Thailand Business Environment
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Thailand Business Environment

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Thailand Business Environment research

Thailand Business Environment research

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  • Slide 4: Branding Strategies and Thai SentimentBecause of US economic power and its current image, some Thais are afraid of American culture. The fact that Thailand has never been colonized while their neighbors have makes Thai citizens hyperaware of encroaching culture from the West. Care must be taken when branding so that the balance is maintained between the attractiveness of a western product and the importance of the Thai identity. Stamping a new product as American and new may not be the best way to sell the product, but it all depends on the product itself and the target market within Thailand.
  • In term of product we would like to present you the high growth rate industries in Thailand. The most interesting one currently is medical tourism. In 2004, Thai government has a vision that Thailand could become medical hub of Asia. Why is that? Because they think that Thailand has a comparative advantage. Thailand has qualified physicians in various hospitals, the cost of getting operation in relatively low, and the best part we have many tourist attraction, imagine if you can lie down on the beach after hide away from everyone after you’re done your plastic surgery. Other booming businesses are restaurant, Automobile-pik up, and long stay or tourism.
  •   1 USD  in USDThai Baht    34.92   0.0286369What are the prices? Should we just put the price on the slides?talk in term on pricing policy starbucks is equal to here Mc and Coke is not equal…Coke is the only one that localize the logoSource: http://www.x-rates.com/d/USD/table.html
  • Overall infrastructure Logistic strategy in Thailand currently is focusing on the transportation through water. Thai government aim to make it the main choice for logistic. Road will be used for delivery goods to the destination. In another word, road is a connection between main water way and destination. There are more than 225 km of inter-city motorways creating links between Bangkok and other major regions of the Kingdom, and the government is enhancing inter-city motorways, which are expected to stretch to 4,150 kilometers of 4-lane roads.In term of shipping Thailand is still behind Singapore which considering the main port in South-east Asia. However, the government is intend to improve that. There are currently 122 ports, wharves, and jetties able to accommodate sea-going vessels engaging in international trade, including eight international deep. These ports, located in Bangkok, LaemChabang and Map Ta Phut on Thailand’s Eastern Seaboard, and Sonkhla, Satun, Narathiwat, Phuket and Ranong in the South, provide capacity of more than 4.5 million TEU, a figure that is expected to double as current expansion projects are completed.AtLaemChabang Port, six new container terminals are being developed with state-of-the-art equipment that can handles the latest generation of container vesselsTheLaemChabang Port's services include cargo handling, distribution and handling, and through a cooperative venture between the Port Authority of Thailand and the Customs Department, imports and exports are cleared within one day.Air is a choice for quick delivery.Thailand has developed an extensive air transport network that encompasses 28 commercial airports, meaning that all Thailand’s regions are about an hour’s flight from Bangkok.In addition to Don Muang Airport in Bangkok, which in 2005 handled in excess of 268,000 flights, 990.000 tons of cargo and 38 million passengers. Thailand has international airports in Phuket, Chiang Mai, Hat Yai, Chiang Rai and KoSamui.Suvarnabhumi International Airport. By region Thailand is aiming to be the center of Indo-China transportation. The new airport-Suvarnibhumi will be a connecting point between China, Burman, Vietnam to other countries. Thailand is also relying on Meakhong river for being connecting point. I the Northand North east the government also tries to develop the railroad to connect the the eastern seaboard port. In the west side, main transportation is carried on by road. There is no ship port in the west due to the unsuitable topography. In the south many port is built in Andaman sea which has deeper sea level. The government is also planning to build another port in the eastern side of the south.However, due to political unrest and terrorist in the south, Thailand might face a problem in becoming transportation hub.Source:http://www.logisticnews.net/index.php www.boi.go.th
  • Industrial estates are spread out through the country indicated on the map. The most prominent area is Eastern Seaboard of Thailand, because this area is the heart of all of Thailand’s export related industries. Export has helped Thailand survive and prosper through the financial crisis, and it has underpinned the Thai baht. The rising economic importance of the region is evident through the central government's commitment to development of the region’s infrastructure. Planners see the region as strategically important because it is close to Bangkok, the airport, and the ocean. Major projects involving railways and motorways are being developed in order to strengthen infrastructure.
