Originally posted 2008-09-11 15:37:14. Republished by Blog Post Promoter
When it comes to manufacturing, it’s all about price, right? Brand management and licensing gurus Oliver Herzfeld and Richard Bergovoy beg to differ, writing in Managing Intellectual Property that a casual attitude toward offshore manufacturing could end up costing a fortune in brand equity:
In a brand owner’s worst nightmare, goodwill that has taken years to generate can disappear in a flash with publicity about wrong-doing in a factory halfway around the world, which is contracted to manufacture goods by a licensee. Such wrongdoing typically takes the form of unsafe products or unfair labour practices. While legal liability risk may be low, brand damage can be high. Victims include the Kathie Lee Gifford apparel line licensed to Wal-Mart as well as toy company Mattel. But brand owners can limit their damage caused by incorporating safeguards in the licensing agreements and manufacturer’s agreements. These should set out the responsibilities of both the manufacturer and the licensee. They should also include provisions on what to do if and when any problems arise. Taking these steps at the contractual phase should help minimize damage to your brand.
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