INTERNATIONAL MARKETING PLAN

EXKI CASE

Professor:

Yves Van Vaerenbergh

Group:

Sabastian Espinoza

Theophile Belivier

Quentin Vedel

Angelo Toma

Natalia Olivera

Sabina Sanchez Aguirre

INDEX

1. INTRODUCTION

2. MICROENVIRONMENT

3. MESO ENVIRONMENT

4. MACROENVIRONMENT

5. SWOT ANALYSIS

6. MARKETING OBJECTIVES

7. MARKETING STRATEGY

8. TACTIC

9. CONTROL

10.CONCLUSION

1. INTRODUCTION EXKi is a fast food chain restaurant first opened in Brussels, Belgium. The first restaurant

was opened in 2001 in Port de Namur. They focus on quality and fresh fast food and also offer fresh coffee. Their slogan is “Natural, fresh and ready”. There are 2 options: Eat in or out. The atmosphere of the restaurant is cozy and relaxing.

There are 70 stores around the world and are present in France, Netherlands, Belgium, Luxembourg, Italy and US. From 2011 to 2015, they opened 32 stores worldwide (8 stores per year in average). The last market entered was the US in Manhattan, New York.

Our proposition is to enter the German market, specifically the cities of Cologne and Düsseldorf. The fast food industry in Germany has grown 1% from last year. and there is also an organic movement in this country which represents a big opportunity for EXKi. This paper covers an analysis of the external and internal situation of the company and development of a marketing strategy proposal to enter and position EXKi in this new market. N.B. : In order to learn more about EXKi strategy and expectations for the future, we have carried out an interview with the Marketing Director, Mr. Robin BLONDEL. We often refers to this during this group work.

2. MICROENVIRONMENT

The EXKi food chain came to life due to the gathering of three young Belgian workers

(Frederic Rouvez, Nicolas Steisel and Arnaud de Meeûs) who shared the passion of travelling and cooking. They met in the GIB group, a Belgian conglomerate, consisting of various retail, restaurant and other food chains. To date, they still cover the highest roles within their multinational (Marine Uhissy, 2014). Three belgian friends, with the same passion and the same training, surely influenced management and culture of EXKi over time.

When a multinational company is characterized by a strong orientation toward the national market, which remain the only competitive area, while the foreign markets are perceived as just marginal, it’s called ethnocentric (Perlmutter, 1969). This type of enterprise has an orientation management closely related to the culture of the home country, which is perceived in a better way than the other operating countries. For this reason, the home market often show a little sensitivity to the needs and preferences of foreign consumers. In this kind of business the headquarters play a crucial role as being strategic decision­makers. The cultural landmark is represented by the behavior and communication values and patterns of the home country. Thus, this kind of orientation could lead the way to a more mature form of internationalization.

In this case, EXKi has more than 50% of its restaurants located in its home country (Belgium). 90% of the restaurants that are situated in Belgium are located in Brussels(EXKi, n.d., a). The competition in this city has been high and very diversified. Additionally, Belgium and Canada are the two countries in the world where the most powerful fast­food chain (McDonald’s) does not have the most amount of restaurants, however, Quick has the most number of restaurants in Belgium(Euromonitor, 2014). Nearly 30% of the restaurants are situated in the north of France, between Paris and Lille (EXKi, n.d., a), where the company found fertile soil not only for logistic reasons but even for the consumer behavior, identical to Belgium. More than 10% of all EXKi restaurants are located in Italy. EXKi glimpsed a potential business chance in this country because the competition was not diversified like other countries (no Starbucks, no KFC, etc…)(Innovation Zen, 2007) and the people are accustomed to having an healthy diet.

Country Restaurant Percentage Belgium 39 52% France 22 29% Italy 9 12%

Luxembourg 4 5% Netherlands 1 1%

USA 1 1%

The main strategy is to conquer the healthy customer offering certified organic food, selected and fresh products and transparency in the cookbook. But other new marketing strategies contemplate the approach with children, creating initiative trying to stimulate their appetite through the colours of the vegetables (EXKi, n.d., a). In addition, EXKi give the possibility to eat in a fast food even to

people with particular food requirements, like they cannot eat normal pasta or bread, offering a gluten free products.

According to different departments and goals, the company follows a unified strategy, consisting in quality products and a good location in large cities. Because of that reason, they choose high cost, and therefore, profit margins are low.

