2012 - PGA Merchandise Show

Adam Berg

Senior Vice President

INTERNATIONAL LICENSING INDUSTRY MERCHANDISERS’ ASSOCIATION

(LIMA)

WWW.LICENSING.ORG

Agenda

• Introduction to LIMA

• Brief overview of the worldwide licensing industry.

• Why companies use licensing to enter new markets.

• Questions that need to be asked.

• What to look for in a region.

• What to look for in a potential licensee.

LIMA – An Introduction

LIMA IS THE WORLD’S LEADING TRADE ORGANIZATION FOR THE LICENSED MERCHANDISE

INDUSTRY

OVER 1,100 MEMBERS IN 32 COUNTRIES

OFFICES IN NEW YORK, LONDON, MUNICH, TOKYO, HONG KONG AND SHANGHAI

LIMA

LIMA’S MISSION:•Staging and supporting trade, educational and social events that foster industry knowledge and exchange of business information and contacts; •Serving as public advocates for the business of licensing globally through public speeches, authoring articles and a wide range of other public relations activities; •Developing industry research and other support information;

LIMA

LIMA’S MISSION (continued)•Creating and publicizing an industry code of conduct; •Organizing and supporting Licensing Industry Excellence Awards around the world, which annually recognize high achievement within the licensing community

LIMA

LIMA SPONSORS THE WORLD’S LEADING LICENSING TRADE SHOWS:

Licensing International Expo (Las Vegas)

Brand Licensing Europe (London)

Shanghai Licensing Show

Hong Kong Licensing Show

LIMA

LIMA’S WEBSITE IS THE PRIMARY PORTAL FOR GLOBAL LICENSING

INDUSTRY NEWS AND INFORMATION

WWW.LICENSING.ORG

Licensing – A Process and a Business

• Licensing Defined:Licensing is “Passion Leveraged”

LICENSING IS THE PROCESS OF LEASING A LEGALLY PROTECTED ENTITY KNOWN AS A

PROPERTY WHICH COULD BE A NAME, LIKENESS, LOGO, GRAPHIC, SAYING,

SIGNATURE, CHARACTER OR A COMBINATION OF SEVERAL OF THESE ELEMENTS IN CONJUNCTION WITH A

PRODUCT OR PRODUCT LINE.

Licensing – A Process and a Business

LICENSING IS VITAL

LICENSING IS VIEWED BY MANY COMPANIES AS A KEY ELEMENT OF A

BRAND, PROPERTY OR EVENT’S MARKETING COMMUNICATION

PROGRAM.

Licensing is World Wide

LICENSING IN GLOBAL MARKETSRETAIL SALES OF LICENSED MERCHANDISE (in

U.S. dollars)

UNITED STATES $104 BILLION

U.K. $ 20.2 BILLION

GERMANY $ 13.7 BILLION

FRANCE $ 6.3 BILLION

REST OF W. EUROPE $ 5.2 BILLION

EASTERN EUROPE $ 0.6 BILLION

Licensing is World Wide

RETAIL SALES OF LICENSED MERCHANDISE

JAPAN $19.4 BILLION

CHINA $ 1.7 BILLION

REST OF ASIA $ 2.7 BILLION

BRAZIL $2.5 BILLION

REST OF LATIN AMERICA $ 2.1 BILLION

AUSTRALIA/N. ZEALAND $ 4.0 BILLION

OTHER $ 2.9 BILLION

Licensing – What Needs to be Known

• Licensing – What a Company Should Know:• How to Maximize Potential and Minimize Risk:

– Maximize:• Understand licensing – it is not a “magic bullet”.• Understand your audience – who are they?• Understand your infrastructure and supply chain issues.• Understand your media and what it is capable of delivering.

– Minimize:• Do your research about the license.• Educate your sales force as to why licensing is important.• Be sure your retail buyers are ready to receive licensed

goods.• Make your commitment and never over-promise.

Global Expansion and Licensing

• How it is done:– Find manufacturers who understand the

region.– Find licensed products that are relevant.

• Its not enough to reflect the brand – the product has to do that as well as strike a chord with the local consumer.

– Must solve the equation that balances what the property means globally and locally.

Global Expansion and Licensing

• How It is Done– Licensing brings the property forward

successfully when the Licensor finds the licensee and product that “speaks the language”.

– Contract with locals.– Strengthen communications by a large factor

that you feel is overkill, and it will be just enough.

Global Expansion and Licensing

How it is Done– Invest the time, resources and energy to the region.– Go there, return there, and make it routine.– Give it time within a disciplined framework both

parties understand. – Overcome cultural challenges to creating

expectations face to face; quantify if need be.– Expanding globally is hands on from HQ; it does not

happen by itself; nor should it be expected to be such.

Global Expansion and Licensing

• Questions to be Asked:– Do I have a global licensing business now?

• Where am I selling licensed products?

– Do I have the infrastructure needed?• If yes – quantify it, flow chart it and study it.• If not – am I prepared to put the infrastructure in

place– The “3am Phone Call”

Global Expansion and Licensing

• Questions to be Asked– Does my company/property want to be

exposed to overseas risks?– Does potential revenue warrant the

investment?– Is my company a “long haul” oriented

company?

Licensing is Fun

• Summary– Licensing is here to stay:

• Mature in the West• Inevitable elsewhere

– Understand the Licensing Business:• Embrace it where appropriate• Know its limitations and be guided accordingly.

– It is a lot of fun:• As business and life should be.