Dexit Case Study

Leading figures in the hard-right Alternative for Germany (AfD) party are calling for a 'Dexit' - Deutschland out of the EU - vote in the wake of the Brexit victory in the UK.

Branding Brussels a 'bureaucracy monster' the party which trounced Angela Merkel's conservatives in vital regional polls in the spring, AfD heavyweights say it will have bigger fish to fry after the general election in the autumn of next year.

'Next year the AfD will enter the German parliament and Dexit will be top on our agenda', said Franz Wiese, European policy spokesman for the party and an MP in the regional parliament in Brandenburg near Berlin.

Glum: Angela Merkel's conservatives were trounced in vital regional polls in the spring, and now AfD heavyweights are calling for a 'Dexit' from the EU - an exit of Deutschland 

Demand: Georg Pazderski of Alternative fuer Deutschland said 'Germans must decide on staying in the EU. The AfD is the only party which speaks out clearly in favour of them deciding'

Tense: David Cameron arrived in Brussels today for a summit meeting - but will not be allowed to attend tomorrow. Meanwhile German far-right parties called for a referendum on an EU exit by Germany

He was joined by the Thuringian AfD Group Chairman Björn Höcke also demanding a free vote for all Germans on the issue saying: 'I know the German people want to be free of EU slavery.'

And Georg Pazderski of the Berlin AfD, said: 'Germans must decide on staying in the EU. The AfD is the only party which speaks out clearly in favour of them deciding.'

Frauke Petry, the firebrand party leader who caused a storm earlier this year when she called for German police to be authorised to open fire on illegal immigrants trying to come to Germany, has not entered the referendum debate.

But she was nevertheless delighted at Brexit, stating through a spokesman : 'This is the chance for a new Europe, one which maintains partnerships and respected national sovereignties.

'The Great Britain decision to leave the EU is a signal to the Brussels Politburo and its bureaucratic attachments. If the EU does not finally leave its wrong path, and the quasi-socialist experiment of deeper political integration, more European Nations will reclaim their sovereignty the way British are.

Brexit joy: Frauke Petry, the firebrand party leader who caused a storm earlier this year when she called for German police to be authorised to open fire on illegal immigrants trying to come to Germany, said: 'This is the chance for a new Europe, one which maintains partnerships and respected national sovereignties.'

Ms Petry added: 'The Great Britain decision to leave the EU is a signal to the Brussels Politburo and its bureaucratic attachments'

Bjorn Hoecke is demanding a free vote for all Germans on the issue saying: 'I know the German people want to be free of EU slavery' while Franz Wiese, right, is supporting calls for a referendum in Germany, saying 'Dexit will be top on our agenda'

NATIONALISTS IN GREECE ALSO DEMAND EU REFERENDUM

A year ago the Greek people voted against the austerity measures that the Greek government did not want to pass, but the result was ignored by ruling party Syriza. A recent opinion poll found 71 per cent of those who took part had an unfavourable view of the EU - far higher than in the UK.

Greece's far-right Golden Dawn party is calling for a second referendum. Spokesman Ilias Kasidiaris said: 'Finally, the European countries have realised that the EU and the way it works right now is our destruction, both financially and socially.

'The EU, at least when it comes to Greece, causes a bunch of problems. They don't allow us to develop our agricultural production, they don't allow any trade links between us and Russia, they don't allow our economy to get better, and, of course, via the memorandums, there is a clearance sale going on in Greece.

'So, we should re-examine the terms the agreement with the EU follows. Golden Dawn has officially asked for a second referendum about us remaining in the Eurozone or not. After all, Euro is one of the main reasons we have reached to this point. 

'If we come to power, we will definitely apply the 'NO' vote and we will indict the arrangements that the government passed as laws without keeping its voters' opinion in mind. 

'Also, we will call for a second referendum about our stay in the Eurozone.'

'The result would be more exits. At the very least the Brussels bureaucracy must be radically reduced and the centralist regulation craze ended.

'The time is ripe for a new Europe, a Europe of fatherlands, where we peacefully trade with each other, maintain partnerships and respect the will of the national sovereignties.

