Check the below link for setting up Salesforce entitlements.

https://help.salesforce.com/HTViewHelpDoc?id=entitlements_setting_up.htm&language=en_US

To implement Entitlements, below are important steps

1. Enable Service Cloud

2. Choose the Entitlement Model

i.   Entitlements Only
ii.  Service Contracts with Entitlements
iii. Service Contracts with Contract Line Items and Entitlements

To setup Entitlement Management, use the below link

https://www.infallibletechie.com/2013/06/entitlement-management-in-salesforce.html

Cheers!!!