Not many companies understand brand licensing or recognize the possibilities it represents. It is a licensing agreement between the owner of a brand and the manufacturer of a product or service. The combination allows a company - usually a small company contracting with a large company - to give its product or service instant recognition and credibility. It's like taking the strongest brand in your segment with you on your next sales call. Licensing comprises a growing segment of jobs in marketing.
If you are selling closet accessories under the ABC brand and you call on Target, more than likely you can't get them to take your call. But if you call Target and say you're representing the Rubbermaid brand in the closet accessories category, there's a high likelihood they'll take your call and even agree to a meeting. You've established credibility and authenticity and that has allowed you to make the connection.
That's just the sales end of it. A small company is probably not going to get the best price in the market on resin or any other commodity, but a company that is part of a bigger organization like Rubbermaid that buys millions of pounds of resin a year will be able to tap into that benefit.
A brand owner typically has a stringent vetting process, so your small company has to be at least a capable company and more than likely the best in its class. Through your marketing pitch to them, you must prove to them that your company is going to help them extend into a category that's important for the brand and that you'll fit nicely into the overall strategic plan for the brand owner. At the bargaining table you will need a convincing argument that what you offer is new innovative technology or a better way of going to market that will strengthen the brand position and enhance overall product delivery.
Chances are excellent you will be required to refine or revise your product or service, rather than merely slap a new logo on it. The brand owner will ask for sales projections and you'll have no history to use as a base. The brand owner might be slow in approving your concept or prototype, blowing any production schedule you may have had. The process is fraught with pitfalls but it's worth the relatively minor drawbacks when a small, new company gets the chance to ride the coattails of a large, well-established company.
Last Updated: 05/21/2014