8/7/2019 Licencing White Paper
1/8
8/7/2019 Licencing White Paper
2/8
8/7/2019 Licencing White Paper
3/8
8/7/2019 Licencing White Paper
4/8
8/7/2019 Licencing White Paper
5/8
8/7/2019 Licencing White Paper
6/8
INCUBATORSINCUBATORS A systematic approach to Brand Licensing Page 6
.
About the Author: Mahadevan Sundarraj is a Founder Director of Collabrant Incubators, a niche, turnkey consulting companywith interests in Foods, FMCG, Consumer Durables, Services & Retail. He can be contacted at [email protected]
AAllll RRiigghhttss RReesseerrvveedd.. CCoollllaabbrraanntt IInnccuubbaattoorrss PPvvtt.. LLttdd
Feasibility Studies should include an analysis of:
o Core Brand Properties (past, present and future)o Consumer Segments (current, target),o Marketing mix (e.g. communications, support level)o Channel Structures & Viabilityo IP (e.g. brand, logo, tag-lines, recipes formulae etc.)
Step 2: Metric DefinitionItis important that license agreements reflect marketing objectives of both licensor and licensee. Performance should be
evaluated based on clear metrics in the agreement and then adjusted to reflect significant changes in business conditions.Unfortunately, divergent business objectives make it difficult to create fair, balanced agreements. In addition, negotiatingleverage and prowess are not always equal between the parties. A good practice is to list out metrics before commencing alicensing program.
Brand Metrics Brand Fit: Relevance, Authority in the new Category Brand Support: Promotion, Consistency Brand Appeal: Loyalty, Price Premium
Category Metrics Concept Viability: Feasibility, Distribution Mechanics Concept Uniqueness: Features, Style, Brand Differentiation Licensee Appeal: Investment, R.O.I., Payback, Success Parameters Retailer Appeal: Familiarity, Gross Margins, Licensing Success Sales Potential: Market Size, Demand, Competition
Resource Requirements Staff Availability and Budget Advertising, Promotions and Tie-ins Support Required Sales Plan Coordination
8/7/2019 Licencing White Paper
7/8
INCUBATORSINCUBATORS A systematic approach to Brand Licensing Page 7
.
About the Author: Mahadevan Sundarraj is a Founder Director of Collabrant Incubators, a niche, turnkey consulting companywith interests in Foods, FMCG, Consumer Durables, Services & Retail. He can be contacted at [email protected]
AAllll RRiigghhttss RReesseerrvveedd.. CCoollllaabbrraanntt IInnccuubbaattoorrss PPvvtt.. LLttdd
Step 3: Alignment
Alignment of the licensor's marketing objectives with the licensee's business objectives is essential to optimizing thelicensing benefits for both parties. The end-goal is to develop terms that reflect these objectives and integrate relatedmetrics into the license. Regular performance reviews and adjustments to license terms should also be considered as partof the license alignment process.
Although sales and royalties are important elements of the license agreement, there are other metrics that can beincorporated into the license to create 'alignment' and better reflect the interests of licensor and licensee. From thelicensor's perspective, these metrics should include brand image, customer satisfaction, and loyalty. From the licensee's
perspective, the metrics should include distribution synergy, sales, and profits.
Step 4: License Negotiation:Once you have the brand & financial objectives listed out, you would go ahead building a complete licensing sales activityplan. This would include
1. Category Marketing plans2. Category sales strategy3. Developing Business plans4. Qualifying prospective licensees5. Meeting with and presenting to prospective licensees6. Negotiating license terms with prospective licensees7. Developing license agreements
Prospective licensees should be evaluated based upon operational, financial and marketing capabilities. The ideal licensecandidate is strong in each of these areas and is willing to make contractual commitments to ensure the success of thelicensed product business.
Step 5 Product Launch Planning & Execution
Step 6: Licensee Supervision
8/7/2019 Licencing White Paper
8/8
INCUBATORSINCUBATORS A systematic approach to Brand Licensing Page 8
.
About the Author: Mahadevan Sundarraj is a Founder Director of Collabrant Incubators, a niche, turnkey consulting companywith interests in Foods, FMCG, Consumer Durables, Services & Retail. He can be contacted at [email protected]
AAllll RRiigghhttss RReesseerrvveedd.. CCoollllaabbrraanntt IInnccuubbaattoorrss PPvvtt.. LLttdd
Phase IIIStagePlan
IA:Initial Scoping &
Feasibility
IB:De-risking &
Metric Definition
IIA:ResourcePlanning
IIB:License
NegotiationExecution
OngoingSupervision
ActivityDetails
Consumer Researchrelevant to LicensingBrand
Category Researcho Strategic Fito Brand Objectiveso Category Fit
Define Objectiveso Brand to Licenseo Product Selectiono Dist. mechanicso Key Resources
Licensee CapabilityoMfg CapabilityoDist. CapabilityoFin. Assessment
Cultural FitmentMetric ListingoBrand MetricsoCategory SalesoChannel
ObjectivesoROI/Royalty
Legal RestrictionsLicense QA req.
Determine all theactivities neededthrough the lifecycle of the project.
Who will completethese activities?
Estimated cost?Share of CostsoLicenseeoLicensor
Trademarks?Time Period?Territory & ChannelNon-Compete?Business PracticesQuality Standards?Financials?Royalty?Min. Guarantee?Op. GuidelinesOrg StructuringLicensors
ObligationsoBrand Support?oExclusivity?oLegal Protection
TrialProduction
Test MarketingMonitoring
Plan
SupportBudgets fromLicensor
SampleReviews
Kick off
ProductReviews
Sales ReviewsLabel ChangesLicenseRenewalsQuality
MonitoringPlan
Outcome
Project Definition Identify StakeholdersGain buy-in to project Identify Project Mgr.
Licensee Short ListRisk SummaryQA RequirementsMonitoring Plan
Resource PlanoFinanceoQualityoBrand Resources
AgreementSigned by BothParties
Launch Performanceto Agreement
PhaseOwner
Collabrant 1. Collabrant2. Project Mgr.
1.Collabrant2.Project
Manager
1.Collabrant2.Project
Manager
1. Collabrant2. Licensee
Licensor
Orgn.ResourceOwner
Corporate /CEO /Brand Heads
Corporate Quality/Legal
Brand HeadsCFO.
Legal/ CounselCorporate Qlty
Division HeadBrand Heads
Division HeadFinance Head