YEMOCHI
International Marketing Plan
Submitted to the Faculty of
Cavite State University – Tanza Campus
Tanza, Cavite
In partial fulfillment
of the requirements for the degree
Bachelor of Science in Business Administration
ANCHETA, CHRISTINE A.
BAES, JAMICA NICOLLE I.
LISAY, MARK LUIGI A.
MACAHILIG, MA. FE O.
RODRIQUEZ, ARJAY M.
JUNE 2023
INTRODUCTION
YeMochi is a combination of YEma and MOCHI. It is a kind of dessert mainly
made from glutinous flour for its based-dough which is called Mochi and a flavored
condensed milk (such as Mango and Pandan) for its fillings that was cooked to have a
texture like Philippines very own "Yema". YeMochi is an innovative and enticing
dessert that combines the best of two beloved culinary traditions: Yema from the
Philippines and Mochi from Japan. This delectable fusion of flavors, textures, and
cultural influences aims to captivate the palates of dessert enthusiasts in Thailand.
YeMochi's entrance into the Thai market, with its Mango and Pandan filled
flavors, presents a compelling proposition that resonates deeply with Thai consumers.
Thailand's love for mango-based desserts such as their famous and iconic mango
sticky rice, it creates a natural connection to YeMochi's mango flavor. By evoking the
flavors of this beloved Thai dessert, YeMochi taps into a familiar and cherished taste
profile. Pandan's widespread presence in Southeast Asian cuisine, including Thai
cuisine, enhances the appeal of YeMochi in Thailand. The distinct aroma and taste of
pandan are deeply ingrained in Thai culinary traditions, making it as a flavor that Thai
consumers appreciate and seek out. By incorporating pandan into the YeMochi, the
dessert offers an authentic and familiar taste experience that aligns with Thai
consumers’ preferences.
Furthermore, Thailand's status as a popular tourist destination adds another
layer of appeal to YeMochi. Travelers from all corners of the globe flock to Thailand to
experience its vibrant street food culture and immerse themselves in the local cuisine.
YeMochi, with its fusion of Filipino and Southeast Asian influences, provides an
exciting and authentic dessert option that allows both locals and tourists to discover
and indulge in the region's culinary diversity. The combination of local inspiration and
international influences ensures that YeMochi will stand out in the dynamic and diverse
Thai culinary landscape, captivating the hearts and palates of both locals and Thailand
visitors and also its alignment with Thai taste preferences and the familiarity of the
flavors, all contribute to Yemochi's potential success in the vibrant Thai market.
ECONOMIC ENVIRONMENT
I. Economic Background
The second largest in economy of Southeast Asia is the country of Thailand,
Thailand ranks in 2022 in fourth Southeast Asian. Thailand is an also ranks in terms of
economic freedom in the 2023 index. It is scored points less than it did the previous
year, Thailand is the 16th-placed nation out of 39 in the Asia-Pacific region, and it
scored better overall than both the global and regional standards. The foundations of
the economy are still mostly sound. The need to increase investor trust and progress
in institutional change are the main obstacles. Political unrest is a serious worry since
it continues to harm Thailand's business environment and economic potential.
Corruption is still an issue, and the judiciary is ineffective and open to influence by
politicians.
However, the export-led model's development prospects that recently drove a
large portion of Thailand's economic growth appear to have drastically decreased as
a result of a stall in productivity. Total factor productivity (TFP) growth average slowed
from an annual high of 3.6% in the early 2000s to just 1.3% from 2009 to 2017. While
foreign direct investment flows and involvement in global value chains have showed
symptoms of stagnation, private investment has decreased from more than 40% of
GDP in 1997 to 16.9% of GDP in 2019.
II. PESTL Analysis
A. Political
Thailand's economic status appears favorable because to wise growth policies
and fortunate occurrences like the Vietnam War and Burma's collapse as a major rice
exporter. However, Thailand's relatively rapid population growth rate and the
constraints that come with tiny, primary exporting industries make the country's longterm economic future worrisome. Long-term economic success would seem to require
some type of effective regional collaboration and/or significant trade or tariff
concessions by the industrial powers.
The role of government in economic affairs is significant, varied, and
expanding. The construction of the economic infrastructure has received a significant
amount of attention in this effort. The defense and improvement of Thailand's place in
the global economy has been another important priority. In actuality, political conflict
erupted within the dominant coalition's parties in the second quarter of 2020 about the
economy's course under the previous technocratic and military-backed government.
B. Economic and Currency
In less than a generation, Thailand went from being a low-income nation to an
above middle-class country, demonstrating a remarkable level of social and economic
development. Thailand has drawn a lot of attention as an example of successful
development as a result of its sustained high growth and substantial reduction in
poverty. The Thai economy developed at a normal annual pace of 5% after the Asian
Financial Crisis.
The total amount of money in existence and the production of currency were
impacted by changes in the status of payments prior to the conflict. When the financial
position was in surplus, currency reserves and financial circulation increased; when it
was in debt, both declined. Expanding and contracting were essentially automated
processes. Prior to World War II, the total quantity of money in movement steadily
increased, reflecting both the monetary system's capacity to do so due to an export an
excess and the accumulation of reserves as well as the rise in demand for it brought
on by the growth of trade and production. There were no deficits financed by the
government. Treasury notes or loans from the Thai government.
