6.02 discuss product licensing
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6.02 Discuss Product Licensing. Licensing. Permission to copy name, logo , or trademark of a league, athlete, sports team, entertainer, film, television show, or character for a fee, also called royalties A licensor is the rights-holder of the name, logo, or trademark. Licensing (con’t). - PowerPoint PPT PresentationTRANSCRIPT
6.02 Discuss Product Licensing
6.02 Discuss Product Licensing
LicensingPermission to copy name, logo, or trademark of a league, athlete, sports team, entertainer, film, television show, or character for a fee, also called royalties
A licensor is the rights-holder of the name, logo, or trademark
Licensing (cont)A licensee is company paying for permission to use the name, logo, or trademarkEx: Nike, Reebok, Adidas, Sony, and Nintendo
Parties of Licensing- reviewLicensor- Company who owns the brand and issues the licenseLicensee- Company or person who purchase the brandLicense- The written agreement giving the licensee permission to use a brandLicensing (cont)Licensed products are manufactured by licensees under an agreement with a licensorLicensees can have a significant impact on a licensors perception among consumers
Licensing (cont)A license issued to another company may allow the licensee to:ManufactureMarketSell
Ex: Franchises
Licensing (cont)Licensing provides greater profit , promotion, and legal protection for the licensor
LicensorThe licensor approves the product and collects the licensing fees and royaltiesFor example, WB will give permission to Electronic Arts to use the Harry Potter character
Licensor (cont)Companies typically pay between 5 and 10 percent of wholesales in the form of royalties
Character Versus Corporate LicensingA sports or entertainment entity permits a licensee to use their image, name or character for a fee
Character Versus Corporate Licensing(cont)For example, LucasArts licenses a manufacturer to use the images of the characters from Star Wars: Attack of the Clones
Character Versus Corporate Licensing(cont)A corporation permits a licensee to use the corporate image of name for a feeFor example, Coca-Cola licenses a manufacturer to use their corporate logo on a baseball cap
Advantages of LicensingAdvantages for Licensora. Enhanced company image and publicityb. Increased profit from royalties. c. Increased brand awareness or recognitiond. Increased opportunity for penetrating new markets
Advantages of Licensing (cont)e. Limited manufacturing costs or risksAdvantages for Licenseea. Existing brand awareness or recognitionb. Lower advertising and promotional costs
Advantages of Licensing (cont)c. Increased possibility of success and profitabilityd. Connection with an athlete, sports team, entertainer, or corporation
Disadvantages of LicensingDisadvantage for licensora. Potential for poor quality of a licensees manufactured productsb. Partial relinquishment of control over the marketing mix of the brand
Disadvantages of Licensing (cont)Disadvantages for licensee:a. Athlete, entertainer, or corporation may lose popularity.b. Sports teams may suffer losing seasonsc. Change in styles, trends, and consumer preferences
Disdvantages of Licensing (cont)d. Royalties and licensing fees can be expensivee. Manufacturing costs and risksf. Competition can drive up costs associated with fees and royalties
Disadvantages of Licensing (cont)g. Competition can cause a negative impact on market share
Impact of Licensing on ConsumersIncreased opportunity to associate with an athlete, sports team, entertainer, or corporationIncreased supply of available products
Impact of Licensing on Consumers (cont)Competition can result in lower prices, new products and better quality.
BootleggingBootlegging is unauthorized use of a name, logo, or trademark of a league, athlete, sports team, entertainer, film, TV show or characterBootlegging reduces the profits of the licensors and legitimate licensees
Bootlegging (cont)Bootlegging can result in poor quality products for consumers, which will decrease brand loyalty