The Basics of Brand Licensing
Let's start by taking the things one at a time, the expression of brand licensing can be split into two words: brand and licensing. It's a symbol, a name, or a word that describes and promotes a product or service. It makes a difference between many things that are promoted in a competition of the market. The brand has a trademark that tells us where the product manufacturing took place. It represents the credibility and reputation of a product in the eyes of the consumer.
The main reason for a company to choose its mark is for having a different thing to represent the product from the competitors in the business. Let's have an example: the client wants to buy a soft drink that has the same taste and the ingredients are almost the same. In the beginning, the consumer buys both until he gets used to them and realizes the attraction for one of them and starts to drink only that one, because the little difference in the recipe makes the product have a little difference in its taste that makes it particular, even if in the beginning it's not noticeable. So from then on the consumer will buy only that mark.
Usually at first consumers choose a brand because they have seen it on a commercial, their friends use it or recommend it, or by Hollywood stars. So even if a new product appears under a name that is already used and known for its quality people will buy it at least for a try and this is what makes it so powerful.
Licensing and asset mean renting it or leasing it. Companies that want to sell products from a specific manufacturer have to obtain a license from it before marketing the product. The trademark owner is in the case called licensor. As an example, we can take the Apple company which after becoming big was in need of different accessories and considered that these would be best made by others and gave them a license. In this way, many firms took the Apple iPod and enhanced it until this product becomes more popular and easy to use. Licensing a product doesn't really mean that the company owns that product; it's just renting it for the purpose of selling.
So in conclusion licensing is an awesome thing because by using it forms that have no reputation can sell use other bug corporations to make money by selling top brands without being forced to create a new brand from scratch. Creating a whole new name is so resource-consuming and does not guarantee it will have success like the competition anyway because there is a lot in the business world.
A very good strategy that an owner can put into practice is extending the brand to many other products of the same type or even different, it's logical that a product that sells great will also sell even if the content changes and an additional style or variation is put into it. This will help the in the company's growth and will bring new working place s and more a lot more profit.
Now after we have seen the meaning of these two words and we even tried to combine them let's give a definition to the whole expression. Brand licensing means in effect that a company that owns a distinctive label can give a license to another company or individual so that they can sell the same label without being the owners themselves, this is done in terms of a contract and also is based on a time period and an area of effect.
Once with licensing great responsibility comes for the selling company to capture the brand's exact positive traits and be sure to preserve them for the consumer in every way possible, as an image, at the emotional level so it can be accepted in the same way by the client and generate the same amount of sales as the original.
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