'One can only warn the German government not to fill the missing British net contribution with German tax money and thus continue the political fallacy.'

Germany's postwar constitution allows for referendums in only two circumstances - if the constitution itself, or if the territories of the states making up the republic, are to be changed.

There was a succesful one in 1951 combining Baden and Württemberg into a single state, and one in 1996 seeking to link Berlin and Brandenburg into a similar entity, which was rejected.

On average there are 200 local referendums each year on matters of policing, enviornment, sanitation, building projects and education.

But the experience of the Nazi manipulation of plebiscites made the postwar constitution writers shy away from them being used at the national level.

'Germany is one of the few EU countries with no experience of national referendums,' said Ralph Kampwirth of the Initiative & Referendum Institute Europe.

'In the Weimar Republic there were two national referendums (in 1926 and 1929); during the Nazi reign, three plebiscites were held, with biased questions and blatant manipulation of results. 

Prisoners look out from behind a barbed wire enclosure at the Dachau concentration camp in Germany in this 1945 file photo. The Nazis abused plebiscites to claim prisoners supported the camps 

Concentration camp prisoners march through a village while on a death march from the German towns of Dachau to Wolfratshausen, April 1945. Hitler abused referendums by claimed that prisoners at Dachau supported them

'A referendum does not mandate an organized political opposition —it simply requires a yes or no answer - one reason why both Napoleon and Hitler were enamored of them.'

Hitler used them to ratify withdrawal from the League of Nations and the Nazis falsely claimed 2,154 of 2,242 inmates at the hideous Dachau concentration camp were for it.

In 1934 came his illegal melding of the offices of President and Chancellor. He received a thumping majority, but of course had no political opposition by then.

The wording was extremely leading. 'The office of the President of the Reich is unified with the office of the Chancellor. Consequently all former powers of the President of the Reich are demised to the Führer and Chancellor of the Reich Adolf Hitler. He himself nominates his substitute. Do you, German man and German woman, approve of this regulation provided by this Law?'

Against this backdrop others believe the party, if it does achieve more than five percent of the vote next year and enters the Bundestag, may settle instead for far-reaching reforms in Brussels.

Swansong: David Cameron arrived in Brussels today for a summit and evening dinner, but will be required to leave before tomorrow when leaders discuss Brexit 

The leadership under Frau Petry says it wants an end to the political aspect of the European project, to turn it back to essentially the trading bloc it started out as, and to achieve a 'common European policy' on refugees which will mean Germany takes no more in.

But referendum or not, the political elites in Germany are horrified at what happened in the UK - and equally horrified by a poll by the respected Emnid research group on Friday whic h showed 29 percent of Germans - one in three- wanting a Dexit vote to take place, if only to find out the 'EU's whereabouts.'

And while one-in-three maybe manageable, a full 67 percent of respondents called for 'radical reforms' of the organization.

Alexander Gauland, deputy leader of the party, did not blame Britain for quitting the EU club, but Mrs. Merkel, stating; 'Mrs Merkel has expelled the British with her open borders in Europe.' His AfD colleague Beatrix von Storch said she cried with joy' at the Brexit vote.

Gauland rejected an immediate AfD campaign to pull Germany out of the EU because of infighting at the top of the party, a recent one percent plunge in its popularity ratings triggered by one of the leadership's anti-semitic views and the fact that the constitution itself would need to be changed in order to allow a vote to go ahead.

But that doesn't mean it will not become an election issue next year; akll political commentators say it most definitely will.

The Pegida group, which has campaigned throughout Germany for the past year for immigration to end, is backing Dexit but its founder Lutz Bachmann has not formulated any strategy or said whether his group will campaign for a referendum on Dexit. 

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BACKGROUND

Company:

Dexit Inc. is a privately owned company formed in Toronto in 2001. The company's goal is to provide customers with convenient and easy-to-use electronic payment system that would be an alternative cash for low-value transactions.

