LICENSING

LICENSING

Contract

Licensee

LICENSING Licensees can have a significant impact on a licensor’s perception among consumers

LICENSING

Licensee

License Agreement

ManufactureMarketSell

LICENSING ( BENEFITS) Appealing to small companies that lack resources

Faster access to the market Rapid penetration of the global markets

LICENSING IN THE PHILIPPINE BUSINESS INDUSTRY:

Commonly observed among large companies • Asia Brewery Incorporated • Colt 45 licensed by Pabst Brewing• Nestea (ready-to-drink) by Coca Cola Company• Asahi Super Dry (beer) –distribution; licensed by

Asahi Breweries• Vitamilk Soy Milk – distribution; licensed by Thailand's

Green Spot Company Ltd.

LICENSOR Ex: SBS Channel in Korea gives license to ABS CBN for the adoption of the story and characters in Two Wives

CHARACTER VERSUS CORPORATE LICENSING

A sports or entertainment entity permits a licensee to use their image, name or character for a fee

CHARACTER VERSUS CORPORATE LICENSING (CON’T)

Ex: LucasArts licenses a manufacturer to use the images of the characters from Star Wars: Attack of the Clones

ADVANTAGES OF LICENSING

Advantages for Licensor1.Enhanced company image and publicity2.Increased profit from royalties3.Increased brand awareness or recognition4.Increased opportunity for penetrating new markets5.Limited manufacturing costs or risks

ADVANTAGES OF LICENSING (CON’T)

Advantages for Licensee1.Existing brand awareness or recognition2.Lower advertising and promotional costs3.Increased possibility of success and

profitability4.Connection with an athlete, sports team,

entertainer, or corporation

DISADVANTAGES OF LICENSING

Disadvantage for licensor1.Potential for poor quality of a licensee’s manufactured products2.Partial relinquishment of control over the marketing mix of the brand

DISADVANTAGES OF LICENSING (CON’T)Disadvantages for licensee:1.Athlete, entertainer, or corporation may lose popularity.2.Sports teams may suffer losing seasons3.Change in styles, trends, and consumer preferences4.Royalties and licensing fees can be expensive

DISDVANTAGES OF LICENSING (CON’T)Disadvantages for licensee: (cont.)5.Manufacturing costs and risks6.Competition can drive up costs associated with fees and royalties7.Competition can cause a negative impact on market share8.Competition can cause a negative impact on market share

IMPACT OF LICENSING ON CONSUMERS

Increased opportunity to associate with an athlete, sports team, entertainer, or corporation

Increased supply of available products +

IMPACT OF LICENSING ON CONSUMERS (CON’T)

Competition can result in lower prices, new products and better quality.

VS.

BOOTLEGGING Bootlegging is unauthorized use of a

name, logo, or trademark of a league, athlete, sports team, entertainer, film, TV show or character

Bootlegging reduces the profits of the licensors and legitimate licensees

BOOTLEGGING (CON’T)

Bootlegging can result in poor quality products for consumers, which will decrease brand loyalty

LICENSING ASEAN INTEGRATION Companies situated in members of the ASEAN members will

be openly embrace engaging into licensing to market their products on the other country due to exposure of different products

Part of the aim of ASEAN integration is to move as one Region to the world market and in which licensing to manufacture a product from any ASEAN countries to the Philippines can also be part

Existing products from other ASEAN members with license agreement:

MoGU-MoGU – product license of Sappe Public Company Ltd. (Thailand) distributed by Gold River Mgt. & Dev’t Corp