Question

Pepsi Cola has entered into a long-term contract with a South African beverage business. The contract calls for the South African firm to produce and market Pepsi Cola in South Africa. Pepsi will receive a royalty on each case of soda sold. This is an example of: (Points : 1)
licensing
a joint venture
a foreign subsidiary
foreign direct investment
Best Answer
100% (1 rating)

Answer 1

Answer:

Licensing is the correct answer.

Explanation:

Licensing is defined as a trade agreement between a company that gives another company authorization to manufacture its product by contract and payment of royalties for the use of the right to use the trademark.

Companies generally license: design, patents, trademarks, copyrights and others whose purpose is to assist in increasing profitability and expanding business.

Despite being a very profitable strategy worldwide, product licensing is not crucial to a company's success, despite the ease of marketing a product or brand already consolidated and valued by the consumer, it is necessary to ensure compliance in production processes. and focus on marketing and sales.