Small and medium-sized businesses gain market with licensed cosmetics

Small and medium-sized manufacturers of cosmetics have betted on licensed brands to gain market. According to the Brazilian Association of licensing (Abral), a brand licensed ensures high up to 20% on sales of products.
"This high in sales is one of the main advantages of working with a licensed and the smaller manufacturers adopt it as a strategy to gain more visibility in the retail and attract consumers," says the President of Abral, Marici.
The manager considers, however, that companies should not focus on the graduates all the investment to ensure sales performance. "The brand actually make the sale happen, but companies need to diversify the stakes", defends her.
In the evaluation of Marici, despite the demand for cosmetics with associated brands continue on high even with the less favorable economic scenario, we need to offer options to the consumer who comes looking for more affordable items.
According to the Brazilian Institute of geography and statistics (IBGE), the production of cosmetics, perfumery and toiletries fell 5% between January to April over a year earlier.
"One alternative is the company investing in a portfolio that has not just cosmetic, so she takes to tow the own brand the added value that the character generates," explains Lorna, about the current moment of the economy.
The Phisalia, a maker of cosmetics and personal hygiene products for the public infantojuvenil, used that strategy to leverage its brand.
"We started working with licensees in the 80, when this was not a consolidated market in the country, but then we also have a brand," says the product manager of the company, Ligia Sposito.
Currently, the brand Get There There accounts for 60% of revenues from Phisalia, but the company does not cease to invest in licensees.
Resume
"In 2010, we saw a boom in licensing for the children's market and since then we have resumed the work with this type of product to keep up with the competition," he says.
The manufacturer recently renewed the contract to continue using the Transformers brand and last year launched a new row with the national brand Patati Patato.
"Licensee represents 15% of revenues, but with the new line this percentage may increase. The ideal would be to have 60% of revenues coming from his own brand and the rest of the graduates ", details the Executive. With this, the company hopes to increase profitability with sales.
Ligia emphasizes that licensees have greater added value and, therefore, Phisalia can work with a higher price for the products of the brand. The licensed products are priced on average 20% larger.
"This is a reflection of the higher costs to produce these lines, because we need to pay royalties of brand, and the packaging is more elaborate," reveals the Executive.
Marici, Abral, States that the royalties-percentage that the manufacturer paid for the licensed brand-manager in the cosmetics industry can amount to 10% of the value of sales of the product to retailers.
The President of the Brazilian Association of personal hygiene, perfumery and cosmetics (Abihpec), Joao Carlos Basilio, warns that companies need to assess the profitability generated with graduates before investing in the segment.
"You have companies that make a lot of sales volume with graduates, but the profit margin just very down. So we need to evaluate well with which categories and products the company wants to work with the licensed brand, "says he.
Products for children, says Basilio, are those with the best return, because customer loyalty in this niche is greater compared to the products for the adult audience.
"Children's products companies can work with higher value-added items, due to the level of consumer demand," he says.
Advantage
The Speciallità, owner of trademark enamels Hits Speciallità, has devoted less share of production to the licensed marks, despite the fact that the strategy was important to the consolidation of the company in the market. "The demands of the companies that make the management of the brands and the profit margin that we can with these products make investment less attractive," says the marketing executive of Speciallità, Orestes Polisel.
According to him, the company is investing more in his own brand of nail polish. "But partnerships with licensed helped make the brand better known in recent years. So there is an advantage in working with the licensee ", recognizes Polisel.
The Executive explained that the licensed lines have in fact performed above the regular line. This sales boom lasts three to four months, but after that period sales generally return to the regular level.
"We are with a licensed line this year, which has sold well. But, all in all, the sale of glazes the company is slowing down, "reports.