Sports Licensing.docx - Sport Licensing and Case Study of...

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Sport Licensing and Case Study of the Reebok Bike Business Written Report Gussie Busch and Jordan Chambers Prof. Gashaw Abeza Southern Methodist University Abstract
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This paper explores sport licensing and internationalization as well as a case study on the Reebok bike business. There are several aspects of internationalization that will be discussed along with the expansion of the details of sports licensing. Additionally, the Reebok bike business will be examined and discussed. The case study explores the different types of licensing agreements Reebok may take and analyzes the strategies of internationalization. Finally, the three licensing options will be discussed in relation to Reebok’s bike business. Licensed Sport Merchandise Licensed sport merchandise is available in almost every kind of store one may walk into
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on a daily basis. Forms of said merchandise can range from a jersey to home decorations to athletic equipment. Licensed merchandise is the result of a licensing agreement made between two parties. A licensing agreement is a contractual agreement that allows one organization to use the name, patent, logo, trademark, or any other entity of another organization in exchange for a royalty or fee (Argan & Ozer, 2006). The licensor owns the trademark and leases the rights to the licensee. The royalty rates usually range from 8-20% and are calculated from revenue sales and a payment plan that is defined within the contract (Investopedia). Reebok Background and Decision to Enter Bike Industry In the late 1980s Reebok has been a leader in the global fitness market with its rise in dominance in the 90s. The main product that shot Reebok to the top of the fitness market was the Princess Aerobic shoes. Reebok was constantly looking into marketing options that could extend their fitness brand and reach new consumers. Reebok began to explore the competitive cycling market by beginning with small sponsorship programs. They launched the Plymouth/ Reebok cycling team. This targeted performance cyclists that were served by the Independent Bicycle Dealer distribution channel. Typically Reebok’s strategy is to focus on fitness and health consumers than sport performance consumers, which is Nike’s strategy. However, Reebok
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