  • Alcohol beverage Alcohol advertising in Thailand is effectively illegal under voluntary observance of a ban by Thai advertisers. Internet advertising remains legal. The ostensible aim of this law was to protect people’s health and to reduce road accidents. In the view of advertisers, however, the ban will slash advertising revenue around 2 billion Thai Baht, a loss most acutely felt in the wake of the beer garden festival In addition, the president of the Advertising association of Thailand (AAT),commented that the ban would hurt Thai beverage companies in competition with foreign entrepreneurs because the Thai government cannot control incoming of goods. Some alcohol enterprises gave the opinion that the beer sales later this year would drop 5-10%. In Thai law a person must be at least 18 to drink alcohol beverage.Tobacco The Tobacco Products Control Act 1992 doesn’t allow tobacco advertising and sponsoring. Cigarette is not allowed to be shown on the shelf. They must be put away in the cabinet. And also on the package must show the picture and has clear caution for smoking cigarette. Products can’t be given out as a or to persuade the people to consume such tobacco products except for a customary gift.Source:http://en.wikipedia.org/wiki/Alcohol_advertising_in_Thailandhttp://news.mcot.net/social/inside.php?value=bmlkPTYxMTEyJm50eXBlPXRleHQ=
  • Thailand has a very strict law about comparative advertisement that it has never been used. However, there is a case about coke and Pepsi Max and Coke zero. That can be seen almost as direct attacks. Pepsi Max has entered the market long before Coke Zero. Yet Pepsi wasn’t successful because of the name that doesn’t imply the positioning of the product. Coke Zero then enter the market with a strong slogan “zero sugar” and a new sharp black can look. Its sales shoot up and control market share over 60%. Pepsi tried to fight back by change repackaging into the same color as Coke can. This is when Coke start attacking Pepsi. As you can see in the ads shows the bottle of Coke can with lizard which implies Pepsi Max imitation. The message on it says “if Coke zero is not cool enough will they change?”. The ads turn to be the talk of the town overnight.
  • (Source: http://www.kwintessential.co.uk/resources/global-etiquette/thailand-country-profile.html)I think we should role play hereSay what to do and do itThe alien business law limit foreign ownership in conducting certain business since Thais are not yet ready to compete. In 1999, the new law relaxes limits. It is now allow foreigner to involve in law, accounting, advertising, and construction. The area that restrictions has tighten are newspaper, publishing farming and antique trading. Retail company and securities are no longer require special government approval. The ownership of the company must be Thai. That means at the maximum foreigner can own the company 49%.Meeting Etiquette1) The wai (as mentioned above) is the traditional form of greeting, given by the person of lower status to the person of higher status. 2) Thais generally use first rather than surnames, with the honorific title Khun before the name. Khun is an all- purpose form of address that is appropriate for both men and women3) In general, wait for your host and hostess to introduce you to the other guests. This allows everyone to understand your status relative to their own, and thus know who performs the wai and how low the head should be bowed.Business Meeting Etiquette1) Appointments are necessary and should be made one month in advance. 2) It is good idea to send a list of who will be attending the meeting and their credentials so that Thais know the relative status of the people attending the meeting and can plan properly.3) You should arrive at meetings on time as it signifies respect for the person you are meeting. 4) Although most Thais will try to be on time, punctuality is a personal trait. 5) Always send an agenda and material about your company as well as data to substantiate your position prior to the meeting. Allow sufficient time for the material to be reviewed and digested. 6) Remain standing until told where to sit. The hierarchical culture has strict rules about rank and position in the group. 7) Written material should be available in both English and Thai. 8) You must be patient. Don’t jump right to business(Source: http://www.executiveplanet.com/index.php?title=Thailand:_Let%27s_Make_a_Deal!_-_Part_1) “When doing business in Thailand, presentations can be fully prepared in English to deliver to Thai businesses, especially in Bangkok. However, emphasis should be placed on clearly enunciated speech and presentations should avoid complex language as it will embarrass the people you are presenting to if you lose them with overly colloquial terminology. As such, Thai people are generally comfortable with British and American speakers while other nationalities and accents can sometimes cause some trouble. But as stated above, always keep in mind the need to speak slowly and clearly and things should be fine. On another note, don't be afraid to take an interpreter if language poses to be a problem.In terms of the actual deliverables, make your materials colorful and full of photographs and other items that communicate the product or service being presented. Try to avoid large