The Licensing Book
Corporate Corner
Michelle Alfandari, president and founder, MODA International Marketing
July/August 2008 — The Licensing Book
In the first edition of The Licensing Book’s new monthly feature Corporate Corner, we asked Michelle Alfandari, President and founder of MODA International marketing, to give her tips on corporate brand marketing. She should know: with a stable of brands including The New York Times, LYCRA, The National Trust for Historic Preservation and Le Tour de France, she’s got the know-how to push brands in today’s tough times.
By MICHELLE ALFANDARI
I am delighted to be inaugurating the corporate corner column for The Licensing Book and even more so at such a propitious moment of economic downturn (in the U.S.) and volatile marketplace and economies (just about everywhere globally). These are the conditions that are ripe for corporations to leverage their existing intangible assets (INTELLECTUAL PROPERTY such as brands, trademarks, slogans, patent, technology, know-how, etc.) through licensing to deliver a ROI like no other business model can. After all, it is a well known fact that licensing can be very profitable for licensees and licensors who can fast-track market entry at relatively lower costs than other business models.
Nothing is static however and in today’s global and quick turning marketplace what retailers, licensors and licensees need to reap the benefits of licensing is an approach that is not the usual standard operating procedure. It is necessary to consciously avoid the “ground-hog day” approach and take a “New Day/New Way” approach to licensing that blurs the lines of branding, marketing, sponsorships and cause marketing, and even look to competitors as possible partners (co-opetition). What I am proposing is to approach licensing as a strategic alliance model for business development that is firmly rooted in intellectual property but incorporates a menu of both tangible and intangible added-value assets that can fast-track end-results.
We start with the following fundamentals:
- Licensing as a BUSINESS MODEL: Brand licensing leverages intellectual property to reach short-term and long-term corporate objectives and goals. Since 1988 when MODA was established, it viewed licensing as an option to be considered and evaluated along with joint ventures, mergers, acquisitions, divestitures and organic growth when determining the best approach to achieving business objectives. We have been beating this drum for 20 years impressing our clients with the power of licensing beyond its impact as a ‘marketing’ tool for brand building.
- Valuation of INTELLECTUAL PROPERTY: The brand is generally considered the key component of a brand license, but is rarely the sole equity delivered to a licensee or retailer. An experienced licensing agency will conduct a ‘brand immersion’ that is a brand equity and corporate asset audit to assess the overall value of a brand license. Not all ‘assets’ are of commercial value thus a short list of “license-able equity” will be developed that may include technology, ingredients, know-how, R&D, marketing, advertising, distribution channels, sales force, sponsorships, membership, mailing lists, good will, etc. in addition to the brand.
- LICENSING/STRATEGIC ALLIANCE: We view a license agreement as a strategic alliance predicated on the give and take of intellectual property and relevant core competencies between licensor and licensee that will achieve greater results than other means.
New Day/New Way thinking broadens the approach to licensing but relies on a strong foundation of BASICS for successful Intellectual Property licensing, such as:
- Top-down Corporate support of licensing as a business development model
- Dedicated internal (decision-maker) licensing director
- Appoint a licensing agency with experience that: �
- Respects the corporate culture but brings complementary and new thinking to licensor. (Don’t hire a mirror image of yourself. In that case, you may as well hire an internal licensing professional. If you are big and bureaucratic, hire a small and nimble company that understands/respects your culture but will deliver innovative thinking and solutions).
- Has proven methodology for a holistic approach to ascertain value of intellectual property for licensing, including brand equity and corporate asset audit
- Conducts risk/benefit analysis
- Has a Keen understanding of marketplace, challenges and opportunities
- Has the Know-how to develop a strategy to meet business and corporate objectives (and protect Trademark/Brand and core business)
- Has ability to execute strategy
- Has Resources to manage and nurture licensing business
- Has a Track record of success.
- Articulates licensing objectives and metrics for success
NEW DAY/NEW WAY
At MODA we say remember what you know and then forget it! What we mean is that if we rely on yesterday’s success and practices, then we have stopped growing. If we rely on today’s data, we cannot ensure successful brand business in 5 or 10 years from now. It is critical to have a baseline, and equally critical to have a visionary outlook and willingness to take calculated risks. I am not cavalier in advocating NEW DAY/NEW WAY thinking and certainly feel that best practices must be considered but should not dictate.
