John Meyer (30 July 2013)
John Meyer discussed the impact of licensed brand extension, a five hundred billion pound industry. Brand extension is a marketing tool. It is granting formal use of a recognised brand name to another product. To find out more look up LIMA, the Licensing Industry Merchandisers Association.
Some companies do it themselves, such as Arsenal. Other companies outsource it to a licensing agency. John Meyer has worked for TLC, The Licensing Company. Taking Michelin as an example, TLC used brand extension to create more knowledge of Michelin as a tyre brand. They took an integrated global approach by providing 100 licences in 40 countries. This saw a whole raft of new products coming to the market. All of these products were designed to reach new potential customers of Michelin, while enforcing the tyre brand.
TLC also worked with Allied Domecq on their alcohol brands, worth £7.4 billion. Malibu is an example of one of the brands they licensed. Domecq allowed TLC to run things but retained control. To extend the brand into new territories they branded cherries with the Makers Mark design, another of their products. Food offers a unique opportunity to reach customers – in this case luxury food because alcohol is primarily a luxury good.
In summary, what is brand extension? It is a licensing strategy. Firstly you recruit relevant first class marketing partners to represent the trademarks in retail, then you match the correct brands together. Perrier-Jouet, for example, was mixed with a luxury collection of champagne truffles. This approach has created millions of additional consumer touch points outside normal channels. The better known the brand, the more beneficial brand extension can be. This strategy is invaluable for brands as it allows them access to a whole new range of customers.
(based on an article by Gary Higson)