The Kitty that Roars with Licensing Gusto

by Felicia Sominglai

Which characters are the kings and queens of licensing? Seriously, take a minute to think about it and make some guesses.

Your intuition might lead you to Mickey Mouse, or to Winnie the Pooh, or to superheros like Spiderman or IronMan, or maybe to Pixar characters like Nemo and Lightning McQueen. What about Star Wars? If your intuition leads you to these characters, you’d be right. (Incidentally, every single one of these properties (Disney traditional, Pixar stable,Winnie the Pooh, Marvel, and Lucas Films) are all under the Disney domain. And, according to work done by the Licensing Letter, the top three properties  for licensing in Canada and the USA come from the Disney Princesses, Star Wars, and Pooh. Each of these properties is worth well over a billion a year in revenue and taken together, they account for almost a third of all character licensed revenues in Canada and the USA.  

But there is one other property that needs special attention. Move over Princesses, there is a Kitty that is world-wide licensing royalty.

Hello Kitty is a fictional kitty character comic created by Sanrio Inc. The famous kitty made her first appearance in Japan on a vinyl coin purse in 1974. Three years later, she was introduced in the United States. Sanrio initially was targeting pre-adolescent females, but Hello Kitty caught on with teenagers and adult consumers as well. It is now one of the "powerhouse" characters in North America (see below) and with its strength in populous Asia, it vies for world-wide cartoon popularity supremacy.

Given the comic's look and feel, it seems obvious that Hello Kitty character  would end up as dolls, stickers, greeting cards, clothes, accessories, school supplies and purses. But what is surprising is that Hello Kitty appears licensed on toasters, televisions, home appliances, massagers, hard rockin Stratocaster guitars, wines, high end gemstones,and computer equipment. It is even less obvious (and more surprising) that Hello Kitty has been licensed out to rare collectibles and an airline. Yes, that’s right, an airline!

EVA Airways, a Taiwanese airline company, has brought brand licensing to a whole different level.  Originally launched in 2005, the totally Hello-Kitty themed fleet has recently grown to 5.(EVA added 2 more to its fleet in the last few months). Just how Hello-Kitty themed is the Hello Kitty airline service?  It's 100% Hello Kitty integration. Every consumer touch-point has been Kittied-up: the plane, the luggage machines, the ticket counters, the in-flight design, the boarding passes, the flight attendant uniforms, and the food. These images speak for themselves.

Even airport in Taipei was even redesigned in order to fit the theme.

The luggage handlers drive Hello Kitty equipment

Hello Kitty, pillows and head rests

In-flight service Kitty-style!

According the EVA, the Hello Kitty themed air service has been a huge success since launched. According to the Evergreen Group, the parent company of EVA Airways, all the Hello Kitty jets have occupied over 85 to 90 percent per flight, well above industry averages.  Try the experience online yourself: http://evakitty.evaair.com/en/pages/experience/lineplane.aspx 

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TOP 10 LICENSED ENTERTAINMENT/CHARACTER PROPERTIESU.S. AND CANADA, 2010

1.                  Disney Princess -- Disney -- $1,725 million

2.                  Star Wars & The Clone Wars -- LucasFilm -- $1,415 million

3.                  Pooh -- Disney -- $1,100 million

4.                  Toy Story -- Disney/Pixar -- $915 million

5.                  Cars -- Disney/Pixar -- $810 million

6.                  Hello Kitty -- Sanrio -- $750 million

7.                  Mickey & Friends -- Disney -- $725 million

8.                  Peanuts -- Peanuts Worldwide/Iconix -- $660 million

9.                  Sesame Street  -- Sesame Workshop -- $525 million

10.                WWE -- WWE -- $520 million

Brands as a Facade

by Pearce Tibbles

Brands are often a symbolic badge and provide confidence for consumers when they make their purchase decision. But sometimes a brand can be a facade; the brand reality of the product is can be very different than what the consumer expects- or is led to believe! The following narrative illustrates this point.

Historically, the aerospace division of Rolls-Royce (which manufactures jet engines) was part of the same company as the auto brand by the same name. These two divisions split up and the car company that spiraled out was purchased by the British conglomerate Vickers. In 1998, Vickers put the Rolls-Royce automotive company up for sale and it attracted a bidding war between two German firms, Volkswagen and BMW, who were trying to expand their brand portfolios into the ultra-luxury market. Although BMW was the likely buyer (it had a longstanding supplier relationship with the company), Volkswagen ended up bidding close to £100 million more and won the auction. With the purchase of Rolls-Royce, Volkswagen received a well-past-its-prime aged factory where most of the assembly was done by hand. Rolls-Royce cars were still using a licensed 1938 Buick engine which was extremely inefficient as the company had not been able to afford an upgrade. After the deal had gone through, BMW came upon an interesting discovery. Rolls-Royce PLC, the aerospace division and an independently listed company, was the owner of the Rolls-Royce brand name and logo. BMW jumped on this opportunity and purchased the naming rights for cars at a bargain price of £40 million (much less than Volkswagen originally paid for the car company). BMW started fresh and built a brand new factory with state-of-the-art equipment, hired a designer to recreate the vintage look of Rolls-Royce cars, and gave the new vehicles an efficient BMW-made engine. BMW is now the sole legal manufacturer of Rolls-Royce cars and Volkswagen is stuck with an old factory capable of producing old, "unbranded" cars.

What this story highlights is the fact that from a consumer’s vantage point it is not always easy to see what stands behind a brand name. Most consumers likely have associations to Rolls-Royce that include legacy, timelessness, and elegance. Many may be startled and even upset to learn that Rolls-Royce, by most measures, is a new car company created by BMW. The only thing linking the Rolls-Royce cars of today and those of the early 20^th Century is a trademark to the naming rights. With this example in mind, it is perhaps necessary for consumers to view brands in a different, albeit more jaded, light. Although brands can be useful as a symbol of brand values and legacy, they can also act as a facade intentionally set up by a parent company in order to exploit and leverage brand equity.