The Trademark Licensing Opportunity

The Licensing Opportunity

Trademark Licensing is an underdeveloped business opportunity for most major brand owners. For corporations that have dedicated significant resources to the development of this business, the results have proven to be very lucrative. In 2007, worldwide retail sales of licensed merchandise attributable to corporate trademarks/brands were $22 billion.

However, Trademark Licensing can be a long and frustrating task for companies that lack experience in this area.

Licensor Challenges

It is difficult to identify the right product categories to avoid common pitfalls:

  • Market cannibalization of the Licensor products
  • Reduction of market share due to Licensee competition with customers
  • Barrier to enter lucrative market in the future
  • Overextension of the brand

It is difficult to identify the right Licensee:

  • High quality products to avoid negative impact on the brand equity
  • No conflicts with the Licensor across all divisions
  • The right product capabilities and manufacturing capacity
  • Recognition of the brand value equation

It is difficult to control Licensee product quality, especially if there is no relevant technical expertise in house.

Licensee Challenges

It is difficult to find the right Licensor:

  • Well-known brands are very expensive
  • It is imperative to select the brand with the right attributes that would be recognized by US consumers and businesses for particular product/markets

It is difficult to negotiate a win/win relationship:

  • Minimize upfront costs
  • Maximize market exposure through licensor’s corporate advertisement
  • Benefit of Licensor’s sales force and distribution channels

ThinkFire’s Trademark Licensing Value Proposition