C. Social and Cultural Factors
Over 95% of people practice Theravadin Buddhism, therefore its philosophy and
fundamental ideas are profoundly engrained in everyday life. In Thailand, good
manners are highly valued. Respect, control, and a peaceful mindset are the three
most important values held by Thai people. Losing face due to angry outbursts or lying
is a major source of humiliation for Thai people. Public displays of emotion are
frequently seen very poorly. No matter how upset or angry a person might feel, they
will always make an effort to maintain a positive attitude, an awareness of humor, and
a grin. Respect for people in higher social positions, including elders, is also essential.
Despite the traditional male dominance in family life and society in Thailand,
women are treated with a great deal of respect. Recent laws and regulations have
given women more flexibility to enter fields like politics, medicine, and business and to
leave behind their conventional responsibilities. In recent decades, respect and equal
rights for women have grown to be significant components of Thai legislation and
beliefs. It could be used to describe a happy and unplanned encounter with someone
on the street or a clever joke said just at the perfect time.
D. Technological Factors and Infrastructure
The Thai government has designated several sectors that it believes can help
the country transition to a high-tech, innovation-driven economy. Automation and
robotics, aviation and logistics, biofuel and biochemicals, digital technology, and
medical hub are a few of the targeted businesses. After putting all its efforts into
promoting the use of cutting-edge technology, science, and innovation in tandem with
the development of infrastructure and the proper business ecosystem to drive
economic development with the targeted industries as the main catalysts, Thailand has
been gradually transitioning from a manufacturing to a high-value manufacturing
economy.
The Thai government has designated several sectors that it believes can help
the country transition to a high-tech, innovation-driven economy. Automation and
robotics, aviation and logistics, biofuel and biochemicals, digital technology, and
medical hub are a few of the targeted businesses. The government's agency for
enabling and promoting investments in Thailand, the Board of Investment, has
assisted the nation's economic development by consistently enhancing its promotional
incentives. to increase investment in the targeted industries and solidify Thailand's
status as a preferred investment destination.
Since a technology disruption has significant effects on how an economy grows
and how contemporary enterprises work, investments in Thailand's selected industries
will contribute to improving both national and corporate competitiveness. The
opportunity for small businesses to change themselves from basic local manufacturers
into suppliers of high-value sophisticated technological goods is even more enticing
than the high return on investment.
E. Legal and Regulatory
The only country in South-East Asia that has lived its whole history without
being ruled by a colonial power is the Kingdom of Thailand (formerly known as Siam
until 1939). Thailand has attempted multiple attempts to construct a contemporary
democracy since the absolute monarchy was replaced with a constitutional monarchy
in 1932. Since 1932, there have been 20 Constitutions enacted and at least 18 coups,
causing frequent and abrupt transitions between elected and military governments.
According to the Constitution, Thailand's three departments of government—the
executive, legislative, and judicial—are split and are based on the common law
Westminster system. The Thailand Law Forum website offers details on the Thai
government's present organizational structure. Information on freedoms, human rights,
the condition of women, and other topics are included in this excellent and current
source on the history and governance of Cambodia.
The Thai legal system is based mostly on written legislation that has been
approved by the government because it is a statute law system. The Constitution,
which is the highest law, as well as legislation like Codes and Acts, decrees, and
tradition are the main sources of law. Although Supreme Court rulings are not legally
binding, they are widely utilized as secondary authoritative sources of law because
they are persuasive, have some precedential significance, and are persuasive in
practice.
III. Economic Factors
A. Size of Market
The Thailand National Economic and Social Development Commission
(NESDC) reports that the Thai economy grew by 1.6 percent in 2021, only partially
recovering from a decline of 6.2 percent in 2020. Investments, exports of goods, and
private consumption all saw increases of 18.8%, 0.3%, and 3.4%, respectively.
Production increased by 4.9 percent in the forestry and fishery sectors, 1.7 percent in
the retail and wholesale market industry, and 1.4 percent in agriculture. Now, it is
anticipated that the Thai economy would expand by 2.5 to 3.5 percent in 2022, largely
as a result of improved domestic demand, a slight revival in the travel and tourism
sector, and sustained export strength.
High middle-class Thailand is the second-largest economy in ASEAN, behind
Indonesia. In 2021, it had a gross domestic product (GDP) of $513 billion, up 1.6
percent from the year before. The United States' 26th-largest export market is
Thailand. More than $60 billion in products were exchanged in 2021, with $12.7 billion
in American exports to Thailand and $47.4 billion in Thai exports to the United States.
Thailand's economy, which is heavily dependent on exports, shipped items worth $294
billion in total in 2021.
B. National Income
According to the World Bank's compilation of development indicators obtained
from sources that are officially recognized, Thailand's net worth per individual, actual
figures, historical information, projections, and predictions were gathered from the
World Bank in May 2023. The net national income per capita is calculated using the
World Bank Atlas technique by dividing the gross national income by the midyear
population. The total of all local producers' contributions, any product taxes and any
other costs not included in the valuation of production is known as the total national
revenue.
•
Thailand GNI per capita for 2021 was $7,090, a 2.75% increase from 2020.
•
Thailand GNI per capita for 2020 was $6,900, a 2.54% decline from 2019.
•
Thailand GNI per capita for 2019 was $7,080, a 9.77% increase from 2018.
•
Thailand GNI per capita for 2018 was $6,450, a 10.82% increase from 2017.
