How and why brand power can influence the consumer and how companies can leverage on the brand power through licensing to reach the target market. What are perceive value and how it can have an impact on your brand, your marketing strategy and the consumer.
THE BRAND POWER
Have you ever wonder why people are so crazy about “I Phone”? What about the queue at “Louis Vuitton” boutique? And the kids crying and dragging their parents to “Macdonald’s” and your sister that will use non other then “Dove” shampoo. And not to mention your dream of owning a BMW. What so special about these brands beside their functional attributes. They all have one common asset, THE BRAND POWER. The brand power set you apart from your competitors and gives you a sustainable advantage.
Some of the brand power is so strong that consumer will embrace different product category so long as it’s of the same brand. And many brand owners are aware of their brand power and take advantage of its brand power to extend into license partnership with established company that can deliver the best product within its industry. And some of the most common industry are Perfume, cosmetic, watches, apparel, eyewear etc.
Many people may not realize that the Chanel eyewear is not produce by the House of Chanel along with many other big fashion brands like Dolce & Gabbana, Prada, Yves Saint Laurent, Christian Dior etc.
Around two decade ago, eyewear are only viewed as a functional product, but everything changes when European brands like Giorgio Armani, Polo Ralph Lauren and Tiffany & Co. etc.. have entered into a licensing agreement with reputable eyewear companies. Today eyewear is regarded as an important must have branded fashion accessory. And most partnership is through a license agreement.
In February 27, 2006 – Luxottica Group a global leader in the premium and luxury eyewear sector, announced a ten-year license agreement with Polo Ralph Lauren Corp. for the design, production and worldwide distribution of prescription frames and sunglasses under the Polo Ralph Lauren name. The agreement that begin on January 1, 2007, is estimated to be worth for Luxottica Group in excess of US$1.75 billion in sales over its duration. Terms include an advance payment on royalties of US$199 million that will mature over the ten-year term of the agreement.
This is just one example of an industry that is paying millions of royalty in exchange for the rights to use a trade mark and they are confident that it will help the company to generate rewarding revenue and on top of that to move the company status to the next level within the industry.
There are many other industry and businesses today that adopt licensing as part of their company goal and expansion. These industries and businesses regard intellectual property as an important asset and a vital part of their business growth and expansion. The intellectual property is also known as intangible asset which includes: