License Legends
Name 1 company that earns major revenue from licensing
Disney
What are the two main parties involved in a licensing agreement called?
The licensor and the licensee.
What financial advantage does a brand gain from licensing its name to another company?
Royalty income
Starbucks opens a new café concept in another country, owned and operated by Starbucks. Is this licensing?
No.
In brand licensing, what asset is the brand owner allowing another company to use?
The brand name / logo.
Name 2 luxury brands that license products like perfume or eyewear
e.g. Ralph Lauren, Pierre Cardin (also acceptable: Ferrari, Chanel, etc.)
In brand licensing, who produces the product?
The licensee
What happens when a brand extends into too many unrelated or low-quality product categories?
Brand dilution
LEGO collaborates with Marvel to create superhero-themed LEGO sets featuring Marvel characters. Is this licensing?
Yes!
What does a licensee pay the licensor for using the brand name?
Name 3 industries where licensing is common
Fashion, Entertainment, Sports, Consumer goods
In brand licensing, does the brand owner usually produce the product?
No. The licensee produces it.
If a licensed product fails to meet safety or quality standards, what challenge does this represent?
Problems with quality control
Chanel creates a cheaper sub-brand under a new name to target a younger audience. Is this licensing?
Nope. This is brand extension.
True or False: Licensing agreements usually include quality control rules.
True
Give 4 examples of commonly licensed products
Toys, Apparel, Fragrances, Eyewear (Accessories, home décor, merchandise)
Explain what is brand licensing
A contractual agreement where a brand owner allows another company to use its brand name in exchange for royalties or fees.
A brand licenses its products in a country where it has no stores. What key benefit is this?
Market expansion
Mercedes allows a toy company to produce miniature cars under its brand name in exchange for royalties. Is this licensing?
Yes
What is one reason a licensed product might be removed from stores?
It didn't meet the licensor’s quality requirements
Give 5 brands mentioned today that license their brand + one product from them
Disney - toys / clothing, Ralph Lauren - fragrance Ferrari - sunglasses, Harley-Davidson - apparel, Mattel - Barbie products via manufacturers
Why is brand licensing considered less risky than entering a new category alone?
Because the brand does not need to invest in production or operations itself.
A brand enters the home décor market by partnering with a specialized manufacturer. What strategic advantage is this?
Leveraging brand equity
Apple partners with Bose to produce headphones. Apple controls design and quality, while Bose handles production. Is this licensing?
No.
Why might a big brand choose to license instead of making every product themselves?
It saves time and money while still growing the brand