C. Purchasing Power
Thailand's outstanding quality the environment, land, sea, and station
transportation networks make it simple to go to the markets of China and India that are
nearby locations Given its excellent internet connections, highly skilled workforce, and
high standard of life, Thailand stands out as a particularly cost-effective option.
Together with the government's comprehensive policies and investment incentives,
these factors promote Thailand to the top investment destination in the region.
Since there has been continued national investment in and quick development
of the nation's logistics network, Thailand's transport network is becoming more
connected with the transportation systems of other developing countries. The 66
million-strong domestic market of Thailand, that's open to firms locally. Also within
1,000 kilometers are 175.28 million customers in the CLMV region, 663.9 million
customers in ASEAN around 3,000 kilometers, and 4.77 billion customers in Asia
overall. This makes Thailand a desirable site for international trade and investment by
opening up a wide variety of alternatives. 18 nations altogether, including powerful
economic powers like China and Australia.
D. Availability of Credit
In Thailand, the financial reporting industry is very new compared to many other
countries. Thai financial institutions formerly relied on the Bank of Thailand for
information exchange on regular borrowers in countries where credit bureaus have
organically developed. As a result of government efforts to increase the stability of the
financial system, quickly up the loan approval process, reduce risks and nonperforming loans, and promote the expansion of the credit information business, two
credit reporting companies were established in Thailand in the year 1999.
According to the regulations, credit information may only be given to users or
customers who need to use the service. Information is used to assess credit scores
and review credit card applications, but only with the owner's consent. However, there
is a time restriction on the amount of time it may be used for credit to consumers, which
is a period of three years, as well as corporate credit, which is five years, for agencies
that supply credit reports. Thailand has a system of citizenship cards that gives each
citizen a unique identification number. quantity. As a result, finding the person who
owns each fund and balancing a person's statements are much more straightforward.
IV. Type of Economy
Thailand's economy is different, with the main economic sectors being
agriculture, manufacturing, tourism, services, and natural resources. The country's
gross domestic product (GDP) in 2019 was 16,879 billion Thai Baht. The tourist,
automobile, and food manufacturing sectors, which are experiencing huge growth,
benefit from the country's established infrastructure, transport, and communications
systems.
Thailand, is the important producer of rubber-based products, also deals in rice,
vegetables, and other fruits and vegetables. Along with shipping and freshwater
seafood, it is widely known for exporting animals. Among its industrial exports are
those from the agricultural sector, textile, electric appliance, and automobile industries.
Relevant natural resources including stone, clay, glass, sand, marble, metal, and
gasoline also have a positive impact on the economy. The theory holds that the pricing
mechanism powers the economy. The state provides infrastructure. With a GDP of
17.367 trillion baht (US$536 billion) in 2022, Thailand will rank ninth in Asia among
newly industrialized countries. Thailand's economy is highly dependent on exports,
which in 2021 contributed about 58 percent of the country's GDP. The Thai economy
currently has a 7.5% GDP account surplus and a rate of inflation of 1.06% on average.
In 2017, the Thai Baht ranked as the 10th form of finance worldwide.
CULTURAL ENVIRONMENT
I. Cultural Background
A. National Culture
a. Identity
Thailand places a strong emphasis on the concept of "sanuk" which translates
to "fun" or "enjoyment". This cultural value of sanuk is reflected in the economic
environment of Thailand, where there is a focus on creating a lively and enjoyable
atmosphere for tourists and locals alike. The tourism industry is a major contributor to
the economy of Thailand, with the country known for its beautiful beaches, vibrant
nightlife, and delicious cuisine. Many of these aspects of Thai culture, such as the
street food culture and the famous "tuk-tuk" taxis, have become iconic symbols of the
country and a major draw for tourists. In addition to tourism, Thailand has a strong
agricultural sector, with crops such as rice, sugarcane, and rubber being major exports.
The country is also home to a growing manufacturing industry, particularly in the area
of electronics and automotive production. Underlying these economic activities is a
strong emphasis on social harmony and respect for authority, which are also core
values in Thai national culture. This can be seen in the way businesses and industries
operate in Thailand, with a focus on maintaining good relationships with government
officials and other stakeholders.
b. Material Life
Thailand has a unique national culture that greatly impacts their material life
and economic environment. The country has a strong emphasis on social hierarchy
and respect for authority, which translates into a business culture that places great
importance on relationships and personal connections. This is reflected in the
prevalence of family-run businesses and the importance of guanxi, or personal
connections, in conducting business deals. In terms of the material life, which can be
seen in their economic practices. For example, there is a strong emphasis on family
and community in Thai society, which leads to a focus on small businesses and local
markets rather than large multinational corporations.
Additionally, Buddhist beliefs and values play a significant role in shaping the
economic environment of Thailand. The emphasis on karma and merit means that
many Thai businesses prioritize giving back to their communities and supporting social
causes. Buddhist beliefs also encourage simplicity and non-materialism, which can be
seen in the emphasis on modest living and the popularity of alternative forms of
medicine. However, there are also challenges to the Thai economic environment,
including income inequality, corruption, and a reliance on low-wage labor in industries
such as agriculture and manufacturing. These issues have led to ongoing
conversations and efforts to address them and create a more equitable and
sustainable economic environment for all Thai citizens.
