BUSINESS

MODELS:
Additional Topics
and Guests
Module 2
M2 - Content Business
Models
1. Interview with Moncler
2. Licensing
3. Interview with Rainbow
4. Textile Industry
5. Ingredient Brands
6. Interview with Cotonificio Albini
7. Interview with Vitale Barberis Canonico

2
 Interview with
Moncler

Moncler

Interview with Remo Ruffini,

Ceo

3
 Licensing

Licensing

is a marketing and a brand extension tool

wildly used by big corporations,
small businesses and start-ups

Entertainment, sport and fashion are the most visible

areas where licensing takes place
Other areas are:
> Universities
> Colleges
> Cities
> Museums

4
 Licensing

What?

It is the process of leasing a trademarked or

copyrighted entity, known as a “property”,
for use in conjunction with
a product, a service or promotion

Who?

Under licensing agreements

the brand owner, the licensor, gives to another
entity, the licensee,
the permission to use its trademark and style for
production and/or distribution of one/more product
category, within a specific territory and distribution
channel, for a certain duration
The brand owner receives a royalty and
a contribution to communication,
both % of wholesale sales

5
 Licensing

Origin

In fashion licensing started in France in the ‘50’s

to support the extension of the griffe
on non-core categories such as fragrances
> Pierre Cardin
> Dior
> Chanel
> Saint Lauren

In Italy licensing emerged in the ‘70’s as a mean to

help young designers develop and market their
core products on a wider scale
> Gruppo Finanziario Tessile (GFT) with
Armani and
Valentino

6
 Licensing

Eyewear and Fragrances

are the two most important licensed categories

in fashion and luxury

Eyewear becomes very important

mainly for two reasons:
> a medical device, with functional benefits,
transformed into a fashion statement
> very visible on the face

Fashion and luxury brands have only few partners in

eyewear business

The global leader in production and distribution

of eyewear is the Italian company Luxottica

7
 Licensing

Luxottica

was founded in Italy in 1961 and in 2013 has a net

sales around Euro 7.3 billion, over 73,000 employees
and a strong global presence

Luxottica is a leader in the design, manufacture,

distribution and sales of premium, luxury and sports
eyewear with a vertical integration in
manufacturing and retail

Luxottica owns specialty retail chains,

such as Sunglass Hut and LensCrafters

Luxottica has a portfolio of both

house and licensed brands:
> The house brands portfolio
including Ray-Ban and Persol,
> The licensed brands are several from exclusive
luxury to premium segments
Chanel, Giorgio Armani, Burberry, Coach

8
 Licensing

Channels and Licensing Partners in Eyewear

Brands Sale channel Licensee
Balenciaga (Kering) License Marcolin
Bottega Veneta (Kering) License Safilo
Bulgari (LVMH) License Luxottica
Burberry License Luxottica
Chloé (Richemont) License Marchon
Christian Dior (LVMH) License Safilo
Diesel License Marcolin
Dolce & Gabbana License Luxottica
Fendi (LVMH) License Safilo
Ferragamo License Marchon
Giorgio Armani License Luxottica
Givency (LVMH) License De rigo
Gucci (Kering) License Safilo
Marc Jacobs (LVMH) License Safilo
Michael Kors License Marchon
Prada License Luxottica
Ralph Lauren License Luxottica
Saint Laurent (Kering) License Safilo
Tom Ford License Marcolin
Versace License Luxottica
9
 Licensing

Fragrances Category

belongs to the world of beauty,

made of 3 businesses:
fragrance, skin care, and make up
According to Bain & Co. figures,
beauty represents around 20% of the value
of the personal luxury goods market
> Giorgio Armani
> Chanel
> Dior

Fragrances and make-up are the categories more

influenced by fashion trends and
with an high presence of fashion and luxury brands
Product lifecycle is short,
the role of brand image is strong and
they are an impulse buying

10
 Licensing

Beauty Licensing

There are few large companies that operate as

licensee
> L’Oréal
> Coty
> Estée Lauder
> Procter & Gamble

L’Oréal
was founded in Paris in 1935, it is the first group at
global level in cosmetics in 2013 with 28
international brands, 23 billion € in sales with
presence in 130 countries with over 77,000
employees
Brands are organized by distribution channel in 5
divisions among which L’Oréal Luxe manages
important brands
> Giorgio Armani
> Diesel
> Victor & Rolf
> Ralph Lauren

11
 Licensing

Coty

was founded in Paris in 1904,

today has about 10,000 employees, 4.6 billion €
sales and corporate headquarters in New York,
has a wide portfolio of brands offered
> Balenciaga
> Bottega Veneta
> Calvin Klein
> Marc Jacobs

12
 Licensing

*
Channels and Licensing Partners in Beauty
Brands Sale channel Licensee
Bulgari (LVMH) Direct
Burberry Direct
In Asia, Bulgari and
Christian Dior (LVMH) Direct Parfums Givenchy
Fendi (LVMH) Direct use a third party for
Ferragamo Direct their sale channel,
namely Bluebell
Givency (LVMH) Direct
Hermès Direct http://
www.bluebellgroup.com/
Balenciaga (Kering) License Coty en/brands/all/
#filter=.brand_bvlgari%2C
Bottega Veneta (Kering) License Coty +.parfum

