Section III.

Management

6. Entry Mode (Valeria & Adwoa)

Are direct sales the optimal market entry mode, or a joint venture, franchising, wholly owned
subsidiary, or a partnership with the local distributors, government agencies, or other forms
would be more effective? If a partnership with a local distributor, retailer, or company is
advised, what companies would be the best candidates for such partnership (list at least
three, with contacts, descriptions, and tips for how to approach them).

A partnership could be a suitable entry mode for our needs. It’s less risky because you can
use the knowledge of the local distributor that you want to contact. Using a high-level local
distributor like British Council or Ofsted with a position and reputation, is useful to
understand well the market, also because Ofsted could help us to select trial schools to start
the project . If you need any other information about partnership from a fiscal point of view,
please go through the website of UK Government. There are details about costs and
bureaucratic things to do to start a partnership.
About the companies considered to start a partnership , the best could be British Council and
Ofsted. But why Ofsted and British Council?

Let’s go in deep with British Council:

British Council is an international organization and their main goals are cultural relations and
international opportunities, according to their short description in their website. So, if we
consider that the aims of our educational project are internationalization, team working and
increase the ability to work with other cultures I think that they could be really interested in
cooperate with us and help us. Working with British Council could be really useful and
helpful also on a future view. They have lots of contacts with foreign, so this partnership
could help also in expanding and considering other countries if in Uk our educational
program works well.
But, how to contact them?They have a clear and immediate website and there is a specific
page in which you can send your request. In contacting them we have to send a specific
inquiry in which we explain our project and all the core values that are compatible with the
goals of the organization.

What about Ofsted?

As we know, Ofsted is the Office for Standards in Education, Children’s Services and Skills.
A part of his activities is represented by evaluating schools if they respect all standards
according to their ranking; so, a school high evaluated according to their criteria is
considered at a high- level. Being a high-level school according to Ofsted, represents a
guarantee of excellence.
If we consider that Ofsted has a reputation, a knowledge of every school in every city,in
every area of the country (United Kingdom) a partnership could be really helpful for our
educational program for many reasons.
Firstly, as a foreign company, we don’t know schools that have an high level of knowledge
in Business. We studied the school system in UK and there is an elective course called
Business Studies . This aspect could be a first contact point to select schools in the country.
Secondly, Ofsted could use their reputation in a promotional strategy to help us to be know in
United Kingdom.
But, how to contact this Office? They a clear and immediate website with all the information
about how to contact them and we have to be clear and express all the core value of the
project.
Considering that United Kingdom is a cosmopolite and international reality, our project could
have an high reply.

The third and last company that we could suggest as a general guideline is a publisher for
schools. Someone that publish material for schools , secondary and high schools has a great
knowledge of educational programme and argument that kids study during the school year.
An example could be Bloomsbury also because has an office in New York and it could be
immediately reached and , we don’t need to use contact form in this case; with a business
plan in which we express all about our educational programme, values,goals, how is
structured it, they could be really interest in help us.

7. Payments (AJ)
What is the best way to collect payments and move money across border when doing
business in the proposed market, particularly with respect to transaction fees, currency
exchange, and taxes?

Since we are dealing with international transactions, the most efficient way to collect money
would be online payments….
Transaction fees from transferring money from the UK to the USA = …
Currency Exchange =
Taxes =

8. Pricing (Akshai)
What is the optimal way to charge for the program like X-Culture Kids? Should it be a fixed
price, or a different model would work better (subscription, membership, group pricing,
repeat customer discounts, installment payments, etc.), and corresponds well with the
marketing strategy suggested earlier.
Pricing of a product depends on variety of factors-

1. Type of Model
2. Type of Selling
3. Product type
4. Maturity of the Domain
5. Price Objective
6. Competitors prices

As X-Culture Kids marketing mix will be directed towards Institutional selling to various schools and
to the parents/students. For each end customers we cannot devise a single model as the
institutional selling will result in conversion of multiple individuals (kids) and the marketing mix will
constitute of benefits for both the institute/teachers and students while the marketing mix for
individuals (parents/students) will constitute of benefits of the program for students.

For Institutions/Teachers/Instructors: The appropriate pricing would constitute of students opting

for a elective/subject, as the fee will cover all the students (Considering there are 40 students on an
average for a single elective) the price could range between 350£ to 500£ (8.75£ to 12.5£ per
student)

For Parents/Students: As this would be individual enrollment, the pricing should be considerate of
factors that a student may choose to leave the course if it’s a subscription-based model. However,
for initial penetration we need to keep the payment options flexible thus the model adopted should
be subscription based and onetime payment with reduced fee for onetime payment. Subscription
fee: 5£ for initial 15 days and remaining fee as a single payment and Onetime payment fee of 25£ -
35£.

As X-Culture Kids is a new product, we can effectively pursue two drastically different strategies
based on the end results we want to achieve.

1. Skimming
a. This would be an appropriate strategy for X-Culture kids as the already have an
established brand and can derive some value to its sub brand.
b. As educational programs are still in the early stage of product life cycle and it being a
intangible product, X-culture would be establish itself as a premium product with higher
perceived value to the customers which could be substantiated by satisfied customers.
c. It will allow X-Culture kids to enter into a new market with a higher price, but as the
price of educational programs is closely associated with the perceived value to the
customers, X-Culture would be able to convert the leads which are less price sensitive.
2. Penetration
a. This is a low-price strategy where the number of enrollments would be higher
b. It poses a threat of diluting the brand of X-culture and may be perceived as an inferior
program as compared to the competitors
c. The long-term ramifications could be higher as the perceived value of the program could
be affected and it may push away the target consumers

Recommendation:

Keeping in mind the various factors affecting the pricing of the product, X-Culture should go with
separate models for instructors and individual students. The pricing should be comparable to online
courses such as Coursera ranging from 10£ to 15£ for individual students. The pricing must be
premium to increase the perceived value of the course and at the same time give flexibility to the
students to opt for either weekly subscription initial 15 days and remaining fee as a single payment
option and a one-time payment option. 15 days subscription will increase the logistical problem of
assigning team new members if the students opt out of the program, but it will increase the trial
enrollments in the initial phase of X-Culture kids launch.