c. Language
The official language of Thailand is Thai, which is spoken by the majority of the
population. It is a tonal language that uses the Thai script, which consists of 44
consonants, 32 vowels, and five tonal markers. As part of their national culture, Thais
take great pride in their language, which has a rich history and unique grammatical
structure. Apart from Thai, there are also other languages spoken by minority groups
in different parts of Thailand such as Lao, Karen, Malay, and Chinese. However, Thai
is the dominant language used in government, education, media, and culture. It is also
a key component of Thailand's national identity and cultural heritage. The Thai
language reflects the country's rich history, traditions, beliefs, and customs, and is an
essential part of Thai culture and society.
d. Social Interactions
Thailand is known for its strong emphasis on social harmony and respect for
authority. This is rooted in the country's Buddhist values, which prioritize moderation,
humility, and interdependence within the community. As a result, social interactions in
Thailand reflect these cultural values. One important aspect of social interactions in
Thailand is the use of formal titles. People are often addressed by their title or position
rather than their compassion, and non-confrontation. Thai social interactions are
characterized by a strong sense of politeness, warmth, and inclusiveness. Some key
aspects of social interactions in Thailand include:
Greetings. Thai people are known for their gracious and respectful greetings.
The wai is the traditional Thai greeting, which involves pressing one's palms together
and bowing slightly. The higher the hands are held and the lower the bow, the more
respect is shown. Thais typically use the wai to greet people of higher status, such as
elders, monks, or government officials.
Respect for hierarchy. The Thai social hierarchy is deeply ingrained in the
culture, and people are expected to show respect to those who are older, in higher
positions, or of a higher social class. This can play out in a variety of ways, such as
using different language forms or showing deference in body language.
Group-oriented. Thais tend to be highly sociable and enjoy being in groups.
Family, friends, and community are highly valued, and people often prioritize collective
interests over individual desires. This can be seen in the way that Thais socialize, eat,
and celebrate together.
Non-confrontational. The Thai culture favors indirect communication and
avoids open conflict. This means that people often use subtle hints or nonverbal cues
to express disagreement, rather than directly confronting someone. This is seen as a
way of maintaining social harmony and avoiding loss of face.
Food and hospitality. Thai culture is renowned for its delicious cuisine and
generous hospitality. Sharing food and drink is an important part of building social
bonds and showing respect for guests. Thais also place a strong emphasis on
cleanliness and proper table manners.
e. Aesthetics
Thailand's aesthetic style is heavily influenced by its national culture, which is
rooted in Buddhism and the country's long history of art and architecture. Thai
aesthetics is known for its intricate and ornate designs, vibrant colors, and use of
natural materials such as wood, stone, and silk. One of the most prominent features of
Thai aesthetics is the use of intricate patterns and designs, often featuring floral or
geometric motifs. These designs can be found on everything from textiles to jewelry to
architecture, and are often created using techniques like weaving, carving, or painting.
Another key element of Thai aesthetics is the use of vibrant colors. Bright hues
like orange, red, green, and gold feature heavily in traditional Thai clothing and decor,
and are often used to symbolize different aspects of Thai culture. For example, gold is
often associated with wealth and prosperity, while red is seen as a symbol of good
luck. Thai aesthetics are deeply rooted in a love and respect for nature. This can be
seen in the country's beautiful natural landscapes and in the many traditional festivals
and ceremonies that celebrate the changing seasons and cycles of the natural world.
Thai art and architecture often incorporate natural elements like wood, stone, and
water, and are intended to create a sense of harmony and balance with the
surrounding environment.
f.
Religion
Buddhism is the main religion in Thailand, with around 95% of the population
being Buddhists. Buddhism plays a significant role in Thai culture, including economic
practices, as it emphasizes the importance of living in a moral and ethical way,
practicing generosity, and avoiding materialism. These principles are reflected in the
way many Thai businesses operate, with a strong focus on building relationships and
maintaining harmony culture and society, and it has a strong influence on the country's
economic environment. Many Thai businesses and entrepreneurs incorporate
Buddhist beliefs and practices into their daily work lives, such as making merit and
giving to charity. Buddhism also underpins the concept of "sanuk," or the pursuit of
happiness and enjoyment to balance work and life. This leads to a somewhat relaxed
and informal business culture in Thailand, where personal relationships and
networking are valued. Additionally, the government of Thailand and many business
leaders promote the concept of "sufficiency economy," which emphasizes moderation,
self-reliance, and sustainability, reflecting Buddhist values of simplicity and nonexcess.
g. Education
Under Thailand's national culture, education is highly valued and seen as a
pathway to upward mobility and success. The government has invested heavily in
expanding access to education at all levels, from primary school through higher
education. However, despite the government's efforts, there are still significant
disparities in education access and quality across different regions and socioeconomic
groups in Thailand. Rural areas and low-income families often have limited access to
education, with a goal of achieving universal primary education and increasing
participation in higher education. The literacy rate in Thailand is high, and the country
has a long tradition of Buddhist education, with many monastic schools and
universities.
Thai education system is divided into different levels, including pre-primary
education, primary education, secondary education, vocational education, and higher
education. Primary education is compulsory and free for all students. The curriculum
places a strong emphasis on traditional subjects such as mathematics, science, Thai
language, religion, and social studies. English language education is also a priority,
especially at the secondary and tertiary levels. Despite the emphasis on education,
Thailand faces challenges in terms of quality and equality of education. There are
significant disparities in education outcomes between urban and rural areas, as well
as between different socio-economic groups. The government has implemented
policies to address these disparities, including providing financial support to
disadvantaged students and investing in rural education infrastructure.
h. Value Systems
Thailand has a unique national culture that shapes its economic environment
and value system. The country values social harmony, respect for authority, and the
pursuit of material success. This is reflected in the Thai business culture, which
emphasizes building relationships, networking, and hierarchy. Thai society values
family and personal relationships highly, which is reflected in their business practices.
