From Michael Stone, The Power of Licensing: Harnessing Brand Equity
There are many new paths for delivering a brand message to consumers, engaging and connecting with them, and motivating them to make a purchase. Brand owners are experimenting, and often struggling, to determine the best paths for their particular brand. Brand messaging today is a stew of consumer experiences and reaching consumers where, when and how they shop has created a “shopping battlefield”.
Brand licensing fits perfectly into this new messaging, communications and retail landscape. Licensing provides a vehicle for brand owners to achieve their communication goals and engage with consumers. It should be viewed in the context of all of the varying ways that brand owners can now communicate their brand message and brand promise to consumers. Considering it in this manner reveals how important licensing can be as a tool to engage the consumer: create, redefine or strengthen brand connection; and navigate the consumer’s connected shopping journey.
That’s the overriding premise of The Power of Licensing: Harnessing Brand Equity, by Michael Stone, Chairman/Co-Founder of Beanstalk. Following is the introduction to Chapter 4, “A Strategy, Not a Tactic”. For the full chapter and Table of Contents, click here.
The Power of Licensing: Harnessing Brand Equity is available on Amazon and www.shopaba.org.
A Strategy, Not a Tactic
You would be surprised to learn how many companies fail to think strategically about licensing opportunities. It’s surprising on many levels, not the least of which is that licensing is about allowing a third party to use a company’s most valuable asset—its brand. When licensing is reactive and tactical, it’s implemented in a vacuum—objectives haven’t been determined,product categories haven’t been vetted, and management is not in place to oversee the process, among other shortcomings.
Would an iconic brand launch a new product without well- thought-out goals and a strategy to achieve them? Probably not. Organizations will fail to take advantage of licensing’s marketing power if they treat it as a tactic, as an opportunity to which they can react. Being proactive, strategic, creative, and managerial (i.e., operationally ready) are requirements for any licensing program. To meet these requirements, best practices and processes must be used to develop an executable strategy. Those as well as illustrative examples will be discussed next.
Every company has its variables that need to be addressed in a licensing plan, but certain elements are critical to establishing and then executing any plan,including:
- Licensing Goals and Objectives
- Description of Brand Equities
- Licensing Positioning Statement
- Target Consumers
- Distribution Channel Strategy
- Market Dynamics and Trends
- Product Categories and Competitive Landscape
- Design Guidelines
- Financial Forecasting
- Program Management and Support (addressed in the next chapter)
The majority of these elements involve a comprehensive evaluation of the brand—the identification of the brand’s equities and the brand’s marketing and licensing goals. Without a clear understanding of the brand’s equities and what the brand wants to accomplish through licensing, a company is essentially licensing in the dark.Following a comprehensive analysis of equities, goals, and objectives with which licensing must be aligned, the brand needs to evaluate appropriate product categories through a variety of filters—for example, distribution channel strategy and market dynamics—before finalizing the plan and moving forward. And to ensure that licensed products meet the quality expectations of the brand, the company must be operationally ready to handle oversight of product design, development, and production.
Several brands will be used as examples in this chapter— mostly Cracker Barrel Old Country Store and content provider HGTV, although other examples will be sprinkled throughout.
The Power of Licensing: Harnessing Brand Equity, Copyright © 2018 Michael Stone