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Co branding, Brand licensing, Celebrity Endorsement

Brand licensing, Celebrity Endorsement Brand LicensingDefinitionHistoryLisencing includesProcessBenefits to licensorBenefits to licenseeConclusionRelated terminologiesBrand Licensing Definition The leasing of a brand name to a company other than the owner of that particular brand. As an example, a beer company located in Europe could lease its brand name to an American brewer.

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The process of creating and managing contracts between the owner of a brand and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory.

Read At Law DictionaryExample After Apple launched the iPod a number of years ago it created an immediate need for accessories; Apple could have chosen to manufacture and distribute these themselves, but decided they were not core to the business and therefore, chose to satisfy the need through licensing. Licensing the iPod brand enabled many companies to produce all kinds of terrific products to make the iPod more user-friendly and enhance the listening experience. Examples include the Bose Sound System with iPod docking station, other products that enable an iPod to be heard through a vehicle's built-in stereo and iPod holding devices that allow users to take their music with them when they go running. All these accessories are sold by licensees.

History Brand licensing is a well-established business, both in the area of patents and trademarks. Trademark licensing has a rich history in American business, largely beginning with the rise of mass entertainment such as the movies, comics and later television. Mickey Mouse's popularity in the 1930s and 1940s resulted in an explosion of toys, books, and consumer products with the lovable rodent's likeness on them, none of which were manufactured by the Walt Disney Company.

History The rise of brand licensing did not begin until much later, when corporations found that consumers would actually pay money for products with the logos of their favorite brands on them. McDonalds play food, Burger King T-shirts and even ghastly Good Humor Halloween costumes became commonplace.

HistoryBrand extensions later made the brand licensing marketplace much more lucrative, as companies realized they could make real dollars renting out their equity to manufacturers. Instead of spending untold millions to create a new brand, companies were willing to pay a royalty on net sales of their products to rent the product of an established brand name. Armor All auto vacuums, Breyers yogurt, TGI Friday's frozen appetizers, and Lucite nail polish are only a handful of the products carrying well-known brand names which are made under license by companies unrelated to the companies who own the brand.

Licensing includes:It grants the licensee permission to use the property Limitations are normally established on how partners can make use of the brand name, and for how long they retain the right of usage. This protects the brand owner in a couple of ways. The time limit allows the owner to consider terminating the agreement and going with a different partner if the relationship does not prove to be as beneficial as originally anticipated. In addition, placing limits on how the brand name can be used in labeling and marketing products helps to prevent the brand from being identified with products that are unrelated to the main brand or are perhaps of lower qualityThe licensor receives financial remuneration normally in the form of a guaranteed fee and/or royalty on a percentage of sales in exchange of usage of his propertyThis approach often makes it possible for the brand owner to receive a portion of the revenue generated by these ancillary products, without having to incur the expense necessary to actually manufacture those goods or services. Assuming that the products manufactured and sold by the entity leasing the brand name are of high quality and meet the standards set by the brand owner.

Licensed product process steps:

Licensor chooses the product categories to be licensedLicensor finds and negotiates a license with the best licenseesLicensees develop concepts, prototypes and final production samples and submit for approvalLicensor approves licensed products for saleLicensees sell licensed products to authorized retailers

The Benefit of Licensing for Licensors

The key benefit for a licensor is the ability to exploit and enhance its brand or property. Licensing can do this by:increasing its brand presence at retail or distribution outletcreating further brand awareness to support its core products or servicessupporting and enhancing its core values by associations with the licensed products/service or category (e.g. association with a healthy food or with a cutting edge mode of fashion)entering new markets (consumer or geographical) which were unfeasible with its own resources or capabilitiesgenerating new revenue streams, often with little involvement or additional financial or other resource implications

The Benefit of Licensing for Licensees

The key benefit for a licensee (especially manufacturer or retailer) is the ability to significantly increase consumer interest in and sales of its products or services. Licensing can do this by:providing additional marketing support or momentum from the core propertys activity provided by the licensorgaining additional retail space and favorreducing efforts of licensee for marketingTrust of customerConclusion

Needless to say, the entire process is lengthy and time consuming. One must also keep in mind that the goal is not to achieve the license but to make a success of it and the activities that follow the signing of the contract. These processes, if executed well, on the one hand, can ensure huge success of the program. While on the other hand, if either the licensee or the licensor do not live up to their commitments, it can affect sales, and more importantly the reputation of the brand


Advance or Advance Payment The initial guarantee paid by a licensee to a licensor, due upon execution of a license agreement. Advances are typically nonrefundable and credited against future earned royaltiesGuarantee The minimum Royalty Payment, or prepaid royalties that a Licensee is contractually obligated to pay a Licensor. Typically, the Guarantee is computed by taking a percentage of the licensee's estimated Royalties for the entire Term of the License Agreement. Guarantees may be paid quarterly, semi-annually or annually and are typically nonrefundable and credited against future Earned RoyaltiesEarned Royalties The Royalties that are owed to Licensor by Licensee computed by multiplying the Royalty Rate by the Net (Wholesale) Sales of all Licensed Products or Articles. Earned Royalties differ from Paid Royalties in that Guarantees and Advances are not subtracted. Earned Royalties + Guarantees and Advances = Paid Royalties. License Agreement The contract between the Licensor and Licensee that grants the right to use the Licensed Property in a specified manner in exchange for payment; typically a Royalty based on Wholesale Sales. The license agreement lays out the terms of the partnership including: legal, financial and otherLicensing Agent A company that develops and manages licensing programs for brand owners or licensors, and manufacturers or licensees. The primary role of the agent is to bring the two parties together to consummate license agreements in return for a share of the royalties.

