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Analysis of markets, product concepts and licensing partners

> Feasibility
> Annual Plans
Selection of licensing partners and negotiation of agreements

> Licensing-in
> Licensing-out
Development of strategies to enhance license relationships

> Licensor
> Licensee
   
  The market analysis or category due diligence is a critical part of the license development process since it provides the information that is used to develop concepts, create sales strategies and assist in the negotiation of license terms.

The following criteria should be evaluated when developing significant brand extension licensed products.

Industry
  1. U.S. market sales (units/dollars/trend).
  2. Segment sales (units/dollars/trend).
  3. Product sales (segmentation by channel).
  4. Number of suppliers.
  5. New product development (% of new products).
  6. Distribution method(s) and geographic coverage.
  7. Competitive requirements and barriers to entry.
  8. Household penetration.
  9. Seasonality.
  10. Replacement rate.
  11. Governmental regulation and subsidies (current, pending).
  12. Consumer issues (personal safety, health or environmental)
Product
  1. Key features and benefits.
  2. Usage occasion and frequency.
  3. Technology (trade secrets, patents, rate of change).
  4. Differentiation.
  5. Industry requirements/regulations (nutritional, safety, labeling).
  6. Packaging practices.
  7. Price range and segments (opening-mid-high, trend).
  8. Number of SKUs.
  9. Accessories or refills.
  10. Warranty or guarantees.
  11. Shelf life.
  12. Life cycle.
Consumer
  1. Wants/needs.
  2. Demographics (current vs. target customers, trend).
  3. Psychographics (current vs. target customers, trend).
  4. Purchase occasion (self, family, gift).
  5. Buyers and users (individual vs. multiple, same or different).
  6. Purchase dynamics (impulse vs. considered).
Marketing
  1. Leading brands.
  2. Laggard brands.
  3. Number of brands (long-standing vs. new).
  4. Advertising and promotional support and programs (trade, consumer).
  5. Industry requirements/regulations (for advertising and promotion).
  6. Line extensions and brand extensions.
  7. Price discounting, special offers, rebates, financing.
  8. Co-branding or ingredient branding.
Manufacturers
  1. Leaders (market share, opening-mid-high price segments).
  2. Laggards.
  3. Trade clout.
  4. Product COGS, profit margins and profitability.
  5. Capital resources (stability, access to capital).
  6. Private label and licensing activities.
  7. Research and development.
  8. Services provided (trade, consumer).
  9. Warranty or return rates.
  10. Litigation.
Distributors
  1. Leaders.
  2. Laggards.
  3. Profit margins.
  4. Trade clout.
  5. Exclusive products or brands.
  6. Services provided.
Reps/brokers
  1. Leaders.
  2. Laggards.
  3. Profit margins.
  4. Services provided.
Retailers
  1. Leaders.
  2. Laggards.
  3. Product offering (variety, SKU count).
  4. Promotion (in-store merchandising, circulars, consumer advertising).
  5. Product category profit margins.
  6. Presence/importance of private label and store brands.
Special considerations
  1. Economic and social trends affecting demand.
  2. Licensor relationships.
 
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