Brand licensing optimization – eight categories to consider

Whether your brand licensing practice is decades old or just starting out, optimizing it is critical to the long-term health and vibrancy of your brand. A fully optimized program ensures that all licensed products reinforce the brand’s positioning, that consumers have access to the licensed products through designated retail channels authorized in each licensees’ contract and that the net sales and royalty revenue growth are balanced across retailers and Stock Keeping Units (SKUs). Unless a brand licensing program has a systematic approach to measuring its level of optimization, the quality and success of the program can be both unpredictable and harmful to the brand. The only thing worse than a program conditional on the decision making whims of one retailer is a program that is selling millions of branded products annually in the wrong categories, reinforcing the incorrect brand attributes or eroding brand equity. So, let me ask you brand managers, marketing directors and CEOs out there, “How optimized is your brand licensing portfolio? “

Determining the level of optimization of a brand licensing program is relatively straight forward if you know what questions to ask. Outlined below are eight categories to help you determine your program’s degree of optimization so that you can begin to identify gaps. Before we get to them, let’s dig a little deeper into why brand owners should pay particular attention to this topic. After all, a program may be growing steadily in net sales and royalty revenue. It may even be adding terrific licensees and exceeding plan year after year. With positive indicators like these, brand owners have good reason to believe their licensing program is on the right track. However, without a detailed understanding of how the program is achieving its sales and royalty growth, companies may be at risk of losing a substantial portion of sales and royalties if their top licensee’s largest program does not get renewed, or if there is a safety recall on the program’s highest selling SKU. Some savy brand owners realize that diversification is important and have chosen to sign a large number of licensees to avoid dependence on a limited number of licensees or SKUs. However, programs with a large number of licensees may become administratively overburdened. If your program has many licensees, when was the last time you had the chance to meet with each of them face to face? And when you did meet, did you take the time to inquire about the state and health of their overall business?

If you don’t know your brand licensing program’s level of optimization or if you are concerned that it may be out of balance, it may be time for a brand licensing audit. A brand licensing audit allows you to dig into your program to assess its current level of optimization and begin to identify gaps so you can close them. Here are eight categories to consider when assessing your brand licensing program’s level of optimization:

1.Portfolio Balance
a. Is the overall brand licensing portfolio balanced?
b. How many licenses does the program have?
c. What percentage of the licenses comprises 80% of the net sales?

2.Category Alignment
a. Is your program licensed in the right categories?
b. Does the brand have permission to extend into the existing licensed categories? (internal/brand research – consumer focused)
c. If so, are there category positioning statements written for each category?

3.Licensee Search and Suitability
a. How are you prospecting licensees to ensure you are finding the best suited to support your program?
b. Where do you look for information when prospecting licensees?
c. What parameters are used to shortlist licensees from the universe?

4.Licensee Health
a. What is the overall health of your licensees? Times are tight, are your licensees as stable as they were when you signed the license?
b. When was the last time you checked their audited financial statements?
c. Do they have any current or pending law suits that could seriously impact their business?

5.Category Management
a. How often are reviews conducted with each licensee to ensure they are meeting their objectives? Annually? Quarterly? Monthly?
b. What questions are being asked in the review?
c. Who from the licensees’ side is attending the reviews?

6.Licensee Orientation and Alignment
a. Is there a robust orientation program in place?
b. If so, who attends the orientation and when does it take place?
c. How often do you meet with the licensees individually and collectively?

7. Business Planning
a. Is there an existing business planning process in place?
b. Is there a licensee summit to review the planning process?
c. How often do you discuss the plan with the licensees?
8. Contract Quality and Accuracy
a. How robust are the contracts you currently have in place?
b. Do they accurately reflect the deal terms and procedures being practiced?
c. When do your contracts expire? Is there proper succession planning?

Canada Plays for Gold in Men's Hockey

In early January I was in Vancouver preparing for the upcoming Olympic Games. At the time, I had heard there was a big hockey game being played between Canada and the USA. As a proud American I wanted to watch the game and cheer on my fellow countrymen. I found out from an American friend living in Vancouver that she would be watching the game at a nearby pub with a group of Canadians. She invited me to join her. I arrived half way through the second period. The place was packed with the game being televised on every screen. No one was talking - everyone was fixated on the game. The USA team was winning. Not sure, I asked my friend what level of teams was playing. She told me the national junior teams were playing for the world championship. Dumbfounded, I remarked, "The whole country of Canada is watching their national junior team play?" not really believing this could be possible. After all, these were high school and college-age kids that were causing the country to come to a standstill. I don't even think the game was broadcast in the United States. At least no one I knew was watching. The USA team ended up winning the game in overtime, the first time in six years. The crowd in the pub hung their heads. They couldn't believe Canada had lost. Everyone talked about the loss the next day. It was at this moment that I began to understand what hockey means to the country of Canada. For Canadians, hockey embodies their national identity. They invented the game. They are not supposed to lose to any other country, especially on their own turf.

