It's licensing, but not as we know it

By Katie Roberts

April 21st 2009 at 11:37AM
It's licensing, but not as we know it

The less traditional brands are making their move into licensing

Traditionally, licensing has been largely used to promote entertainment properties, in particular in the children’s market, by surrounding the launch of a new film or series with a range of products including toys, food and drink, stationery and more.

However, more recently, there has been an influx of brands that have made industry veterans stop and take notice. No longer is the latest animation or kids’ drama drawing attention, instead, it’s the construction brands, police departments, car manuals and even soap operas that are getting us talking.

It’s licensing, but not necessarily as we know it…

Ciaran Coyle, managing director of the Beanstalk Group, explains: “Strategy and execution vary greatly between licensing character/entertainment properties and corporate or celebrity brands.

“Since character/entertainment licensed product is timed to coincide with the hype and publicity surrounding a film or TV release, the product is typically in the market for a limited period of time as many categories are feasibly covered.

“In contrast, brand licensing takes a more graduated approach, with opportunities for product extensions triggered mostly by consumer and market permission.”

Non-traditional brands now entering into licensing programmes largely fall into two categories, but have one factor in common – a recognised brand with broad awareness and appeal.

The first group of licensors are those who are looking to expand awareness, strengthen the image and establish its name further as Scott Bannell of Stanley explains: “Stanley launched its licensing programme in 1999 with the vision to strengthen its image, broaden its brand appeal to core consumers and establish itself further as the authority in the hardware and tool category. As such Stanley embarked on a strategy to extend the brand into products that its core customers need to do their jobs.”

Simon Gresswell of licensing agency, IMG agrees: “In essence it [a licensing programme] should provide one thing… more of that same functional and emotional satisfaction (or better) for its consumers. If it does, the brand and its owner have maintained and enhanced their reputation.”

The second group are those who have had concerns over the control of the use of their name and have taken on the management of the licensing themselves in order to oversee brand usage.

Chris Evans, MD of Oxford Limited, explains: “Our programme started through the need to control the use of the university’s name by the retailers in Oxford itself, and to try and generate some revenue from the considerable volume of sales of University branded gifts and souvenirs sold by those retailers, in the main to tourists.”

While many of the unconventional brands are licensed into regular sectors, some brands give scope for more unusual products to be created. For example, digger manufacturer JCB has branched into the telecommunication sector. Although not a sector directly related to the company’s brand, the phone is tagged as the JCB Toughphone, the world’s toughest mobile phone, so uses the brand values to create relevant extensions.

Sam Johnson, brand manager for JCB, explains this theory further: “Our kids programme is fuelled by the fascination children have with our big yellow diggers and now embraces toys, clothing, publishing, DVD, greetings, homeware, experiences and online. Our DIY and trade division utilises our brand’s heritage in creating innovative and strong products and covers categories such as safety footwear, power tools, garden tools, padlocks and heaters.”

ITV does similar within the ITV Global stable. Brands such as Coronation Street and Emmerdale are at first glance, unlikely candidates for transforming into licensed products. On closer inspection, however, there are many themes running through the brands which can be translated into tangible product.

Coronation Street is nearing its 50th anniversary next year and the licensing programme will be about best of British. The licensing team is looking to sign partners for gifting, keepsakes, social expressions, milestone moments and FMCG products.

ITV’s (recently departed) commercial brand director, Gustavo Antonioni explained Emmerdale’s direction: “Emmerdale is about the Emmerdale Garden Club where we are engaging pertinent licensees that have everything to do with the great outdoors and the Yorkshire dales. We signed a significant deal with Tenax to do outdoor furniture, garden tools and kits and accessories.”

So the latest stream of brand licensing is a somewhat more subtle affair and isn’t about replicating characters or sticking a brand name onto a generic product. Rather it appears to be about working with consumers’ connections with a certain brand and creating product that works within the brand’s values.

Gresswell comments on the importance of creating this consumer connection: “Everyone acts emotionally to brands – it’s impossible not to. But if we subscribe to the thought that we do live in a disposable culture and that consumers do create demand, then I believe it is up to brand owners, licensing agents, licensees and retailers to qualify brands on behalf of each of their end customers.”

Coyle agrees: “At every level of spending, consumers face a vast array of choice that they need something to differentiate one from the other. Their decision to go with one brand over another largely depends on one important yet intangible factor: their emotional connection with the brand.”

And this tact seems to have worked as across many of the non-traditional brands entering the market, consumers have responded positively to the products launched.

Ford motors was one of the first to launch such a programme in the early 1990s. Mark Bentley, European licensing manager for the firm, comments: “Consumer retail sales of Ford merchandise are very strong and exceed $1 billion globally. Essentially, we receive third-party validation which positively influences consumer goodwill and helps build our brand for future generations.”

Oxford Limited has also experienced positive results. Evans explains: “All indications and reports tell us that the University of Oxford brand is providing very good sell-through, in every territory that is being used. Retailers are positive about it for the same reasons as licensees, and consumers seem to be reassured by the combination of heritage, excellence and aspiration that the brand offers.”

It’s not only commercial brands that are popping up among the unusual licensed names, however. At the end of last year, The Metropolitan Police launched the New Scotland Yard brand project in response to an increasing interest in crime and investigation and demand for police related products and memorabilia.

Also embarking on such ventures is the Ministry of Defence with brands such as the RAF and Army. Camilla Lawrence, Intellectual Property and Commercial Brand Manager for The Met Police, explains: “The powers to ‘trade commercially’ for police services were only introduced relatively recently (1996 Police Act).

“The Metropolitan Police Service are fortunate in having a well-known, established brand name in New Scotland Yard, which gave us the opportunity to look at a broad spectrum of potential product categories and licensees. If there is consumer demand and the opportunity for income generation, then why not.”

The benefits of a licensing programme are clear, regardless of what kind of brand you own. So will such brands continue to do well in the licensing industry?

Ian Wakefield at Haynes thinks so: “I think there has been a rise because a well-managed, creative licensing programme can really benefit a brand. The Haynes licensing programme is integrated in our core business which benefits both Haynes, our licensees and our retailers.”

Antonioni agrees: “Exposure and relevance make brands attractive to licensees. It’s only natural that one would exploit in-house brands with the recognition that ours have.”

And will the industry see more of these brands entering into consumer licensing? JCB’s Johnson says: “With so many entertainment brands competing out there it can be difficult to see the wood from the trees. I believe that certain non-traditional brands provide a refreshing difference in the market place for licensees, retailers and most importantly the consumer.”

Gresswell concludes: “More brands are discovering their potential and more incremental revenue streams are being sought after, for obvious reasons.”