Brand Licensing: The Fastest Expansion

Tree brand is really not easy. Don't see, from October last year, the warm underwear advertising war, movie stars, laughing stars, the whole family turns to debut, let consumers feel at a loss. The volume of the market has not increased. The manufacturers are facing a lot of advertising costs. Consumers complain that the cost of buying clothes is half the cost of advertising. There are also many difficulties for many manufacturers to advertise in the same way: the thermal underwear market has entered a mature stage, and our products are almost the same. At this point, the concept of hype technology is not effective, and the way out is to set up brand names to distinguish them from similar products. Unexpectedly, the result of the big advertising campaign is that the brand influence is offset each other. We can imagine that despite the reluctance of manufacturers, the thermal underwear industry will step into the mire of price war.
Looking around, many enterprises have been caught in such a dilemma: no publicity, no advertising, lack of popularity, enterprises may not survive at all, and spending money to advertise and push brands is not necessarily ideal. This is particularly prominent in some small and medium enterprises. At this time, a number of enterprisers of foresight, after fully recognizing the importance of brand building and the arduous degree of brand building, have cast their hopes on a new business mode brand licensing alliance.
Brand licensing Alliance
Brand authorization, also known as brand licensing, means that the authorized person will grant the authorized person the contract or brand that he owns or surrogate in the form of a contract. The authorized person shall engage in business activities according to the contract stipulations (usually producing or selling certain products or providing certain services), and pay the corresponding fee to the authorized person - the right of gold; meanwhile, the authorized person shall give guidance and assistance to personnel training, organization design, operation and management, etc. Franchising means that the franchisee imparts its products and operation mode to franchisee franchisees in the franchise system, so that franchised franchisees are entitled to operate a product or service. It can be seen that the organizational form of the two is very similar, but there is still a big difference between the brand and the licensee, the franchisee and the Licensee. The brand authorization emphasizes that the bond between the authorized party and the authorized party is the brand, and the link between the franchised Licensor and the licensee is a product or service. Comparatively speaking, brand authorization gives the authorized party a greater degree of freedom and a wider range of industries to adapt to. It is more likely to reach the complementary advantages between the brand Licensor and the authorized party, and because the products or services provided by the authorized party may be different, the possibility of conflict and the difficulty of coordination are relatively small. For example, The Walt Disney Company has more than 4000 licensed franchise businesses worldwide, ranging from the most common ball point pens to watches worth $twenty thousand. Bob Dog, a famous cartoon brand in China, has a number of different franchise partners, such as MasterCard group (sports shoes), grand group (bedding series), Shanghai Li Guo knitting (socks), Hongkong collar high company (plush toys, bags). From time to time, the franchise operation in China is relatively early. McDonald's, KFC, Ma Lan ramen, Quanjude and Lianhua supermarket are quite successful cases, but they are very dependent on the franchisee in terms of evaluation, publicity and coordination, and are more restricted to the franchisee. The premise is that licensed products or services are quite successful, and are more suitable for catering, retail and service industries.
Although brand authorization is probably unknown to most of us, in fact, brand licensing has a long history in the US, Europe and Southeast Asia. Its source can be traced back to the beginning of Voight Disney film company. One day, Voight walked into a restaurant. A man approached him and said, "I am a furniture manufacturer. I will give you 300 dollars. Would you like me to print the image of Mickey Mouse on my desk?" Voight readily agreed. This money has also become the first brand authorization issued by The Walt Disney Company. It is this mode of operation and the Disney theme park that created this famous company. At present, in the United States, various brand licensed products account for 1/3 of the retail market, and are the most rapidly growing sales force. In Singapore, vigorously developing brand licensing has even been listed as one of the main commercial policies of the government.
Based on China's actual situation, from the analysis of the big environment, China's current promotion of brand authorization has the following advantages: the middle class expands, the demand for consumer goods and services increases, and consumers have obvious brand demands; with the ever increasing market competition and the upgrading of competitive form, the competition of enterprises is gradually shifting from price competition to non price competition.
From the micro perspective, brand authorization is probably a great profit for the authorized party. For enterprises who have gone through all kinds of hardships and rely on a certain kind of product or service to establish a brand successfully, the risk of popularizing the existing brand is obviously less than that of a completely new or new industry and market. Of course, at present, some enterprises adopt the methods of opening the semicolons and engaging in joint ventures, which can also play a positive role. However, because of such defects, these methods are difficult to control. Brand licensing can avoid similar problems, because brand authorization is an enterprise's initiative and planned output of brand and output management, and the authorized party can regulate the behavior and scope of the authorized party in the form of contract, so as to avoid "unmanageable" situation.