Building relationships and trust is critical in Thai business culture. The value system of
Thailand revolves around the principles of respect, politeness, and harmony. The Thai
culture is deeply rooted in Buddhism, which influences its value system. The following
are some of the fundamental values that characterize Thai culture:
Respect. Thai people believe in showing respect to their elders, parents,
teachers, and people in positions of authority.
Politeness. The Thai culture values and beliefs. Some of the core values of
the Thai culture include:
Respect for elders and authority figures. Thai society places great
importance on respecting those who are older or in positions of authority. This is
reflected in the use of formal language when addressing superiors and the emphasis
on hierarchy in social interactions.
Generosity and hospitality. Thai people are known for their generosity and
hospitality towards guests. They place great importance on offering food, drink, and
accommodation to visitors, and this is seen as a reflection of their kindness and
generosity.
Humility and modesty. Thai people value modesty and humility in social
interactions. Showing off or boasting is considered impolite, and it is important to avoid
confrontation or criticism in public.
Harmony and community. The Thai culture emphasizes the importance of
harmony and community over individualism. Group harmony and social order are seen
as crucial for maintaining a peaceful and stable society.
Loyalty and filial piety. The value of loyalty to family and friends is deeply
ingrained in Thai culture, as is the concept of filial piety – the duty to respect and care
for one's parents and elders.
B. Business Culture
Thailand has a unique business culture that is influenced by its history, religion,
and geography. Business culture in Thailand is very important as it plays a
significant role in shaping the way business is conducted in the country. Thai
culture is heavily influenced by Buddhism, which can affect how business
negotiations are done and how decisions are made. Understanding Thai business
culture can help foreign investors navigate the market and build relationships with
Thai partners. Being aware of cultural differences, such as communication styles,
decision-making processes, and work ethic, can help foreigners to better navigate
business dealings in Thailand. Adopting an understanding and respectful approach
to Thai business culture can facilitate strong partnerships, successful negotiations,
and ultimately, profitable business ventures. Here are some of the key
characteristics of business culture in Thailand:
Respect for hierarchy. In Thailand, there is a strong emphasis on respect for
authority and hierarchy. This means that it is important to show respect to elders and
senior members of an organization.
Relationship building. In Thai culture, building relationships and establishing
trust is crucial in business. This means that it is important to spend time getting to know
your business partners and clients on a personal level before discussing business.
Non-confrontational communication. Thai people are known for their polite
and gentle communication style. They avoid confrontational or direct communication,
as it is considered rude.
Saving face. "Saving face" is an important concept in Thai culture. Business
people want to avoid any behavior that would cause them or their counterparts to lose
face in a business transaction.
Gift-giving. Giving gifts is a common practice in Thai business culture. It is
seen as a way to show gratitude and establish goodwill.
Punctuality. Being punctual is considered important in Thai business culture
as it shows respect and responsibility.
Flexibility. Thai culture is more laid-back and flexible in its approach to
business, and negotiations may take longer than in Western cultures.
Buddhist influence. Buddhism is the dominant religion in Thailand and has an
impact on the country's business culture. It emphasizes the importance of maintaining
harmony, being compassionate, and refraining from unnecessary aggression.
C. Organizational Culture
Thailand's organizational culture can vary depending on the industry, company
size, and region. However, there are some common characteristics that can be
observed. One of the key aspects of Thai organizational culture is the emphasis on
hierarchy and respect for authority. This is reflected in the way that decisions are made,
with senior management often having the final say. Thailand has a collectivistic culture,
which values maintaining social harmony, respect for authority, and loyalty to the group
or company. This is reflected in the workplace, where teamwork and consensusbuilding are prioritized over individual achievement. Employees are expected to be
respectful and deferential to their supervisors and to follow rules and procedures
strictly. There are several different types of organizational culture in Thailand,
including:
Hierarchical. Hierarchical cultures are common in large organizations and
government agencies in Thailand. These cultures prioritize following the chain of
command and respecting authority figures.
Entrepreneurial. Entrepreneurial cultures are becoming more common in
Thailand's private sector, especially in startups and tech companies. These cultures
value creativity, risk-taking, and innovation.
Family-oriented. Many small and medium-sized enterprises in Thailand have a
family-oriented culture, where the owner or founder is seen as the head of the family.
These cultures prioritize loyalty and empathy towards employees and prioritize their
well-being.
Nationalistic. Nationalistic cultures are common in government agencies and
state-owned enterprises in Thailand. These cultures prioritize serving the national
interest and are often focused on promoting Thailand's economic development.
Overall, the organizational culture in Thailand is heavily influenced by Thai values
and traditions, including respect for hierarchy and collectivism. However, as Thailand's
economy and society continue to modernize, there is also growing interest in more
entrepreneurial and innovative organizational cultures.
II. Implications of Culture to Marketing Mix
A. Product
Thai culture places an emphasis on product quality and uniqueness. Therefore,
products that are perceived to be of high quality and offer unique features are likely to
be more successful in the market. Additionally, Thai cultural values play a significant
role in product development, packaging, and branding. Certain products, such as spicy
food, handmade crafts, and traditional clothing, are more popular in Thailand due to
their cultural significance. Companies need to consider local cultural values before
introducing new products to the market to ensure they are accepted and successful.
