With brand names like Electrolux, which originated in 1909, or AEG – a global brand that was established in Germany in 1887 – Electrolux Global Brand Licensing has been offering companies brands with centuries of performance since 2007. “To me, the brand name brings trust,” says Matt Young, head of global brand licensing for AB Electrolux. “People are going to buy things that they trust in. When you have a brand name that consumers associate with high quality, trust is the key element that gives you the extra margin.”
Retailers can obtain more sales and bigger margins with brand names, Young declares. “You go in with a house brand or an unknown brand with no history behind it and no story to tell – without those things, people aren’t willing to pay the extra $2 to $3 for a product,” he asserts. “If you go in with Frigidaire, you have a story. You don’t have to worry about building a brand. You can get more money for it, and obviously, with what’s happening with the world economy, trying to create your own brand in a retail environment is not necessarily cost-effective.”
For manufacturers and marketers, a well-known licensed brand can open the door to new retail channels. “It offers the opportunity to go into different price points, and in some cases, it offers opportunities to give a partner of theirs exclusivity,” Young points out. “Everybody is looking for something different to put traffic into their stores. By being able to offer a wide range of brands and something exclusive to you, it gives the retailers an advantage. So the angle we look for and that offers opportunities is to offer a brand that gives our partners a chance to maximize their abilities to grow sales and increase their profits.”
So far, that strategy has worked well for Electrolux Global Brand Licensing. Licensing fees for its stable of 50 brands are up 20 percent in 2011, which Young attributes to the success of the company’s partners, new contracts and new brand partners. One of those new partners is Artisan Manufacturing, which will license the Frigidaire brand name for a high-quality line of kitchen faucets and sinks that will be marketed in the United States and Canada.
Artisan is one of the first partners for Electrolux Global Brand Licensing’s new focus: the U.S. market. While Electrolux has been active for decades in Europe, the Middle East and the Far East, Young has maintained and grown those markets with his established team in Stockholm, while simultaneously launching an aggressive search for partners in the U.S. with a new team, located in Charlotte, N.C. Both teams, however, continue the company’s traditional emphasis on brands. “A good brand is a necessary building block of success,” Young reiterates. “That will always be our focus, no matter where we search for partners.”
Additionally, the company is branching out internationally to Mexico and India. “We are very focused on the Indian market, because it is a new opportunity in licensing for us; our brands have history there,” he says. “We are working on some potential projects that I can’t go into now. We have a lot of good opportunities in the Indian market with companies that are leading-edge in a number of different technologies.”
As for Mexico, breaking into that market “is a little tougher creating exposure,” Young concedes. “In Mexico, we think we have another market that is very brand-centric that can offer U.S. opportunities. So when you look geographically at how we’re trying to handle our licensing business, those are the primary markets we are looking to expand into. If we can do those, we’ll have more than enough things that we do.”
When Electrolux was established in Sweden in 1909, the company produced lighting products. Its name even is derived from “lux,” which is Latin for light, and “electro” for electricity. So in 2011, branding LED lighting and environmental products is not far afield from the company’s origins.
“We are focusing on things around the home both inside and outside,” Young announces. “We have a number of existing licensing partners in the solar industry. That’s an industry that is quite the buzz currently. We’re focusing on that as well as an opportunity with a water-saving-type product.”
The solar products are being marketed business-to-business under the AEG brand, which remains a strong global brand more than a century after it was founded, Young says. The solar products include inverters and converters – which convert the direct current from the solar panel to alternating current for household use – and uninterruptible power supplies, which provide backup power.
“The AEG brand – while one of the strongest brands in our portfolio – is not yet known in the U.S.,” Young states. “However, the German heritage and premium position in other markets will open doors for us in our U.S. expansion. We have a few projects that we are excited about that will be launched in 2012.” Additional branding opportunities for Electrolux Global Brand Licensing may be found in the bathroom and laundry room, Young reveals, along with environmentally friendly, energy-saving, solar and water-treatment products.
“These categories are growing, and we think we have a solution for them,” Young says.
Additional names among the 50 brands that Electrolux Global Brand Licensing handles are Eureka, which was established in 1909; Kelvinator, which goes back to 1914; Philco, associated with televisions, among other products; and Gibson, known for appliances.
Frigidaire was established in 1918 as a brand of refrigerators and is closely identified with appliances. Electrolux, like Eureka, was used in the United States after World War II for floor care products. Around 2000, an upscale line of kitchen appliances was introduced under the Electrolux brand.
The Kelvinator brand is tactically used in select product categories in the United States but is strong internationally in Australia, South Africa, India and Hong Kong, Young says. “We have some brands that have a long legacy in a lot of different categories and lots of different parts of the world,” he notes. Besides the strong brands in its licensing portfolio, Young is quick to point out that the success of Electrolux Global Brand Licensing is due primarily to the exceptional group of companies who are Electrolux’s brand partners and who manage the brands with respect.
“We’ve put our brands and our trust in the hands of companies all around the world, and their efforts have been remarkable, especially given the fact that these partners are trying to survive in a very tough economy,” he says.
With brands and partnerships that are the envy of the business world, Electrolux Global Brand Licensing continues to grow in new markets and new categories. As Young notes with a smile, “We’re just getting started.”