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Brand licensing may bring 20% extra profit
29.12.2011 1945

Brand licensing may bring 20% extra profit

Brand licensing is very popular in the world. This business was dedicated to the conference, which was held in Moscow.

Many companies, in order to generate additional income, enter into licensing agreements with owners of well-known brands in order to bask in the rays of their glory - to release their goods in a recognizable design. The volume of the global licensing market, according to some sources, reaches $ 225 billion, according to others - $ 190 billion. Media corporations and manufacturers of children's toys from the USA, Germany, Italy, France, and Great Britain set the tone here. The most powerful global brands include Coca Cola, Intel, IBM, Microsoft, Toyota, Nokia, McDonald's, Marlboro and Disney.

Experts are increasingly talking about the potential of Russia and its ability to integrate into global licensing. According to some estimates, the Russian licensing market is 1,5-2 billion dollars per year. At the same time, he adds 15-20% annually. Ten years from now, market size could reach $ 6 billion.

According to Elena Evseenkova, Director for licensing projects at MVG Licensing, the features of the Russian licensing market are as follows: emphasis on children's brands and products; an attempt to independently build the licensing process by copyright holders; in overstatement of the cost of licensed products, as well as in the appearance of the first local licensing agencies. The trend of sports licensing is especially gaining momentum in Russia, as products (souvenirs, clothes, food, stationery, toys, etc.) with the image of sports teams, clubs and athletes attract not only avid fans, but also all sports fans.
To create a successful brand and maintain it at the initial stage, at least $ 50 million is required - if it is a serious national brand
According to the official representative of the International Organization for Licensing of Merchandising William Krnyak, the Russian market at this stage is the most important market for the film industry, as in society in recent decades there have been great changes in terms of thinking, namely, a turn to Hollywood culture. The children's goods industry is also a priority, it makes up 44% of the entire licensed market. The highest dynamics in the domestic market is demonstrated by children's products, their possibilities for licensing are endless. Children are very fond of cartoons, not only Western, but also domestic. The series “Smeshariki”, “Masha and the Bear”, and “Luntik” are popular among the children's audience. All these brands can successfully generate access to the market for lines of children's products. In order to produce, say, shampoo with the image of Smeshariki or Luntik, the manufacturing company needs to agree with the copyright holder on the acquisition of the appropriate license. This is much cheaper than promoting your own brand, investments in which can amount to millions of dollars.

According to William Krnyak, the main problem of brand licensing is the lack of information from manufacturers and distributors on how this model works. In the case of licensing, each licensor promises decent marketing support to his partners. It is based mainly on his constant presence on TV and the movie screen. All this allows him to maintain the "star" status of the brand, and licensees to "play on it." To become a full-fledged licensee of the company, you must meet the specific requirements of the licensor. As a rule, they come down to compliance with product quality standards, compliance with the rules for the use of trademarks, and transparency of doing business, which implies constant reporting to the copyright holder. There is one more criterion, the importance of which should not be underestimated. This is the originality of the product, which often lies in its design and positioning. Simply put, they should reflect the character of the character. The end result for both the producer and the seller is the increase in sales of 25-30% compared to a product that has not been licensed. This was reported by the website riamoda.ru with reference to the “Russian Business Newspaper”.

Brand licensing is very popular in the world. A conference that took place in Moscow was dedicated to this business, Russian Business Newspaper reports.
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