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July 31, 2017 02:00 AM

Goodyear, Michelin push profits with unique brand licensing

Miles Moore
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    Tire Business image by Michael McCrady

    AKRON — Product licensing is big business around the world. According to the April 2017 issue of License Global Magazine, the top 150 global licensors reported $272.2 billion in retail sales of licensed merchandise in 2016, up from $262.2 billion in 2015.

    License Global's list of top global licensors for 2017 includes two tire makers: Goodyear, 86th with 2016 sales of $338 million, and Group Michelin, 89th with sales of $320 million.

    Even combined, Goodyear and Michelin's licensing sales are a tiny fraction of the $56.6 billion in sales recorded by the No. 1 global licensor, Walt Disney Co.

    Nevertheless, product licensing is a major profit center for both Goodyear and Michelin, according to licensing executives for both tire makers.

    "Licensing is a global business for Michelin, and we offer hundreds of products in several categories," said Tom Jupena, director of North American brand licensing for Michelin.

    • This story appeared in the July 31 print issue of Tire Business.

    Automotive accessories comprise the biggest category of products, including windshield wiper blades, floor mats, digital inflators, pressure gauges and many other products, according to Mr. Jupena.

    Michelin also licenses its brand for footwear, which is its fastest-growing branded product category, he said.

    "Our footwear ranges from athletic shoes to hiking boots, all designed to make mobility safer, more comfortable and more enjoyable," Mr. Jupena said.

    Michelin lists 11 different footwear companies that are licensed under its "Sole Power" footwear program, including Dickies Occupational Wear, a division of Williamson-Dickie Mfg. Co., for a line of anti-slip footwear for the service and hospitality industry.

    Global undertaking

    Goodyear began its licensing program in 2001, but it has been building on its North American base since 2012 to be more global in scope, according to Nancy Ray, Goodyear director of licensed products.

    This is display at a mall in Mexico City. The licensee sells clothes, footwear and accessories.

    "Our focus is on reinforcing the Goodyear brand message and touching current and potential buyers," Ms. Ray said.

    Goodyear has 101 licensees that sell Goodyear-branded products in 164 countries, according to Ms. Ray. The company focuses on automotive, garage, footwear and lifestyle products, she said.

    "The hundreds of products sold by our licensees are made in countries around the world and packaged in many different languages," she said.

    While Mr. Jupena did not give the exact number of the company's licensees, he did say, "We are fortunate to work with dozens of high-quality licensees around the world that produce the absolute best products in their categories."

    One of Goodyear's licensees, SCL Footwear Group L.L.C., launched a line of Goodyear-branded casual footwear, dubbed the Goodyear Performance Collection for men, in 2016.

    A licensee since 2014, SCL also markets a line of Goodyear-branded safety and work footwear, using the names of NASCAR tracks, such as Bristol, Daytona, Darlington, Phoenix, Pocono, etc.

    Michelin is heavily involved in the development of all its products, including its licensed products, according to Mr. Jupena. The tire maker has robust processes in place to ensure its licensees meet company standards, he said.

    "Our licensees are truly partners," he said. "We expect them to develop and manufacture innovative and differentiated products that contribute to better mobility."

    Michelin also expects licensees to be secure distribution partners that properly represent the Michelin brand, as well as providers of exceptional customer service, Mr. Jupena said.

    One long-time Michelin licensee is Remington Industries Inc. of Ooltewah, Tenn., which makes BFGoodrich-brand floor mats and other products. Remington soon will introduce a line of BFG-branded floor mats for SUVS and pickup trucks, Mr. Jupena said.

    "Like all of our licensees, Remington has invested the time to understand our customers to develop a product that meets their unique wants and needs," he said.

    Being designated as a brand licensee is not easy, both companies said.

    "There is an extensive review process that includes financial viability of the licensee, product fit with Goodyear branding and product quality, as well as the licensee's business capability and current successes," Ms. Ray said. "Additionally, there can be other requirements in a given country or region."

    Luxembourg's iTrike eMobility launched the Goodyear Ego2 electric scooter in 2016.

    Large retailers (including online retailers) are the primary sellers of Goodyear-branded products, according to Ms. Ray.

    Goodyear dealers

    Goodyear does not have a formal licensed products sales program with its dealers, but it is looking into the possibility, Ms. Ray said.

    Independent Goodyear dealers may acquire Goodyear-branded products via www.thegoodyearstore.com, she said.

    One of the biggest steps forward for Goodyear's licensing program occurred in June, when a Goodyear licensee opened in Beijing, the first-ever stand-alone Goodyear footwear store, according to Ms. Ray.

    The store, in one of the city's busiest shopping districts, features Goodyear-branded men's and women's shoes, including athletic, casual and dress styles, she said.

    Product counterfeiting is a major problem in most industries today, and product licensing presents some of the greatest dangers in that category. However, Michelin and Goodyear said they had effective programs in place to combat counterfeiting in branded products.

    "Michelin is one of the most well-known and trusted brands in the world, so it should be no surprise that we are fiercely protective of the Michelin brand name, our marks and, of course, Bibendum, one of the most recognized and celebrated brand icons," Mr. Jupena said.

    "Like any large brand, we have teams and legal processes in place to protect our brand assets," he said.

    Goodyear uses holographic tags on all its licensed products to help lessen counterfeiting, according to Ms. Ray.

    "Also, our licensees are protective of their business and are vigilant to spot and stop counterfeiting," she said.

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