Greetings!
Now that I have presented some of the benefits of brand extensions through licensing, you may be wondering what some of the pitfalls to look out for are. With this in mind, I thought it might be helpful if I covered a specific pitfall each week over the next several weeks. These are pitfalls I personally witnessed in my business experience. So take a minute to read the next section of the newsletter so you can be better prepared. If you are already in licensing and have personally witnessed the same pitfall, I hope you will share your story with us so we can pass onto our readers.
Sincerely,
Pete Canalichio
Vice President Business Development
Licensing Brands Inc. talks to Emory Marketing Students
Pete Canalichio and the Licensing Brands team paid a visit to the Goizueta Marketing Association at Emory University Wednesday evening, March 17, 2010. There we had what turned out to be a lively discussion on the subject of brand extensions through licensing. It turns out not only were the MBAs interested in learning more about the subject, many of them are taking jobs this summer with companies who have a brand licensing department. This is indeed exciting news for the industry as it appears more and more professionals with brand marketing skills are entering the field of brand licensing.
If you know a business school that would be interested in having Licensing Brands present on the subject of brand extensions through licensing, let us know. We would be happy to participate.
Pitfalls of Brand Licensing: "Biting off more than you can chew"
Licensors interested in licensing a particular category to a manufacturer will usually ask the manufacturer to provide a sales projection for that category. Many times manufacturers in their effort to "win" the license will offer the licensor a best case scenario instead of a more realistic set of sales projections. These "blue sky" projections unfortunately then become the basis from which the licensor develops their minimum sales targets and guaranteed royalties. Instead of working towards a reachable sales target, the manufacturer often finds themselves having to meet unrealistic targets. When they fail to achieve these targets, the manufacturer either ends up paying royalties with no supporting revenue or breaching the contract.
Now that you are aware of this pitfall, I hope you will be on guard so you and your company don't fall in.
