A brand can be considered the ideal image of products or services in the minds of consumers. A brand helps consumers identify the commercial source of a product (Meffert, 2000, p. 847). This psychological aspect of a brand is called branding. Branding includes information and expectations related to a product or service, and in addition, brands increase value added for products or services and justify higher prices (ArabNews, 2007). The imprint of a brand`s image is influenced by emotions. Thus, the image of a brand is the result of a process of learning and transforming information about that brand (Diller, 2001, p. 941). Branding is the most visible part of a brand for the consumer.
It is determined by the notoriety and uniqueness of a brand (Esch-Andresen, 1997, p. 14). Branding helps consumers create a certain brand image. The brand and its image help consumers justify their buying behaviour, and most consumers are willing to spend more money on products from a well-known brand (Esch-Langner, 2000, p. 411). Since branding is always accompanied by a significant financial contribution (Sattler, 1998, p. 1), branding is important for any type of licensing agreement. Historically, we see an evolution in the use of licensing agreements. In the middle of the 20th to 2. In the 200s, Italian manufacturers used their industrial know-how and craftsmanship to make pre-a-wear collections. At the time, French couture was not only a very expensive and tedious activity, but also, in many cases, unprofitable.
Indeed, the luxury sewing market was not able to produce collections that were not only barely affordable by the noble class, but also had no really narrow appeal to the upper classes of society. However, in this case, fashion brands do not build their own production sites to access these markets, but enter into licensing agreements with companies specializing in the manufacture of these products according to their required specifications. Companies such as Luxottica or L`Oreal are examples of licensees acting as manufacturing service providers. Licensing is, if you prefer, a kind of manufacturing contract that allows manufacturers to fully recognize the value that the brand implies when it is linked to a product. The fourth chapter of this thesis is divided into different parts. In order to provide a fundamental understanding of the evolution of fashion brands and their importance to the fashion industry in general, the first section of Chapter 4 will contain a detailed description of brands and their importance. Chapter 4 also contains an analysis of licensing in the fashion industry.