Building a brand from scratch can be daunting in today’s fast-paced business world. However, a lesser-known strategy can accelerate your path to market success: licensing discarded brands. This approach leverages existing brands’ established reputation and trust and offers a quicker route to market entry.
Take, for instance, the recent case of Microsoft’s licensing agreement with Onward Brands. This collaboration perfectly exemplifies how licensing can breathe new life into established yet discarded products, turning them into profitable ventures. In this blog post, we’ll explore the ins and outs of brand licensing, using this compelling case study as a focal point.
Understanding Brand Licensing
What is Brand Licensing?
Brand licensing is an agreement in which one company (the licensor) allows another company (the licensee) to use its brand, trademark, or logo on its products or services. This mutually beneficial arrangement can help both parties achieve their business goals more swiftly.
Key Benefits
- For the Licensor:
- Additional revenue streams without significant investment.
- Increased brand exposure and market reach.
- For the Licensee:
- Instant brand recognition and trust.
- Reduced time and cost associated with brand building.
Examples of Successful Brand Licensing
- Disney and various merchandise companies: Disney’s iconic characters are licensed to numerous manufacturers, resulting in a wide array of products that boost both Disney’s brand presence and the manufacturer’s sales.
- NFL and apparel brands: NFL licenses its team logos to apparel companies, creating a lucrative market for fan merchandise.
The Microsoft-Onward Brands Case Study
Partnership Overview
Microsoft announced its decision to stop selling Microsoft-branded computer peripherals. In a strategic move, Onward Brands stepped in to give these discarded products a second life under new branding. Products like the Microsoft Ergonomic Keyboard will now become Incase products, featuring “Designed by Microsoft” branding.
Impact on the Market
This partnership has significant implications for both brands and the technology accessory market. For Microsoft, it means continued revenue from products they no longer wish to market directly. For Onward Brands, it provides an opportunity to leverage Microsoft’s reputable design and engineering to boost their product lineup.
Strategy and Terms
The agreement allows Onward Brands to rebrand 23 Microsoft-designed products starting in 2024. These products will maintain their original design and functionality but will be marketed under the Incase brand, with the added credibility of the “Designed by Microsoft” label.
How Brand Licensing Can Benefit Your Business or Startup
Advantages
- Reduced Time to Market: Licensing an established brand can significantly reduce the time required to build a market presence.
- Cost-Effective: Avoid the high costs associated with brand development and marketing.
- Built-In Trust: Consumers are more likely to trust and purchase products associated with a known brand.
Tips for Success
- Select the Right Partner:
- Ensure alignment in brand values and target market.
- Negotiate Favorable Terms:
- Focus on aspects like royalty rates, duration, and exclusivity.
- Mitigate Challenges:
- Be prepared for potential issues like brand dilution and legal complications. Regular audits and clear contractual terms can help.
Future Trends in Brand Licensing
Tech Industry Predictions
The tech industry is poised for further growth in brand licensing. Companies increasingly value leveraging established brands to accelerate market entry and gain competitive advantage. The Microsoft-Onward Brands case study could set a precedent for future partnerships, influencing industry dynamics and encouraging more companies to explore similar strategies.
Cross-Industry Influence
While tech is leading the way, other industries are also taking note. From fashion to automotive, the principles of brand licensing offer versatile applications, promising a future where businesses can grow faster and more efficiently through strategic partnerships.
A Unique Licensing Strategy for Business Growth
Licensing discarded brands presents a unique and powerful strategy for business growth. By leveraging the established reputation of existing brands, businesses can reduce time to market, cut costs, and build instant trust with consumers.
The Microsoft-Onward Brands partnership is a compelling case study that illustrates the immense potential of brand licensing. If you’re a startup, business owner, marketer, or entrepreneur, now is the time to explore this innovative licensing strategy.
Ready to take your business or startup to the next level? Schedule a short consulting call today to explore how licensing can accelerate your growth opportunities.
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He’s licensed some of the biggest Hollywood entertainment blockbusters, including the Batman Movies (1 and 2) and the number one kid’s action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges, and startup events. His first book, Hidden Wealth: The Money-Making Power of Licensing, was released in 2019 and is available on Amazon.com. He’s also a published writer, and his articles have appeared in several prestigious trade magazines, including The Licensing Journal, Intellectual Property Magazine, and License India.
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