Licensing

Licensing, The Brand Power and the Perceived Value
By Mr. Allan Yeng

How and why brand power can influence the consumer and how companies can leverage on the brand power through licensing to reach the target market. What are perceive value and how it can have an impact on your brand, your marketing strategy and the consumer.

THE BRAND POWER

Have you ever wonder why people are so crazy about “I Phone”? What about the queue at “Louis Vuitton” boutique? And the kids crying and dragging their parents to “Macdonald’s” and your sister that will use non other then “Dove” shampoo. And not to mention your dream of owning a BMW. What so special about these brands beside their functional attributes. They all have one common asset, THE BRAND POWER. The brand power set you apart from your competitors and gives you a sustainable advantage.

Some of the brand power is so strong that consumer will embrace different product category so long as it’s of the same brand. And many brand owners are aware of their brand power and take advantage of its brand power to extend into license partnership with established company that can deliver the best product within its industry. And some of the most common industry are Perfume, cosmetic, watches, apparel, eyewear etc.

Many people may not realize that the Chanel eyewear is not produce by the House of Chanel along with many other big fashion brands like Dolce & Gabbana, Prada, Yves Saint Laurent, Christian Dior etc.

Around two decade ago, eyewear are only viewed as a functional product, but everything changes when European brands like Giorgio Armani, Polo Ralph Lauren and Tiffany & Co. etc.. have entered into a licensing agreement with reputable eyewear companies. Today eyewear is regarded as an important must have branded fashion accessory. And most partnership is through a license agreement.

In February 27, 2006 – Luxottica Group a global leader in the premium and luxury eyewear sector, announced a ten-year license agreement with Polo Ralph Lauren Corp. for the design, production and worldwide distribution of prescription frames and sunglasses under the Polo Ralph Lauren name. The agreement that begin on January 1, 2007, is estimated to be worth for Luxottica Group in excess of US$1.75 billion in sales over its duration. Terms include an advance payment on royalties of US$199 million that will mature over the ten-year term of the agreement.

This is just one example of an industry that is paying millions of royalty in exchange for the rights to use a trade mark and they are confident that it will help the company to generate rewarding revenue and on top of that to move the company status to the next level within the industry.

There are many other industry and businesses today that adopt licensing as part of their company goal and expansion. These industries and businesses regard intellectual property as an important asset and a vital part of their business growth and expansion. The intellectual property is also known as intangible asset which includes:

  1. Trademarks, trade names, or brand names
  2. Patents, inventions, formulas, application, processes, or designs
  3. Copyrights and artistic compositions, example music and books
  4. Legal contract, Franchises or licenses
  5. Specifically data created or compiled by a company, such as technical data, programs, procedures, methods, systems, surveys, studies, estimates, forecasts, customer lists, or campaigns

THE PERCEIVE VALUE

Among the intellectual property, the trademarks, trade names, or brand names are the most commonly seen and adopt, it is a part of our everyday life. As we consume many different consumer products in our daily life we seek brands that embody values and aspiration of a certain culture to express our personality, characteristic and attitude. We want to be associated with a desire lifestyle.

A lifestyle brand connects with the consumer with an identity that help reinforced and represent them publicly. Therefore it is important that lifestyle brand has a clear identity that has an instant recognition. The recognition is the perceive value of a brand that enable the consumer to acquire information and mentally interpreting the identity to form an attitude and understanding based on what is observed.

Perceive value is a set of information and expectation that translate into promises overtime which will form a trust and confident relationship with the consumer. These values are shaped from all the different contact points or also known as “touch point” the brand made with the consumer through a long period of time, which is both psychological and experimental aspect. Through the brand experience the brand has a perceive value and a relationship with the consumer that enable them to expand to other product by licensing the trade mark. For example Calvin Klein had license its name to perfume called CK One. Jeep had license its name to apparel. Hallmark had license its name to babies wear. However brand owners must be careful not to dilute the brand perceive value, one too many product that do not live up to its expectation will be detrimental to the brand.

In the recent years many celebrities, sport star are becoming powerful brand and license to many different merchandise. For example Paris Hilton with her own line of licensed product which include fragrance, cosmetic, bags, shoes, clothing etc. Jennifer Lopez has a range of licensed products from lingerie, fragrance, swimwear, sunglasses etc. Lindsay Lohan has a leggings line and a self tanning lotion. And David Beckham, have fragrance and a clothing line under his name and the list go on. Celebrities are banking on their popularity and their image and these are emotional appeal that targeted at consumer's psychological, social, or emotional needs. It is interesting to note that consumer in this case is interested not only on the look, the glamour or the ability of the sport star but also the behavior of their daily life. Everything about their daily life has a positive or negative impact on their appeal and therefore will affect the sale of the product.

The most recent scandal of Tiger Wood is a good example of perceive value that works for you or against you. Some people ask why his personal lifestyle is affecting his income and his name. In the world of sports, branding is not just about the ability of the athletic. Been the best in your field is a prerequisite but good looks, great body, sportsmanship and good behavior are equally important. It is the perception that matters. And in Tiger Wood case he is always perceive to be a squeaky-clean and a family man image to sell you things. He is a public figure and role model so people have expectation on his behavior and his lifestyle.

Some expert say that he fell victim of his own branding, he earned a billion dollars from public adoration but the same adoration that made him million is the perceive value that he fail to deliver. His reputation is certainly taken a beating and it will take more than playing good golf to win back the consumer.

Hm..? I wonder what your wife will think the next time you wear a Tiger Wood branded base ball cap on an outing with her.


Mr. Allan Yeng has been a branding and licensing consultant for the 11 years. He is working with Interasia & Associates (holdings) co., Ltd, a US licensing company as the Marketing Director at its South East Asia regional office. He is a regular speaker in many international licensing seminars and workshop and regularly contribute branding and licensing article on magazine and website. And he also lectures part-time in the polytechnic on licensing.

Mr. Allan Yeng | Marketing Director
Tel: +65 6749 8023
Email: interall@singnet.com.sg

Interasia & Associates was established in 1992. Over the years, the company has broadened the range of their services from licensing to merchandising and retail development (in China). Currently the company represents some of the world’s largest companies such as Hallmark, Daimler Chrysler, Jeep, UCLA, WWE, Santa Barbara Polo & Racquet Club, Elegance, Budweiser, Daniel Hechter, Crayola, Harvie & Hudson etc. Headquartered in Los Angeles, the company has offices in New York, Paris, Hong Kong, Shanghai, Taiwan, Singapore and Malaysia.