black and white tracts of text, especially if it is in English. Be careful also of losing your message through lack of content. Make sure to have lots of copies of your proposal—ideally one for each person attending the presentation and a few spare for staff unable to attend, but who may be interested. For legal documents, you can also be confident, especially in larger companies and definitely in Bangkok, to use English as the language for all of your proposals. Contracts in English are almost always acceptable.”Business Cards1) Business cards are given out after the initial handshake and greeting. In theory, you should give your card to the most senior person first. It is advisable to have one side of your business card translated into Thai. 2) Using your right hand, deliver your business card so the Thai side faces the recipient. 3) Look at a business card for a few seconds before placing it on the table or in a business card case. As in most Asian countries, it is polite to make some comment about the card, even if it is only to acknowledge the address.4) Business cards usually include both your name and your position, plus associated company information such as address, website, email address etc. A high quality business card is an important asset in Thailand.(Source: http://www.kwintessential.co.uk/resources/global-etiquette/thailand-country-profile.html)Relationships & Communication1) Thais prefer doing business with people they respect. 2) Relationships develop slowly and do not flourish after one meeting; it may take several meetings.   3) Always be respectful and courteous when dealing with others as this leads to the harmonious relationships necessary within business.4) Thai communication is formal and non-verbal communication is often more important than verbal communication. 5) Rank is always respected. The eldest person in the group is revered. 6) It is difficult for most Thais to say no, so you must be cognizant of their non- verbal communication. 7) Watch your body language and facial expressions, as these will be believed over your words.(Source: http://www.executiveplanet.com/index.php?title=Thailand:_Let%27s_Make_a_Deal!_-_Part_2)“Building a good relationship is an important part of the negotiation process, so don't be afraid of simple conversation, normally at either the start or end of your 'official' presentation. Thai people place a lot of importance on 'liking' a person, and never underestimate this. Invitations to activities such as golf, dinner, and other functions should always be accepted and seen as an opportunity to get to know each other. It is very rare for a decision to be made on the spot. Instead, a call back is required once a few days have passed. Thai people generally are not confident decision makers and often need to consult with several different people before making a decision. If they are not ready to do business, then this is a common excuse. Don't be put off by this, instead see it as an opportunity to further develop the relationship by offering to meet again, or present more information. When negotiating, be aware that if your Thai counterpart is focusing on small, insignificant details as problems, these may indicate there are larger problems that need your attention. Because your Thai counterpart doesn't want you to lose face, or confront you directly, these little sign posts are very important. To identify what the problem is, try standing back and asking questions about details, all the time avoiding the specific topic but being careful to place all the pieces together. The pace of business is often much slower than in western countries and it is not a good idea to push things along at a faster pace. Confrontation is almost always avoided, and a cool head and a pleasant disposition are normally rewarded with a positive response.”
  • Thailand has shown extremely high economic growth rates (6% to 8%), even through the downturn caused by the Asian financial crisis. Still, in the opinion of multinational companies, corruption in Thailand is considered a major barrier to conducting business. Corruption is significant within both the private and public sectors, but it is found mainly at the crossroads of business and government. Approximately 79% of businesses had to bribe officials for a contract or service. The cost of bribes has been estimated to increase the overall costs of a contract by 20%. Up to 30% of government funds vanish because of corruption. According to the NIDA, 95 mega-projects cost the state 400 billion THB, about 12 billion US dollars, due solely to corruption during the last six years. Bribery is especially concentrated in the Land Department, Transport Department, Tax and Customs Department, and the Police. Corruption reaches from the central government to local governments, and the connections between businessmen, civil servants, and politicians are its foundation. Government officials are able to help businesses secure monopolies, protect against foreign competition, and shelter businesses that are illegalSources:http://www.adb.org/Documents/Books/Key_Governance_Issues/default.asp?p=govpubhttp://wwwwds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000090341_20040112153303http://www.transparency.org/policy_research/nis/regional/asia_pacific
  • tell Who will talk about what?
