Download 2.07 PPT

WF Sports and Entertainment
Marketing II
2.07
-OBTAIN ENDORSEMENTS FOR SPORTS/EVENTS
-DEVELOP A LICENSING PROGRAM
Endorsement(s)
 Is an act of giving one's public approval or support to
someone or something.
 Testimonial in advertising, written or spoken
statement endorsing a product.
 Athlete/Entertainer actually becomes a ‘human
brand’.
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Must possess two kinds of key attribute groupings:
those you see on the field
 those you see off the field
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On-field Attributes
 Performance quality
 Winning record
 Skill
 Style
 Potential
 These attributes speak for themselves. Brands want
their endorsers to be successful, to be skillful and to
play the game in style.
Off-field Attributes
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Personality
Physical attractiveness
Uniqueness or unique personal background
Role model
Relationship with fans
 Brands should look for athletes who possess most of the off-
field attributes above.
 Even when one of these attributes is clearly not achieved,
possessing the on-field attributes and the other off-field ones
may just be enough.
Considerations in Obtaining Endorsements
 Must be positive, charismatic, trustworthy
 Must be someone consumers know
 Career must be active…usually
 Someone who presents few risks
 Must be believable
Reasons for Obtaining Endorsements
 Add to credibility of product/company
 Cut through commercial clutter
Benefits Obtained from Endorsements
 Fans will buy endorsed products
 Viewers less likely to turn commercial off
 Consumers believe celebrities
Why learn how to develop a sport/event
licensing program?
Sales of licensed products:
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Generate billions and billions of dollars each year
Create plenty of work for sport/event marketers
It’s important for the people in charge of licensing to:
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Develop licensing systems carefully
Maintain licensing systems carefully
Licensing mistakes can prove to be disastrous:
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For licensors
For licensees
In finances
Licensing programs exist for three main
reasons:
 Profit
 Public relations
 Protection
 One company allows another to use its trademarked property
to manufacture and sell products.
 Licensors legally protect all of the organization’s names, logos,
slogans, and graphics by registering them as trademarks.
Without a trademark—any manufacturer could use a logo on its
merchandise and profit from it.
 With a trademark—licensors have the right to charge that
manufacturer to do so and to collect part of the profits.
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The Basics of Trademarks
Trademark: a word, name, symbol, or device used by a person, generally a
manufacturer
or merchant, to identify and distinguish its goods from those manufactured and
sold by others.
Includes/covers:
Words
Names
Symbols
Devices
Internet domain names
Pictures
Slogans
Examples—“Monday Night Football,” Churchill Downs, Nike “swoosh” logo,
Rollerblade, www.reebok.com, trading card pictures, “Sports is life…the rest is just
details.”
Service mark
 a word, name, symbol, or device used to identify and
distinguish a company’s services, including a unique
service, from those of another service provider.
 Signifies services rather than goods
 Professional sport franchises are considered sport
services.
Examples—“NFL,” “The Chicago Bulls,” “MLB”
 Personal training and fitness are also sport services.
Example—World Gym name and logo
Trade Dress
 a particular type of trademark that protects the distinctiveness
of the appearance and image of a good or service
 Protects a product’s packaging
Graphics
Size
Texture
Shape
Color or color scheme
Particular sales techniques
Example—athletic shoeboxes
 Protects distinctive décor and atmosphere
Applies heavily to stores and restaurants
ESPN Zone
Collective Mark
 a trademark or service mark used by members of a
cooperative, association, or other group or
organization.
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Nation Hockey League Players Association
Major League Soccer
DECA
Mark
 a shorthand reference to any type of mark, including
trademarks, service marks, and collective marks
Registered Mark
 a mark registered in the United States Patent and
Trademark Office
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© TM ® SM
Trademarked Property
 trademarks are owned by the entity (licensor) that
registers them and no other entity may use them or
the likeness without permission from the licensor.
Trademark infringement
 the reproduction, counterfeiting, copying, or
imitation, in commerce, of a registered mark
 In commerce—the company copying the mark is
using it to sell its own products.
