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International Marketing Term Paper

International Marketing One of the fastest growing and most profitable investment opportunities open to international entrepreneurs today is the possibility of constructing entities known as 'virtual corporations' or 'hollow corporations.' Such companies are designed to capitalize on outsourcers' points of leverage to achieve greater efficiencies, lower costs, and access to resources, thus increasing one's own competitive advantage. In other words, because of one's proximity to particular goods, without much capital, by constructing a 'hollow corporation' one may act as an effective 'middle person' or distribution center for goods. These are usually goods desired in another area of the world that are plentiful near one's own location, but not plentiful in another location. (Commercial Accounts, November 11, 2001, Website Accessed November 29, 2002, (http://www.thepldgroup.com/commercial%20accounts.htm) Of course, the reverse is also true. One can also import goods from abroad, with the intent of facilitating distribution of these goods to a scarce section of one's own country.

The Internet has made such hollow corporations, primarily constructed with the intention of importing and exporting goods, both easier to set up and far less expensive to advertise and promote. The Internet has also enabled such hollow corporations to become more globally based. However, when setting up such a company, designed to...

But always, there must be an acknowledgement that the regulations pertaining to different countries vary. Despite the many individuals whom might have access to knowledge through the Internet, not all will provide an entrepreneur of a virtual corporation with a viable market. Thus the Internet's potential fluidity of knowledge can pose a danger as well as a boon, as agreements have the potential of being entered into too quickly. Ultimately the potential investor must keep a cool head in the face of such a heightened opportunity to enlarge his or her coffers. Also, individuals with whom one does business with must be verified as reliable and trustworthy. This is often a difficult thing to accomplish on an international scale, at an international distance.
A potential international marketer must then survey similar companies in existence on the Internet and also outside of the World Wide Web.

He or she must do so with an eye to ensure that he or she is fulfilling an unmet need to import and export goods. Or, if a need is in fact being met by potential competitors, the goods transmitted ought not being priced at a competitive and relatively inexpensive…

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He or she must do so with an eye to ensure that he or she is fulfilling an unmet need to import and export goods. Or, if a need is in fact being met by potential competitors, the goods transmitted ought not being priced at a competitive and relatively inexpensive rate compared to the rate one is prepared to provide at the onset. Can the goods this potential marketer is considering brokering find a market, and what sort of audience will these goods be targeted at? How much will it cost him or her to target a particular country with his or her business, and will the shipping rates internationally not detract from the 'bottom line'? The potential market for goods is critical because it must be assured that there is a stable demand for the product, or such a demand can be generated over time. To determine this, the businessperson must have a savvy knowledge base of the sort of market that exists internationally for the particular goods he or she will be dealing with.

On a more practical level a businessperson of this virtual business must think of the regulations regarding shipping and handling of particular goods, internationally. What sort of regulations could potentially impede him or her importing particular goods into a particular country? Conversely, will goods that are legal from a particular outside country be prohibited in their transmission to the United States? The European Union, to take an obvious example from the real world, has different regulations containing genetically modified foods than the United States. If a particular hollow corporation was involved in the transmission of a popular brand of chocolate that made use of fruit flavorings from genetically modified crops, these products might potentially be banned from being imported into all EU countries.

A third and equally important consideration is that of payment. If on a small scale, a businessperson may have to ask him or herself, what methods of credit card verification are available? Will the individuals in the country or country that is primarily being dealt with have forms of payment that are acceptable in the United States, such as Visa, MasterCard, or other international forms of credit? Will the exchange rate be favorable or unfavorable to an individual doing business from the United States? On a larger scale, can there be a reasonably equal flow of imported and exported goods by the hollow corporation in all transactions? When, for instance, one's firm has agreed to sell goods to another firm for cash contingent upon their purchase of a like value of goods from that firm in a counter-purchase deal, there must be some level of certainty that the other firm is both solvent and the goods are salable in both markets. (Caeotra and Grahmn, (2001), International Marketing, McGraw Hill, Chapter 18 & Chapter 17)
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