  • CP group is one of the biggest company in Thailand that has international recognition. Founded in 1921, The Chinese family company started from importing seeds from China to sell to Thai farmers. After years of expansion into livestock farming, convenient store(7-eleven) business, food business, and telecommunication network(Orange), in year 2006, company sales reach 14 billion. CP has the license for operating 7-eleven in Thailand since 1988. It is then spread out in a form of franchising and corporate owned. 7 eleven is the most widespread convenient store in Thailand. In total Thailand has 3912 branches and around one third is the form of franchise. It is also one symbol to show that the neighborhood has fairly good economic level. Orange is another investment of CP now it has changed to True. The company provide telecommunication network such as land line for house phone, cell phone network, and high speed internet. Currently, Truemove most popular product is its high speed internet. It has signed contract with Bangkok government authority to provide Wifi network in the city for free at a low speed. True is the company that made high speed internet more available to the public in affordable price. The company also has global network in various countries like Malaysia, Bangladesh, Turkey, Taiwan, India. Especially in China, the company has invested in many different businesses such as convenient store, mall, automotive industry, petrochemical, media and entertainment.Source:http://www.cpthailand.com/AboutCP/tabid/216/Default.aspxhttp://www.cpgroup.cn/http://www.7eleven.co.th/corp/about_Number_of_branches.php
  • Because the majority of Thailand is developing, it is a good place to invest, but one might face issues of corruption and other difficult challenges. Therefore one has to build up a good relationship with locals who can help the company to go find the right loopholes in Thailands business enviroment.
  • So after you started to get the feeling of the environment we like to move on to Thai people and over all culture.What does it mean to be a Thai? Has anyone been to Thailand before? (If there is .Ask when and why share a little bit about the trip.) what he or she think about the people….(If not then Good so we can have a tour now!)So everyone. Let’s imagine if you were on a plane on the way to Thailand when You step out from the plane first thing, first thing they will greet you with “Wai”. What is wai? ….. Can you show us a little? You’are a steward I’m a tourist I walk out the plane and yousay “Sawasdeekrab” (someone needs to wai and say for me) that’s for a guy. if you’re a girl would say sawasdee ka.(I will say this).Wai is one of the most distinctive Thai customs.People use it all the time when they say Hi, good bye, or sorry. The gesture is also a way to show respect to people who are senior or higher rank. This shows that Thai society put a lot of emphasis in seniority. Even Mr. Ronald here when he’s in Thailand he has to Wai his customer to show them some appreciation. Another point that I want to mentiwhen you visit Thailand. The king picture will be shown everywhere you go. Why Thai King is so important? I would say this from my personal perspective. Because he has given up so much in his life for Thai people. Everything he has done has hold Thai people together until today. You might have heard the news before about youtube being banned because one of their video has content that insulted Thai King. At the end the clip was cleared out from the website. Then the government allow the access again. Unfortunately, we don’t have the actual banned video but what we do have the owner’s of that clip’s apology let’s take a quick look at it! it tells you a little about how people can misinterpret thing about culture and probably make us aware on. And trust me you can’t help notice this of the difference.