As reported by EXKi in his “Re­think 2.0” paper, the company has several partners and service providers, in order to reduce the environmental impact of its activity and be socially responsible.

EXKi participates actively in the promotion of the branded products “Fairtrade Max Havelaar”, which come from fair trading actions in 60 countries, affecting 1.5 million producers. For instance, Arabica coffee is a very unstable product, having no security about producers’ revenues and provoking fatal consequences for them and other economic actors in coffee sector. Fair trading offers producers a minimum price for the long term and bonuses so they can invest in development projects for the community. (EXKi, 2013)

Moreover, it guarantees rights to producers and encourages themselves into cooperatives to strengthen their weight on the international stage. In return, they agree to respect economic, social standards and to use production methods that respect the environment.

Regarding to other service providers, EXKi is partnered with Lampiris, who provide green electricity, gas and CO2logic to offset carbon emissions from their delivery service.

Additionally, a starred Michelin chef creates the dishes according to what vegetables are in season, and the company also owns a partnership with World Wildlife Fund (WWF) and Ecolife to calculate their ecological footprint, analyzing and applying systems to decrease it.

Stakeholders

According to Freeman (1984), “A stakeholder in an organization is any group or individual who can affect or is affected by the achievement of the organization's objective”.

Nowadays EXKi is surrounded by several stakeholders, as following:

Employees

The company maintains a policy of “selection, training, compensation, motivation, termination and review of all staff.” (Exki, n.d., a)

Hence, EXKi not only works on the product quality, but also trains staff to a higher level in The EXKi Academy, establishing a new concept of good customer service. The company focuses on regulation for health codes and inspections, team spirit among employees and strong companionship and relationship. It also tries to create a friendly atmosphere in all of its restaurants.

Shareholders

According to the shareholders, EXKi was founded in 2000 by three former managers of GIB together with the GIB group itself. In 2003 the Dossche brothers joined the company shareholding, being the major shareholders next to the founders.

In addition, EXKi is financed by Triodos Bank, a bank which only finance environmentally and socially responsible projects. (Investment in projects and companies that are genuinely sustainable and involved in the community)

Environmental groups

This is one of the most important stakeholders EXKi has, due to the weight environment has in its marketing strategy. As explained above, EXKi collaborates with organizations such as World Wildlife Fund (WWF) or Ecolife through different aims as identification and reduction of the environmental impact of restaurants, staff motivation and client sensitization.

Suppliers

The corporation has different local suppliers, providing high quality and fresh food, keeping in mind natural seasonal vegetables, which are BIO or Fairtrade, and also not using additives in their ingredients. They are gathered into “hubs”, which are production cores located strategically to supply restaurants within 300 kilometers around. Nowadays there are three hubs in order to provide products to the company: In Belgium, Italy and France.

In the case of the new market, our strategy would be to set a new hub close to Belgium in case that the business does not work as expected and so we could keep it active in some other regions.

For instance, some of the suppliers EXKi has are Café Liégeois, Spa or Tao.

Spa is a mineral water brand from Belgium distributed around Western Europe. In partnership with EXKi, the packaging of this product is made with recycled materials, from the bottle itself until tags.

Customers and Society

According to customers and the society in general, EXKi is focused on specific customer groups: middle class customers being its main target business people, women and students.

The company not only looks for the food satisfaction in its customers, but also a long term fidelity, making society take part on the environmental and sustainable project.

Some of the initiatives made by EXKi is consisted in Introducing the Green Card, a loyalty card that can be used to get free bike tours, initiations or environmentally friendly products.

EXKi immediately became an international company. The first country, after Belgium, where the company introduced its chain was Italy, just three years after it was founded. And after 15 years, it was present in six different countries. As mentioned before, we claim EXKi to still be an ethnocentric company on the right way to become more popular, i.e. a regiocentric company, because it could achieve a prominent position in the international market and gain a solid international culture in the near future. Later on, if the USA project will be successful and with the entry into the new market, EXKi could became even polycentric, with standardized units for each country.

