Kitchen magazine plans to license the use of its name by a line of cookware. For a magazine, licensing the use of its name for products involves some danger, since if the products disappoint consumers, the magazine's reputation suffers, with consequent reduction in circulation and advertising. However, experts have evaluated the cookware and found it superior to all other cookware advertised in Kitchen. Therefore, Kitchen can collect its licensing fees without endangering its other revenues.
c. Makers of cookware will not find Kitchen a less attractive advertising vehicle because the magazine's name is associated with a competing product.
Premise 1: Kitchen magazine plans to license the use of its name by a line of cookware
Premise 2:.......... since if the products disappoint consumers, the magazine's reputation suffers, with consequent
reduction in circulation and advertising Kitchen's revenue will arise from
1) licensing 2) advertisements from makers of cookware 3) circulation
Premise 3 : However, experts have evaluated the cookware and found it superior to all other cookware advertised in Kitchen.
(no risk on licensing since it is evaluated by experts)Conclusion : Therefore, Kitchen can collect its licensing fees without endangering its other revenues.(
If Kitchen license its name then other cookware producers will not give adds, thus the revenue will be lessen. )