Question

The term royalty is closely associated with ________________.

• A. licensing
• B. direct exporting
• C. contract manufacturing
• D. piggybacking

Answer 1

The correct option is A licensing

• Licensing is the process of permitting another party in a foreign country to produce and sell goods under your trademarks, patents or copy rights in lieu of some fee is another way of entering into international business. Licensing is a contractual arrangement which comes with a fee called royalty.
  
• It is under the licensing system that Pepsi and Coca Cola are produced and sold all over the world by local bottlers in foreign countries.