3. MESOENVIRONMENT Consumer behavior :

Germans are very interested in consuming high quality food, especially organic products. Indeed, it is one of the European countries that are leaders in this trend for healthy food, both in consumption and production. German consumers are more and more aware of the dire effects of pesticides and GMOs on health, as witnessed by the 12% increase of acceptance of organic food among young people (below 30 years) in 2012. As a matter of fact, the organic food market should grow by 9% within five years, especially concerning meat, bread, egg and cereal segment. The intense activity of major retailers, such as METRO AG, EDEKA Zentrale AG & Co KG or ALDI Einkauf Gmbh & Compagnie, can also partly explain this evolution in consumer behavior (PRnewswire, 2014).

German government is also very involved in making its citizens healthier. Indeed, German people eat too many calories (an average 3568 calories per day, far more than the daily 2500 calories a man needs per day) and are getting fatter and fatter. For example, the obesity has increased of 4% in 12 years, reaching 23% of the population. Consequently, the government is promoting exercise, healthy food and has launched campaign against weight disorders and diseases as obesity, anorexia, bulimia, etc. (Euromonitor, 2014).

German traditional breakfast is quite different from the one in most Western countries. Generally speaking, French, Spanish, Italian people prefer a “cold” and sweet meal, made of croissants, biscuits, cereals, bread etc. Of course, Germans also consume those goods, but they are used to eating and cooking cheese, sausages and bacon too. Thus, their breakfast is quite close to the New Yorker breakfast EXKi proposes in the US, meaning that it includes both cold and hot, sweet and salty products.

Germans are also big meat consumers, especially pork (it represents an average two third of the global amount of meat eaten every year), with the traditional German sausage, the famous “wurst”. They are also big bread eaters; around 80 kg per person per year in average, that is to say 30 kg more than in UK for example (Euromonitor, 2014).

We can also add that, globally speaking, German young people drink less and less alcoholic drinks and more and more caffeine ones. This fact is particularly true with young people and hipsters, who consume Club­Mate, a soft caffeine drink which is very trendy. It is increasingly popular in Berlin’s night clubs. Another caffeine drink is getting very common in Germany: Fritz Kola. This soda drink is strong in caffeine, and is now competing traditional soda brands.

German workers are used to eat close to their workplace during lunch, at the work canteen most of the time. We can also notice that consumers have less and less time to cook, especially during the evening. Ready­made dishes are getting more and more popular, even if some people still care about having a healthy meal at night, a home­made soup in particular.

Another important fact is the importance for German consumers grant to tea­time break. They enjoy to take their time, seat in a cozy place and relax with a nice coffee, and good pastry (apple strudel usually). This moment of the day is very important, and consumers do not want to ruin it with cheap food and drinks. This trend originally comes from the US, so German often consume muffins, brownies or cupcakes during those breaks.

In addition to our research, American Psychology Association argue that people tend to buy ‘green products’ not for themselves or environmental reason but more for social reason. Since those products often cost more and are of lower quality than their conventional counterparts. People are more likely to give money in a public goods game to preserve the environment when the giving is public and can influence one’s reputation (Griskevicius V., Van Der Bergh B., Tibur J., 2010).

Competitors:

Entering in a new market implies to deal with competitors. According to the Marketing Director Mr Blondel, the company is used to cope competition since its creation. Indeed, most of the time, EXKi is placed in locations where there are lots of competitors. We can take the example of the first EXKi which was launched in 1999 in Brussels at Porte de Namur. It is located close to Fast Food chains like McDonald´s, Quick, Pizza Hut but also close to trendy fast food places like Food Taster or JAT. However, Mr. Blondel said that “people attracts people” and their unique nature helps them to appeal a certain population. But is serving organic and local food still unique in Germany?

The best way to study competitors is to distinguish first the direct from the indirect competitors. We also have to take into account that EXKi offers four different types of meals. Open

from 8:00 to 22:30, there are the breakfast, the lunch, the coffee break and then the dinner (Exki, n.d., a).

First, as Germans are attracted to organic food, a company has already penetrated this market. Indeed, Dean & David, the principal direct competitor has already 35 stores all around Germany. It is a local brand, which is mainly implemented in Central Europe, including Switzerland, Austria, Luxembourg, Germany but also in Qatar. Most of their stores are concentrated in Western Germany; Dusseldorf, Koln, Dortmund, Frankfurt, Bonn, etc. but some are also located in other parts of the country, such as Berlin, Leipzig, Nuremberg, Hamburg, Hanover or Munich. Like EXKI, they propose organic healthy food; salads, hot meals (warm soups, curry dishes, etc.), fresh juices and smoothies, coffee, sandwiches and wraps.

