A move by Mack Trucks Inc. to lend its brand name to a manufacturer of lawn mowers is part of a growing licensing program that could extend into construction equipment and restaurants.
Mack announced an agreement last month that allows Ariens Co. to sell a line of Mack-branded consumer lawn, garden and snow-removal equipment.
Ariens, of Brillion, Wis., will sell the Mack-branded equipment through as-yet unannounced retailers beginning next year. The company will continue to distribute Ariens-branded equipment through dealers.
The sale of Mack-branded clothing and other goods has grown fast since 1990, when the wholesale value of the business was about $500,000.
This year, the value of Mack-licensed sales to retailers will be in the $15 million to $20 million range, said Randy DeLillo, Mack's manager of corporate stores and licensing. Mack receives a royalty on the wholesale business.
Licensing lets Mack, a heavy truck maker in Allentown, Pa., increase revenue by extending its brand into new markets without committing to big, upfront investments or product-development costs.
For the Ariens deal, Mack worked with New York-based Leveraged Marketing Corp. of America to identify possible partners in the lawn-equipment industry. Ariens manufactures riding and push mowers, rotary tillers, snow blowers and garden tractors under the Ariens and Gravely brands. The company has a good product but needed a brand name with greater consumer recognition to expand its business through national retail chains, DeLillo said.
'We have strength of brand and they have quality,' he said. 'It makes for a perfect marriage.'
Another industry in which Mack may consider licensing its name is construction equipment. Putting the Mack brand on back hoes and front-end loaders would be a natural for Mack because its trucks traditionally have been popular with construction companies. Mack also is considering a licensing deal in the restaurant business, perhaps lending its name to a Mack-themed eatery.
Licensing the Mack name, its bulldog symbol and the 'built like a Mack truck' phrase is not without risks. An unsuccessful deal could weaken Mack's appeal with other potential partners, and shoddy quality in a licensed product could hurt Mack's image.
Still, Mack is pursuing the licensing business because it brings in new revenue and builds name recognition. And, as Mack creates more licensing deals, its legal rights to the name are secured in ever more new markets, DeLillo said.
Said DeLillo: 'As we use our trademark more consistently on products, it allows our legal department to defend it.'