Product and service:

Product/service 1 - On registration by filling a form at the Dexit enabled merchant locations, on the Dexit website, or by calling the Dexit call center, customers will receive a Dexit Radio Frequency Identification (RFID) tag that could be attached to a keychain. Once they transfer funds to their Dexit accounts, they would be able to pay for purchases at participating merchants simply by contact less 'tap and go' communication with the Dexit tag and an RFID reader located beside the till. With the Dexit tag each customer receives a username and a password which they can use to login to their Dexit accounts using the internet and check account balance and transaction details. They can also access their accounts by phone which will offer an interactive voice response system or a live customer service representative.

Product/service 2 - Merchants will be provided with a retailer account, an RFID reader and a point-of-sale terminal. The RFID reader will read the consumer's Dexit tag when placed in close proximity without the need of contact as needed by the debit or credit cards meaning hassle-free fast transactions. They will be provided with a user name and a password to access their accounts via internet. Transaction settlements will be executed on a daily basis by electronically transferring the funds to the merchant's account.

Competitors:

Even though Dexit does not seem to be in direct competition with any one, their competitors include:

Debit and credit card providers.

Retailers that issued their own proprietary payment cards (Starbucks Coffee).

National retailers offering 'gift cards'.

The issues / Problem:

In order to construct a sound marketing plan, Persofsky needs to analyse the market and find market segments in both the merchant side and the consumer side, decide on a target market the Dexit service could best be served and position the service. A decision on whether the launch of the product will be regional, national or Toronto-only also has to be made.

ANALYSIS

Market:

For the marketing plan to be effective, it has to be closely tied with the company's goal, which is, to provide customers with convenient and easy-to-use electronic payment system that would be an alternative cash for low-value transactions.

So we are looking at consumers and merchants dealing with low-value transactions. Dexit expects the average purchase transaction to be about $4, and that customers might use the Dexit service for purchases as large as $25. Dexit's research shows that consumers and retailers has embraced the debit/credit card solution for ease and efficiency in making transactions, yet low-value transactions are made in cash in the most part. This market has not been effectively serviced yet and Dexit has the opportunity to be the pioneer and capture this market.

Dexit's research estimates that the total value of Canadian cash purchases will reach $270 billion in 2003 at an average of $4.50 per transaction. The total value of purchases being estimated at $536 billion, 50.37% of all purchases will be by cash, while debit and Visa/Master purchases will account for only 21.46% and 28.17% respectively.

There are two markets Dexit has to consider, the consumer market and the merchant market, which works hand in hand with each other. Those being directly linked, choosing a market segment for consumers will give the criteria for selecting the merchant market segment.

Consumer market

1. Benefit segmentation

FEATURES ADVANTAGES BENEFITS

Customer account, user name and password Visibility of small value payments

Online top-up of account, check balance Small businesses: Track small cash transactions for business and tax purposes.

Parents: Track children's expenses. More control

Small key tag Easy to carry, stylish Teenagers: fashion component. No need to carry a wallet, the tag can be attached to any item carried all the time (mobile phone)

No-contact reading Ease of use, convenience Teenagers:

Transaction takes less than 3 seconds Shorter queuing time

No pin, no signature Ease of use. Fast, no-hassle transaction saves time

people on-the-go

E-cash No need to carry money

No need to wait for balance

No loose change or counting balance

2. Observable Characteristics

Income: low medium high

As illustrated in the graph, people with low to medium income levels tend to spend a high percentage of their income on low-value transactions while people with high income level spends a lower percentage of their income on low-value transactions.

One lifestyle criterion for the consumers could be whether they are trendy or conservative.

Although Dexit is a debit service provider, it does not use the traditional card and the 'tap-and-go' technology used at least looks more sophisticated. This will appeal to the trendy part of the market.

Majority of the trendy (cool, stylish, up-to-the-minute) segment are teenagers and young adults. So we also might want to consider life stage as a criterion too to better define the market segment.

Merchant market

Dexit's research has identified more than 350,000 retailers in Canada that accepted payment via debit card, some 20% (i.e. 7000 retailers) of which dealt primarily with low-value transactions. Dexit has to extend this research to find the total no. of retailers

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