Brand Extension
3 Keys to Success for Brands in Licensing

By: Colleen Baird, Creative Director, LMCA

Brand building today requires not only considering ways of improving on your brand promise and involvement in the current market, but also anticipating how the future may evolve customers and change market dynamics. Now more so than ever it is necessary for brands to strategize ways to stand out amongst the crowd and implement strategies that build on brand reach and awareness.

Brand licensing is one of the most widely used ways to extend a brand. Licensing offers brands a way to create a new income stream while extending awareness and increasing marketing without the production overhead costs.  It is why the licensing industry has grown to be a $292 billion industry.

So how can brands profitably build out a licensing initiative?  There are many factors that go into building a successful licensing program. Primary among them is the brand itself. The following are 3 keys needed for brands to set themselves up for the greatest chance of meaningful success with brand licensing.


When consumers get into the routine of purchasing a specific brand and have positive interactions with its product or service, they build a commitment to continue to buy the brand. Dunkin’ Donuts, Apple, and Nike are prime examples of companies that have built a strong brand loyalty amongst their customers. Brand loyalty lessens the time and promotion needed to make future sales and also offers positive engagements such as word of mouth advocacy. The wider the recognition of a brand and the stronger the brand loyalty, the higher the value of the brand and the greater the revenue the brand will generate.


Strong recognition and loyalty are essential factors for a successful brand licensing program. Brands that have spent time, resources and marketing dollars to build the awareness, customer base and loyalty for their brand are primed for attracting top-line licensee partners that are eager to reap the benefits of attaching their product or service to a beloved and well-recognized brand.


Brand elasticity refers to the number of products and services that can reasonably be covered by one brand and the permission for the brand from consumers to create new products and services in new areas. The more elastic the brand, the more likely it can be to extend into new categories and distribution channels.  Arm & Hammer is an excellent example of a brand with strong elasticity.


Today, Arm & Hammer markets everything from toothpaste to foot care to cat litter to laundry detergent. Central to Arm & Hammer’s positioning is the power of baking soda and its proven deodorizing effects. This gives the brand consumer permission to extend into a broad range of CPG and other categories and in turn, bring Arm & Hammer products into a variety of distribution channels.  You can find Arm & Hammer at Costco, Rite Aid, Petco, Target, Amazon, and CVS. Talk about broad distribution range! A brand that has this kind of elasticity is key when looking to build out big, powerhouse licensing programs and increase touch points with consumers.


Although authenticity is at the core of building brand recognition and loyalty, and helps define a brand’s elasticity and permission, it is worth noting just how vital authenticity is in driving a brand’s success. In today’s highly-connected digital environment, a brand simply can’t compete without brand authenticity. Who are you? What drives your company? What do you stand for? Consumers crave brands that are transparent, engaging and consistent.


This means that licensees are more likely to partner with a brand that consumers trust. A licensee gains the benefit of a brand’s authenticity, which lends immediate distinction and trust for the manufacturer’s product rollout.  Without the need for any brand development investment, the licensee is able to attain marketplace prominence and command a premium sales price thanks to the legitimacy and trust of the licensor’s brand name.  Brands such as HP, Newman’s Own and Dansko have spent years building their brand authenticity and are already top-of-mind in the hearts and minds of consumers for their great reputation and strong emotional connections. This quality translates well for licensing extensions.

In a good licensing partnership, both parties benefit. The brand gains the benefit of an extension and revenue without any investment in product development, production, or marketing. The licensee gains the benefit of the licensor’s brand name and the reputation that goes with it. But at the heart of any strong licensing program is the brand itself. The stronger the brand – its recognition, loyalty, elasticity and authenticity – the greater the brand licensing program.

To learn more about how licensing can help grow your business, reach out to us at

Colleen Baird, Creative Director, LMCA

Colleen has over 11 years’ experience as a creative brand strategist, marketer and storyteller across industries. She holds a BA in Marketing from New York University.

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