.com ‘Teach Yourself: Be a happier parent with NLP’ is published by Hodder Education and is available on Amazon and MX Publishing www.mxpublishing.co.uk

Neuro Linguistic Programming is the study of the structure of excellence. In Secrets of Success in Brand Licensing you will discover the structure of excellence of successful Brand Licensing campaigns so you can apply that structure to your own properties.

Acknowledgements

Thank you to all the Licensing Industry experts we spoke to who have each given generously of their time and expertise. They have shared their secrets of successful Brand Licensing with us so that we can pass them on to you.

Al Gosling – Extreme Group

Andrew Carley - Entertainment One (Peppa Pig)

Andrew Lane - Fluid World (Hello Kitty)

Cathy Snow - RSPCA

Ciarán Coyle - Beanstalk (Paris Hilton)

Darran Garnham – Mind Candy

Darrell Jones- Bandai (Licensee)

David Haigh - Brand Finance (Brand Valuation)

Ian Downes - Start Licensing (The Beano)

James Walker - Hasbro (Monopoly)

Jane Garner - Kilogrammedia (PR)

John Burns - Gateley

John Vasta – Licensing Industry Consultant (Segmentation)

Julia Posen - Walker Books

Kelvyn Gardner – LIMA UK

Lisa Lovell – Brand Enforcement

Matt Gilmore – The Arsenal

Matt Webb – Creating Kids Magic

Nicolas Loufrani – Smiley World (Smiley)

Nicole Blake – Classic Media (Where’s Wally)

Olivia Smales – IMG (The Armed Forces and Pelé)

Rachel Cowdrey - Advanstar

Richard Pink – Pink Key

Rick Glankler- HIT (Thomas and Friends)

Robert Hughes – Zeon (Licensee)

Samantha Loveday – Licensing.biz

Sarah Swindell – Watermelon Europe (Retail)

Stuart Burns – HW Fisher and Company

Tom Roe – CPLG (Sport)

Trevor Jones – Danilo Promotions (Licensee)

Wendy Munt – Be Inspired Consulting (Retail)

William Fenton – Sponsorship Consulting

Introduction To Marketing

The Chartered Institute of Marketing (CIM) defines marketing as ‘The management process responsible for identifying, anticipating and satisfying consumer requirements profitably."

Some people incorrectly refer to the sales or advertising functions as ‘marketing’ but marketing is in fact the complete process of getting the right product to the right consumer at the right price in the right place and at the right time. If you don’t get it all right then your competitors will. Remember - consumers have a choice!

The central idea of marketing is to match a company’s capabilities with consumer needs in order to achieve the goals of the firm. Consumer needs can be satisfied in many different ways and consumers will choose the products that they perceive offer them the greatest bundle of benefits at whatever price they are prepared to pay.

Companies are grouped into ‘sectors’ which define the type of company it is. For example, your company might be in the ‘retail sector’ or the ‘technology sector’.

We tend to refer to ‘markets’ when we group together consumers by their geographic location or demographic e.g. the Nordic market or the student market.

Then within each market we group consumers with similar requirements of the product together and separate them from groups with different needs so we can target our marketing appropriately. These groups of consumers are called ‘segments’.

It is the function of Marketing to define and segment the market for the product or service into geographic markets, then (if appropriate) demographic markets and then segments and position the brand or property in such a way that consumers needs within each segment are not just satisfied but exceeded. If the marketer does a good job of understanding consumer needs, develops products that provide (perceived) superior value and then prices, distributes and promotes these products effectively, these products will sell.

The process by which this job is done is called the ‘marketing plan’. For more detail go to http://www.malcolm-mcdonald.com/books.htm because we are just giving a brief overview to put Brand Licensing into the Marketing context whereas Professor Malcolm McDonald has written over 40 excellent books on this subject!

1. Start with a marketing audit. Where is the company now, where does it want to go and how will it get there?

2. Conduct a SWOT analysis by brainstorming the strengths, weaknesses, opportunities and threats a) facing your company (internal) and b) in the market place (external).

