For TVs, Brand Licensing Can Provide Hidden Appeal

In 2019, brand licensing continues to be an effective tool for some television OEMs and ODMs looking to break into marketing their own products in less-familiar international regions. But recent trends are showing brand licensing is being used more and more by savvy retailers looking to differentiate products positioned in the opening price points of store assortments.

In this way, retailers can offer exclusive door-buster specials around key promotional periods to increase traffic. Those with assisted sales floors can upsell, encouraging shoppers to step up into better-performing, higher-ticket and more profitable models.

Exclusively licensed brands or model exclusives let retailers dangle aggressively low prices without giving shoppers the chance to price compare. It also prevents e-commerce competitors from undercutting them on price.

There’s been a lot of evolution since a decade ago when Royal Philips NV decided it would stop making and selling some of its Philips and Magnavox consumer electronics products and, instead, license out those trademarks to Asian manufacturers. Over the years, TV brand licensing has been employed by a wide range of manufacturers, distributors and dealers to offer products with built-in brand awareness and established reputations under familiar logos.

The practice helped Philips lower its heavy debt load, while ridding itself of businesses that were increasingly under pressure from low-margined competitors. Other TV makers, such as Thomson SA/Technicolor, JVC, Sharp and Toshiba, made similar moves.

Since that time, mostly Chinese television manufacturers have used licensed brands to break into regions outside of their domestic market. In the last decade, a Peoples Republic of China national directive for Chinese manufacturers to begin using and promoting their own brands has started to supplant the use of licensed logos. For example, TCL, which used the licensed RCA trademark to build a business in Western regions, let the license lapse as it replaced RCA with TCL sets. In North America today, TCL ranks as one of the best-selling brands—behind only Samsung.

Enter retailers, who are now taking on—with more frequency—licensing familiar brand names of the past for exclusive product lines they can control, while removing the ability of shoppers to price match against price-aggressive online retailers.

Best Buy is successfully using this practice today, but instead of licensing the brands itself, the big-box chain is getting OEM/ODM partners to license various brands and models that it then sells as exclusives or near-exclusive house lines. Examples of this can be found in certain JVC and Toshiba-branded televisions as well as other brands. Obviously, for the practice to succeed, the retail chain must move sufficient volume to warrant container-load shipments on a national scale.

Elsewhere, mass merchant retailers and even grocery store chains are using licensed television brands of the past for exclusive cheap TV specials. The German-based discount food chain ALDI, for example, owns the Bauhn TV brand for cheap flat-panel TV deals sold in various outlets and regions around the world, including Australia, The U.K. and, at times, North America.

Five years ago, the English-based Dixons/Curry’s retail chains licensed the Pioneer brand for its house brand of LCD TVs, looking to cash in on the once wildly acclaimed quality of Pioneer’s Elite Kuro plasma televisions. That experiment proved to be short lived, however, and never really caught on for the merchant, who tried to use the trademark on lesser-performing LED LCD TVs.

And now we see a trend emerging in growing economies like India where licensing prominent multinational brands has proven to be a successful formula for one up-and-coming company. Super Plastronics Pvt. Ltd. of India has leveraged licenses of two prominent brands aiding it in rapidly growing its market share in the value-priced Indian TV business.

The company believes that Indian consumers would rather buy a multinational corporation brand that they are familiar with than an unknown domestic or Chinese brand. After all, businesses as well as individuals are clamoring to “build their brand.” Those who own popular brands are simply cashing in on their assets—even if they don’t make anything anymore.