How to be differentiated? Compared to Dean & David, EXKI has a totally different way to serve its clients. Indeed, while Dean & David propose a self service, EXKi has acounter service. In this way, the perception of time of waiting will change. According to Mr. Blondel, the fact that you serve yourself in EXKi stores, as long as you want and then you wait just for paying is much more appreciated by consumers. Indeed, you do not have the impression to wait for choosing your meals, for paying and then for the heating up of your meals. Hence, it is a good way to take advantages of this situation.

Besides, depending on the time of the day, the different competitors will change. For breakfast and coffee break, we will look for companies selling coffees or pastries. It is important to know that 85% of entire German coffee consumption remained at home in 2013 (Euromonitor, 2014), with a constantly growing proportion of single portions and coffee pods like Nespresso. Nevertheless, we can notice that German people are more and more seeking coffee specialties away from home, especially paying attention to the origin, the level of sustainability and fairness of the entire supply chain, and in many case a hint of originality. Even if McCafé and Starbucks maintained the lead in this area, they are reaching only a 5% combined value share. EXKi has the possibility to stand out from this kind of competitors, serving a locally roasted coffee selected from the finestFairtrade Certified Organic coffee beans as we can see below.

Cooking on the spot some local and organic pastries like apple strudle, donuts, or muffins is also a way to be different and to move aside competitors like Dunkin Donuts or Balzac Café. Finally, as mentioned above, EXKi can face an important indirect competitor: roasted milled coffee or pods for coffee at home like Nespresso and Lavazza.

Moreover, there are also competitors who are selling the same type of products, or with the same function. It is the case for lunch and even for dinner because EXKi is open until 10:30 PM. EXKi will have to deal with every fast food chains implemented in Germany and especially in Dusseldorf or Cologne. There are worldwide companies, like McDonald´s, Burgers King or Pizza Hut. But some local fast food can compete with EXKi too, like Space Burger for burgers, Kochlöffel and Ditsch for German specialties, or Vapiano for Italian dishes.

It is also important to report the existence of bakeries and kebab places which are playing a major role as well. Mr. Blondel also told us that they really take into account the restaurants competition during the evening.

4. MACROENVIRONMENT Economic:

The household disposable income is 33,688 US Dollars per capita which is 5,084 more than the average of the Euro Area, according to OECD Data. In other words, Germany has more available money to spend or save in average than other European countries.

Another important factor is that the organic food market in Germany is expected to grow at a CAGR of 9% from 2014 to 2019, meaning that there will be much investment in this sector the following years. The fastest growing segments in the organic food market are bread, cereal and meat.

Figure 1. Household Disposable Income

Social:

There is a positive perception on organic food among German consumers around the age of 30 and the acceptance of this type of food in general is 39%, according to OTA. One of the main reasons consumers buy this type of food is climate protection. There is a negative perception on GMO(Genetically Modified Organisms and pesticides which the organic food market benefits from.

German consumers take into much consideration the quality and long­term outlook of the

products/services. To create trust with the consumer, high quality and reliability is expected. The most popular leisure activity is going to restaurants and cafés. 1 out of 3 consumers eat out one or two times a month, according to Euromonitor.

Technology:

Germany is a world leader in engineering, innovation, science and technology. This includes, physics, consumer products, robotics, energy and others. One of the reason is because of the money spent in the sector Research and Development. They spend around 2.94% of its GDP in this sector according to OECD Data.

Additionally, 85.5% of the population has access to the internet in their household. Which is about 9% more than the average of the EU. However, only 63.1% have mobile broadband subscription. Which is much lower than other European countries like Norway, Sweden and UK.

Political/Legal:

Job stability is supported by different labor laws, meaning that employees are usually hired for long­term. These laws also protect the employees, making it hard to dismiss them. Additionally, there are strong protection policies against patents and trademarks Furthermore, Strict regulations for consumer protection and information. For example, certain standards have to be complied, specifically for food, like labeling.

Demographic : 1

Population: 80,996,685 (2014) Population growth rate: ­0.18% (2014) Major cities (2011)

Berlin: 3.462 millions Hamburg 1.796 millions Munich 1.364 millions Cologne 1.006 millions

Urban population: 73.9% of total population (2011) Age structure:

0­14 years: 13% (male 5,386,525/female 5,107,336) 15­24 years: 10.6% (male 4,367,713/female 4,188,566) 25­54 years: 41.7% (male 17,116,346/female 16,664,995) 55­64 years: 13.6% (male 5,463,221/female 5,574,166) 65 years and over: 21.1% (male 7,468,552/female 9,659,265) (2014 est.)

