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Bulk Vending | World
Brands retain bulk
vending balance
of power
Licensed products entered the bulk vending
industry in a big way more than a decade ago,
MERCHANDISERS' and though right now they may be down,
they're far from out, according to the LIMA.
xperts in both the slightly more than $2.6bn in company has been assertive upscale venues. “Brand aware-
licensing and bulk 2008. Accounting for 46 per in acquiring high-profile ness” can ease location man-
vending busi- cent of the licensing business, licences for bulk vending agement’s resistance to bulk
nesses believe this drop was seen as a major products. Over the past year, equipment.
that licensed blow. Sports licences, another A&A has picked up licences AA’s Brilliant and others in
products in the bulk vending major segment, also showed a for Major League Baseball and the industry also observed
sector will remain viable and decrease, from $8.1bn to the National Basketball Asso- that the majority of licensed
profitable far into the future. $7.4bn. ciation, and renewed its part- products arrive in bulk
According to an annual survey “Given the current eco- nership with Marvel Comics venders with clearly defined
conducted by the Interna- nomic climate, the revenue to bring such well-known demographic targets. For
tional Licensing Industry Mer- declines are not unexpected,” characters as Iron Man and operators who take the time
chandisers’ Association said Charles Riotto, LIMA’s Spider-Man to bulk venders. to study their locations’ demo-
(LIMA), the global financial president. “However, a strate- “A&A is still aggressive in its graphics, this is very appeal-
slump severely depressed gic, thoughtfully imple- licensing programme,” said ing and can help boost sales.
consumer spending on mented licensing programme Brilliant. For suppliers, licences can
licensed properties last year. remains a very effective way There are proven reasons establish desirable ‘exclusiv-
Brand owners collected for businesses to build their why offering licensed goods ity’ if one can become the sole
$5.7bn in royalty revenues in brands, drive incremental continues to work in bulk provider of a hot product.
2008, down 5.6 per cent from revenue and position them- vending. Consumer familiar- Even with the added charges
2007's $5.8bn. LIMA recorded selves to thrive in a rebound- ity with these licences often is of royalties and guarantees,
What seems clear, even profit declines in eight of the ing economy. To succeed, it’s bolstered by ongoing promo- licensed goods can offer
in the midst of a strug- nine defined licensing cate- more important than ever for tion and marketing efforts pleasing profit margins for
gling economy, is that gories, with only the colle- brand owners to identify across a scope of industries. both suppliers and operators
licensing is in no danger giate market posting an brand extensions that will Promotional efforts for films if developed and deployed
of fading from the bulk increase. support and enhance their include multimillion-dollar smartly.
vending landscape. “The business was doing core businesses.” advertising and promotional Finally, some bulk vending
Indeed, given the recent okay through the first three This general decline may campaigns. Next year’s Iron suppliers have discovered
fall in licensing fees, quarters of 2008, then con- not be entirely bad news for Man II, for example, will be over the years that creating
combined with a need to sumer spending in general bulk vending. Speaking off the accompanied by a major pro- their own licences can prove
increase vend price went off a cliff in the last record, many licensees indi- motional blitz. even more prof-
points, licensed products quarter. You had retailers cated that licensing fees, “When consumers are itable. Brand
will likely play an ever- downgrading or, in some including royalties and guar- valuing every penny they’re Vending Prod-
larger role in bulk cases, cancelling orders,” said antees, had inflated over the spending, they are looking for ucts maintains
vending. Despite their Marty Brochstein, LIMA’s past several years. This the trust factor. That’s where its own licensing
higher wholesale cost, senior vice-president of indus- decrease has initiated a transi- licensing comes in,” said programme
licensed products try relations and information. tion to bring these costs back LIMA’s Brochstein. “If you can through its Desert
provide numerous mar- According to LIMA’s in line with ‘reality.’ present a product with a well- Sky Studios.
keting benefits over research, licensing income “Sales of licensed bulk known brand, it enhances the “Our focus is
generic merchandise, from entertainment charac- products are stronger than sale of that product.” on themes
and help operators make ters (such as Mickey Mouse they’ve ever been, simply Offering licensed merchan- that are time-
the jump to higher price and Hannah Montana) because of the public’s famil- dise helps when presenting to less,” said
points. declined 3.9 per cent last year, iarity with the product,” said potential new accounts, par- Brand’s Craig
from $2.7bn in 2007 to A&A Global’s Phil Brilliant. His ticularly malls and other Goodman.
GamesWorld | 24 | October 2009
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