The basic tenets of New Day/New Way as applied to licensor, licensee and retailer are: What is the end game and is this brand/partner (Licensor) or Vendor, Manufacturer, Retailer (Licensee) the best way to get me there? Brand/partner is combined because they should be inextricable. Long gone are the days of a licensor simply licensing its brand and getting a royalty. Today, licensing is a strategic alliance that marries intellectual property with other added-value benefits both parties can deliver to mutual benefit. The brand/partner must deliver equity that is ‘relevant’ to the consumer and beneficial to the licensee thus delivering a return on investment to licensor and licensee. While MODA represents the LICENSOR, we must ensure that the licensee is well served or the business partnership will be short-lived. These are our five dictates:
- It’s not just about the Brand! Oftentimes a retailer or licensee has a brand awareness metric that must be met before being considered. Brand awareness should no longer be the sole criteria for licensing. We have seen great results when retailers like Lowe’s and vendors like Valspar Paint and Empire Moulding use the National Trust for Historic Preservation brand for historic paint colors and decorative mouldings. In this case, the National Trust “brand” could not be tested by the same “brand awareness metrics” of a consumer brand, yet, it deliveres authenticity, relevance, an emotional connection with the consumer and reason to buy; while at the same time, providing differentiation for the retailer.
- Blur the lines of sponsor, cause marketing with licensing: Many companies and non-profits strictly delineate the lines between what is licensing and what is cause marketing or sponsorship. In many cases the lines are clearly drawn but need not be and in all cases they are a form of strategic alliance. Once you accept that licensing is a strategic alliance you can begin to gain a greater mutual benefit to traditional licensing or sponsorship deals.
- Leverage core competencies in addition to the brand: For example, Le Tour de France is the iconic globally recognized bicycle event. The brand logically extends to bicycles, accessories and gear. The owner of the Tour de France event and brand is an event company. Clearly, a high profile retailer event run by and branded the Tour de France combined with branded merchandise delivers a unique and enjoyable consumer retail and purchasing experience. This is certainly a winning proposition for all parties.
- Connect the dots of licensor with R&D, know-how, ingredient, etc.. For example, LYCRA® is a textile “ingredient” as well as a fashion and lifestyle brand. INVISTA (brand owner) wanted to extend the LYCRA® brand into complementary fashion products without interfering with its core textiles/apparel business. MODA developed and executed a strategy that brought LYCRA® to cosmetics (fashion related / no textiles). While the branding was enough inasmuch as LYCRA® communicated special function and performance of certain cosmetics, INVISTA was able to add-value to this proposition with a form of LYCRA® that could be incorporated into the formula as an ingredient to nail enamel that actually enhanced product performance. The end result was a licensed brand + ingredient that not only substantiated product performance but actually enhanced it (long-lasting, durable, maintains shape, flexible).
- License with your competitor, Co-opetition: This has been going on for a long time in technology licensing but has not been used as much in brand licensing. Years ago, for example, P&G decided that a valuable juice formula it had developed would deliver greater return on investment if licensed to competitor Tropicana rather than keeping it exclusively for its own Sunny Delight. The license fees generated went back to R&D where they were used for more research and development. This same thinking can be applied to co-branding.
The advantage of licensing over other strategic alliances, is that the Licensor is relying on the expertise of the licensee to mitigate risk and fast-track market entry into new geographies, products, services or channels of distribution (amongst other objectives) while allowing the licensor to keep a focus on its core business. Taking a more holistic approach does not stress the resources of the licensor but effectively leverages existing assets.
There are 2 schools of thinking with respect to difficult market conditions. One is to hold on to what you have and stick with business as usual; the other is to seize the opportunity.
CARPE DIEM!
Reprinted with permission of the publisher. The Licensing Book, July/August 2008 issue, Adventure Publishing Group and Total Licensing Ltd.
The Licensing Book
June 2008
MODA Drives Licensing for The Henry Ford, The New York Times
As MODA International Marketing marks its 20th year in business, it is celebrating with new clients The Henry Ford and Hoppe’s and new deals for existing clients, including The National Trust for Historic Preservation and The New York Times.
MODA recently signed on as the exclusive licensing agency for The Henry Ford, a history attraction based in Dearborn, Mich. MODA hopes to extend The Henry Ford family of brands (including the Henry Ford Museum, Liberty Craftworks and Greenfield Village) into categories such as food, bedding, garden and outdoor living, tailgating, and gift and stationery. All products will celebrate America’s history of ingenuity and commerce.