I returned to Vancouver in early February to help Coca-Cola with the Olympic Winter Games. Since arriving I have asked many Canadians what their personal wish was for the Games. Nearly everyone I spoke with told me how important it was for Canada to win gold in men's hockey. Canada could win a record number of gold medals (which they already have done with 13), but if they didn’t win in hockey the Games would be deemed a failure. I told one taxi driver whom I had posed this question to that I thought I understood what winning gold in hockey meant to Canada. You see I am a Naval Academy graduate. We have a game with similar stakes. Navy faces Army each year in football. It is arguably the greatest rivalry in all of college sports. Navy can win every game in its season, but if it doesn’t beat Army the season is considered a failure. Similarly, the season is considered a success as long as Navy beats Army. For Army, the game holds the same significance.

On Sunday Canada will play the USA for the gold medal in men’s hockey. In their previous meeting earlier in Vancouver, Canada lost to the United States by a score of 5-3. The country was practically in mourning. The loss forced Canada to play an extra game against Germany to stay in the tournament. Despite a slow start against Germany, Canada caught their stride in the second period and never looked back. Canadians breathed a sigh of relief. The next day, Canada had to face Russia in the quarter finals, a team they hadn't beaten in Olympic hockey in 50 years. Many people expected Canada to be playing Russia for the gold medal. Instead they were meeting in the quarter finals with the loser going home. The country was anxious but hopeful. They knew their team had the talent to win. The Canadians decided to play with a lot of physicality and work to contain Russia's superstar, Alexander Ovechkin. The plan worked like a charm and Canada ended up crushing Russia 7-3. Earlier that day Canada had won four medals including gold and silver for the first time ever in the same event (women's two-man bobsleigh). While the Globe and Mail, Canada's national paper, covered the medals won the next day on the front page, the rest of the front page and almost the entire sports section was dedicated to the win over Russia – despite the fact the win did not result in a medal for Canada. After the win, Canadians had a swagger in their step. Their team was back. And, yes, they were happy their country was also winning medals.

While Canada continues to rack up a record number of gold medals at this Olympics – currently at 13 – they will not be satisfied unless they take one more in a win against the Americans Sunday in hockey. For team USA, this has been a tremendous Olympics with 36 total medals. Tomorrow the USA will win their 37th when they play Canada, the most ever for any country in a Winter Olympics. While every American wants the USA to take home the gold in hockey we will not be devastated if our team doesn't win. As the youngest team in the tournament at 26.5 years of age, they have already exceeded everyone’s expectations. Gold would be icing on the cake.

Canada, you are a great nation and a great friend to America. Congratulations on an outstanding job hosting the world at the Vancouver Olympic Winter Games. Sunday your men's hockey team plays the USA for the gold medal. I know how important this game is to you. So best of luck and know you can hold your head up high regardless of the outcome.

POD announcement--NBC

An Interview with Sid Hopkins

Pete Canalichio interviews Mary Remoue

2010

Here we are a month into 2010 and many of us have already broken our New Year’s resolutions. You know what I am talking about, the ones we made in late December or early January when we promised we would get to the gym at least three times per week. We told ourselves we would eat more fruits and vegetables and stay away from processed foods – the kind with all that high fructose corn syrup, saturated fat and carbohydrate content. And we really would have kept those promises to ourselves, but it has been so damn cold outside and there were all those college bowl and NFL playoff games on TV that had to be watched. Everyone knows that when you are watching football, you’ve got to have the right kind of munchies to eat and plenty of beer to wash them down. Right? Oh well, maybe we can get back on track when the weather is warmer…

When you’re in your 20s or 30s, you can get away with making excuses about being young and not having to worry about all that healthy lifestyle stuff until later. But for many of us in our 40s and beyond, later is now and if we are really honest with ourselves, we’ve run out of time for excuses and we’ve seen too many of our family, friends, or friends of friends suffer from an “early” case of cancer, heart attack or stroke. Many are left incapacitated, or worse. Western medicine makes it pretty easy for us to be slackers. The obesity standards get a little more tolerant each year and so do the testing tables for cholesterol, blood sugar and blood pressure. Before, there was either “normal” or “obese”; now you become “overweight” before you become “obese.” The same thing goes with those testing tables. We now have normal, high normal and high. And when your test results finally do come back high because you are 20–30 lbs. overweight, you have a host of medicines to regulate you back to normal.

