Then came the “A-ha” moment in the mid-1990s while working with Procter & Gamble (P&G) on a Vicks licensing program. NBA was interested in putting the brand name onto a vaporizer. Within six months after the product launch, the Vicks vaporizer was the top product in the category and grew the category by 25%. Since then, NBA has focused on brand extension licensing programs mainly for consumer packaged goods (CPG) brands.
“The idea is to take a brand and put it on products that are closely related,” said Bailey, chairman. “If the brand equity is consistent, you can launch in a category where the brand hasn’t played before.”
NBA’s operations are strategic and center on brand extensions for trademarked corporate brands. The key element is recognizing the equity of the brand to be licensed and leveraging that equity with licensed products. Bailey used the example of a program with Hawaiian Punch, which used to be a P&G brand.
“They wanted us to focus on their Punchy character, but we saw that the equity was the unique fruit taste,” she said. “We put that into products like Betty Crocker fruit snacks, and that was the first time a consumer brand had been licensed into fruit snack products.”
Beyond the intangibles
The trick is to understand what is licensable about a brand. The licensor may see the brand equity as one thing, but NBA has to dig deeper than brand personality and intangible equity points. NBA must determine what can be translated to another product to extend a brand.
“Extension products need to appear seamless to consumers so they can connect with the product because a brand they know and trust is on it,” said Nell Roney, president. “The corporate brand licensing business is different from licensing characters in the entertainment space. It takes more strategic thinking and product development than just slapping a hot character on a lunch box.”
To determine the right direction, NBA starts with a brand equity analysis. The company needs to know everything about a brand—its tradition, target audience, point of difference, and unmet consumer needs that the brand represents. From there, the company develops a licensing strategy built around what the brand is trying to achieve.
Bailey said licensor objectives vary. They could be trying to reach a younger audience or looking to get into a new distribution channel. By understanding the licensor’s goals and the brand’s equity, NBA can develop a strategy to move into appropriate categories. This is where finding the right licensee partner comes into play.
“Our licensees are experts in the category and have the financial resources to develop innovative products that maintain the core brand equity elements,” said Bailey. “We identify the top few players in a category and engage them to understand their capabilities and discuss what kind of program and marketing plan they could launch. From there, we recommend to the licensor who the best partner would be.”
Roney said NBA’s job is to bring the licensor and licensee together so each understands the expectations of the relationship. The licensor needs to feel that its valuable trademark will be on the right products and properly supported. The licensee wants to know that working with a given brand can help build its business. And all of this must take into account a retail environment that has become extremely congested.
“Retailers today are very selective, having conducted vendor consolidations and SKU rationalizations that have further reduced the available retail shelf space for licensed products. As part of our due diligence on finding the right partner, we do store walks to see what products are on the shelves, and we call retail buyers to find out who retailers are likely to work with,” Roney said. “Product innovation is important because the products have to fit a need and tie the equity back to the brand so they get on the retail shelf and sell through.”
For every client, NBA’s capabilities go well beyond simply brokering a licensing deal as the company provides ongoing management of licensees. This builds up an enormous amount of trust with clients as well as licensees.
“The work begins once the contract is signed. We are hands on to make sure licensees keep up with marketing plans and try to grow the business,” Bailey said. “We are also doing more in terms of promotional tie-ins and having the core brand and licensee interact at retail.”
That trust and reputation is the reason why NBA can continue to demonstrate its ability to successfully serve Fortune 100 companies and find the right licensees. The company has worked with P&G for more than 15 years on many programs. Recent brand extensions with P&G include working with Home Care Industries on Febreze premium allergen filtration vacuum cleaner bags and filters and with Health-Tech on Scope portable breath mists and drops.
The company has also taken on new clients and directions. NBA is working with Energizer on a number of brand extensions consistent with the brand’s equity of providing innovative solutions to power people’s lives and with Nesquik to bring the brand to a variety of products in housewares, apparel, toys, plush, and collectibles. In addition, NBA extended the online Travelocity brand in several areas. For example, Exhart is producing Travelocity Traveling Gnome garden statues while MIZCO International launched travel accessories like passport holders and leather luggage tags.
With almost 30 years in business and a history of pioneering brand extension licensing, NBA’s future is sure to include more development of strategic long-term partnerships, leveraging brand equity and creating innovative and successful retail products. But the company also knows the retail environment has changed, and competition is greater than ever.
“The brand extension concept is a great marketing tool, and more corporations understand that,” Bailey said. “There are often several competing brands playing in the same space, but we know how to address that competition and still find the right licensees in any given category.”