When consumers purchase products online or in a retail store, they usually assume that the products are the ideas of their manufacturers or distributors. This is often not the case. Instead, manufacturers license products from inventors and market them to their established target markets. Product licensing benefits manufacturers in a number of ways including reducing research and development costs, utilizing excess manufacturing capacity and personnel capacity, and giving the manufacturer the ability to introduce more new products in a shorter amount of time. Licensed products are all around us; here are some examples of product licensing that you may have come across recently.



Licensing is very popular in the toy industry, because it allows toy manufacturers to come out with many new toys each year. Even toys based on popular movies and television shows are licensed from their inventors. You may see licensed toys from Batman Begins, Star Wars, Harry Potter, Spongebob Squarepants, and Shrek at your favorite department store or toy store.

Board Games

Board games from popular companies such as Hasbro are often licensed from their creators. This has several advantages for board game companies. They can introduce new games to the market more quickly than their competitors and they can also cut research and development costs since board game creators usually do their own testing and prototype development. Board game creators benefit from licensing because they are not forced to deal with marketing and distributing the games they have created. This leaves more time for creating and testing new games that can be licensed to other manufacturers in the future. Chances are that many of the board games in your home or local recreation center are licensed.

Action Figures

Action figures are usually based off of movie and television characters. Good examples are Superman, Spiderman, Batman, He-Man, and GI Joe. Most of these action figures are licensed and distributed by manufacturing companies with a wide market reach and excellent manufacturing capacity. This gives product creators the time to create new products instead of spending time figuring out how to market and distribute products they have already created. Product licensing also benefits action figure manufacturers. These manufacturers are able to capitalize on the popularity of movies and television shows in order to make more sales. Licensing also makes it possible for manufacturers to introduce these action figures without having to spend a lot of money on testing and developing the products in house.

Video Games

Video game manufacturers also take advantage of licensing when creating video games for the child and adult gaming markets. It is much easier to sell video games when they contain recognizable characters from movies, television shows, comics, and cartoons, so video game manufacturers will often license popular characters and use them in new video game offerings. This gives the manufacturer an edge in marketing and selling their new video games to both children and adults.

Licensed products are all around us in the marketplace and provide excellent forms of education and entertainment. The best part about these licensed products is that everyone involved wins. Creators are compensated for their products, manufacturers are able to cut costs and remain competitive, and end users are able to continue buying new products for entertainment and educational purposes.