Brand Licensing Overview
Brand licensing happens when a company grants permission for other businesses to commercially use their intellectual property in return for royalties. For example, Nike licenses its name and logo to other companies. Licensing allows the licensee to leverage the established brand recognition and reputation. It is a strategic partnership that benefits both parties by expanding market reach and generating revenue.
Reasons for Brand Licensing
Reasons for licensing include extending consumer acceptance of brand extensions or new products. Licensees can incorporate popular brands into merchandise without sharing ownership. Licensors choose items they believe will sell and grant licensees permission to create prototypes.
Major Global Licensors
There are several major global licensors. Disney licenses its characters and earns over $50 billion. Other companies license designs, logos, software or patents. Licensing helps increase brand visibility and awareness. It can mean reaching new consumers and locations.