BMW’s Co-Licensing Strategy

BMW has recently announced a licensing strategy that will connect the iconic car brand with a wide range of lifestyle brands, including Maclaren baby strollers (with four-wheel suspension and original wheels), Aspex sunglasses (with TurboFlex hinge technology), Group III travel accessories (BMW-branded luggage with custom zippers, wheel housing, and handles), and Ball Watch timepieces (with BMW anti-shock system).

Co-branded licensing deals have become popular with brands across almost all industries, not just automakers. While some brands use licensing primarily to bolster revenues, others have learned to use it to enter new target markets and channels, increase visibility, reinforce existing brand equities, add new brand equities, and/or become more deeply integrated into the customer’s total lifestyle. These objectives are typically accomplished through co-branded offers in which the licensee is positioned as a prominent ingredient for increasing differentiation of the partner (licensor) brand. 

If you have a great brand that could benefit from co-branded licensing, make sure you take a closer look at these six areas:

  • Customer Relevance: Are the unique branded features and competencies perceived as relevant and appealing by the target market of the partner brand? For example, a stroller with a BMW four-wheel suspension system will be more relevant to new parents wanting premium, high-performance products and brands.
  • Brand Fit: Are the brand equities of the licensee and partner brand compatible? For example, safety and better handling is likely a better fit with a stroller brand than simply speed.
  • Brand Risk: Are there any threats of damaging the licensee brand? For example, licensing the BMW brand to a cigarette company could alienate the customer base of BMW as well as broad sections of the general public hurting not only the product brand but also the reputation of the corporate brand.
  • Brand Equity Transfer: Which brand equities will likely be exchanged between licensee and partner brand? For example, will the BMW equities of precision and speed infuse a watch brand and what positive equities will BMW receive in return?
  • Brand Credibility: Does the co-branding have credibility with the target customer? New functional benefits that are tangible, such as the BMW inspired TurboFlex hinge technology on the Aspex sunglasses, prove that the whole is greater than the sum of the parts, thus helping target customers justify buying the co-branded product even at a higher price.
  • Brand Protection: Does the licensing agreement provide for sufficient transparency across the entire value chain and can the plug be pulled quickly if necessary? For example, BMW will have to make sure that all BMW-branded luggage meets the high quality and performance standards that are part of the BMW brand.

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