The Promotions Industry and the Relationship with the Licensing Industry

Abstract

This paper looks at how over the past 14 years we have seen the licensing business grow from a small almost cottage industry into the multi million dollar marketing operation today. Licensed properties are now one of the tools which many FMCG brands and products use to create new products and/or increase sales for existing ones. In fact there is a genre of products that rely solely on the licenced property as the main marketing proposition to gain distribution and sales based on the strength of the licence. We have seen businesses as diverse as BT (with their ET adverts) through publishing, especially children's magazines (Sorry, but Roy of the Rovers doesn't cut any ice any more!) to petrol companies and greeting cards. It is undeniable that the use of a licenced property is a very very powerful tool in the armoury of a brand manager. In addition, many brands and companies also like to use licences tactically and ‘rent’ in licenced properties in key periods of the year to give their brands a ‘sales boost’. This is more a short‐term relationship but still ongoing as the brands use licences regularly. Some companies such as McDonalds and Nestle have gone further by purchasing the rights to all Disney properties exclusively for their categories and become ‘preferred partners’. The cost of the purchase of these licences is often not small and a brand that buys into a licence that fails to deliver is an expensive and costly business. It is often said that choosing a licenced property is an art and one in which there is little or no guarantee of success.