a n i n t ro duc t ion to

Brand LicensingPETECANALICHIO

Licensing means nothing more than the renting or leasing of an intangible asset.

An example of intangible assets includes a song (Somewhere Over The Rainbow), a character (Donald Duck), a name (Michael Jordan)

or a brand (The Ritz-Carlton). An arrangement to license a brand requires a licensing agreement.

A licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor).

1. The brand or its legalterm, trademark, affixed to the product helps the consumer understand where it was manufactured or produced; in essence, a trademark simply states “I made this”.

3. Consumers can beassured the product they are purchasing is exactly what they want.

Based on its reputation, a brand will convey a level of quality, reliability and durability.

1. By giving their productsa brand, a company or brand owner can begin to communicate with their consumers regarding the attributes of their products.

2. If a consumer likes whata brand represents and they have purchased it before, there is a higher likelihood they will choose the brand of their preference over a competitor.

Brands also lead consumers to develop certain expectations of products.

1. The longer theyexperience predictable, consistent quality and performance, the more they will expect any new products sold under the same brand to have the same.

WHAT IS A BRAND?

According to Philip Kotler and Gary Armstrong a brand is defined as “a name, term, sign symbol or combination of these, that identifies the maker or seller of the product” or

service.

2. From the brand owner’s perspective, it distinguishes theproducts or services from those of its competitors.

WHY DO COMPANIES BRAND THEIR PRODUCTS?

The primary reason companies choose to brand their products is to differentiate them from their competitors’

products.

Over time, a consumer can rely on the brand to connote not only a product’s value but also its reputation.

Consumers will often purchase a brand for the first time if it has a strong reputation or if it is used by friends or

celebrities.

3. Consumers willassociate a brand with a certain price level and standard of performance; comparing the watch brands Rolex and Timex, one is associated with a high price and high performance and the other with value through a low price and durability.

2. When consumers andbusinesses get into the habit of buying certain brands, they automatically buy them again.

According to Philip Kotler, brand loyalty, in marketing, consists of a “consumer’s commitment to repurchase or otherwise continue using the brand” and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy.

The stronger the brand loyalty, the higher the value of the brand and the greater revenue it will drive for its owner.

3. This reduces the amount of time and promotion neededto make future sales, and it results in brand loyalty.

Brands usually pass through successive stages of brand loyalty, which is the customers’ allegiance to a particular

brand.

2. The brand adds value to products; for example,customers expect new products sold under the BMW brand

to be of the same quality as an existing BMW.

WHAT IS BRAND LOYALTY?

1. Many companies as well as consumers look to UPS fortheir shipping needs because of its reputation of

understanding its customers’ needs and its consistent reliability.

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