There’s just one problem with all of that. The added weight, lack of exercise and improper diet affect a whole lot more than your cholesterol, blood sugar and blood pressure. And those pills that help get you back on track have a tremendous number of potential side effects. They may help you keep your heart healthier, but what about what they are doing to your other organs?

Unfortunately, there’s no free lunch. We intrinsically know that, don’t we? Still, it is easier to make excuses until we get a small scare, like when a friend of a friend or a distant relative dies way too early. Hopefully then we start to make a permanent change to our diet and exercise. If not, we may persist in our bad habits until things hit a little closer to home. Maybe we lose a loved one or suffer a “minor” heart attack, as if there were such a thing.

This year I was due for my first colonoscopy. You see, my dad died of colon cancer. They say he didn’t die early, so I didn’t have to get my test early. Of course, I disagree and wish he were still on this earth to offer me advice and to keep my mom company. But that is another story. In any case, I have made it a point throughout my entire life to tell my doctors that my dad died from colon cancer and I’ve been awaiting the day when I would have to have one of them examine my colon to ensure it was free of polyps—or God forbid, something worse. For most of us, the prep for a colonoscopy is much more uncomfortable than the examination itself. For those of you who have yet to have one, I won’t go into detail as to why, just in case it may dissuade you from having the recommended test. And for those of you who have had the pleasure, there really isn’t much more to say, is there? Fortunately for me, my test came back clean and I am good to go until the next time. And despite a broken healthcare system in this country, my insurance covered the colonoscopy. I guess it must be financially beneficial for insurance companies to pay for us to get our colons examined.

In addition to cancer, my dad suffered from heart disease. He had a triple bypass in his 60s, which enabled him to live another 10 years. As a result, I have been wary of high cholesterol my whole life and have wondered if my arteries were clogging despite all my best efforts to keep them clear. Without warning, my cholesterol started creeping up about fifteen years ago. By the time it hit 200, the normal range went to 220, so I was ok. I committed to eating healthier and exercising more. Nevertheless, it crept up to 225. I got pretty worried until I found out that my cholesterol wasn’t considered high. It was only “high normal” so I was ok, sort of. I discussed a plan with my doctor and we both agreed if my cholesterol didn’t go down on my next test, I would begin taking a drug called a statin to reduce it.

Instead of going down, my next test came in at 247 and I had to begin taking the drug. After three months my cholesterol went down from high to high normal. While I felt better about my cholesterol, I was worried about what the drug was doing to my liver. I realized during this period when my cholesterol was creeping up that my weight had crept up as well. I had gained 20 lbs. Could 20 lbs. make that much difference? I guess so. Last year I got serious about losing weight and managed to shed the 20 lbs. Not surprisingly, my cholesterol is back under 200. While my doctor and I were pleased with my results, he prescribed a calcium scan to determine whether any build-up had accumulated in my arteries.

Given my dad’s track record, I was a bit worried. To check for calcium, they use an MRI machine. As I lay motionless inside that big circular magnet getting my arteries checked, I wondered if the weight, lack of exercise, bad food and bad genes had finally caught up with me. Before I knew it the technician said the test was over and I would hear from my doctor in two days with the results. I had 0 percent build-up. My arteries were clear, the best I could have hoped for. I had dodged another bullet, for now. Surprisingly, my medical insurance did not cover this test. Go figure. What if my arteries had become blocked, but I couldn’t afford to take the calcium scan to find out? It seems a bit counterintuitive. In any case, I am thankful that I am going into the second half of my life in relatively good shape and at an optimum weight. If I stick to a healthy lifestyle, I might even live a few years more than my dad.

If you are still reading this blog, you are probably wondering why I chose to title it the way I did and what the relevance is. If you are like me, you have seen a host of managers make the same kinds of poor decisions with their companies that many of us have made with our bodies. Weak management is pervasive. Very few managers are choosing to invest in their employees or to take a long-term approach to decision making. Like our bad habits with regard to eating and exercising, managers have cut corners in the workplace and lowered their standards. As a result, our global economy has stopped working properly, just like our bodies. Our financial system is in intensive care and our real estate market needs a defibrillator to revive it.

