Pepsi provides Heineken with its formula or agrees to supply the cola syrup and Heineken adds carbonated water,packages it in appropriate containers,and sells it in the Netherlands.Pepsi cannot enter into a similar agreement with another firm to sell Pepsi in the Netherlands,and Heineken cannot alter the product,nor can it begin duplicating other Pepsi products (such as Lays Potato Chips)without a separate agreement.This is an example of:
A)Franchising.
B)Exporting.
C)Licensing.
D)Contract manufacturing.
E)Management contracts.

Question

Quizplus · Accepted Answer

This is an example of licensing, where Pepsi allows Heineken to use its formula and brand name in exchange for payment. The restrictions on Heineken altering the product and duplicating other Pepsi products without a separate agreement show that it is a licensing agreement, rather than one of the other options listed.

Pepsi Provides Heineken with Its Formula or Agrees to Supply