Brand Licensing is a strategic relationship between a brand owner (licensor) and a manufacturer (licensee) in which the licensor grants the licensee the right to manufacture and distribute specific products or services under the brand name. For example, Timex Group has recently acquired license from the International Cricket Council (ICC) for launching merchandise using the ICC World Cup 2011 logo. Timex can use the ICC World Cup 2011 logo on its special edition watches.
A licensor is the brand owner, who will license the brand as effectively as possible to different manufacturers and retailers. At the same time the brand owner will be concerned about the quality of the merchandise and that the brand is being used correctly in accord with the agreement.
A licensee must come up with the designs for the proposed merchandise. The licensee must be quick and flexible implementing the licensor’s stipulations and turning the designs to pass from the approval stage to market. The licensee works closely with the brand owner to develop a product or service which is in line with the brand image and the brand philosophy.
A licensing agent represents the licensor’s products. Its role is to find an appropriate company that will license the brand of the licensor and pay royalties to the licensor. The agent manages all the aspects of the formal licensing process. At times, licensors may even delegate the responsibility of collecting royalties, and evaluating the quality of products too to the agent. HW Agency is an example of a licensing agent.
Not only manufacturers, but also retailers can license the brands. For example, Godrej is planning to license its brands to future group. According to the deal, Godrej Consumer Products Ltd (GCPL) will license brands like Godrej Tea, Evita, Banish and others to the leading retailer Future Group for a period of three to five years.
GCPL will be able to cash in on the retailer’s sizeable distribution network, while Future Group will gain access to sourcing and R&D facilities of Godrej Group.
Spykar is using the brand licensing route effectively to increase the turnover of the brand. Spykar is delivering quality products in the relevant youth categories like travel gear, eyegear, deos, etc, increasing the customer loyalties towards the brand. The customer need not go to different places, the customer can get maximum brand value and brand satisfaction for all their styling and lifestyle needs at a single Spykar store.