I remember not too long ago visiting my doctor for a routine test. Instead of the nurse asking me to stand on the scale to get weighed, she asked me what my weight was. I can only assume that the scale in the office was broken. How many of you would have answered the nurse honestly about your weight if you were in my shoes? How different is it to be asked by a lending institution to provide a “stated income” when applying for a home loan? No wonder our economy is in a state of emergency! Instead of improving our practices when the results of our “business tests” were out of the normal range, we looked the other way—or worse yet, we chose not to have our practices tested at all.

For those who have followed good business practices over the last 20 years or longer, I say, “Well done.” For the rest of us, let us learn from this economic crisis and resolve to manage our companies with an unwavering commitment toward long-term health and prosperity. And like our own bodies, maybe our companies will live longer than some of the giants of industry who ignored the warning signs for too long and died an untimely death.

Five strategies to increase the value of your brand

An increase in brand value can help drive revenue growth through higher consumer demand, improve gross margin by commanding a premium on prices and reduce business costs through improved supplier agreements. One method of valuing a brand is to take the market value of a company (total shares of stock outstanding multiplied by the company stock price) and subtract the value of its assets (found on the balance sheet). Using this methodology, Coca-Cola ranks as one of the world’s most valuable brands. Consumers choose Coca-Cola billions of times per day because of its authenticity, refreshment, originality, consistency and taste. The more The Coca-Cola Company can improve consumer demand for its brands, the more consumers will consume their products. For Coca-Cola, more consumption translates into more revenue and more profit.

So here are my five strategies to improve your brand:

• Improve your understanding of what your brand means. Taking our first example, there are a variety of reasons why people choose to drink Coke. Many people drink Coke because of the way they are perceived by others. It has a certain “coolness” factor. Others drink Coke because they know they will gain social acceptance. Some drink Coke for the increase in energy it gives them. Still others drink Coke for its refreshment and great taste. By keeping abreast of how consumers perceive their brands, Coke continuously meets their consumers’ expectations. This enables the Coca-Cola brand to maintain tremendous brand value.
• Innovate your products to meet your consumers’ unknown needs. When Nintendo launched the Wii, they revolutionized the way people play video games. Nintendo created a product consumers hadn’t even dreamt of. In so doing, Nintendo not only delighted avid video game players they also converted millions who never played video games into Wii players. With games like Wii Sport and Wii Fit that enhance both skills and fitness, Nintendo eliminated the inactive aspect of video games – one of its biggest negative perceptions – and, in turn, permitted consumers hours of guiltless entertainment. Talk about a brand value builder!
• Stay solution focused. Product engineers and marketers are notorious for creating all kinds of new features for existing products. If the features, however, don’t provide a specific benefit that the consumer needs, or are not intuitive, those features may end up hurting the brand. Remember how hard it used to be to program a VCR? Conversely, a feature that meets a need can provide tremendous value to a brand. When the makers of Sharpie finally developed a retractable Sharpie (the feature) that could be operated with one hand and not dry out (the benefits), they delighted millions of brand loyalists enhancing their already high brand scores.
• Pay attention to the details. There is nothing more exciting for consumers than when they buy a product that exceeds their expectations. That is why I love driving my Acura MDX. It is an SUV that drives like a car and offers so much more. The instrument panel is simple to read and easy on the eyes making driving safe and enjoyable. The four-wheel drive keeps me moving in all types of terrain. The blue-tooth audio provides perfect communication clarity. The vehicle seats seven comfortably or the rear two rows of seats can be folded down to haul as much stuff as a pickup truck. I could go on and on about my MDX, but more than anything it is the attention to detail put into each of these features that makes me thrilled to be an Acura owner.
• Be consistent and reliable. In thousands of restaurants all around the world, people consume McDonald’s burgers and fries millions of times a day. The fries they eat in the morning taste just like those they eat at night. The Big Mac they buy in Beijing is delivered to them in the same amount of time as the one they buy in Baton Rouge. The menu board, the restrooms and the seating area look the same in every restaurant. For this consumers reward McDonald’s with their patronage more than any other fast food restaurant. And, while McDonald’s food usually does not rank first in taste, they consistently rank first in market share and revenue. When consumers can trust that their brand experience will be the same every time, they will value that brand more and more over time.
• Stay passionate – Ok, I lied. There are six strategies for building brand value. The last strategy is to let your passion shine through in everything you do. Consumers love brands whose owners are as passionate as they are. That “never rest on your laurels” attitude translates into exciting and superior products that continue to wow and delight consumers. One of the reasons people love the Apple brand so much is because of the passion expressed by Apple employees. Despite being the little guy, Apple enjoys going toe-to-toe with Microsoft. As a consequence Mac users revel in the controversy. As a result, there is no other computer or mobile technology brand as loved as Apple.