3 Factors To Study Before Entering A New Brand Licensing Market
It's no secret that entering a brand licensing market requires a great deal of preparation on the licensor’s, or agent’s, side. The preparation process starts with the validation of a brand's licensing strategy and establishing its fit to a new market. In point of fact, an absolute match is rarely the case. While you may have every contractual matter handled, some sociological criteria may require adjusting your local licensing strategy. Therefore, it may be beneficial to carefully study these factors when expanding your brand’s global licensing presence.
These factors include:
The legal factor
Differences in laws and regulations are among the most commonly-met challenges that brands come across in international licensing. This isn't surprising since guidelines on handling intellectual properties differ by country. Besides, tax laws, customs laws, and regulations related to transportation and launch of branded products also vary across different jurisdictions.
Therefore, it makes good sense to team up with local agents who understand brand licensing environments in their home markets. Your team should seek an agent who is experienced in licensing IPs similar to yours in the same or similar product categories.
The economic factor
The economic factor is equally important to examine before launching a brand licensing program in foreign markets. Among the sub-factors that shape a market's economic environment are its overall profitability, income levels, pricing, retail situation, and currency fluctuations.
Again, an agent's help may come in handy when validating the rationale behind expanding into a new brand licensing market based on that market’s economics. Yet, it’s crucial for a brand to carry out an independent estimation of all risks associated with the early development process of licensed products.
The cultural factor
Cultural traits of the new market’s audience have direct influence over its spending habits and trend preferences. Among such traits are specific knowledge areas, beliefs, morals, customs, language, superstitions, celebrations, and other aspects that distinguish a culture. All these need to be taken into account when planning a cultural “integration” of a licensing program into a new brand licensing market.
The above is far not the only criteria that licensors should evaluate before expanding licensing operations globally. As we mentioned above, it’s important to keep all the basic matters, such as understanding local retailers, making the right choice or licensee(s), and deciding on the product categories for international licensing programs, under control. Hopefully, this material will help your brand succeed in the international licensing arena!