How Do You Determine Whether A Market Is Ready For Brand Licensing?

When traveling in Mumbai, India, I had the opportunity to attend the Brand Licensing India conference. Considering brand licensing is a relatively new industry in India, topics such as “best licensing practices” and “the intricacies of the Indian brand licensing industry” triggered some stimulating discussions. For those familiar with the Indian market, it comes as no surprise that organized retail is a relatively recent phenomenon and while growing, it still accounts for only 4.4% of total retail. Since the success of brand licensing is heavily dependent on the retail roll-out, it made me think – how can a brand owner tell whether a market is “ready” for brand licensing? Through extensive deliberation and years of personal experience, I composed five types of criteria that, if used appropriate, will aid any brand owner scoping out a market.  

  1.    Brand Awareness:

Brand licensing is centered on brands, brand positioning, and leverages the brand equity generated over several years. Once consumers become aware of a brand, relationships start to formulate. This relationship then flourishes into brand preferences and later brand insistence. When consumers become so infatuated with a brand, they will start to insist or demand additional product categories different from the brand original category offering. This signals that consumers are interested in branded products, they are willing to pay a premium for those branded products, and the market has become accessible.

  1.    Per Capita Income:

Research the per capita income of the target consumers. Incomes should be high enough so that they are able to afford “non-necessity” items from their favorite brands. It is imperative that consumers are in a position to able to spend non-disposable income on licensed merchandise. Without sufficient income, the branded products are unable to be purchased by the target market causing adverse effects.

  1.    Confidence In The Licensing Business Model:

Manufacturers and brand owners alike should have faith in the Licensing Business Model, which has proven itself in the developed world. This model has worked well in several countries, but for this program to be a success, both parties must commit.

  1.    State Of The Retail Industry:

As mentioned, retail is one of the keys to a successful brand licensing program. The retail industry should be on board with the licensing program and be world class logistically.  

  1.     Robust Intellectual Property and Trademark Protection Laws:

For any brand to enter a market, the brand owner must ensure that their trademark will be protected by the law of the land. The creation of new and innovative technology and innovative technology has made global access more easily accessible to everyone. Thereby granting brand owners the advantage to license their brand to licensees not only in their country, but within other countries as well. Though it is beneficial to have the power to expand your brand’s awareness and reach, doing so without proper legal protection could inflict pain on the brand. Make sure that whether you are trying to pursue brand licensing within your own country or another you do your homework.

Always remember the retail market is a tricky organism to predict due to constant changes in consumer preferences and economic factors. As a brand owner, the uncertainty associated with the retail market makes it difficult to determine whether a it is ready for brand licensing. Honing in on the criteria listed above and watching the market vigilantly for new opportunities will start you on the path of scoping out the market for your new and exciting venture.

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