3. 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.
4. 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
5. 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)
6. 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.
7.
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.
8. 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.
9.
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
10. 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 a counter 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 finest Fairtrade
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.
11.
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.
12. 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.
13. 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
14.
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
15. 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.
16. 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)
18. 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
19. 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 like Dusseldorf and Cologne so
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.
20. 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:
21. 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.
22. 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.
23. 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 of data
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
24. ● 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
25. 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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