For almost a quarter of a century, brands were ‘loaned’ for licensing fees or vice versa were purchased for money. Most of the time these were companies which did not possess own brands and wanted to jump on the successful bandwagon for little money and figured they would achieve higher margins with a minimum amount of work through lending brands, without having to render the troublesome work and expenditures of brand build-up and brand maintenance. On the other hand it was tempting for companies with successful brands to award the rights for the utilization of brands against payment of licensing fees in order to increase their profits and decrease their marketing costs.

In recent past mainly the internationally active big companies of the consumer goods industry have been retrieving their brands and have taken the brand diffusion into their own hands via in-house structures in order to get back control over their brands. This development has caused an existential crisis for licensing marketing.

In my judgement, this is going to lead to licensing marketing in its current form, to pretty much disappear from the market.

Often the conception of what a brand is able to achieve is exorbitant. And that many so called brands aren’t even true brands and thus do not possess the capacity for different branches and product groups.

Another reason for this whole problem is again and again the lacking discipline of brand management. And, as in many other segments of life too, people often do not understand the notion that you have to treat borrowed goods even more carefully than your own stuff. Meaning, licensed brands are often not treated with the diligence and responsibility they deserve. The assumption of the licensor one could avoid undesirable developments through contracts, is unrealistic. There is no contract on this earth which would allow for a transplant of brand culture. Brand culture develops only there, where a deep understanding for the essence and character of the brand exists. This understanding cannot be bought for money and it also cannot be sold.

What could succeed licensing marketing in the current shape? I think, what we suggest offers great chances, namely to perform brand diffusion in-house and if that is not possible or expedient then to find partners within the scope of a strategic alliance who accept the Canoe Principle© developed by us. The Canoe Principle© requires the brand owners and potential brand users to lead the brand (in other words the canoe) in the scope of a holistic brand strategy with the precision and discipline of expert canoeists. The Canoe Principle© contains all the criteria for choosing a partner and all the necessary requirements to be met by partners.

We analyse and examine diffusion suitability of brands, we develop in-house strategies and we verify if a potential strategic alliance is promising.

February 2007