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Licensing
When a company is small it cannot sometimes enter a foreign market. It can sign a licensing agreement with a foreign firm. A license is a legal agreement in which one firm gives another a right to manufacture and sell its products. A company that obtains this right pays the licenser a royalty. Royalty is a certain percentage of the income from the sale of the product.
Business that has patents or trademarks usually can use licensing to protect them against counterfeiters. The licenser gains a successful product and the know-how. The licenser often controls the quality of the goods, which the licensee produces, because high quality guarantees the reputation of the licenser. The licenser chooses the selling strategies because he knows more about how to sell the product in the foreign market.
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Enter, agreement, legal, manufacture, royalty, percentage, income, patent, usually, licensing, protect, counterfeiter, successful, quality, reputation, selling, strategy.
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