Every day, a battle is fought in the carts and aisles of the supermarkets all over the world. Brands fight for shelf space and wish to find a spot in the shopper’s cart.

Licensing means renting or leasing of an intangible asset. Examples of intangible assets include a song (Somewhere Over The Rainbow), a character (Donald Duck), a name (Michael Jordan) or a brand (The Ritz-Carlton). An arrangement to license a brand requires a licensing agreement.

A licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor).

The main reason companies choose to brand license their products is to differentiate them from their competitors’ products. When executed properly, licensing allows a product to leverage an existing brand’s attributes while mitigating some of the risks associated with building a new brand from scratch or the cost of deploying additional media against a current brand.

The primary reward of licensing can be summed up in one word: leverage. Leveraging another brand through licensing reduces some of the risks and costs associated with building a brand from scratch. While large CPG firms dedicate years—and millions of dollars—to developing and launching a new brand, most of new products launched in supermarkets still fail despite that considerable investment.

10 Benefits Of Brand Licensing – Source: Branding Strategy Insider

1. Brand Managers to extend their brands with minimal investment. Through the licensing arrangement, third party manufacturers are responsible for everything from product development to inventory management to store replenishment.

2. The brand to obtain supplementary marketing support. For the right to use the brand in their category, the manufacturer must agree to spend a percentage of their net sales on marketing. This marketing commitment not only supports the category licensed, but can be significant to the overall brand.

3. Trademark protection in the category. For a brand to benefit from trademark protection in a particular category, it must be actively sold in that category. If the category lies vacant, others may claim rights to use the mark. Extending a brand into a category via licensing helps brand owners meet the commerce standard.

4. Increased consumer connections and insights in the categories being licensed. Extending a brand via licensing offers thousands of incremental opportunities to connect with consumers. By inserting a survey inside the licensed package or a toll free number on the exterior, a brand owner can gain many additional insights about the brand.

5. A brand to gain incremental shelf space. If a brand owner chooses to extend a brand via licensing into a new category, the brand gains tremendous additional exposure in those categories in every retail store the product is sold. When sold into major chain retailers, the brand can gain thousands of additional feet of brand exposure in each category.

6. Entrée into new distribution channels. By licensing the brand to a manufacturer which currently sells into a retail channel where the brand currently does not have a presence, the brand can gain access to that channel via the licensing relationship.

7. The brand to enter new regions. Similar to new channel access, a brand can gain entrée into new regions via a manufacturer which has a presence in regions where the brand is currently not sold.

8. Access to patented technology. Many companies which choose to license brands offer proprietary innovation to the brand owner. When the patented technology reinforces the brand’s position, the new product offered can be met with tremendous consumer appreciation and pent up demand.

9. Knowledge transfer from the manufacturing partners who license the brand. A licensing arrangement provides the opportunity for the brand owner and the manufacturer to share insights and knowledge across multiple disciplines including product development, marketing, R&D and sales.

10. The brand owner to capture royalty revenue through the manufacturer’s sales of licensed product. This symbiotic relationship helps to create new products for the marketplace that consumers crave. For every dollar in revenue generated by the manufacturer, the brand owner receives a percentage in royalty payments, most of which go straight to the bottom line.

-Pete Canalichio, Chief Brand Licensing Strategist, The Blake Project

The drugstore industry in Poland is getting more and more exciting with the arrival of a new player, hebe and the opening of their 1st store in Warsaw (Al. Jerozolimskie 11/19) on the 24th of May 2011.

Hebe is the drugstore project of Jeronimo Martins in Poland, where they also operate Biedronka, the 1,600 point-of-sale hard discount chain.

Before discovering what hebe means, I thought that it is the combination of the first 2 letters of health and beauty, then to find out that hebe drugstores got their name from the name of Greek goddess, in the mythology that is the epitome of eternal beauty.

hebe is a unique combination of the highest standards of service, leading brands and best prices on the market. – says Pedro da Silva Pereira, Country Manager of JM Polska.