Ethnic groups: German: 91.5% Turkish: 2.4% Other: 6.1% (made up largely of Greek, Italian, Polish, Russian, Serbo­Croatian)

1 Source: Germany demographics Profile 2014, from http://www.indexmundi.com/germany/demographics_profile.html

Geographic

Germany covers an area of about 357,000 square kms and it’s located in the central part of Northern Europe with Belgium, France, Netherland, Luxembourg, Denmark, Poland, Czech Republic, Austria and Switzerland as its borders. It has a temperate climate and 3 rivers navigable by large, freshwater barges. Its system is a recognized international waterway between Rotterdam and the Black Sea ports. Germany has a highly efficient transportation infrastructure praised in the Global Competitiveness Report in 2011­2012. This includes high quality of roads and airports, the rail and port infrastructure and the communications and energy infrastructure.

Cultural distance

1. Power distance: Germany shows a low power distant score meaning that they dislike control, and leadership is based on expertise. 2. Individualism: their high score represents a direct communication and loyalty based on personal preferences or based on the sense of duty and responsibility. 3. Masculinity:Germany is a masculine society where performance is highly valued and status is often shown. 4. Uncertainty avoidance: Germans prefer to avoid uncertainty; they prefer a deductive thinking and planning rather than inductive approaches. 5. Long term orientation: As a pragmatic country, their traditions can easily adapt to changed conditions, they have a strong propensity to save and invest, thriftiness, and perseverance in achieving results. 6. Indulgence: German culture is restrained. This implies that they control the gratification of their desires and do not put much emphasis on leisure time

5. SWOT ANALYSIS Strengths:

1. EXKi offers a product range with health benefits. 2. It uses organic ingredients and are transparent regarding its cookbook. 3. EXKi offers good customer services. 4. The stores of EXKi have a cozy atmosphere with wifi connection. 5. It is a new interesting and proven business model. 6. EXKi has experience in the industry. 7. It is strongly involved in green and fair activities.

Weaknesses:

1. EXKi has high prices compared to competitors. 2. It works with high costs and low profit margins. 3. EXKi has a low brand awareness in Europe and the world in general. 4. EKi is still an ethnocentric company. Most stores are located in Brussels. 5. They use organic products with no additives. Therefore they only use vegetables that are in

season. 6. EXKi’s supplies are taken from a 300 km radius. 7. They haven’t developed any CRM programme.

Opportunities:

1. Germans have more available money to spend or save in average than other European countries.

2. The organic food trend is growing in Germany. There is a negative perception on genetically modified organisms and pesticides.

3. Germans value the quality and long­term impact of the products and services. 4. The most popular leisure activity is going to restaurants and cafes. 5. German young people like caffeine drinks. 6. Germans eat in places close to their workplace. 7. Germans like to relax during their tea time break. 8. The Government is promoting healthy food. 9. There is a big urban population, Cologne being the 4th biggest city. 10. A 41.7% of the population is between the ages of 25 and 54. 11. Germany is a neighbor country of Belgium. 12. Germany has an area for winter sports. 13. Germany has a highly efficient transportation infrastructure.

Threats:

1. There is a strict regulation for consumer protection and information. 2. The cost of transportation is higher in Cologne than in Brussels. 3. Restaurants prices in Cologne are lower compared to Brussels. 4. Big chains as McDonald’s are focusing on healthier food and quality. 5. 85% of coffee consumption remains at home.

6. German taste differs from Belgian taste.

Confrontation matrix

STRENGTHS 1. Offer high healthy products,

with organic ingredients 2. Cozy atmospheres in stores 3. Involvement in green and

fair activities 4. Transparency regarding the

ingredients

WEAKNESSES 1. High prices compared

to competitors 2. High costs 3. Low brand awareness 4. Ethnocentric company 5. Limitations in supplies

OPPORTUNITIES 1. High purchasing

power 2. Growing organic

food trend 3. Germans value the

quality and long­term impact of products.

