#01 GET TO KNOW YOUR SUBJECT
Licensing is buying and selling rights to use intellectual property on consumer goods. When you see Doctor Who on a T-shirt, or Peppa Pig on a pencil case, that's licensing in action. Licensing is a marketing tool that can be used effectively both by the owners of intellectual property (IP) and by consumer goods companies looking for strong brands.
#02 BORROW OTHERS' SKILLS
If you're a brand owner, licensing out your brand can be a new revenue stream and an additional marketing resource. You could brand-extend, but do you really have the skills, for example, to turn your successful chocolate brand into cakes, kitchenware or cookery books? Find good licensees and you "borrow the competence" of experts to work on your brand — and
they pay you to do so!
#03 FOLLOW A PLAN AND DIVERSIFY
Your licensees will pay you a royalty (a percentage of their sales revenue) when using your IP/brand on their products. A strong licensing programme might build into a list of 30 or more licensees manufacturing dozens of products. This can produce serious revenue, but can also be great at enhancing your core brand.
#04 BUY INTO AN ESTABLISHED BRAND
At the other end of the business, buying a licence — for a popular TV show such as The X Factor or a consumer brand such as Thorntons — is a great way to get fast recognition for your products. Your retailer customers are likely to pay attention to a strong licence knowing that consumers are out there who want to 'buy into' their favourites.
#05 IT'S CHEAPER THAN YOU THINK
You'll be surprised how economically strong licences can be bought, gaining you instant brand power for a modest outlay.
#06 GET PROFESSIONAL ADVICE
There are skilled licensing professionals out there — agencies, consultants, lawyers — for whom licensing is their daily bread. They can help you make it work.
#07 THINK BIG
Walt Disney is reckoned to be the world's biggest licensor, with consumer goods worth £19bn per year sold by licensees around the world. Many are small or niche operators, but they are all prospering thanks to Disney intellectual property. If it's good enough for them...
#08 BOOST STAFF MORALE
Much licensing activity is based on TV shows and movies. Might you and your staff enjoy new product development meetings when the topics for discussion are the relative merits of Thomas the Tank Engine vs Transformers, or In the Night Garden over Bob the Builder? Get the fun part right and there's money to be made, and market share to be won.
#09 PUT CONSUMERS FIRST
IP owners (licensors) make product development for their licensees a straightforward process. This minimises risk and acts as an important safeguard for consumers. Licensors do everything within their power to ensure the high quality of their licensees' products — after all, it's in their interest to protect the core brand's image, as well as producing first-class goods.
#10 THINK INTERNATIONALLY
Iconic British brands, from Marmite to Mini, Paddington Bear to Oxford University, have all used licensing to build their presence and tap into new customer segments around the world. Whether you own a brand or are looking to export, licensing can be a relatively low cost, low risk way of breaking into new international markets.
Kelvyn Gardner is UK managing director of LIMA, the International Licensing Industry Merchandisers' Association, a not-for-profit organisation that represents both licensees and licensors worldwide. Visit licensing.org
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