B. Price
Thai consumers value affordability in their purchases. Companies that set overly
high prices for their products may fail in the Thai market. However, Thai consumers
are willing to pay higher prices for products that reflect quality, authenticity, and luxury.
Thus, pricing strategies should reflect Thai consumers' expectations, cultural values,
and purchasing power.
C. Place
The distribution network in Thailand is influenced by factors such as geography,
infrastructure, and cultural preferences. For instance, more traditional markets are still
popular in Thailand, and products that are sold in such markets reveal a local touch
and differentiation. Urbanization and the rise of e-commerce have influenced
marketing decisions on the placement of products and services in Thailand.
Companies must consider different channels such as supermarkets, street vendors,
and online platforms to reach wider audiences.
D. Promotion
Promotion strategies in Thailand should reflect local cultural values and
preferences. For instance, Thai people are culturally diverse and have varying tastes
depending on the region, age, and lifestyle. Therefore, companies need to develop
promotions that appeal to specific demographics and cultural groups. Thai consumers
are also influenced by social and cultural norms such as politeness, respect, and
humility, which are reflected in advertising messages.
In conclusion, the cultural values in Thailand suggest that companies must be
aware of and take into account key influences on the marketing mix. Cultural values
affect pricing strategies, branding, packaging, manufacturing, and promotional
activities. Companies that take into account and understand the local cultural
preferences will effectively market their products and services in the Thai market.
POLITICAL AND LEGAL ENVIRONMENT
I. Political and Legal Background
A. Home Country Vs. Host Country (relationship)
The Philippines and Thailand were regarded as allies. They supported the US as
its companions and had a strong anti-communist stance. They belonged to the Manila
Pact, also known as the Southeast Asia Treaty Organization. Even though the military
agreement is no longer in effect, its offshoot, the Thanat-Rusk Communiqué of 1962,
is still in effect. As members of the multinational peacekeeping force, their soldiers
participated in the Korean War from 1950 to 1953 alongside one another. Only two
Southeast Asian nations Thailand and the Philippines, sent troops to the conflict. 1,368
casualties in all, including 116 Filipino soldiers killed, were sustained by both sides.
The small flags of the two nations are still visible today in Panmunjom, the truce
settlement located at the border between the North and the South. However, outside
of the Asean circuit, no one has had anything to say about Thailand-Philippines
relations in ages. One straightforward reason is that the two countries have no mutual
issues. The Thais see Filipinos as a reflection of themselves: pleasant and easygoing,
with a penchant for partying. They are everyday survivalists. Thais are like twin
brothers reared by different partners who speak Thai to Filipinos. We can't tell the
difference between us unless we open our mouths and speak.
The golden years of Thai-Philippine relations were from the 1950s through the
1980s, when the two countries were pump-priming economic expansion and
advancement despite the increasing communist menace. Their efforts to raise the
standard of living, create social stability, and eradicate poverty as a method of
combating communism were extensively recorded. Throughout this period, both
countries worked closely in all aspects of agriculture and technical development under
the US security and development umbrella.
In the mid-1980s, Filipinos dominated middle-level management roles in both Thai
and foreign enterprises. Today, Filipino technical and management abilities are in high
demand, since their forefathers have left lasting legacies in the Thai business sector.
Furthermore, approximately 30,000 Filipinos are currently employed in Thailand,
primarily as English teachers, nurses, and managers, among other positions. Only
2,000 Thais live in the Philippines, the majority of them are students or expats working
for Thai and other enterprises.
Filipino crooners have entertained Thai and foreign audiences in five-star hotels,
restaurants, and pubs for decades. Some of them rose to prominence, such as
Christina Aguilar. Little Home Bakery was established in 1951, introducing Thais to
Filipino bakery delicacies. Ma-yong-ness, as Thais termed the creamy mayonnaise
from the Philippines, was a must-buy present from the Philippines back then. It's dried
mango and cold-pressed coconut oil today.
B. Structure of Government
Structure of Thailand’s Government
Thailand is a constitutional monarchy, which means that the King serves the
people of Thailand as "HEAD OF STATE" under the rules of the Thai Constitution. (It
should be noted that the Constitution provides that the successor to the King may be
a Princess, rather than a Prince, and thus some translators use the word "Monarch"
instead of the word "King" in translating this Constitution into English; the word
"monarch" is a non-sexist term, indicating that a monarch may be either a man or a
woman.) Thailand adopted a new Constitution in October 1997, which is now in effect,
although certain provisions of that Constitution are still in.
The Executive Branch
The Prime Minister leads the executive branch of government. It is made up of the
Prime Minister, ministers from several ministries, deputy ministers, and permanent
staff from various government ministries. The Prime Minister is chosen by the House
of Representatives, with the President making a recommendation to the King for
appointment. Typically, the person suggested for Prime Minister is the leader of the
political party with the most elected Members of Parliament. However, a "coalition
government" may be formed when a group of political parties jointly represent a
majority of House of Representatives members. If such a coalition government is
formed, the coalition may elect someone else as Prime Minister, and the President of
the House of Representatives will normally send the name of the coalition's proposed
Prime Minister to the King. The Prime Minister must be a House of Representatives
member. The King picks the Prime Minister after the president of the House of
Representatives makes his suggestion to the King.