“With more than 26 million artifacts and national and international recognition for the unique way we bring the American experience to life, we are confident our retail presence will be as embraced as our current on-side offerings and programs, which draw more than 1.5 million people through our gates and an additional 1.8 million virtual visitors annually,” says Patricia Mooradian, president of The Henry Ford.
Current brand extensions for The Henry Ford include a birdhouse replica of Thomas Edison’s laboratory Menlo Park from Home Bazaar, and two ornaments from Klassics by Kurtis. The birdhouse will be available this summer at The Henry Ford and via the Web at The Henry Ford online store. The ornaments will be based on the Model T Ford and the Mary Martha Chapel, both of which can be found in Greenfield Village at The Henry Ford.
Other brand extension launches for MODA clients include The National Trust for Historic Preservation decorative moulding available at Lowe’s from licensee Empire, and Low Country, a new furniture collection from Hammary. The National Trust for Historic Preservation is a non-profit organization dedicated to saving and preserving America’s historic places.
The six styles of mouldings from The Empire Co. are inspired by the country’s historic sites, and were made available in stores and via special order this spring. “The National Trust provides vast resources for product development and gives Empire the opportunity to market truly authentic American mouldings – real differentiator at retail,” says Dennis Berry, vice president of sales and marketing for The Empire Co.
Hammary, a La-Z-Boy company, has introduced the Low Country collection, a line of furniture inspired by the South Carolina coastal region. The collection is part of a partnership with National Trust – Design in America, for the National Trust for Historic Preservation. The pieces are influenced by the Beaufort Inn in Beaufort, South Carolina, and by the area’s many antique shops. The collection is an updated interpretation of English, French and Caribbean styles, and incorporates mahogany, cherry and figured anegre veneers. Hammary will launch the collection at the High Point Furniture Market in October, and plans to target better department and specialty stores for retail.
Valspar Corp. and the National Trust for Historic Preservation have also renewed their agreement for indoor and outdoor paints. “The extension agreement ensures further development between the National Trust for Historic Preservation and Valspar for the manufacture and distribution of its premium line of interior and exterior historic paint colors available at Lowe’s,” says Michelle Alfandari, president of MODA.
For The New York Times, Franklin Electronics has introduced an Electronic Handheld Pagemark Dictionary, and Excalibur Electronics has created a Deluxe Talking Chess Game and a two-in-one SuDoku/Crossword Handheld game. The dictionary from Franklin Electronics, which features content from the “On This Day” section of The Times Learning Network as well as more than 300,000 word definitions from Merriam-Webster, should be in stores this fall; the games from Excalibur Electronics are available now.
“We’re delighted to work with Franklin,” says Nancy Lee, vice president of development for new business at the news service division of The New York Times. “they have great experience developing and publishing reference and educational content in electronic format. There will be many more opportunities for collaboration in the future”.
In addition, two new Knowledge Card Decks, The Potted Garden and The Kitchen Garden are available from licensee Pomegrante. Info on the decks comes from the book 1000 Gardening Questions and Answers (based on the New York Times column “Garden Q. and A.”)
In another new deal, Prism Industries has licensed its patent-pending lighting technology to AmerTac, which will create night lights with distinctive designs. AmerTac is the first to license the technology, which could also be used in signage, seasonal items, and toys and games.
“We immediately understood that this technology delivered functional differentiation and economies in a highly competitive marketplace. It is a low-cost, energy efficient lighting technology that enhances visual effects, color blends and synchronizes light with sound,” says Alfandari, “Given the challenge faced by many manufacturers to present retailers with unique offerings, we knew that this technology would have broad-based appeal.”
Finally, Jibbitz will launch a line of shoe charms for MODA’s client Le Tour de France, and Coty will expand the Lycra cosmetics franchise into China.
Reprinted with permission of the publisher. The Licensing Book, June 2008 issue, Adventure Publishing Group and Total Licensing Ltd.
Royalties
Roundtable Discussion
By Christopher Byrne
In this first Brand Impact Roundtable discussion, Royalties recognizes that retail space is dwindling, many parts of the economy are trending downwards, and consumers are in no mood to buy. So why are folks in corporate branding feeling good? Well, for one, according to many, corporate licensing is largely recession-proof, but taking the longer view, experts recognize that the economy is always cyclical and that, though it may be a roller coaster ride for a time, the ups and downs are endemic to the business. Finally, many agree that there is a greater understanding than ever before of the value of strategic expansion. The business is, as always, in flux, and no matter what is going on the ability to respond, strategize, and take a forward-looking perspective is essential to long-term success.
Brand Impact: How has branding strategy changed in recent years?
