The Licensing Game
By Craig Rexford
Published: May 31, 2010


What’s in a name? For those that do it right or simply get lucky, having the right name or affiliation can mean tremendous sales growth and the ability to develop a niche in a very crowded marketplace.

For those who do it wrong or are unlucky, it can be a financial disaster.

As this month’s cover story discusses, licensed products are starting to catch on in the pet category as suppliers, seeking to expand the potential of their products, are eagerly latching on to licensed names to develop sales.

Yes, it all makes sense. Retail shelves are jam-packed with products, much of which are simply imitations of other items. Putting a well-known name on a product can build consumer awareness and, more importantly, consumer acceptance. People buy what they know and respect. Placing an image or name that they know on top of a pet item goes a long way in helping them decide whether to purchase the item.

This is why we are seeing affiliations with such groups as NASCAR, Major League Baseball and the National Football League. It is also why we are seeing affiliations with the American Kennel Club and other groups that have significant standing in the pet community.

But the industry still needs to be careful. Buying a licensed brand or character does not always equate to success and profits. Over the years, I have heard many horror stories about companies acquiring the rights to a character or brand, only to see sales stagnate because it did not catch on with shoppers. I have also heard stories of companies acquiring rights to licenses that have long since seen their heydays. Consumers pay little attention and sales go nowhere.

Retailers have to pay special attention to this trend. As we all know, shelf space is limited and merchants must stock the right merchandise. Having a hot license brand will attract more shoppers and help build sales. Taking on an over-the-hill license or one that simply does not connect with the product is just a waste of valuable space.