The store is spacious, compared to other drugstores, there is enough room between the shelves and the different categories, they are using shelves management system for well-ordered displays, excellent lighting reflecting on the white tiles. They have a very beautifully designed shopping baskets, but store security did not allow to take photos.

Their 1st leaflet has a totally different design than the competitors and is printed on very high quality paper, offering many promotions and a discount voucher of 10PLN for every purchase of 40PLN.

Tesco Polska is setting a new trend in the daily shopping habits of consumers, so they launched some time ago their Tesco Extra stores. 4 locations are available in Czestochowa, Lodz, Nowy Sacz, Poznan and more will be opened in 2011.

Tesco Extra stores will be offering more quality and premium products in their assortment.

Last week I had the chance to drop by the Lodz point-of-sale, a very nice store, the categories nicely dispersed, enjoyable atmosphere and lighting.

In October 2010, Lidl opened it frist 2 stores in Cyprus, then came another 8 locations to increase the total number of stores to 10 by May 2011.

Furthermore, it aims to achieve a double digit share of the retail sector as plans also include attaining a turnover of 90 mln euros by the end of year 2011.

This aggressive marketing approach pushed Orphanides to declare a plan to open 11 Orphanides Express stores throughout the island offering “the lowest prices” in the market, challenging Lidl’s worldwide reputation of “quality buys at smart prices”.

Last week while in Nicosia, I visited a Lidl store and i was really impressed by the traffic they were having. 8 busy check-outs with almost full shopping carts. Mainly foreigners and expats are loyal consumers to Lidl in Cyprus as I understood from our local friends.

Petit Casino, flagship of proximity stores of Group Casino, is about to change its name: Casino Shopping for stores over 350m² (700 potential units) and Casino Shop for stores less than 350m² (1200 potential stores). The 1st Casino Shopping will open its doors in Marseilles before the end of April 2011.

This is the answer, as expected, from Groupe Casino on the offensive of all its competitors in the proximity stores business. A perfect response: When Carrefour (Carrefour City, Carrefour Contact), System U (U Express, Utile), Intermarché (Intermarché Express) or Auchan now with A2Pas, are moving forward with dedicated concepts in order to optimize the time consumers are spending during shopping.

“We want to focus on enjoyment and conviviality” explains Jean-Pierre Lanzetti (CEO of Casino Proximité). His objective: to become France’s favorite store. “Our competitors have a choice in their approach to proximity. They work on physical proximity rather than on emotional closeness. It is this relationship with our customers that we want to strengthen.”

The new store design features a chocolate brown and fuchsia pink color scheme and a smoothed, curved interior lay-out. The aim is to give customers “roominess and modernity” with a gourmet and feminine twist.

click to enlarge

Sweden/Sverige, officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden shares borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund.

At 450,295 square kilometres, Sweden is the third largest country in the European Union by area, with a total population of about 9.4 million. Sweden has a low population density of 21 inhabitants per square kilometer with the population mostly concentrated in the southern half of the country. About 85% of the population live in urban areas.Sweden’s capital is Stockholm, and with 1.3 million inhabitants, it is also Sweden’s largest city.

The retail scene of the Swedish market is a bit different from other European countries, mainly western ones, where big groups are controlling the mini/super/hyper daily game, while in Sweden, it’s the Swedish retail brands themselves who have full domination of their own field and so far no external player showed up except in the hard-discount format.

Swedish retail market is dominated by 4 local players who, together they manage 97% of the total market size: ICA, COOP, AxFood and Bergendahls.

The hard-discount format also exist, where Lidl (Germany) and Netto (Denmark) are simply enjoying 2% of the total market size and the last 1% are all the rest.

Another store category is working in the shadow silently, the ethnic stores, well organized in Sweden, but with limited dispersion in the populated areas of Stockholm and its suburbs, these stores are mostly owned by immigrants and their surface varies from 100 to 700 sqm.


