The Benefits: The Advantages of Harnessing Brand Equity Through Licensing

AuthorMichael Sanford Stone
ProfessionB.A. from Hamilton College and a J.D. from Emory University School of Law
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
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
4. To reach new consumers and educate them about the
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
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.

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