Alfandari: Brand licensing strategies have changed inasmuch as more companies recognize that licensing is a business development model that should be considered in much the same way as an acquisition, merger, joint venture, or other strategic alliance. More companies understand that licensing is not simply a marketing tool; through marketing is surely a deliverable. Additionally, the overall equity of corporations is being valued on their IP as much or more than on their tangible assets. Therefore, a greater appreciation of leveraging intellectual property to create greater value is a trend. Licensing is clearly a means of demonstrating tangible value from an intangible asset.
License! Global
Top 15 Licensing Agents
License! Global ranks the top licensing agents, which played a key role in extending many of the world’s most iconic brands into successful licensed programs.
MODA International Marketing Inc.
Est. $656 M (private)
Michelle Alfandari, president, MODA International Marketing, Inc., +1 212.687.7640
13 MODA continued to expand its already diverse client roster during 2007, with The Henry Ford, Hoppe’s (Bushnell Outdoor Products), and the Dakar Rally. New brand extensions include: Design in America, the National Trust Low Country furniture collection; The New York Times Pagemark Dictionary; and a new line of decorative mouldings from the National Trust’s licensee. Key initiatives during 2008 will include the add
Royalties
ON THE RADAR – New products, new deals, and new trends this month in the licensing industry.
MODA
MODA recently announced that it has signed a deal on behalf of National Trust for Historic Preservation with The Empire Company to develop a new collection of authentic mouldings inspired by the national Trust. Six distinct styles will be available representing America’s diverse heritage. The line will be available exclusively at Lowe’s.
Royalties
MODA International
MODA International has partnerships with a variety of licensees for The New York Times brand. Altru products vintage T-shirts and will access The New York Times photo archives to place classic photos on the shirts. Pomegranate Publications produces stationery products including The New York Times Crossword Puzzle Cube Calendar. The company will also produce a new card game called Really?, which is based on a column that runs in the Science section of The New York Times.
License! Global
Top 100 Global Licensors
National Trust for Historic Preservation
Est. $265 M (private)
Michelle Alfandari, president, MODA International Marketing, Inc., +1..212.687.7640
The National Trust licensing program continued to grow during 2007, with key sales drivers including the introduction of three new Design in America-The National Trust carpet patterns from license Karastan; the launch of “Low Country” furniture collection from Hammary; and continued growth of the paint program at Lowe’s with licensee Valspar. This spring, the National Trust will launch decorative moulding, available exclusively at Lowe’s. Also in 2008, the Trust has partnered with The Empire Company to create six unique moulding collections inspired by great American landmarks of the National Trust.
License! Global
Top 100 Global Licensors
INVISTA
Est. $170 M (public)
Chiaretto Calo, global licensing & business development director, +39 (02) 392 02032; Michelle Alfandari, president, MODA International Marketing Inc., +1.212..687.7640
The Lycra licensing program remained strong within the highly competitive cosmetics category during 2007, with significant sales drivers including the worldwide launch of new, improved nail enamel, fusing Lycra with minerals for super-durable, lasting color. Key support for continued market share increases came from print and television ad campaigns, and strong in-store displays. Key initiatives for growth in 2008 include new Lycra mascara and nail enamel, and global expansion of the Rimmel brand. New product innovations with possible applications in additional cosmetic categories and existing products are currently being tested.
Total Licensing Report
National Trust Signs with The Empire Company
The National Trust for Historic Preservation announced that The Empire Company has been licensed to develop a new collection of authentic mouldings inspired by the Landmark homes of the National Trust. The mouldings will be available exclusively at Lowe’s.
“The Empire Company is an industry leader, known for its quality products. They immediately recognized the value that the National Trust brought to the partnership, making them a clear choice as a licensing partner,” says Michelle Alfandari, president of MODA International Marketing Inc., the National Trust’s licensing agency.
Representatives of Empire and the National Trust toured the country, visiting many sites for inspiration. They came up with six moulding styles. The mouldings will be available in-store and via special order in the spring.
Royalties
MODA and AmerTac
Moda International Marketing has signed its client, Prism Industries, into a deal with AmerTac. Under the terms of the deal, AmerTac will use Prism’s patent-pending lighting technology to create night lights with distinctive designs. The Prism lighting system is a low-cost energy-efficient lighting technology that is designed to enhance visual effects, color blends, and synchronize lights with sound.
Reprinted with permission of the publisher. Royalties, January 2008 issue, Vol. 3, No. 1, aNB Media, Inc.
