Licensing/Merchandising Products
for Latin American Children

For media products, there is a market for the direct consumption and there is also a significant aftermarket for the consumption of related products.  Whenever there is a major hit in the form of a movie, a television series or even a comic book character, the market may be flooded by related merchandise, such as sequels, books, magazines, apparel and accessories of all imagination.

A Mafalda t-shirt on sale 
in Buenos Aires, Argentina
(photo credit: R. Soong)

Here are some examples of popular characters among Latin American kids between the ages of 7 and 11:

Source: Pan Latin American Kids Study 1998, Audits & Surveys Worldwide

Insofar as the licensing/merchandising of accessories go, this is an issue of exploiting (or, if you prefer, leveraging) the brand equity of the original character.  Brand equity is a complex concept (see for example David A. Aaker (1991).  Managing Brand Equity.  Free Press: New York).  A simple conceptual definition of brand equity is the incremental amount that a customer will pay to obtain a brand rather than a functionally equivalent alternative with a different brand name.  Therefore, the licensing/merchandising process is the extraction of that brand equity.

In theory, other things being equal, an accessory (such as a pencil or a notebook) with a character on it should cost more to the consumer because of the added value.  In practice, this does not have to be true.  The merchandiser may offer the branded accessory at a lower price, because the objectives are to raise volume while seeking earnings growth through greater efficiencies.

Building popular characters is a separate process from licensing/merchandising products.  If you look at the table above, the Disney company (for Mickey Mouse, Donald Duck, Aladdin as well as many other characters) and the Warner Brothers (for Bugs Bunny as well as many other characters) are the consummate marketers of branded  merchandise, with strong reputations for going after pirates vigorously.  By comparison, El Chapúlin Colorado and El Chavo are hardly visible as branded merchandise, despite their ubiquitous popularity on broadcast television everywhere.

Here are the incidences of school accessories that are branded by characters or cartoons among Latin American kids 7-11.

Source: Pan Latin American Kids Study 1998, Audits & Surveys Worldwide

If we compare the last two columns, we see that the incidences are always higher among the affluent children, suggesting greater awareness, higher propensity and more purchasing power for branded accessories.

PRINT REFERENCE

• Karen Raugust (1996)  Merchandise Licensing in the Television Industry.  Focal Press: Newton, MA.

(posted by Roland Soong on 9/18/99)

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