 Copy doesn’t have to be exact, just enough to cause
customer confusion.
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A four-ring logo would be close enough to the Olympic fivering logo to cause confusion.
CAPS (Coalition to Advance the Protection of
Sports Logos)
 “Logo cops”
 Formed in the early 1990s
 Addresses trademark protection and enforcement
concerns for all the major sport leagues and college
athletic departments
 Works closely with law enforcement to assist in the
investigation and prosecution of trademark violators
 Offers guidelines to educate consumers on how to
distinguish real merchandise from fake
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High product quality
Tightly woven embroidered logos
Intact garment tags
How to develop a licensing program
1. Perform nonmarketing activities.
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May need an attorney for trademark issues
Coordinate budget issues with Chief Financial Officer
Decide whether the licensing program will be managed internally or externally
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Research shows that internal management tends to work better.
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Internally—your organization’s employees will manage and oversee all aspects of
the program.
Externally—you will hire an agency to manage it for you.
Internal management is more expensive.
It typically produces higher profits than external management because there are no
commission fees to be paid.
Professional sports—licensing programs are usually managed by a part of the
league known as the “properties division.
Advantages of agency management (external)
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Agencies have a great number of contacts in the wholesale and retail industries.
They are experts in understanding licensing programs.
Sometimes it’s a good idea to hire an agency to get your licensing program started
and then bring it under internal management once it’s up and running.
How to develop a licensing program
2. Select your licensees.
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Most important step in developing a sport/event licensing program
Many different types of companies will be interested in becoming
licensees.
Exclusive license categories and nonexclusive license categories
An exclusive category is one in which only one licensee can
manufacture merchandise.
 McArthur Sports—only business authorized to produce golf gear
bearing team logos for the NFL
 A nonexclusive category is one in which more than one licensee can
manufacture merchandise.
 Trading cards
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You will generally be able to charge more for an exclusive license
than a nonexclusive one.
How to develop a licensing program
3. Develop an application process for your licensing program.
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Develop an efficient way to distribute and collect submissions.
Gather the following information:
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A complete business and marketing plan
A listing of their existing retail distribution channels
A sample or drawing of the product(s) they plan to manufacture
A history of their reputation and corporate knowledge
A disclosure of their financial status
A list of licensing references
Proof of insurance
Remember that you are entrusting a substantial portion of your organization’s
profits and public image to your licensees.
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Consider each applicant carefully.
Choose licensees you feel are trustworthy.
Try to contact the owner personally.
Make sure to speak with the company’s competitors.
Make sure to speak with the company’s previous licensors.
Check with trade journals in the industry about the company’s reputation.
How to develop a licensing program
4. Design the license agreement. (May need to call on legal
counsel.)
Basic components of license agreements:
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License grant
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Term
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Specifies which rights and properties are being licensed
Specifies what types of merchandise will be produced
Describes the exclusivity of the category
Specifies the begin and end dates of the contract
Describes the processes for contract renewal
Compensation
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Contains all details regarding payments
Ways licensor is paid:
 Guarantee—up-front fee based on expected sales
 Royalties—5 to 15 percent of profits after the guarantee
Includes a detailed payment schedule
How to develop a licensing program:
Design the license agreement cont’d
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Quality control
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Restrictions and requirements
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Sets up procedures for you to review the work of your licensee
Sets up requirements the licensee has to report to you on all issues related to
the merchandise
Restrict your licensees from subcontracting any part of the license to other
manufacturers.
Require that licensees mark all their products with the proper identification.
 Hangtags
 Labels
Protect your organization, but try to do so without strapping your licensees
with unreasonable or unfair obligations.
Warranties and obligations
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Lists the reasons the license can be terminated
Spells out what happens if either party violates the agreement
Determines under what circumstances the agreement can be changed
How to develop a licensing program
5. Establish a system of maintaining relationships
with all your licensees.
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Routine checks to ensure the quality of your licensed
merchandise
Routine checks to ensure compliance with your restrictions
and requirements
“Code of conduct” to prevent unfair wages or worker abuse