Project Business Exam Questions

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country. He regards that entry modes help businesses to determine goals, resources and policy to channel their international activities toward a sustainable international expansion.

Functional position

Functional position in the market solve problems, provide benefits to customers and get favourable perception by investors and lenders.

Constructivistic logic

Constructivist approach - participate in the construction of the scope and rules of the game.

Deterministic logic

Deterministic approach – The project is going to happen! Preactive preparations for upcoming projects (can be unknown at the time). Social continuity by contacting key actors in the milieu directly/indirectly to the customer. Continuity with the customer based on durability and repeability of social and economic exchanges.

Customer Relationship Management (CRM)

The central objective of CRM is to maximise the lifetime value of a customer to the organization.

The most commonly mentioned CRM benefits are:

● improved ability to target profitable customers

● integrated offerings across channels

● improved sales force efficiency and effectiveness

● individualized marketing messages

● customized products and services

● improved customer service efficiency and effectiveness

● improved pricing

Essay questions:

Discuss the role of offsets in project sales & marketing.

An offset agreement is an agreement between two parties whereby a supplier agrees to buy products from the party to whom it is selling, in order to win the buyer as a customer and offset the buyer’s outlay. Generally the seller is a foreign company and the buyer is a government that stipulates that the seller must then agree to buy products from companies within their country.

Offsets are powerful marketing tools to motivate the purchase, by showing and giving additional advantages for the purchasing country or company. They are generally related to huge amounts of public funds used on a project. There is a big political motivation especially in democratic country to have some of the benefits of that trade stay inside the country. Naturally the cost of the offset is included in the price of the project.

Offsets can be direct or indirect. Direct offset is directly related to the sold project. The initial producer might give the right to produce some parts or even the whole product in the company/country which bought the end product. Indirect offsets usually require the producer to buy goods from the buyer which are not directly related to the project, such as materials or other goods.

What dimensions constitute the project offer and what is their role when marketing an international and complex project (such as military system)?

Four dimensions of an Offer

● technical dimension

● financial dimension

● political dimension

○ hidden project network (citizens, assosiations [t.ex. Greenpeace], opponents)

○ formal and informal accords (t.ex. details on local investment)

● societal dimension

○ environmental and social considerations in the offer

○ sustainable development etc.

Dimensions can be used to get support from different groups of stakeholders by also offering to improve something that is not directly asked in the bid. This is most relevant when dealing with governmental and public organisations.

Role:

● Broadening the offer

● Gathering support from different stakeholders (politics, society, environment etc.)

Tools:

● Countertrade

○ barter

○ buy-back

○ debt or switch account

○ counterpurchase

○ offset (usually military)

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Discuss the concept of business model and explain how it is related to project marketing?

What are the challenges and benefits of implementing a CRM system in the context of project business?

In B2B context, the cost of acquiring a new customer are often very high

● The situation is more complex than in B2C context, since different types of customer/partner relationships need to be managed

● Value can often be created through co-operation between supplier and customer

Project business is discontinuous by nature

● Customer relationships decay during long periods of inactivity

● Tools / techniques that can be used to (partially) overcome this problem include (Cova et al. 2002):

○ Mixed activities

○ Services

○ Intermediaries

○ Friendships

○ Rituals

How do constructivistic and deterministic selling strategies differ in the different phases of sales process? / Discuss the twin-track approach to project marketing and how can a project supplier apply the approach in marketing its projects to potential buyers?

Constructivistic approach - participate in the construction of the scope and rules of the game

Deterministic approach - anticipate the scope and rules of the game

Deterministic approach is based on the idea that the project will happen and it will be integrally decided by the future customer. The supplier tries to anticipate the demand and