Corporate Brand Licensing
June 16, 2008
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"EVERYONE'S A BRAND," pronounced a Brandweek story published in the late 1990s, when it seemed that anyone- the President, you, me-could be considered a "brand."
Today, the same story might be updated with the following headline: "Everyone's A Corporate Brand."
Corporate brand licensing continues to be one of the fastest-growing areas of the licensing business. Now second only to character brand licensing, it accounted for more than $1 billion in revenues in North America alone in 2006. Pioneers in the field continue to push the envelope with creative new programs, such as Coca-Cola's eco-friendly "sustainable fashions" made from recycled beverage products.
But the arena is expanding far beyond the Coca-Colas and General Motors of the world. This year's LIMA awards finalists in the corporate brand category include such diverse names as The Trump Organization and American Kennel Club. Experts say that's a testament to the long-term viability of the medium.
"There have been some real success stories of corporations extending their brands through licensing," said Michael Stone, president of the Beanstalk Group, New York. "It's a way that brands can touch consumers' lives at a time when that goal is becoming increasingly difficult to achieve."
The question is no longer whether companies enter the space, but how. "When a company goes into licensing, they're no longer number one in the category. They have to do a complete competitive analysis."
Companies that do their homework can add significant revenue while reinforcing their core brand identity. Consider Michelin. The tire company has parlayed its reputation for safety and durability into a thriving licensing program by lending its technological expertise to a variety of partners outside the automotive industry. This year, professional boxer Miguel Cotto sported Everlast boots with Michelin soles, and U.S. golf equipment manufacturer Lamkin introduced co-branded Michelin grips for "increased traction in all playing conditions," per company materials.
"We see potential for growth in sports and leisure, especially in Europe, where there aren't as many well-known [tire-related] brands," noted Daniela Gould, head of marketing communications for Michelin's worldwide licensing program, based in the UK.
Donald Trump, meanwhile, certainly qualifies as a well-known brand. One of the more recent challenges for The Trump Organization, which has been licensing the Trump name on men's apparel and accessories since 2004, was introducing a line of home furnishings that was relatively affordable yet consistent with Trump's tony image.
"Many people viewed his real estate properties as untouchable," said Cathy Hoffman Glosser, executive vp of global licensing at The Trump Organization, New York. "So, we decided to create home décor based on exclusive pieces featured in Trump properties, but at a more manageable price point."
Two initial product lines bowed in 2007: The traditional-inspired Westchester collection; and the Central Park series, which reflects a metropolitan lifestyle with its contemporary design and Art Deco flair. The newest collection, Mar-a-Lago, is inspired by Trump properties in Palm Beach, Fla.
Looking ahead, where else might we find the Trump label-that is, besides the superpremium vodka that launched last year?
"We're constantly approached with new licensing proposals, and some of them are, let's say, quite interesting," said Glosser. "We are very careful about finding the right fit for the Trump brand."
Corporate brands on the other side of the spectrum from Trump's include the American Kennel Club. AKC thinks of itself as the equivalent of the Good Housekeeping Seal for pet owners; its educational mission is to promote responsible dog ownership. That's hardly the basis for a commercial licensing revenue stream, yet since 2004, the company has been licensing its trusted name on a plethora of human and pet-related products.
There was, however, a steep learning curve.
"It took some time in the beginning to convince retailers and the public that AKC was not just about pedigrees and dog shows," said Alyssa Tucker, svp-marketing and licensing sales at 4Sight Licensing Solutions, New York. "In addition, the imagery we were using at the time- such as old-fashioned dog photos from the 1800s-was not working. We needed a fresh approach."
Since then, AKC has updated the design of its licensed puppy products (onesies, teethers, bathrobes) with softer colors and more modern images of the animals. "The line flew out of Target," said Tucker, adding that AKC recently signed a three-year deal with the retailer on a branded leash program.
While corporate licensing continues to attract new participants, some of the companies that paved the way are busy raising the bar on innovation.
Coca-Cola, for one. Heeding consumers' calls for a commitment to protecting the environment, the company recently introduced T-shirts, knit tops, outerwear and accessories using a combination of rPEt (recycled condipolyethylene terephthalate) made from recycled plastic drink bottles and natural fibers.
"We're not even calling it a 'line.' To us, it's an action and a movement," said John Shero, global licensing strategy director at Coca-Cola. The green fashions may go a long way toward demonstrating the company's ability to adapt to changing societal values (especially with young people), just as it has had to adapt in recent years to shifting tastes in beverage consumption.
Danielle Ogletree, Coke's global licensing strategy manger, points to the 'Wear Your Waste T' as an example of "how we have taken a traditional product category and made consumers think about it in new ways."
As for the company's overall licensing strategy, Ogletree said: "We've gotten out of some categories and enhanced our position in others. We're always looking at ways that licensing can be a marketing asset for our brand."
For more LIMA coverage:
A note from Charles M. Riotto, LIMA President
2008 LIMA Finalists
Character Brand Licensing
Corporate Brand Licensing
Film, TV and Entertainment Brand Licensing
Sports and Sports-Themed Entertainment Licensing
Licensed Promotions
Art Brand Licensing
Retailer Licensing Programs