Chloé (Richemont) License Coty

Diesel License L’Oréal
Dolce & Gabbana License P&G Beauty
Giorgio Armani License L’Oréal
Gucci (Kering) License P&G Beauty
Marc Jacobs (LVMH) License Coty
Michael Kors License Estee Lauder
Prada License Puig
Ralph Lauren License L’Oréal
Tom Ford License Estee Lauder
Versace License Euroitalia
Yves Saint Laurent (Kering) License L’Oréal 13
 Licensing

Who Does What in Licensing

The licensor is the brand owner and the licensee is

taking care of the execution of the strategy
Licensee Licensor

Develops prototypes
according to licensor’s
Creativity
design direction Product
mood, inspiration and
Management
stylistic guidelines
Manufactures final product
samples

Full control of creativity in

communication strategies
Local media plans
& Communication Media Plan usually defined
PR by licensor, leveraging the
media presence of other
Licensor categories

Develop retail business and
sell to final consumer in
several retail formats
Pricing strategy and
general conditions of sales
Creativity development of
defined tools such as point of
sale materials
Distribution and
Retail
Sometimes licensor defines or
limits some parameters in the
commercial policy
14
 Licensing

Advantages and Disadvantages in Licensing

Advantages Disadvantages

A diminished ability to enforce

Sharing the risks and
quality controls (production, distribution)
costs of
with a potential negative impact on
the new business
the licensor’s reputation and goodwill

Earning initial licensing fee Risk of infringement upon

and ongoing income the licensor’s intellectual property
from royalties (counterfeiting, parallel imports)

Faster market penetration Less opportunities to understand

leveraging on licensee’s the market and the customer
resources and capabilities

15
 Licensing

Key Success Factors of a Licensing Agreement

> Co-makership: creative project (licensor) and

knowledge/experience on the product/distribution
(licensee) and dedicated brand management and
product development teams
> Duration (increasing)

> Professional management (contract,

management of details, approvals)

> Distribution plan

16
 Interview with
Rainbow

Rainbow

Interview with Alessandra Gabriele,

Brand Manager
and
Lorena Vaccari,
Marketing Manager

17
 Textile Industry

Textile Manufacturers

The fashion system can be considered a cluster of

closely interconnected industries.
Often attention is focused only on the end
products, in spite of the fact that these are the
results of a long and developed chain of stages
and activities whose interaction is largely
responsible for the product’s final success on the
market

An issue that textile companies face is that they are

somehow hidden in the value chain for the final
customers but are fundamental to give to the
product
> The right aesthetic
> Value for money
> Fit
> Quality
> Comfort

18
 Textile Industry

The Value Chain

Some textile companies in the past went from

upstream to down stream
> Ermenegildo Zegna
> Loro Piana
The begin as spinning mills and now they produce
the finished product and they are also retailers

Others stay in the B2B, they sell fabrics and not the
final garments. Examples are:
> Albini Group for cotton
> Mantero for silk accessories
> Vitale Barberis Canonico for wool fabrics

Tendency towards vertical integration

> Albini acquired a spinning mill company
in order to control the yarn phase and
started to cultivate the cotton in Egypt
in order to provide the best raw materials

19
 Textile Industry

Revenues and Corporate Governance

Most of Italian textile companies are family run

businesses. This assures investments’ continuity and
know how’s transmission throughout generations

It is a very complex business,

companies do not have the same level of margins
than the companies of finished products
Those companies need to invest a lot in
technologies,
but sometimes the value created is not recognized

20
 Ingredient Brands

Strategy of Textile Manufacturers

Ingredient branding is the strategy than can be

followed to make the value to be perceived and to
get a premium price on the market

Kotler Philip and Waldemar Pfoertsch in the book

“Ingredient branding: Making the invisible
visible.” (Springer, 2010) give this definition of
Ingredient brand as “the technical term for this
strategy of taking the product, originally a business-
to-business product, to the consumer marketplace,
where it gains global recognition”

In other words it is key that the final costumer is

aware of the components that are inside the final
product. Examples are:
> Lycra, Gore-Tex, Swarovski, Vibram

21
 Ingredient Brands

Why Develop Ingredient Branding Projects?

> Create value for the customer: promote value for

money, image and corporate social responsibility
> Educate the customer about the function,
features and benefits and therefore increase
customer loyalty
> Establish a premium price and therefore increase
profitability
> Establish entry barriers in the sector
> Increase brand equity 
 
 

22
 Interview with
Cotonificio Albini

Cotonificio Albini S.p.A.

Interview with Silvio Albini,

President

23
 Interview with Vitale
Barberis Canonico

Vitale Barberis Canonico S.p.A.

Interview with Francesco Barberis Caninico,

Creative Director

24