The war is going on between the retailers (supermarkets and hypermarkets) and the suppliers (brand principles) and if you are wondering why, it is because of the non-stop products price increase.
And no matter who will win at the end of the tunnel (it is a very very long tunnel), the biggest loser will be the consumer as both parties are trying to pass the new cost(s) to him.

Some retailers are categorically refusing the new rising costs while others are putting a limit for the increase by fixing a percentage (Leclerc in France limited it to 2%), and some (which I hardly believe) are cutting some points from their own margins to keep the prices aligned because they would like to maintain their status of EDLP (everyday low prices).

Definitely the biggest part of this pressure is on the suppliers because of the endless influence of retailers and the ability of buyers to say “NO” (sometimes no matter what you offer them).
Therefore some suppliers will follow a new tactical move and it is by decreasing the packaging size, which means offering less for the same price, leading to have a higher unit price and making it difficult to consumers to spot the difference and in my opinion this is not ethical.

Some brand principles have a different point of view, such as increasing prices and all the rest will follow but this is a risky step to take and needs some time to be reflected on the market and might take some consumers away from picking their products and some other principles might take advantage of this by waiting some time and giving the impression that their prices are stable and this might lead to some confusing on the consumer decision making while at the shelf.

During all this dilemma, the retailers are giving more hard time to suppliers by cutting down their assortments and removing under-performing products provided that this will not hurt the consumer basket, consequently this will help them optimize their shelves with products bringing more margins to their pockets.

We have also seen some extreme situations, where retailers delisted well known international brands, as example, Costco in the US removed Coca-Cola from its shelves for 3 weeks back in 2009 and in the UK, a Tesco and Premier Foods dispute for same reasons, led to the removal of 12-18 products from the shelves.

Before judging who is right or wrong, one thing is sure, the power continues to shift into the hands of the retailers, and this goes for every and each market and country.

Despite the constantly rising number of stores in Romania, Carrefour, the largest hypermarket operator in the country, did not succeed in increasing its revenues over the last two years. The company earned €1.13bn in 2010, a 0.4% reduction in comparison with the previous year and 5% less than 2008, its record year in Romania in terms of sales. With 15 stores more in 2010 than in 2008, representing an investment of about €60m between them.

Carrefour did not succeed in matching its 2008 sales level during 2010.

In 2010, Carrefour opened 10 supermarkets and one hypermarket, the latter in the city of Drobeta-Turnu Severin, in south-western Romania. On the other hand, the company closed three supermarkets in the country in 2010, one each in Hunedoara, Baia Mare and Turda, as part of its strategy of optimising its operations. Carrefour had 55 stores on the Romanian market at the end of 2010, of which 23 were hypermarkets and 32 supermarkets.

In 2011, the company plans to open two hypermarkets in Romania, one in the Botosani Shopping Center in Botosani and another in the Colosseum shopping centre in Bucharest. The latter is due to open in 2011.
The average amount invested in a Carrefour supermarket is €1.5m and that in a hypermarket €20m, according to Ziarul Financiar estimates.

Source: ceeretail.com

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Starbucks, the world famous coffee bar network, is planning to speed up its expansion on the Polish cafe chain market, which is worth PLN 1.5bn (€390m). By the end of 2010 the company intends to have set up five new cafes in Poland. At present, it manages five establishments in the largest Polish cities.

As Retail Update Poland has learned, in September a new establishment is planned for Krakow. In addition, the chain also intends to launch its fourth establishment in Warsaw.

In the next few years, Starbucks expects to continue its expansion in the largest cities in Poland and abroad. Within the next few months it will focus on launching establishments in cities in which it is currently has a presence: Warsaw, Wroclaw and Poznan.

Starbucks plans eventually to become one of the leading market players in Poland and to open several dozen cafes.

Source: Retail Poland

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