The Benefits: The Advantages of Harnessing Brand Equity Through Licensing

• Author: Michael Sanford Stone
• Profession: B.A. from Hamilton College and a J.D. from Emory University School of Law
• Pages: 45-73

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CHAPTER 3

The Benets:

The Advantages of

Harnessing Brand Equity

Through Licensing

Brand-focuse d licensing i s not a one-size-f its-all strateg y.

Although brand owners should align this strategy with larger

marketing objectives, tai loring it to t specic goals is crucial. In

fact, the versatility of licensing is a n advantage for companies that

use the strategy properly.

Licensing helps companies leverage brand equity in wide-

ranging, innovative ways. Organizations sometimes don’t fully

realize how valuable their brand equity is and how licensing can

be used for a variety of marketing purposes. For example, some

companies may want their licensing program to change a brand’s

positioning or extend a brand’s meaning. P&G’s licensing program

for Mr. Clean helped turn a brand known as a liquid cleaner into

a broader household cleaning brand. (See Figure 3 in the photo

insert.) Skechers extended its brand meaning from footwear to

The Power of Licensing

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fashion by utilizing licensing. ese ty pes of brand redenitions

are ambitious but fully withi n the scope of strategic licensing.

Alhough many benets exist for marketers who use licensing

in strategically sound ways, we will focus on the following seven

benets of brand licensing:

1. To enter or maintain a presence in businesses that have

strategic value, but fall outside of the company’s core

businesses or nancial thresholds.

2. To build brand awareness and reinforce brand values.

3. To engage with consumers, strengthen the relationship

with existing customers, and increase consumer

touchpoints.

4. To reach new consumers and educate them about the

brand.

5. To extend into new channels of distribution and new

paths in the consumer shopping journey.

6. To generate new revenue streams with minimal upfront

investment.

7. To protect the brand via broad trademark registration.

Virtually every brand that engages in licensing is doing so

to achieve more than one benet, so the odds are that a number

(or most) of the benets on this list apply to any brand owner.

Frequently, however, one or two of the benets are the real focus,

whereas others just naturally accrue to t he brand as a by-product

of successfully pursuing the primary benets.

e discussion of each of these benets includes examples

designed to spotlight specic benets. Although one particular

benet is highlighted for each example, you will easily be able to

discern the other benets that licensing provides for the brand.