In exchange for the access it will have to PFP technology, Dulux will be expected to pay an annual royalty fee. The said fee is expected to be 15% of the profits Dulux rakes in from the sale of PFP paint. Thus with regard to merchandising, PFP Ltd. plans to have a main partnership with Dulux. On the production front, the company will enter into a one year trial period partnership with Dulux for the production of Power Paint. Mass production of the same will largely be dependent on the results of this trial.
Benefits of Partnership
One of the key benefits of PFP's partnership with Dulux is the specialization each partner brings to the arrangement. Currently, Dulux has an elaborate distribution system and sound customer base to guarantee maximum exposure to Power Paint. The company also has extensive knowledge of the industry. On the other hand, PFP lacks all of the above but has the technical expertise to produce and develop highly innovative paint products like Power Paint.
It is also important to note that should there be a need for additional capital to be pumped into this particular undertaking, the two companies...
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