4. Germany is next to Belgium

5. Germans have lunch in stores close to their workplace

6. Germans like relaxing in their coffee break.

SO strategies o As German population has a

high purchasing power, they will be able to purchase our offer of healthy products, with organic ingredients. (O1, S1)

o Position ourselves as store with fresh, organic, healthy food. (O2, S1)

o Maintain the cozy atmosphere of EXKi stores with sofas and wifi connection. (O6, S2)

o Inform the customer about green activities. (O3, S3)

o Locate stores in business areas. (O5, S1, S2)

o Offer coffee­pastries combos for breakfasts and evenings. (O6, S1, S2)

WO strategies o Have a differentiation

strategy offering high quality products with premium prices (O1, O3, W1)

o Develop public relations with businesses on the area. (O5, W3)

o Advertise the use of products from the season: they are organic, free of additives. (O2, O3, W5)

o Enter the german market through Cologne and Düsseldorf that are within the 300km radius permitted to get supplies. (O4, W5)

THREATS 1. Strict regulation for

consumer protection and information

2. Restaurant prices lower than in Brussels

3. Increase of competition

4. Coffee is mostly consumed at home

5. German taste differs from Belgian taste

ST strategies o Inform about the ingredients

used (in store and in the website) (T1, S4, S1)

o Emphasize the quality of the products and service to differentiate from competitors. (T2, S1, S2, S3)

o Launch a new product: coffee bags to take home. (T4, S1)

WT strategies o Open 5­10 stores in Germany to create economies of scale. (O4,2W2)

o Develop promotion campaigns (T3, W3)

o Work with a local chef to adapt the menu to german taste. (T5, W4)

6. MARKETING OBJECTIVES Based on the previous findings we establish the following objectives:

1. Open 5 stores in Germany by the end of 2017. 2. Get more than 100 000 likes on the Facebook page by 2017 3. Obtain 5% of market share by the third quarter of 2016. 4. Gain 20% of brand awareness by 2017. 5. Establish a HUB in Germany by 2019. 6. Enter to Berlin’s market by 2020.

7. MARKETING STRATEGY Target Segment:

It is now important to study the strategy of EXKi about the targeting and the positioning of their market.

During the interview, Monsieur Blondel described us four different segments they are targeting. The first one is the Business people who can use EXKi for different purposes: for lunch but also for a meeting place after the work. The second one is the shoppers. Indeed, in a commercial area, it can be interesting to do a break around a coffee and a fresh pastry. It is the same situation for another target, the students. Finally, it is major to attract the locals.

The federal Ministry of Food and Agriculture’s annual Ecobarometer released in August 2013 showed that young people were increasingly buying organic groceries, with shoppers under 30 the most likely to do so. We can get the example of EXKi store in Paris, close to Bibliothèque François Mitterrand, which is in the middle of business offices, commercial shops, habitations and of course the biggest national library of Paris full of students. Thus, it is the best place where EXKi could be set up.

Positioning:

With their 35 stores all around Germany, the direct competitor Dean & David is found almost everywhere. EXKi has to establish a positioning strategy to deal with this constraint. It will keep its initial positioning which is serving ‘natural, fresh and ready’ food. We can also imagine that to be distinguished with its concurrent, EXKi can add a special characteristic to its slogan: a local side. Indeed, according Mr. Blondel, it can be an attractive criteria to cook some local dishes prepared by a local chef with local and natural products. They have experienced this idea in New York and it is a real success.

Besides, as mentioned earlier and in the slogan, the service is also unique by its quickness. The customers can eat organic and local food quickly and without an important waiting time. This is the advantages of a self service, which is not the case in Dean and David Restaurants.

Entry Mode:

EXKi has two options to penetrate a new market. Either it can enter on its own and export its product there (direct option), or it can use a franchise (indirect export).

Both have advantages and drawbacks, and the choice will depend on the objectives and the strategy EXKi wants to adopt to get into the German market.

If EXKi goes there on its own, it will have a total control on the products, the management, etc. The level of control is lowest in the case of licensing and franchising and highest in the case of wholly owned subsidiary. In the latter, control over day­to­day operations and certain strategic decision may be delegated to the foreign subsidiary (Hill C., Hwang P., Kim C., 1990). The feedbacks will be better, more accurate, and the relationship with the consumers will be more direct and better too. Plus, the profits will be potentially higher. However, this strategy requires more capital and more time. EXKi will need a huge amount of information, so it has a complete and reliable view of the situation about German market. It will also imply organizational changes, a

redefinition of EXKi model and the creation of a new supply chain. Last but not least, it will be a riskier approach ; if EXKi fails, they won’t have any kind of intermediary firm to protect them.

