Is this a brand problem you have witnessed?
Common Brand Problem Number 36: Licensing the brand name out to whomever will pay for it
Analysis: While this will generate additional revenues and profits in the short term, it is an unwise practice in the long term.
You should use brand licensing to:
• Extend the brand into new categories
• Expand the meaning of the brand
• Reinforce key brand associations
• Build your brand as a badge
• Bring your brand to life in new ways
Key Point: You should avoid licensing your brand just for short-term gain where it doesn’t make sense. Where the licensing department resides in your organization and what its objectives are will have a large impact on how well licensing is used to build (versus bleed) the brand.
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Having been Taco Bell’s brand steward for the highly successful “Chihuahua” campaign, I can say first hand that a brand with value will be solicited endlessly by companies with licensing opportunities. The temptation to capitalize on short term financial return is high, but overexposure and risk of watering down the brand’s meaning are most often too high a price to pay.
I agree with this author’s recommended use of licensing to build a brand, and would advise looking at the financial gains as gravy, not the reason to license.