Audit Rights The permission for a Licensor, or licensor's agent, to review Royalty Payment, financial statements, accounting data, warehouse and inventory, financial systems and procedures, or other pertinent licensing information to verify accuracyStrategic Licensing Plan (SLP) A document, developed by the Licensing Agent with input and approval by the Licensor that outlines strategies and details of the Licensing Program. A well-written plan includes the targeted list of Licensed Products or Articles, Channels of Distribution and marketing plans. . Brand Representation Licensing A Brand Owner's enlisting of manufacturers to produce, market and sell approved products bearing its brand name, logo, or Mark and/or its Licensable Assets in exchange for a fee, typically a Royalty, paid as a percentage of Wholesale Sales

Celebrity endorsement

DefinitionPurposeProducts Models giving insight of celebrity endorsementBenefitsDisadvantagesDefinition of celebrityCelebrity Celebrities are people who enjoy public recognition by a large share of a certain group of people and can influence life of people. Celebrities are :ActorsModels Sports figure EntertainerPop star Business manPoliticianFictional celebrities

Definition of celebrity endorsement Aform ofbrandoradvertising campaignthat involves a well knownpersonusing their fame to helppromotea product orservice. Manufacturersof most of products usesclassic celebrity endorsementtechniques, such as television ads andlauncheventappearances, in themarketingof theirproducts. Read more:

As our obsession with celebrities has reached unhealthy levels, fuelled by media, gobbled up by the masses, marketers have dialed up the idea that consumers are prepared to buy into the celebrity lifestyle more than the product itself.

Basic purpose of celebrity endorsement

Generally increase saleAttract more attention of customer

Celebrity Endorsement Required for products Markets in which advertising coordinates consumer purchases, celebrity endorsements are more likely chosen for products that have either of the following: -High price-cost marginsLarge potential customer poolsThe need to coordinate across diverse sets of customersSpecially for young age product as young ages take impulsive decision to buy a product as their need changes continuously as per trend.

Models giving insight of CE

1. Source credibility and attractivenessSource attractiveness refers to endorsers physical approach, personality, likeability to receiverEndorser must be trust worthy enough to modify people attitudes toward brand

Source Credibility

Source attractiveness 2. Match up hypothesisEffectiveness depend on the existence of fit between celebrity spoke man and endorsed brandIt say that CE will only change buying behavior if characteristics of product match-up with the image conveyed by celebrity

Priyanka chopra and Ranbir kapoorProductYoungStylishEnergeticChoice of youthFor young people Energetic 3. Model of meaning transferMeaning attributed to celebrity become associated with the brand in the consumerConsumer acquire brand meaning

4. Multiple brand and celebrity endorsementspecific brand is endorsed by the different spokesman to attract diverse set of target customer .But it may confuse the customer about brand identity so it should assure that each and every celebrity must possess compatible meanings that are sought for brand

Some celebrity endorse several brand or Preety zenta endorses Cadbury Godrej TVS Scooty , Maggie, head and shoulder

Benefits Of Using Celebrity Endorsements

Attract New Users: Finding and keeping new customers is hard for some organizations. Using a celebrity to endorse an organization's product or service can entice new customers.Breathe Life Into A Failing Brand: Celebrity endorsements can help revive a product or service that is losing market share. Celebrities can tout the benefits of the brand and help create new interest from consumers.Build Awareness: Brand awareness is an indicator that measures how familiar people are with a particular product or service. Celebrities advertising can build brand awareness, according to Supermarket News, a publication covering the food distribution industry.Benefits of using celebrity endorsementInfluence Consumer Purchases: Celebrities who are well respected can instantly add credibility to a product or service. Consumers may have the attitude, 'If this celebrity is backing the product or service, it must be good.' Consumers might also think 'If the product is good enough for him or her, it is good enough for me.'Position a Brand: Celebrities can be used to position a brand. Product positioning is a process of convincing the consumers that the product being advertised is the best on the market and all other products are inferior.Recall brand People recall brand in mind which is associated with a celebrity.Connect emotionally and quickly As people are emotionally connected with the celebrities so they connect with the product sometimes they endorse


Multiple endorsements Preety in vatika and head n shoulderBrand shifting e.g. when aishwarya rai and Amir khan shifted to the coke from PepsiOvershadowingNegative image of celebrity Veena malikInfluence of celebrity scandal and moral violation on brand ( salman khan scandal Thums up drink take akshay face hard)Celebrity trap Once into a celebrity its hard to get rid of it