Step 1: Finding & Assessing Potential Brands To License
Prospecting For The Right Brand
As you search and evaluate potential brand owners, don’t approach it with a mindset of being the lesser party without authority. Approach it with the understanding that you also have the power to decide what best benefits you and your organization.
There are four ways to prospect licensors: Research, trade publications, store walks, and trade shows. I go into great detail of how to get the most out of each method in my downloadable guide, Licensing From a Manufacturer’s Perspective: A Disciplined Path To Licensing Brands And Making Them Profitable. For now, let’s say you’ve zeroed in on one particular brand that looks promising.
You Can’t Win The Business If You Don’t Understand The Brand
Even though the brand you have under consideration is an entity of the brand owner, it is important for you to know its essence. What does this brand mean to the brand owner, others in their organization, customers, and consumers? Do consumers and customers find the brand differentiated and relevant compared to the competition? Take Coca-Cola, Google, and Apple for instance. Each brand’s essence is different from the other and means different things to the people in whom they are in contact.
In my guide for manufacturers and other licensees, I show you how to understand your target’s brand positioning. Why is this important? If the brand you want to license does NOT occupy a clear, distinctive, and desirable place in the mind of a target consumer, you might win a license that is decidedly difficult to market.
What Are The Brand’s Strengths & Weaknesses?
My guide also shows you how to assess the brand you’re thinking of licensing through a SWOT analysis. It will assist you in measuring the brand’s strengths, weaknesses, opportunities, and threats; internally and externally. It is part of your responsibility to research the brand thoroughly to gain a sufficient amount of knowledge of the parent brand’s equity, the brand’s positive and negative associations, addictiveness, competition, captured market, target market, presence and so forth. Just because you are the licensee doesn’t mean that you can walk into this license blindly.
By understanding the ins and outs of the brand, you’ll gain a competitive advantage. I can’t tell you how impressed brand owners are with a licensee’s ability to articulate the brand’s strengths and opportunities while countering its weaknesses and threats. Click here to see how to conduct a SWOT analysis of your targeted brand and how to use it to win business.
Step 2: Pitch The Brand
So, you’ve identified a brand prospect, researched and approached them. You’re now a candidate. Congratulations! Now, how do you win the business? By knowing:
- What characteristics brand owners look for in best-in-class licensees
- The Four selection techniques licensors use to find their prospective licensees
- The parameters licensors measure licensees against.
Get more details here.
Make Your Licensee Application Form Stand Apart From The Competition
Most brand owners will ask you to thoroughly complete and sign a Licensee Application to provide the licensor with in-depth information related to your organization. Want to see what a typical application form looks like? Click here for the template.
Below you’ll see an important part of the template: Channel distribution questions. As a prospective licensee, you must qualify your distribution by channel and give a percentage of the sales of the product you are selling in each particular channel. The licensor uses this information to verify that the percentages align with the channels that they prefer you to sell through.
If you have a stronger distribution capability outside of the channels the licensor wants you to sell in, then this data will inform them that you are not as strong as they would like. The licensor may consider asking follow-up questions such as: “Our brand is strongest in the sports specialty channel and your organization appears to be strongest in the mass channel. How will you ensure that our licensed product will be distributed in an efficient manner to be successful?”