go back a long way. Before setting up his own marketing and communication consultancy, the "naming" expert worked with the world-renowned marketing strategist for close to 15 years at Trout & Ries Inc. Rivkin and Trout have also co-authored three books, including The Power of Simplicity and Differentiate or Die, both of which spent several weeks on bestseller lists everywhere.
So, who better than Rivkin to ask Trout about the current fascination with licensing brand names? One of the current siren songs of marketing is the opportunity to earn some extra money by licensing your brand name.
Someone comes up to you and offers you a deal you can't refuse. After all, you're playing with other people's money. But it's also long-term trouble for your brand, warns Trout. Excerpts from a no-holds-barred conversation:
How does brand name licensing get started?
It all begins, in many instances, with a licensing agency that goes out and hustles your brand.
Here's an actual example from a Web site: "We are the licensing agency for Pratt & Whitney Corporation. Pratt is interested in licensing companies the rights to produce and market products under the Pratt & Whitney brand name. Categories that we are currently in discussions with companies include power generators, aviation tools (power, air, hand tools), pilot accessories, welders, air compressors, power washers, tow units, engine stands, aviation electronics (headsets, GPS, radios, etc), outdoor power equipment and small engines. If you are interested in becoming a Pratt & Whitney licensee to capitalize on the worldwide recognition of the Pratt & Whitney brand, then please contact me."
There you go. Instead of focusing on being the No. 2 jet engine in the world and figuring out how to sell against General Electric jet engines, they want to become everything they can think of and then some. Not good marketing, but it's someone else's money.
Who are the biggest culprits "" or victims?
Fashion's big guns will put their name on just about anything. Designers aren't content to merely dress their customers anymore. They want to furnish their clients' homes, outfit their children and formulate the shade of lipstick they wear.
American designer Ralph Lauren was a pioneer in the "lifestyle brand" trend in the 1980s, but nearly every A-list designer today, from Giorgio Armani to Stella McCartney, has his or her name on sunglasses, jewellery, handbags and perfume.
Those who do it well make a lot of money. But creating line extensions is a risky strategy that can dilute a brand's power if it is overdone. Calvin Klein and Bill Blass discovered that years ago when they signed a bunch of licensing agreements that allowed manufacturers to slap their names on inexpensive goods. Their cachet eroded.
Pierre Cardin has lent his name to just about everything "" at the expense, say some, of much of his credibility. He is known all over the world due to his penchant for stamping his name on everything from golf clubs and frying pans to binoculars and orthopaedic mattresses.
While most designers content themselves with fragrance, accessories and underwear, Cardin has amassed more than 800 licensees around the globe, and earns royalties on Pierre Cardin luggage, ceramics and cooker hoods.
When he acquired Paris' famous Maxim restaurant in 1981, Cardin made merry with that name, too, applying his creative talents to such Maxim products as flowers and sardines. (Yes, Pierre Cardin sardines.) But one product you won't find around anymore is Pierre Cardin wine. People who tried it said, "It tasted all right, but it did have a perfumy smell." Not good marketing... but it's someone else's money.
Speaking of money, "the Donald" seems to be brand-happy with the Trump name.
Donald Trump is the current king of silly licensing. He made his name negotiating gold-plated real estate deals, but when it comes to selling other goods, this tycoon doesn't always have the Midas touch.
A line of golf clothing sold in Macy's is being discontinued. And a fragrance unveiled in 2004 with much fanfare is no longer in production. (Do you really want to smell like Donald Trump?) Marty Brochstein, editor of The Licensing Letter, put it very well when he said, "If I'm a golfer, whose clothes do I want to buy, Tiger Woods' or Donald Trump's?"
Tracking the performance of Trump merchandise is not always easy, since sales figures are not made public. Ironically, the one area you can measure performance is the Trump Casinos. They have been heading south for some time while losing a lot of money for a lot of folk.
Any other very public figures in the licensing game?
Richard Branson is sort of a Donald Trump on steroids when it comes to licensing the Virgin brand. He has 50,000 people working on Virgin brands all over the world in all types of business. (One, Virgin Cola, is no longer with us.) But as the Brits would say, "Sir Richard is in a spot of bother."
In Branson's home base, the UK, his Virgin empire is being battered from all sides, from its squabbles with Rupert Murdoch over satellite TV to loss of a cross-country rail franchise.
Despite an advertising campaign fronted by actress Uma Thurman, Virgin Media, created out of the former NTL cable company, is losing customers and is also subject to a takeover approach from private equity company Carlyle Group that could see the Virgin name ditched.
Meanwhile, in America and Asia, Sir Richard is launching "Virgin" brands of discount airline service. For his name, he takes a 20 per cent ownership stake and his partners put up the capital. All I can say is, good luck in those discount airline jungles. But the beat goes on... with other people's money.
Any other examples, or caution signs?
Toy company Hasbro has struck a deal to license its Playskool brand into baby-care products, including disposable wipes and diapers, and CVS drug stores will begin selling these products this fall at more than 6,100 national stores. A toy diaper? My guess is that these baby-care products won't do very well against the likes of Pampers and Huggies.
Will it ever end? I doubt it. As my father once advised me, "There's a sucker born every day, and two to sell him."