The Prime Minister is the "Head of Government," and he is in charge of all
government agencies save the judiciary and legislative bodies. The Prime Minister
chooses those individuals, generally members of the House of Representatives, to be
nominated as Ministers or Deputy Ministers to oversee the activities of each of the
government's different ministries. When a coalition of political parties is established,
each party traditionally seeks a representative proportion of ministerial and deputy
ministerial nominees from that party's membership, as proposed by the party's leader.
All Ministers and Deputy Ministers are appointed by the King on the proposal of the
Prime Minister. The King will appoint the Prime Minister and other officials under the
new constitution.
The Judicial Branch
The Judicial Branch is composed of judges appointed by the king. The Thai Ministry
of Justice oversees all courts in Thailand. Thailand likewise has an independent
Constitutional Court. The Court of Appeals is organized into districts, each with three
judges.
Structure of Philippine Government
The Philippines is a presidential republic with authority divided equally among its
three branches: executive, legislative, and judicial. One fundamental conclusion of a
presidential system of government is the principle of separation of powers, which
states that legislation is the responsibility of Congress, implementation is the
responsibility of the Executive, and legal controversies are the responsibility of the
Judiciary.
The Legislative Branch
Through the power vested in the Philippine Congress, the Legislative branch is
permitted to make, amend, and abolish laws. This body is divided into two chambers:
the Senate and the House of Representatives.
The Executive Branch
The Executive branch is made up of the President and Vice President, who are
chosen by direct popular vote and serve six-year terms. The President is given the
right to appoint his Cabinet by the Constitution. These departments account for a
significant component of the country's bureaucracy.
The Judicial Branch
The Judicial branch has the authority to resolve disputes regarding legally
demandable and enforceable rights. This branch decides whether there has been a
grave abuse of discretion resulting in a lack or excess of jurisdiction on the part and
instrumentality of the government. It consists of a Supreme Court and several other
courts.
The Supreme Court is expressly granted the power of Judicial Review, which
includes the authority to declare a treaty, international or executive agreement, statute,
presidential decree, proclamation, order, instruction, ordinance, or regulation illegal.
C. Government Policies and Regulations
Philippines’ Administrative Rules and Regulations
Administrative rules and regulations are orders, rules, and regulations issued by
the heads of Departments, Bureaus, and other government bodies to ensure that laws
within their authority are effectively enforced. To be valid, such rules and regulations
must be within the allowed limits and jurisdiction of the office issuing them, as well as
in accordance with the conditions of the law permitting their issue. The National
Administrative Register, which is available in print, CD-ROM, and on the Supreme
Court website, has made it easier to access administrative rules and regulations.
Thailand’s Government Policies and Regulations
Thailand is overhauling its regulatory environment to assist businesses expand in
the country. Since 2017, the government has worked to reduce administrative costs in
order to improve the business environment by simplifying the licensing procedure and
building online platforms to support e-commerce. In its amended constitution in 2017,
the Thai government promised to strengthening the regulatory process. Thailand has
also created a new 4.0 Strategy with the goal of transforming the country into a firstworld nation by developing future industries. The government has formed specific
industry clusters to support the growth and development of priority industries both
domestically and internationally in order to assist small and medium-sized firms
(SMEs) in connecting with global value chains (GVCs).
II. Marketing Laws
A. Promotions
The major goal of the advertisement must be to provide consumers with clear and
adequate information. For example, if an advertisement promises that services will be
supplied free of charge, the services must not be conditional on any costs, ensuring
that customers accurately understand that they do not have to pay any fees for the
services. Advertisement statements must be in Thai, easily seen, heard, or read, and
not deceptive. If the advertisement is in a foreign language, a Thai translation must be
provided. The announcement also specifies specific rules for various forms of
advertising media.
B. Product Development
Product Development is a leading independent Thai manufacturer and marketer of
high-quality oils, premium greases, certified food grade lubricants, and specialty
products. Product Development offers a wide selection of automotive, industrial,
mining, agricultural, food grade, and specialty goods as part of its services and
dedication to customers. Products and containers that are unique. Opportunities for
toll mixing Customized filler in various packaging sizes R&D skills to create products
for the most difficult applications. Quality control reference testing as well as aftermarket laboratory services Technical, application, and engineering guidance from
product experts. Services for consulting on the design, construction, operation, and
administration of blending plants.
C. Labeling
The Thai Food and Drug Administration (FDA), Ministry of Public Health (MOPH),
requires labeling on all processed food, healthcare, and cosmetic items, whether
imported or locally made.
For marketing imported foods, a Thai label must be placed where necessary before
entry and fastened to every single item of the food product. Failure to apply the label
before arrival will result in the Thai FDA seizing the product. Only pre-approved labels
for particularly restricted goods are required by the Thai FDA.
The importer of
specifically controlled foods must apply for a permit to use the pre-approved label by
submitting Form, along with formulations, production methods, food quality analysis
results, or other documentation regarding food standards and labeling, through the
Thai FDA's electronic submission system. Thai FDA will provide a food serial number
and label authorization once it has been approved.
D. Pricing
Thailand's impressive recovery from the global financial crisis helped to legitimize
the government's historic borrowing strategy of Bt1.49 trillion (US$49 billion) to boost
the economy and fund major populist campaigns. The government is fortunate in that
Thailand is a significant food producer and exporter. The Baht's strength has also
helped to alleviate import-cost constraints.