Otherwise, if EXKi decides to adopt the franchise option, it will be a very fast way to access the German market. It can focus on production, and delegate other aspects to the other company. The financial commitment is very low, and so does the financial risk. Managing a franchise is easier too ; EXKi will only have to deal with a few, or even one single privileged interlocutor(s). It saves stress, and it simplifies the relationship the management has with the stores abroad.

But this indirect approach also involves drawbacks. The level of control of some important aspects is low. EXKi will have to delegate sales, marketing and management aspects in particular. There is also a risk to choose a disappointing partner, that will ruin the penetration of EXKi in this market and tarnish the international reputation of the firm. Benefits will be lower too, so EXKi may virtually lose some income.

After considering all those aspects, we recommend for EXKi to opt for the direct approach.

Indeed, EXKi has decided that it will set up stores in cities likeDusseldorfandCologneso it can use its Belgian Hub. As a matter of fact EXKi needs to choose an option that let it full control over its providers. Plus, German habits concerning food are a little different from the ones in Belgium or France for example, so EXKi needs to adapt its marketing and its offers to this new type of customers. Also, German people are quite picky concerning the quality of the moment the will have in store to eat, especially during the coffee break in the afternoon. A direct export enables to build a close relationship with customers and to have high quality feedbacks from the stores, so EXKi can correct what’s wrong in a fast and effective way.

8. MARKETING TACTICS: Standardization vs adaptation

Product:

Based on EXKi’s strategy of having a 10% of adaptation, we propose to maintain the concept of offering fresh and quality sandwiches, salads, juices, fruits, coffee, hot plates and desserts. This will be accompanied by a fast and friendly service, in a cozy atmosphere with light colors and comfortable chairs and sofas.

To customize this concept to the German market, the head chef will work with a local chef and based on the 400 kinds of ingredients EXKi works with, they will develop new products and flavours more related to german taste. This new menu will be adapted to the different times of the day. For example, for breakfast and coffee break we will offer cold cuts of quality pork (ham) and apple based pastries like the Apfelstrudel. For lunch, we will include in our menu products like würst(sausage), schnitzel(breaded pork), and add mild curry to certain products.

It is important to keep innovating during the year and adapt to the season. For example, in summer we can offer chocolate and coffee frappes, fresh apple juices and increase the offer of fresh fruits. While in winter, we can increase the offer of pastries, hot chocolate and add Flädlesuppehot (soup with pancake garnish) and Glühwein (mulled wine).

To know the amount of we should offer from each product we are taking Dean & David’s sales mix as a guideline.

Source: http://www.hitzberger.com/assets/files/pdf/fse02_GreenFastFood.pdf

Price:

The pricing strategy we are using to enter the new market is competition based pricing. The prices will be similar but with a slight increase to ensure the prices go along with the positioning: a high quality offer. The main competitor we are basing our prices is Dean and David. Some of the prices of this competitor are the following:

Dean and David:

Caesar chicken salad 8.45 euros

Fruit smoothie 3.95 euros

Menu: Yellow thai curry + side salad + Coca­Cola 8.95 euros

Place:

The food offered in EXKi is made of natural and fresh products. To be able to do that is important that the supplies are local and therefore, EXKi follows a strict rule of getting their supplies from a radius of 300 km. This is why we have chosen Cologne and Düsseldorf, that are around 200 km away from Brussels, as the most suitable cities to enter the German market.

It is important that the EXKi stores are located in areas with a lot of circulation during the day. We have 3 location propositions for Cologne: the first is Schilddergasse, the centre; the second is Mediapark, a business area with a cinema close to it; and finally, Zulpicherplatz, a student area. In the case of Düsseldorf, we propose to open a store in Königsallee which is a very frequented areas with many expensive boutiques and banks around; and Bolkerstrasse, the most frequented street in Old town.

Promotion:

To make EXKi known in this new market we would use the promotion methods that are usually practiced by company. During construction, big boards will be placed around the restaurant to create awareness and curiosity. Before official launch, we will also organize a private event with all the stakeholders invited such as the press. And finally during the first weeks after the opening, there would free tasting inside the store. Apart from the tasting, we will give out flyers in specific locations where our Facebook page is showed and if they join they get a free small coffee at the location.

