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Guest Column: An A-Z of best licensing practices for brand owners: Rohit Sobti, Brand Monk Licensing

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Guest Column: An A-Z of best licensing practices for brand owners: Rohit Sobti, Brand Monk Licensing

In the last few years, celebrities, corporates, sports and others are increasingly jumping on the brand licensing bandwagon. For the common man, it may seem as someone endorsing a product or service, but in the real sense, brand licensing is an attempt of the celebrity, company or sports team to extend their value, beliefs and ideas to a certain service or product. Salman Khan’s Being Human blends the star’s fashion and his charitable causes through the brand. Disney’s consumer products are an extension of their stories and characters, but it qualifies the quintessential attributes like joy, happiness and quality that echoes through all its businesses. Licensing, at the core, may be an additional revenue stream but it must resonate with the brand’s overall ethos and essence.

Here’s a low-down of questions to ask and factors to consider for those entities such as celebrities, corporate houses or sportsmen who have or are on the verge of venturing into the big world of licensing and merchandising.

1. Who is a brand owner?

A celebrity, entertainment personality, sportsmen, artist, digital star, restaurant, film, festival or a corporation with a reputation that can be extended beyond the realm of familiarity and create a new product, content or experience in tandem with tangible and intangible attributes associated to the brand (be it a person, film, restaurant, corporation, etc.) Whereas the party that pays a fee for the rights to incorporate the tangible or intangible assets of the brand is the licensee.

2. Is the brand ready for licensing?

Licensing is the process of leasing a legally protected (trademarked, copyrighted or patented) entity like a name, likeness, personality traits, logo, trademark, graphic design, slogan, signature, character, etc. The entity is then used in conjunction with a product. Unlike brand endorsement, licensing isn’t just about slapping the personalities name or logo on or getting them to endorse the product.

Brands can explore licensing for assorted reasons such as reaching out to existing fans in a newer avatar, testing the viability of a new category without making a major investment, building affinity in unknown territories, engaging with the community, positioning brand in a new way, marketing strategy to grab more eyeballs through new products or trademark protection.

For licensing ventures, it is quintessential for brands to gauge and understand the attraction for its entity beyond the product or service. In recent times, Royal Enfield diversified into a new business - developing merchandise of biking apparels and accessories. The oldest motorcycle maker around the world has built company’s credibility over 100 years, leading to a loyal and passionate fan base. The brand has emerged into a leading name in its line of business. For a brand owner, it’s critical to assess its pull in the crowd before exploring licensing.

3. Does your brand have an identity and strategy?

It’s great to want to look at newer ways to make more money but a brand needs to stand for something like a cause, emotion, purpose, utility, experience, education or entertainment. Organically but strategically, formulate an identity that will permeate through all the products and services the brand extends to. Put together a clear-sighted strategy defining the key elements of a brand that are sacrosanct from both inside and outside perspectives. While a powerful brand identity becomes the foundation for marketing efforts, a consistent and strategic branding leads to a strong brand equity that translates into loyalty and higher profits.  

4. Study the market

In the recent rat race to launch brands, owners often forget to comprehend the demand, supply and differentiation in the market. While in India branding and licensing is still in nascent stages, in developed countries like the US and Europe, the market has matured. Study about leading brands and licensing deals for insights as well as look at failed brands to understand what not to do in the business. Don’t just invest money but also give time to build a long term, sustainable and profitable brand.

5. Invest in Intellectual Property audit

Empanel an IP agency to carry forward critical assessments. Intellectual Property audit is a systematic review of the intellectual property assets owned, used and acquired by a business. The purpose is to uncover under-utilised IP assets, to identify any threats to a company and to enable business planners to make informed decisions that will maintain and improve the company’s IP strength. Very often, Indian companies don't invest efforts into this and take it casually which is not right if you are looking at building a robust Brand Extension business.  

6. SWOT Analysis

The popular management tool, SWOT analysis, enables the brand owner to determine its Strengths, Weaknesses, Opportunities and Threats (SWOT). This method helps to evaluate a business or a project from a strategic point of view. It involves specifying the objective of the venture and identifying the external and internal factors that are favourable or unfavourable to achieving that objective and to determining the attractiveness of the venture.

7. Establish a licensing process

While licensing may seem like a marketing tool for a product or service by the brand owner, a gamut of processes goes into conceptualizing and creating a brand. Either engage an internal team or an external agency to focus on the multiple procedures from strategy, agreements, brand guidelines, approvals, development, marketing, sales tracking, retail presence, monitoring monetary returns and to managing counterfeit raids.

8. Create brand guidelines

Integrity to the brand is paramount for long-term success. It’s necessary to create a brand guideline that will put down details on the ethos and essence of the brand, the style guide, the look and feel of the product, the communication highlights and the creative liberties, which must be followed internally and externally, to keep the brand consistent. Brand owners should also revisit the guideline to be in sync with the brand as well as check relevance with changing times and modify, if needed.

9. Lend marketing support to licensee

For the brand owner to leverage their goodwill among fans, it’s critical for them to employ their marketing and promotional platforms and channels like social media, print media, etc. to reach out to a wider audience. Marketing efforts should be a combined and cohesive effort by brand owner (licensor) and licensee.

10. Get several licensing agencies to pitch

If you are looking to outsource the licensing process, it’s best to invite pitches from several agencies to weigh the ideas, concept, processes and bottom lines before signing on the dotted line. It helps access tenacity, preparedness and professionalism of the agency at the same time give a fair assessment of their understanding of the industry, realistic analysis and an overview of risks involved of the venture. Often, agencies in order to ink the deal, may make tall and unrealistic promises and magnanimous bottom lines.

11. Research about the royalty rates

Standard practice in the licensing industry is that the brand owner (licensor) gets a minimum guarantee fee plus a percentage of the profits as royalty. However, it varies across product categories. The brand owner should research on the market rates of identical product categories and then unanimously agree upon a royalty rate instead of demanding ad hoc figures.

(Rohit Sobti is the CEO & Co-Founder of Brand Monk Licensing)

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of

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