Encore: Food Licensing Tip #4: Licensing vs. Promotions Part 2

Food Licensing 101: Licensing vs. Promotions-- Part 2 of 2

Burger King recently licensed its "Flame" meat-scented cologne.

The product was available only for a short time, attracted a lot of media attention, and was soon gone and is now mostly forgotten, as with most media sensations. It was exactly the kind of viral success the brand thrives on, with its quirky ads developed by advertising industry mavericks Crispin Porter + Bogusky:

This is a perfect example of promotional licensing.

Crispin Porter asked our help in licensing and placing "Flame" with retailers, but we convinced them (and the brand) they were better off using the cologne as a teaser. Retailers usually settle on their product lines months in advance, and manufacturers aren't interested in licensing a property for a quickie that gets talked about but doesn't sell month-in and month-out.

It's called a promotion because it's just that: a "stunt" that attracts attention to a property but isn't usually revenue-generating. Promotions are popular with restaurants, usually as a form of tie-in with a new movie ("buy a kid's meal and get a free Spiderman action figure for just 99 cents").

The problem is that many smart marketing execs don't understand the difference between licensing and promotions:

Promotions are paid-for by the promoting company (Burger King sourced the "Flame" cologne, mostly to give away and "sell" in selected locations).

Licensed goods usually become an important part of the licensee's manufacturing with a contract that extends over years, not months.

The final difference between promotions and licensing is how the companies get paid: a licensing deal results in income for the brand from sales of the product. Promotional agencies are hired by the brand to produce product for limited sale or giveaways.

Tomorrow: Is It Better To Handle Licensing In-House or Use an Agency?

For information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)