We are also proposing to use different methods and actions that EXKi is not used too to gain high brand awareness and create big expectations. Two weeks before launching, we will locate fake large carrots with our logo in strategic locations such as metro stations, supermarkets, universities, gym, etc. Also on the carrot will be a QR Code where the people that pass by can scan it and get a 20% discount at the store.

We will also organize “food truck tasting” days before and during the first days of our launch in which EXKi will visit the strategic places and offer tastings of their different products like coffee and sandwiches. A side from the food truck tasting, another action we will take is to put stands with a modern­cozy design and our logo inside business buildings and universities offering about 4­5 products including coffee and small sandwiches. The coffee cups at the food truck tasting and stands will have a QR code that directs them to our Facebook page and gives them a discount at the store.

9. CONTROL In the case of this company, the Customer Relationship Management (CRM) system is not

implemented due to the high cost. In this manner, EXKi only cares for complaints, being the marketing director the one who receives and analyzes every complaint of any store.

Moreover, the company uses several monitoring and reviewing systems to achieve the objectives for any country in which is working and taking into account that every decision must be backed up by controlling.

Some examples of this system that actually implemented are: very serious studies about investments, statistics about turnover, sales, average spent, and even the mystery shopper. These indicators must be analyzed monthly with a more accurate annual audit to measure and control our activity confirming the process of our business in our targeted countries.

The entry on the German market can be monitored mainly by behavioral metrics, such as social networking (likes on Facebook, twitter conversations, hashtags, followers…), measuring the evolution of total sales, market share, number of complaints, number of new customers and customer satisfaction. Their system of mystery shopper can be followed in Germany, not only one every two years as the company is doing nowadays, but more often to control exhaustively the daily performance and the restaurant environment (customers, employees, product placement in the store…). Specifically, the company can take a timeline from about one month before entering the market until one year after being working in this country, and so they can measure the progression and evolution of this process.

One month before Every year during first years ­ Collect data about German

population ­ Conduct research on customs and

behavior ­ Analyzing best the location

opportunity

­ Conduct two or more survey on the customers

­ Analyze carefully mystery shopper reports

­ Implement new studies and statistics

Once established what we need to measure, recent studies suggest that before to draw out any conclusion about the trend of the market, managers need to understand the importance ofdata equivalence. Literature use to divide this concept in three different phases. Construct equivalence signifies whether a given concept or behaviour has the same meaning and function from culture to culture (Kumar, 2000). Measurement equivalence refers to the relative comparability of the wording, scaling, and scoring of constructs across cultures (Craig & Douglas, 2000; Mullen, 1995). Data collection equivalence relates to the comparability of sampling frames and the techniques used to gather data in each culture.

In the EXKi case, we decided for some behavioural metrics, in particular when we go to compare the results from the new market (Germany) to another one, we should consider:

Social networking: the relation between total population and number of users of social networks; the average age of the users

Total sales: the high cost of living for each location; average salary of population Market share: how many restaurants will be active in Germany; where exactly they will be

locate (centre, commercial complex, touristic place); how big they are Number of complaints: psychological studies on the population; training and experiences of

employees Number of new customers: how many years EXKi is active in that country; how much

money are invested for advertisement Satisfaction: correct interpretation and translation of survey; survey relative to the same

period for each market

9. CONCLUSION

EXKi is a fast­food company that focuses on high quality organic food and drinks in a cozy atmosphere. It focuses on the quality of service and customer satisfaction. We have chosen to implement EXKi in Germany because it is a mature market that has a very big potential concerning organic food. EXKi will have competitors there, but its model is slightly different, and the market is growing and still has a great potential.

Plus, the proximity of this country enable EXKi to open new stores without opening a new HUB or creating a new supply chain. Thus, we have chosen to opt for a direct export model, so EXKi can benefit from this existing structure, and have a full control on the products it proposes.

We have decided to set new stores in Western Germany, close to the existing HUB EXKi has in Belgium. We have finally chosen Dusseldorf and Cologne, because of their location and because the consumer habits there are close to the targets of EXKi. We have also chosen places in those cities that are consistent with EXKi positioning.

EXKi will have to adapt to German habits concerning food and drink, by proposing pork, caffeine drinks, and all the products that have been discussed before.

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