CORPORATIONS LATCH ONTO LICENSING

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NEW YORK-Batman and Pocahontas aren't the only ones seeking to license products with their names on them. Many corporations are quickly getting in on the act to capitalize on brand imagery.

Of the 265 exhibitors attending this summer's Licensing Industry Merchandisers' Association meeting here, close to 60 of them were representing corporations seeking to profit from the explosion of licensed products.

In 1994, $13 billion in retail sales were generated from corporate licensed products in the U.S. and Canada, while worldwide sales of all licensed goods reached $102 billion, according to The Licensing Letter. Only 15 years ago, $13 billion was the total revenue from all licensed products.

Industry watchers say this growth is "well outpacing" that of general business conditions and predict the numbers will continue to swell, especially in the corporate licensing segment.

"Corporations that have invested millions and millions are finally realizing the profitability of their products," said Murray Altchuler, the licensing association's executive director.

Borrowing a page from fashion and soft-drink company licensing tactics of the last decade, many companies are now trying to capitalize on their brands' images.

One of the most successful examples of this has been Harley-Davidson, which, in conjunction with the Beanstalk Group, a New York-based licensing agency, was recently recognized by LIMA for its brand extension work with bicycles.

"Harley-Davidson has a very strong image," said Michael Stone, co-chairman of the Beanstalk Group, who believes the merchandise and services available with the Harley name on it empower people to "embrace the mythology without owning a motorcycle."

Licensing also creates greater brand awareness, especially if a corporation would like to expand beyond a core product. "We try to build on the products we already have in-house and expand on that," said Lynn Krominga, president of licensing at Revlon, the cosmetics marketer that has licensed products in 12 categories.

Increasing awareness through licensing can have damaging results, though, if not handled carefully.

"Too much of what has been done with licensing-specifically corporate licensing-has been questionable as it relates back to the core business," said Allan Feldman, president of Leveraged Marketing Corp. of America.

Mr. Feldman pointed out there are many opportunities for confusing the customers who have been loyal to a brand, and when a corporation seeks to expand in a new direction it could have damaging results. "You just don't want to mess with the core group of consumers," he said.

Faberge, for example, recently introduced its "House of Faberge" collection of dishware, jewelry and other fine products with the image of the famous Faberge Eggs on them to resurrect the Faberge brand image circa 1900. However, 95 years later, the Faberge name is more commonly associated with mass market products like Brut men's cologne.

Mr. Stone and others said that they have yet to see a licensing failure impact a brand for long because of the "quiet" type of licensing corporations tend to do as opposed to that of most movies and other "loud" properties.

"When you get into products like these, you're really positioning your brand for a long life," said Carole Francesca, VP-licensing of Faberge. "It underscores everything you are doing for the long haul."

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