On the other hand, brand authorization is more important to the authorized party. There is a real story that has been widely heard in the industry. In the recession of the US economy, Ryan, an electric toy train company that has filed for bankruptcy in court, has been sold for 250 thousand months in the market in 4 months due to a very accidental chance to get a toy train made by Mickey mouse after authorized by The Walt Disney Company. Next, I will take the "Babu" brand alliance as an example to introduce the specific benefits that the brand alliance can bring to the authorized enterprises.
Although, from the above analysis, brand authorization is beneficial to both the authorized party and the authorized party. But at the same time, we should see that because the two sides of the brand licensing alliance belong to two different owners and stakeholders, it is easy to produce all kinds of contradictions, and even when the contradiction intensifies, it will even lead to the rupture of the authorized alliance. In order to prevent problems, the Licensor and the authorized party must ask themselves the following questions before signing the contract.
- for the Licensor: is there a need for brand licensing? Is there a feasibility of establishing an authorized alliance? Is there enough capacity to manage and serve the entire licensing alliance?
- to the licensee: is it necessary to use brand authorization to promote the original products and services? Does the brand owner have good overall status and business records? Is the brand licensing alliance protected by relevant laws? Can the authorized party provide strong training, legal and coordination support? Wait.
- the attention of the authorized party
To ensure that brand licensing can achieve real benefits, the licensor should pay attention to the following points:
---1. builds a mature brand authorization system through in-depth investigation and analysis. The promotion of brand licensing is a highly sophisticated, complex and highly specialized execution process. As an authorized person who intends to expand his brand, before building the brand alliance system, we must first understand his strength. Secondly, we must make clear the market positioning. If we can not study the needs of customers, then no matter how excellent operation mode can not play its advantages in the market, then we must carefully analyze and carefully design. The choice of affiliate firms is an important part. When seeking franchisees, we must clarify the licensing requirements, formulate selection criteria, conduct a comprehensive assessment of the qualifications of the authorized persons, and establish the basic conditions for attracting long-term and mutually beneficial relations.
- after the establishment of the authorized alliance, the licensor should also regularly assess the authorized party and attach importance to the construction of the overall corporate culture. Only in this way can the values and business characteristics of the enterprise be reflected from inside to outside.
---2. grasps the pace of franchisee development and maintains a good image of the brand licensing alliance. When authorized, the authorized party should strictly follow the overall plan formulated in the early stage and do everything in a right way. Because if the development is too fast, the Licensor is likely to be struggling to cope with all kinds of new or unforeseen problems, which will affect the efficiency of the whole brand licensing alliance and even destroy the good image of the original brand. Take Disney as an example, in the early days of authorized activities, Disney only expanded its franchisee team and was indifferent to the quality of its products. Later, Her Mon Cayman, the advertising master, suggested that The Walt Disney Company should pay attention to the quality of licensed products and prevent the inferior products from smear the brand. Subsequently, the The Walt Disney Company immediately accepted the proposal and signed a contract with the company, which was handled by The Walt Disney Company on behalf of The Walt Disney Company. With the professional operation and strict control of the company, the quality of the products authorized by Disney has been greatly improved. Recently, The Walt Disney Company made the decision to stop the use of Disney's cartoon image for mobile phones. It is based on the fact that there is no reliable evidence to prove that using mobile phones will not threaten health, especially children's health. Although this affects short-term earnings, it is necessary to maintain brand image to gain long-term benefits.
---3. establish a concise and efficient authorization process and system. In order to adapt to the trend of flat organization structure and the flexibility of the authorization system, the organizational design of brand authorization should be as simple and clear as possible. Within the permitted scope of the authorization contract, the authorized party shall be given full freedom and the authorized party shall play the role of "consultant" as much as possible.
The legal protection of ---4. brand authorization. In modern society, new business models emerge in an endless stream. In many cases, the formulation of laws will not keep pace with the development of the situation. In addition, many domestic enterprises have weak legal awareness. Therefore, brand protection is a key part of brand protection in China. Whether it is deliberate or unintentional piracy, the impact on brand licensing system is very huge, sometimes even leads to the collapse of the authorization system. Many famous international brands have suffered setbacks in domestic sales, which are directly related to the proliferation of counterfeit products, such as Nike sports shoes, Montagut clothing and so on. In the process of preventing such adverse effects, the authorized party should play a major role. In this respect, The Walt Disney Company can be regarded as a good example and a vivid lesson for domestic counterparts on how to protect brands. In 1992, Wouter Disney's representative in China constantly found traces of Disney cartoon characters from the domestic children's picture books. Later, after careful comparison, the The Walt Disney Company believed that the picture books belonged to unauthorized publications and sent them to court. Results the The Walt Disney Company won the lawsuit.
- attention from franchisees
From the perspective of franchisees, first of all, we need to confirm whether the licensee has legitimate and complete authorization. After all, the operation mode of brand authorization has not been carried out in our country for a long time, and there are still many irregular and imperfect laws and regulations in operation. According to reports, some departments have found that some criminals are under the guise of brand authorization.