Has Licensing's Time Come?

It Has for Mustang, Stanley

By Published on .

A correction has been made in this story. See below for details.

This Father's Day a new men's fragrance from Estee Lauder will go on sale in Sears. Its name: Mustang. Yes, that's right, Mustang. As in the storied automobile.
Ford's Mustand might appeal to 'bold, daring and legendary' men with a fondness for wild horses, but it also makes sense as an 'eau de.'
Ford's Mustand might appeal to 'bold, daring and legendary' men with a fondness for wild horses, but it also makes sense as an 'eau de.'
Mustang as in a Ford marque that appeals to men who are "bold, daring and legendary," to quote Michael Stone, CEO of Beanstalk Group, who brought together Ford and Estee Lauder a year ago to conceive the product. By August, Mustang will be in Wal-Mart. By September, it'll be in all major department and drug stores.

Try not to wonder whether the world's hommes really need another eau de or whether Father's Day was invented by a top-secret society of day branders in the employ of Hallmark. Focus instead on what this licensing deal might do for the two companies. This is a sizable potential revenue stream for both marketers, and, in branding terms, a way for Lauder to stand out in a cluttered marketplace and for Ford to connect with daring old chaps in an arena otherwise free of car brands.

I can't help thinking you'd have to be very daring to wear a scent named for a wild horse, but then again, the Mustang scent is no stranger eau de Britney or the idea that anyone would aspire to smell like Celine Dion -- and the songstresses' perfumes are each said to be pulling in as much as $500 million a year. And with Beanstalk's track record, you wouldn't bet against it.

The Omnicom-owned agency, which deals exclusively in licensing, has created franchises such as Mary-KateandAshley, a fashion, health and beauty brand sold largely through Wal-Mart, which rakes in more than $1 billion a year. Most famously, perhaps, it licensed the Harley-Davidson brand to create an incredible range of apparel and collectibles that seem to pop up on every corner, often sported by people who will never own a motorbike. Among other brands Beanstalk licenses: the AT&T name for phone handsets; the Subway brand for deli meats; and Purina for animal toys.

Yet Beanstalk, and the entire licensing business, often seems to operate somewhat under the marketing radar. Even as Disney, the granddaddy of the game, revels in the profits from $23 billion in licensed-goods sales, many brand giants eschew the concept completely. Perhaps that's because marketers don't see licensing as one of their core competencies. Perhaps it's about brand managers' fear of losing control of their most precious asset. Maybe it's the lack of instant gratification, given that it can take as long as two years from product inception to retail. Or maybe it's the absence of a simple ROI metric for the impact of a license on a brand.

Still, licensing's time may have arrived. With media and clutter proliferation chipping away at ad effectiveness, the potential of licensing to provide meaningful brand impressions is huge -- Coke, for example, gets that. Even more important, licensing plays into the growing need for marketers to find ways to add value for consumers. A communication that does nothing for your consumer is barely better than burning money, so the idea of creating a branded product -- something that will succeed only if consumers want it enough to purchase it -- will surely find favor with more marketers.

Beanstalk is about to launch an ROI tool to measure the impact of a licensing deal on a brand. But if you look at the right case studies, the outcomes speak for themselves. Take tool manufacturer Stanley, which six years ago started licensing its brand to makers of hi-tech work gloves and other garments, ladders, and products in several other DIY categories in which it did not have manufacturing expertise but did have brand equity. The venture allowed Stanley to introduce packaging designs it later rolled out for its own products; greatly increased the brand's presence at the moment of truth in Wal-Mart and Home Depot; and provided a pillar in Stanley's strategic repositioning as a brand for professionals rather than amateurs (who, of course, gravitate to and pay more for brands professionals use).

And it's yielded tens of millions of dollars, too. But that's just a rather smart byproduct of licensing as a great branding tool.

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CORRECTION: An earlier version of this story missquoted Beanstalk Group's Michael Stone regarding the Ford Mustang. The correct statement from Mr. Stone is that the Ford marque appeals to men who are "bold, daring and legendary."
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