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The Walt Disney Company and its Licensing Sales Strategy
First, we meet The Walt Disney Company, a company that requires their licensees to have a minimum of five years of experience in the manufacture and distribution of products with a direct merchants license. In addition, through their website they have an exclusive section dedicated to all those people who want to get a license to market products with the image and name of the brand. If The Walt Disney Company could boast to lead the ranking of brands that get the greatest benefits thanks to the use of licenses, from 2012 they saw significantly increased their turnover through this strategy thanks to the acquisition of the company Lucasfilms, company of the company of the company of thecreator and responsible for Star Wars, George Lucas. The Walt Disney Company is undoubtedly the leading company par excellence, since through the character Mickey Mouse, they began to develop this strategy in the 30s of the last century.
In fact, in July 2018, the General Director of the Disney Consumer Products & Retail of Spain and Portugal, Gonzalo Sanmartín, made the following statements to the Licencies magazine: “Personally, I am tremendously positive with the future of the Licensing and its ability toexpansion, what in Disney reflects in the establishment of ambitious growth objectives both year and medium term. We have brands, franchises, sufficient content and support to carry it out and to expand our business in the way we want to do it. I maintain that within the Licensing, the competition is not the rest of the licenses, but all that space for winning for "non-Licencia". Finding the value of our brands and what makes them unique, will allow us."As far as we can affirm that in the face of the future, The Walt Disney Company looks like a chance to continue triumphing in the sale of licenses refers.
In the twelfth place we can see the company Sanrio, that although generally in Spain its name is not known, what is familiar to us all is its famous character: Hello Kitty. This Japanese firm grants licenses from its white kitten with various conditions since the drawing is known worldSweet image, nothing aggressive and without sexual connotations. Although they do not give the permits light, it is estimated that there are about 50.000 products with the image of Hello Kitty. Granting licenses allows Sanrio to assume less risks when entering new markets and in turn, they continue to control the image of their brand and benefit from it since 2008, when Hatoyama repetition, the then CEO of the company, defended theSale of Licensing of the famous Hello Kitty.
We can also find in the ranking of the Mattel toy, famous for its characteristic Barbie doll between a wide variety of products. Last July, Mattel España organized his Licensing Summit 2019 meeting where the brand’s plans for the year 2020 presented and Licensing business professionals attended to establish guidelines on the future of the most popular brands they sell: Barbie, HotWheels, Fisher-Price and Planning.
However, in 2018 the company lost the licenses of most DC Comics toys that marketed because DC Comics reached an agreement with the Spin Master toy company that gives the latter the license to market products from the characters from the charactersof the editorial. This implies that from 2020 Spin Master will be in charge of most toys based on DC characters, taking the place that Mattel previously occupied. However, recently the company reached an agreement with the International Olympic Committee (IOC) for the launch of the first collection of toys related to the Olympic Games, specifically those of Tokyo 2020. This has been possible thanks to the COI’s global license strategy. As we see, Mattel generates income thanks to the development of own licenses but also to the acquisition of licenses of other companies.
The Hasbro company, also dedicated to the manufacture of toys, published “Hasbro Ethical Supply” in March 2019, a guide for the company’s licensees. In it, conditions such as the fact that licenses can only use the factories approved by the company’s ethical supply program are collected, in addition to establishing three main steps to follow by those who acquire a license:
- Licenseer’s responsibility: has three fundamental pillars, which are commitment, participation and control. At this point, special emphasis is placed on compliance with the social and environmental requirements of the licensors.
- Factory approval: before starting production at any final assembly installation, the licensee must work with the Hasbro Product Development Team to obtain the approval of each factory through the licensing system (LAS, for its acronym inEnglish) Online of Hasbro. In the LAS, all licensees must detail the factories where they will produce, send the reports of the social audit of the factory and obtain the approval of Hasbro before starting the production. Three steps to follow are established: Dissemination of the factory, sending the audit and confirmation report of the factory approval.
- CORRECTIVE MEASURES AND FOLLOW -UP: BRAICIARIES MUST COOPE WITH HASBRO to ensure that factories address any problem and concern derived from an audit or another source of information.
In addition, it should be added that in 2013 Hasbro and The Walt Disney Company signed an agreement in which the first company obtained the necessary licenses to continue manufacturing Marvel and Star Wars games and toys until 2020. It is known that Hasbro promised to deliver an additional guarantee of $ 80 million to The Walt Disney Company for Marvel products and 225 million for those of Star Wars.
Another really successful case is that of the Danish company The Lego Group, which thanks to the acquisition of characters from great sagas such as Star Wars, Harry Potter, the lord of the rings, Indiana Jones or Batman, has seen its income significantly increased its incomeIn recent years. In the following graph we can see in a very clear way the different licenses with which they work and the benefit that this reports them. In yellow, the number of sets in each license line. In Azul, the total and blank revenues the cost of license agreements. Clearly it is obvious that the business is more than profitable for the company because compared to the blue part of the graph, the white one is almost non -existent.
In all these cases, the licensing strategy is especially convenient since they all have in general a common target audience: children. When choosing to sell popular characters among the younger public, great enthusiasm is created and in turn a rapid and great reception is secured by customers. In this way, manufacturers ensure a greater number of sales thanks to the differentiation of working with famous characters such as Mickey Mouse, Barbie or Hello Kitty, among others. These licenses can also generate emotional value since consumers (in this case, children) will choose those products that awaken in them a greater number of emotions. In summary, thanks to the universality and acceptance of the characters with which the aforementioned companies work, they ensure a large number of manufacturers willing to acquire the necessary licenses to benefit from the positive aspects of the image of the company Licensers.
But there are also the brands that lost value by resorting to licenses as an international marketing strategy. An example is Pierre Cardin, which ceased to be a respected brand and with great positioning thanks to the concept "Ready to Wear" based on the commercialization of high quality and design garments in traditional stores, which meant a revolution in the world offashion because the garments of these characteristics were no longer exclusive to the haute couture catwalks but were available to any person who could allow them. The reason for its loss of prestige and popularity was due to the sale of licenses in markets such as the Mexican, which were responsible for marketing products such as shirts and ties at a low price that had little to do with the quality standard with whichThe company worked.