  • 63 Million people200,000 sq milesBangkokDisparity in Rural and UrbanEducationAnalytical skillsInternational schoolAfter you get the qualitative information we would like to get into quantitative side of Thailand. Thailand has population approximately 63 million. That’s 20 times less than China and 5 times less than the US. Its total area is 17 smaller than the US. The capital of course Bangkok. This is where the wealth, the jobs, and the adoption of all gadget and fashion started. Before getting into detail about the population and city let’s check out what American star Nicolas think of Bangkok. Well It is dense Nicolas. Bangkok is rank at no. 22 in world rank for density. Therefore, in Bangkok itself there are two groups of people the blue collar lives in slum area while the white collar lives in high-rise condominium. Yet there’s a big gap between the rural and urban life. Just to point it out to you more clearly the average income in Bangkok is 10,000 USD/year while the suburb or the vicinity average income is dropped to 3000 USD. The orange dot in the middle is Bangkok where most marketers would go. Then the bigger lighter orange surround that is the suburban area is the residential area. Nowadays because density and pollution that Notto mention it is hard to live in the city. These are the main city in each region. The marketer should pay attention to those areas when they try to penetrate the more rural are.So education, the literacy rate according to CIA world fact book is 92%. That means 92% of the people can read and write in Thai. And again education are concentrated in Bangkok area. The top university is normally public. The two thing important about education. Thai education system has just started to emphasize in analytical thinking instead of memorization. And more and more Thai are sending their children to study abroad or attend international school.  Most Thai are real Thai. The interesting ethnicity and powerful people are Chinese. Most of them have big family business where outsider find hard to get in. Notto will mention later about the big boys. Again most people are Buddhism and religion does have impact on our lives but in a declining trend.
  • 63 Million people200,000 sq milesBangkokDisparity in Rural and UrbanEducationAnalytical skillsInternational schoolAfter you get the qualitative information we would like to get into quantitative side of Thailand. Thailand has population approximately 63 million. Most Thai are real Thai. The interesting ethnicity and powerful people are Chinese. Most of them have big family business where outsider find hard to get in. Notto will mention later about the big boys. Again most people are Buddhism and religion does have impact on our lives but in a declining trend. That’s 5 times less than the US. Its total area is 17 smaller than the US. The capital of course Bangkok. This is where the wealth, the jobs, and the adoption of all gadget and fashion started. Before getting into detail about the population and city let’s check out what American star Nicolas think of Bangkok. Well It is dense Nicolas. Bangkok is rank at no. 22 in world rank for density. Therefore, in Bangkok itself there are two groups of people the blue collar lives in slum area while the white collar lives in high-rise condominium. Yet there’s a big gap between the rural and urban life. Just to point it out to you more clearly the average income in Bangkok is 10,000 USD/year while the suburb or the vicinity average income is dropped to 3000 USD. The orange dot in the middle is Bangkok where most marketers would go. Then the bigger lighter orange surround that is the suburban area is the residential area. Nowadays because density and pollution that Notto mention it is hard to live in the city. These are the main city in each region. The marketer should pay attention to those areas when they try to penetrate the more rural are.So education, the literacy rate according to CIA world fact book is 92%. That means 92% of the people can read and write in Thai. And again education are concentrated in Bangkok area. The top university is normally public. The two thing important about education. Thai education system has just started to emphasize in analytical thinking instead of memorization. And more and more Thai are sending their children to study abroad or attend international school.  
  • These graphs show age distribution in Thailand. Essentially, the main takeaway here is that in 1991, the largest population was teenagers. As time passes this group’s age will increase, and the elderly will soon represent the majority. The reason a new majority of teenagers and young adults will not surface is because of the recent lifestyle change of Thai women. Birth control has become socially acceptable, and more and more women are joining the workforce and having less children. Ultimately, there will be a majority of older citizens being supported by a minority of working age individuals.
  • This growth in the elderly market has other implications as well. The health care business will experience heavy growth in addition to its already successful status because of medical tourism.Pin will talk about that later!
