Brand licensing, also known as brand licensing, originally originated in European and American countries. It means that the owner of the brand passed relevant agreements on the basis of agreed terms (such as the use of the brand's merchandise category, the area in which the product was sold, and the time period of use). Allowing licensees to use the licensee’s brand to produce and sell a product or provide a service, and to pay the brand licensee a mode of operation for the agreed amount of royalties.

 

As an important tool for marketing, brand licensing has been widely carried out in developed countries in Europe and America. It is also known as the most promising business model in the 21st century. According to a survey, the United States, which is currently the most developed brand licensing industry, has a market share of about 65% of the world brand licensing industry. In contrast, China's share of the world brand licensing industry is less than 0.5%. Relevant experts said: China should introduce the brand licensing business model and vigorously develop related industries.

 

Experts also pointed out that brand licensing is an emerging industry for China, which can create a “win-win” situation for the market.

 

1, from the perspective of brand licensees. For licensees with well-known brands, these brands that are easily recognized by consumers as an effective investment license mean that the brand is expanded, that is, licensees with well-known brands do not have to put in troublesome matters such as plant, equipment, office equipment, and personnel. Can enter a new market.

 

2, from the perspective of authorized dealers. Authorized merchants are quickly known by consumers and more easily accepted by distribution channels by using a brand name and logo that has been successfully established for many years to enable their products to immediately gain the benefits of the brand's popularity. The brand authorization provides the licensee with a consumer group that is already familiar with and loves the brand image, and because the brand is willing to pay more money than before to purchase the product of the licensee, thus also improving the product’s Profit rate. For licensees, the completion of all this does not need to start and establish their own brand of investment, and the benefits of the brand can be realized immediately, and the establishment of a new brand may take several years.

 

3, from the perspective of the market. The reason for brand licensing is also that a strong brand allows consumers to produce clear identification and evoke consumer brand associations, which in turn promote consumer demand for their products. For example, an image of Mickey Mouse can give an ordinary cup a brand story beyond the functionality of the product, thereby attracting the purchase of Mickey Mouse-loving consumers. More importantly, consumers can buy high-quality, well-known brand products at reasonable prices and become the most direct beneficiaries.

 

Second, the risk of brand authorization

 

Although brand licensing can create a “win-win” situation, it also has the following risks.

 

1, the risk of authorization monitoring. Authorized persons obtain the right to use the brand through “purchase”. Therefore, the authorized person must consider the short-term income of the investment and will not pay attention to the maintenance and development of the brand. Therefore, some short-term behavior is likely to occur. In addition, because brand licensees do not directly produce products, most authorizers are far abroad, and even some brand licensees are still "two traders." They cannot supervise the quality of specific authorized companies. Once quality problems arise, they will Endanger the entire brand.

 

2. The risk of authorizing product conflicts. Due to the long-term business strategy and actual operation results of certain authorized products, consumers have already identified the brand in a certain area and made its extensibility weakened. Under this circumstance, if the authorized product is related to the original product Poor sex, even conflict, will make consumers feel unwell and detract from the original brand image. For example, if the original product of the brand is food, and the licensed product is medicine, the credibility of the product will be reduced.

 

3. The authorization changes the risk of “circling money”. According to reports, the relevant departments have found some unscrupulous people under the brand name license, and some even do not even register the trademark, then they launched a so-called brand authorization, after the big money, and then take the buttocks to leave, change a The sign continues to trick and bluff. Once such a "consortium" is added, the consequences will be disastrous.