Licensing Deals Boost Corporate Recognition More Companies Granting Use Of Names, Trademarks
Corporations don’t want their names just on company stationery.
Everything from cooking supplies to stereos are branded with corporate logos as many of the nation’s companies use licensing as an easy, yet lucrative way to promote their names and trademarks.
Motorcycle-maker Harley Davidson’s label appears on T-shirts and restaurants; Dr. Scholl’s has expanded from footwear to mattress pads and pillows; Taco Bell produces Mexican cookware.
“Licensing lets you reach out to an area that you are not reaching consumers in right now,” said Seth Siegel, co-chairman of The Beanstalk Group licensing firm. “It lets you develop products that fit with your brand … without the costs.”
Corporate licensing is now the fastest growing segment in licensing today, with retail sales rising 6 percent last year to over $15 billion, according to the International Licensing Industry Merchandisers’ Association.
At next month’s licensing trade show in New York, about 30 percent of all the exhibitors will deal with corporate licensing, up from under 10 percent two year ago.
To license their names, brands or trademarks, companies usually grant permission to an outside firm to develop a given product. The upfront costs to the company are minimal, and profits are generated through royalties from sales.
The licensed products aren’t necessarily tied to the business of the corporation.
“Licensing allows companies to eclipse their core product brands,” said Debra Joester, president of Hamilton Projects Inc. “It lets companies identify where else the brand might go on related products and unrelated products.”
A popular license is Chrysler Corp.’s Jeep brand, which can now be found on toys, electronics, eyewear, apparel and mountain bikes. While the products have little to do with the actual Jeep vehicle, they all coincide with the outdoor, rugged lifestyle tied to the Jeep.
“We are building awareness of the Jeep name,” said Marvin Klein, manager of Jeep licensing at Chrysler. “We also make money.”
In fact, Jeep’s licensed products world-wide, not including auto sales, grossed $305 million last year, up from $140 million in 1992.
Other companies have also found success through licensing. Coca-Cola Co. now boasts stores filled with Coke products that have very little to do with the actual consumption of soda. Beaded Coke pocket-books go for $2,240 and Coke-inspired Madame Alexander dolls sell for $120.
Licensing is also increasing for lesser-known brands. Popsicle frozen dessert brand now appears on video games, backto-school products and housewares. Pillsbury produces a full line of bakeware and Kodak has come out with Christmas lights.