3. Develop marketing objectives (what you want to achieve) and strategies (how you will achieve them). In the case of Brand Licensing for example, the marketing objective could be ‘getting new products into new markets’ and licensing out your brand is the strategy which will involve ‘the four Ps’ of the Marketing Mix – product, price, promotion and place.

4. Finally you need a marketing programme for each product or brand setting out the marketing activity for the next year.

Marketing is not only a business function like Human Resources or Finance but it is also a front line attitude of mind, one that puts the consumer at the core of its operations. It is responsible for;

· Gaining a deep understanding of the consumer and the market place

· Defining consumers in terms of their needs and priorities

· Putting together the product or service offerings to meet these segment specific needs

· Providing powerful differentiation, positioning and branding

· Developing effective strategic marketing plans

· Communicating these to everyone in the organisation responsible for delivering them e.g. product development, manufacturing, purchasing, sales promotion, direct mail, distribution, sales and customer service.

· Communicating and delivering them to the marketplace

· Monitoring the value actually delivered

Excellent marketing has always emanated from this deep understanding of consumer needs. You will find when you read the case studies in Part 3 that respect for this emotional connection between consumer and brand is a key element of their success.

The Marketing Mix

We usually refer to ‘the four Ps’ in the Marketing Mix; product, price, promotion and place. They will form the structure of your Marketing Plan.

· Product

‘Product’ is the product itself, the product range and all variants of the product. The product can also be a service, a personality, design, character, TV show, book or similar.

Ideas for new products come from a number of places. They can be generated as a result of formal processes such as using NPD (new product development) companies, Market Research or semi formal processes such as internal brainstorming, customer feedback forms, comments on the website or they can result from your own desk research, shopping trips and chatting with friends and colleagues.

One theme that comes through again and again in the case studies is the importance of getting out of the office and walking the streets, watching how people connect with your product and looking at the competition. You will learn so much about how consumers buy your product from watching and listening in store.

· What are the customer needs of this product or service?

· What features does it need?

· How and where will the product be used?

· How will customers experience it?

· What does it look like – size, colour, shape etc?

· Product name?

· Branding?

· Differentiating features compared to competitors?

· Packaging

Develop the habit of disassociation. Look at your packaging as if you were the consumer. Look at it in the competitive environment alongside other brands on the shelf. Consumers make their choices in the first 30 seconds of looking at the shelf for most products.

· How does your packaging reflect the qualities and attributes of your brand?

· Does it give them the information they need about the product immediately?

· Look in detail at what each element conveys; colours, font, images, information.

· Get out of the office! Go and chat with consumers at point of purchase.

· Positioning

How are you positioned in the hearts and minds of your consumers?

· How do consumers talk about your brand?

· What is your brand story?

· If your brand was a person, what sort of person would they be? How old would they be? What would they wear? What would they like to do?

· What words would consumers use to describe your brand? What attributes would they give it?

· Is it a friend or is it aspirational?

· How would you like it to be positioned and how can you get it there? What would you have to say or do to engage at the emotional level with your consumers?

· Price

‘Price’ is the pricing strategy associated with the product which will vary according to how desirable your brand is perceived to be over the competitor. There will always be a limit on price within the product category although this will be much higher if you can present a highly differentiated unique product offering a benefit on which consumers place high value.

· Value of the product or service to the buyer?

· Established price points in this area?

· How price sensitive is the market?

· What discounts should be offered?

· Price comparison with competitors?

· Promotion

‘Promotion’ is how the product is promoted including all elements such as advertising, sponsorship, public relations, live events, promotions and so on. Nowadays viral marketing is becoming increasingly important e.g. social network sites such as Facebook and Twitter. Effective promotions involve delivering the right message to the right messengers in the right environment. To turn an ordinary message viral you need messengers who have a huge social network, are ‘on the pulse’ of things and would be considered opinion leaders in your product category or target market. The message itself needs to be memorable and relevant.

· How does the target market consume advertising media?

· When is the best time to promote? Is there seasonality in the market?

· How do your competitors do their promotions? And how does that influence your choice of promotional activity?

· Place

‘Place’ is the channels of distribution, where it is to be sold; be that in shops, online or both. The channel of distribution itself will be a brand and have a position in the market place with consumers. Ideally match your product position with the channel position