E. Channels of Distribution
The selection of distribution and sales channels is heavily influenced by the type of
product and the end-user. Product exporters who seek after-sales service should have
a Thai importer represent them locally. A local agent or distributor can provide service
and parts replacement more promptly. As a result, if there is a location where nearimmediate assistance is available whenever a machine fails, the end-user's confidence
will grow. Furthermore, because there are no language or distance obstacles, the enduser often feels more at ease working with a local agent or distributor. The agent or
distributor also helps end-users with customs processes. It should be emphasized
that, in general, only local agents, distributors, or manufacturers' branch offices in
Thailand are qualified to bid on routine government bids on a daily basis. Please also
consult the parts in this chapter on "Selling Factors" and "Selling to the Government"
for additional information about overseas bidders bidding on projects.
III. Impact of Political and Legal Factors to Marketing Mix
A. Product
Even as Thailand's political crisis has deteriorated from street protests to daily
violence, disintegration of state institutions, and the threat of a coup, most Thai
businesspeople, foreign investors, and Thai economic analysts have maintained a
relatively positive outlook for the Thai economy this year and next. After all, as some
long-term Thai investors have informed me, the Thai economy has shown unusually
robust over the years, weathering nineteen coups and attempted coups, natural
disasters, Indochina wars, and numerous bloody Bangkok street rallies. Thai
entrepreneurs are developing and patenting items, as well as strengthening Thailand's
wireless and physical infrastructure, among other priorities. The zero-sum aspect of
current Thai politics has also driven both Puea Thai and, while they were in power, the
Democrat Party to make populist pledges in an attempt to either shore up or win over
their power base in the north/northeast. Although some of these populist promises
were not realized, while others had a significant impact on equality, others, such as
the disastrous rice pledging system, hampered growth and created a bad precedent
for future economic policy-making.
B. Price
Developing an international market is comparable to entering a domestic market in
that a corporation invests resources in that market to achieve a competitive advantage.
Local enterprises will frequently, and sometimes successfully, pursue copycat
methods. When they succeed, the economy of their home country benefits. When they
fail, the international corporation frequently buys them out.
Thailand's market is open and very competitive. As they examine this industry, US
enterprises should consider elements such as distribution routes, necessary sales and
advertising strategies, and the existing pricing policies of important competitors. In
Thailand, standard credit payments are accepted.
Importers of major equipment or machinery charge a five to ten percent
commission and allow their customers to open a letter of credit on their own.
Manufacturers and wholesalers often earn a profit margin of five to 10 percent. Local
goods retailers and distributors want a 25-35 percent profit margin. There is also a 7%
VAT tax on consumer products.
Thai customers are extremely price conscious. In reality, less than half of Thai
consumers report buying based on brand recognition, while first-time purchasers
frequently buy based only on price. Customers are frequently offered complimentary
gifts or additional options with their purchases. Furthermore, midnight sales and one-
time promotions have shown to be very profitable. Retail pricing is determined by the
product and the frequency of turnover.
C. Place
Historically, coverage issues have arisen as a result of whether political
demonstrations are characterized as acts of civil unrest or acts of terrorism; most
policies, in accordance with international practice, do not specifically cover terrorism.
As a result, risk management is more than just having insurance coverage in place.
Businesses must become operationally agile by incorporating flexibility into their
business plans, such as having 'emergency' business premises - if possible - in case
their regular premises are disrupted by business interruptions (and accepting that
getting around Bangkok is notoriously difficult even at the best of times, let alone during
street demonstrations).
To mitigate these risks, corporations might purchase political risk and business
interruption insurance. The insurance business has done well for those who have
insurance coverage throughout the last year. Insurers have evaluated the standard
wordings for infectious illness provisions, as well as the numerous additional clauses
that may be regarded to include pandemic risks, as in other nations. However, most
claims have been settled. However, a recent surge in COVID-19 instances, as well as
the longer-term impact of the pandemic, could lead to bigger pay-outs in the future,
thereby fueling litigation and premium rises. Furthermore, the claims processes have
been criticized for being slow, and there is concern that some businesses will fail.
D. Promotion
In Thailand, commercial promotions are an equally essential marketing tactic for
both consumer and industrial products. In Thailand, consumer trade promotion is
typically carried out through the use of gift premiums, discount coupons, or drawings
for commodities such as package tours, cars, or electrical equipment. Supermarkets
and shopping malls routinely host consumer trade marketing activities. Exhibiting
companies attend these events on a regular basis since the cost of attendance is
substantially lower than that of a privately organized trade show.
Thailand's
Department of Trade Promotion routinely hosts industrial exhibits to promote Thai
exports to international buyer audiences during "trade days" and raises domestic
awareness at similar fairs by hosting "a public days." After the pandemic, trade shows
will likely become hybrid events, with more virtual or live streaming for content events
and seminars.
Promotion of industrial products, on the other hand, differs by industry. Trade
shows and the placement of adverts on social media are the two most effective means
of promoting industrial products. Trade shows with an industry focus function as a
screening tool since exhibitors know they will have access to the right customers. The
Commercial Division of the U.S. The Embassy in Bangkok keeps a list of suggested
industry events in Thailand and the United States. Local events and trade missions
have pavilions. When advertising in trade periodicals, participating in trade exhibitions,
or conducting technical seminars, it is best to localize all product documentation and
technical specifications. Successful companies also arrange for their agents to obtain
specialized training at US headquarters or facilities.
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