  • Their lives revolve around friends, study, and tight schedules. Their first priority is discovering what theya re passionate about and capable of, and getting a good job(with good pay) after graduation. Then they believe a social life and love will follow. In short, they want stability and self determination. The current trend that Thai teens are really into is the Korean style. It is the trendsetter in terms of fashion, appearance, and music taste. Many Thai teens take it so far to learning the language. This also happened when Japanese trend were popular. Girls loves the pale skin, with messy hair, and cute look of the Korean boys. The popular trend started of from the music industry. Korean singer like “Rain” has been used as a symbol of this trend. What amplifies the effect is the Korean series that is broadcast during night time. This group of teen are not into the mainstream stars. But they have interest in art. They believe in “being unique”. Yet in their own group there’s certain type of music, magazine, and places that would be appeal to them all. It is just not appealing to the general public. They want to rebel against the mass and express themselves to society as a unique artistic group. Even though they believe in being different but there’s always a similarity in differences. Many female teens have the illusion of being fat and are obsessed by this issue. It is purely driven by beauty not health. This trend is so strong as we can see university students dress in super-tight uniforms just like their friends. They mostly choose unhealthy approaches such as taking diet pills or just stop eating. Missing out on nutritious food as they do, most of them take supplements such as vitamin A,C,E , marine extract, fruit extract and flower-oil extract, as a substitute. The infulence from friend is irresistible. They take it because their friends do it as well.Teenagers in Thailand are very much into Western brands, and they have a very strong appetite for products. While adults worry about issues such as education and finances, many Thai teens are focused on forming collections of their favorite products and having the latest fashions. Research shows that Thai teens have a large amount of disposable income because of large parental allowances and casual and part-time work. However, they do not have an understanding of the concept of saving, and much of their disposable income is disposed of.Of course, not all teenagers in Thailand obsess over branded products. Some don’t care about western products or brands and instead focus on saving money. Some teenagers like to try new things, regardless of Western or Thai identity. Others prefer Thai products because the recognize the loss of the Thai Identity as a major issue. However, teenagers who are always following the trends and altering their images are the best target for companies looking to profit in Thailand. Interestingly enough, the Thai teenage market is very much like the American teenage market.

Transcript

  • 1. 1. Situation Assessment 2. Be a Thai 3. Segment 4. Target and Positioning 5. 4 P’s 6. Company Approach 7. Thailand as a competitor Situation Be a Thai STP 4P’s Company Competitor
  • 2. Political Southern Turmoil Terrorism Economy Pollution Situation Be a Thai STP 4P’s Company Competitor
  • 3.  Wai  “Sa-wad-dee”  Krub or Ka  Respect & Seniority  Thai King  Youtube Situation Be a Thai STP 4P’s Company Competitor
  • 4. Bangkok Situation Be a Thai STP 4P’s Company Competitor
  • 5. Chiangmai Khonkhaen 10,000 USD 3,000 USD Bangkok Phuke t Situation Be a Thai STP 4P’s Company Competitor
  • 6. 1991 1995 2000 2005 Situation Be a Thai STP 4P’s Company Competitor
  • 7. 2000 2006 2015 2020 Situation Be a Thai STP 4P’s Company Competitor
  • 8. Situation Be a Thai STP 4P’s Company Competitor
  • 9.  Booming industries  Medical tourism  Physician  Low cost  Tourist attraction  Other industries  Restaurant  Automobile  Tourism Situation Be a Thai STP 4P’s Company Competitor
  • 10.  American Vs. Thai Prices 4 USD/price 1 USD/price $0.50/price Situation Be a Thai STP 4P’s Company Competitor
  • 11.  Singapore is currently the Asia hub  Mode  Water Maekhong connect Indo-China  Road  Air Suvarnabhumi new airport For quick delivery
  • 12. Situation Be a Thai STP 4P’s Company Competitor
  • 13.  Alcohol beverage advertising  Tobacco law Situation Be a Thai STP 4P’s Company Competitor
  • 14.  No comparative ads  Special case  Coke Vs Pepsi  Direct attacks Situation Be a Thai STP 4P’s Company Competitor
  • 15. 1 month in advance Be on time Conservative business dress Wai Khun+ firstname Be patient Blah blah bla Business Card Gift Situation Be a Thai STP 4P’s Company Competitor
  • 16.  Economic Growth  Bribery  Bribe costs  Corruption costs in recent years Situation Be a Thai STP 4P’s Company Competitor
  • 17.  Different Trade Agreements  Thailand is not part of the OECD  Member of the ASEAN and have Bilateral Agreements with the United States and Australia Situation Be a Thai STP 4P’s Company Competitor
  • 18. BIG BOYS  Chinese family  One of the biggest company  Subsidiary  7 eleven & True  International recognition  Global network  Investment in china Situation Be a Thai STP 4P’s Company Competitor
  • 19. Situation Be a Thai STP 4P’s Company Competitor