Licensing

What is Licensing?

An arrangement in which a business grants another business the right to produce and sell its product, or to use its brand name, in a defined market in return for a fee or a royalty on sales. It allows entry to a foreign market with very little capital investment and no local operation, but yields a smaller share of the revenue and hands day-to-day control of quality and brand presentation to the licensee.

This definition is part of the Marketing chapter in Cambridge O Level Business Studies.

Concepts related to Licensing

• royalty
• low capital
• Quality Control