MARKETING ASSAULT: THE POWER OF LICENSING
By Rod Alan Richardson
The other day, I was walking through the cereal isle in my neighborhood Wal-Mart Super Center. While examining all the delectable cereals that are available and trying to imagine which ones would make me a hero with mom and children, my eyes latched hold of a bright white box with a giant green ogre and donkey plastered on the front. Instantly, I remembered the preview I had seen in the theater announcing the release of Shrek II.
“Isn’t that cute,” I thought to myself. “Those clever marketers got their message on a General Mills cereal box. As I was musing on my discovery, I turned around and saw the green ogre on a box of breakfast bars. Now that my fascination was up, I began to notice Shrek on nearly every product isle right down to the shampoo department. Then came the thought, who is paying who in this deal?
In most cases the product company seeks the license so they can capitalize on a short term popularity of a mega event—like a movie. Some companies like John Deere, on the other hand, are long-term companies. John Deere for example represents the core of American family values and has a whole division dedicated to getting the John Deere name to appear everywhere. John Deere licenses the use of their name for books, toys, games, tools and clothing. Many times, they co-venture the project.
While many large, established companies can set up mass marketing licensing projects, small businesses and emerging companies do not have the capacity. So how do we use big company marketing tactics in our small enterprise? Try these four ideas to get your brand out more:
Get partners and affiliates that will refer your name – Do you currently offer a referral program? If your business if focused on providing a component of the value chain for a number of companies, it is likely that many people will gladly refer business to you, especially if it strengthens your partner’s offering. Referral fees vary from a few dollars, to as high as 20 percent of the sale, with 10 percent being the average for most companies.
Allow other companies to license and sell your products as their own – Again, if your offering provides a valuable component to the value chain, you can allow other companies to actually offer your product as their own. An example of providing a component to the value chain is having a company that provides ball bearings to auto manufacturers. You could share a fee between 10 and 75 percent of the sale price depending on the type of product you offer.
Develop and Share supportive products that have your brand on them – If you offer a product that is useful to someone else’s customer base, you have the option of selling your product to the partner business’ customer base. For example, we had a client offer a training CD produced by an herbal supplement company as a free gift to customers of their health food store.
Co-Brand new products – Develop products and services together with other businesses in your value chain. If you’re a patent attorney, create an information product on intellectual property rights that can be distributed by contract manufacturers. If you manufacture animal shampoo, co-produce a specialized product with a busy veterinary clinic.
How does a little company market like a big company? Be a Shrek. Get your brand visible everywhere. Look for opportunity to get your name on things. Profile your customers. Know where they hang out. Be aware of what they buy and where they shop. Go to those companies and look for ways to get your name on their shelves. Work the deals and share the profits. In the end, if you do this right, you will make a boatload more money and significantly boost your business.
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