When a manufacturer enters into a legally binding agreement for a local manufacturer to oversse the production but the firm retains control over marketing of the product, this is known as:
A) franchising.
B) direct entry.
C) contract manufacturing.
D) licensing.
E) joint venture.

Question

Quizplus · Accepted Answer

This is a clear example of contract manufacturing, where the manufacturer outsources production to a local firm but retains control over marketing decisions. Franchising typically involves a more extensive agreement where the franchisor provides a complete business model to the franchisee, including marketing and operational support. Direct entry refers to a firm entering a foreign market without the assistance of a local partner. Licensing and joint ventures involve different types of agreements where the rights to a product or technology are licensed or shared between two or more parties.

When a Manufacturer Enters into a Legally Binding Agreement for a Local