Ananas international marketing plan in Thailand market

1 million. Thailand's middle class is emerging and is expected to make up about 13% of all households. This translates into the high value of income inequality of 90.2 on the Gini coefficient. Average Salary Percentage of people Earn this salary or more 5% THB 3,733,000 12% THB 2,663,076 23% THB 1,788,268 58% THB 815,776 82% THB 476,011 94% THB 249,070 98% THB 123,380 TABLE 3.2 – Average Salary Consumer spending Growing domestic income is generating optimism among the population and increasing consumer demand for a wide variety of products. With the increase in income, consumers - especially the richer ones - have spent more on experiences, such as eating out and traveling. The luxury market is also growing domestically. When it comes to buying luxury, consumers prefer to buy directly than buy online, as they say they can't make any buying decisions without seeing the product in person. Price, quality and availability of service are the main selling factors in Thailand. However, consumers are willing to pay more for the brands they love, and they rarely switch brands - even if the prices are better. Thai consumers are the most brand-conscious and loyal in Southeast Asia. They also spend more than their neighbors, which is reflected in their higher debt levels. Furthermore, consumers tend to like and shop impulsively, instead of saving their money - as is common in other Southeast Asian countries. Household Consumption Expenditure Sector Percentage Food and beverages 39.6% Housing 29.3% Transport 10.9% Energy 3.8% ICT 3.5% Clothing and footwear 2.8% Personal care 2.5% Health 1.3% TABLE 3.3- Household consumption expenditure Inflation rate (ản tin bộ công thương. According to TPSO, Thailand's CPI, a measure of overall inflation, in June fell 1.57% from the same period last year, after falling 3.44% in May - the highest drop in nearly 11 years. Generally for the first six months of this year, Thailand's overall inflation was 1.13% and core inflation was 0.32% (Thailand's core inflation in June was -0.05%). Thailand's deflation is likely to be worse than initially expected, after the Southeast Asian country's consumer price index (CPI) fell for the fourth consecutive month in June 2020. Unemployment Thailand's unemployment rate was 0.69% in 2019 according to the latest data from the World Bank. The Thai unemployment rate increased by 0.02% in 2019 compared to 0.67% in 2018. Statistics of Thailand's unemployment data up to 2019 are in tables and graphs. During this period the unemployment rate in Thailand peaked in the year with 3.40% of the working age population without a job. Lowest in the year with an unemployment rate of 0.49%. FIGURE 3.1- Unemployment Rate Interest rates (base lending rates) On November 6, the Central Bank of Thailand (BoT) cut its prime rate down to 1.25%; This is the second basic interest rate cut in the past three months to boost economic growth and curb the baht's appreciation against the dollar. Five out of 7 members of the Monetary Policy Committee under BoT voted for this decision. The Thai government is stepping up the monetary and financial management measures to boost the economy, which is currently at low growth. The Thai baht's value has risen by around 9% against the dollar over the past year and has become the most bullish currency in emerging markets. This trend has constrained Thailand's exports and tourism, with an economy quite dependent on the trade sector. According to the new data released by the Ministry of Commerce of Thailand, in October, the consumer price index (CPI) of this country increased by 0.11% over the same period last year, lower than the previous month. and make the inflation rate in this Southeast Asian country at the lowest level in 2 years. → Overall, the economy is in good condition thanks to the current account surplus, adequate foreign exchange reserves, low unemployment, and relatively low public debts enabling the use of fiscal policy as an economic stimulus. Still, all sectors of the economy should work on risk management and boost competitiveness in the face of today’s structural changes such as the use of automation in many industries, consumers’ changing behavior in everyday spending, and higher business competition from both domestic and international firms. Despite the Thai economic stability, these factors may have a negative impact on households, labors, and businesses that cannot adapt in time. 3.3.1.4 Social and Cultural Environments Social The total population of Thailand, as of December 2019, is around 69 million. There is no official state religion in the country; however, Buddhism is the most widely practised religion. Other major religions are Islam, Christianity, and Hinduism. The life expectancy for men is 71 years, while 79 years for women. The major language in Thailand is Thai. The people of Thailand are generally very friendly. They are very hard working as well. Thailand is a diverse country and tensions between ethnic groups are few and far between as people love to live freely and practise their faith as they wish. Many Thai women are very educated, and tech savvy; hence well-paid. Thai consumers are very brand conscious and do not mind paying some extra for their favourite brands. The demand for luxury products such as smartphones, jewellery, designer watches & sunglasses, and luxury cars is on the rise. However, Thai society faces some big social challenges. For example, adolescent pregnancy, ageing population, human trafficking, and corruption to name but a few in this regard. Cultural Language: The main language used in Thailand is simply called Thai, although it can also be referred to as Siam or Central Thai. Thai is the official language of the country and is widely used in government and education. Thai is part of the Tai-Kadai family, and is closely related to Lao, the main language spoken in Laos, so the two can understand each other for the most part. There are different dialects of Thai that are spoken across different regions of the country, including Southern Thai and Northern Thai. There are also a wide range of minority languages ​​spoken across Thailand, including Khmer, Malay and various Chinese dialects, in addition to many tribal languages, many in that number are in decline. Religion: Religion is a core feature of Thai life. While Buddhism is regarded as the national religion, practised by more than 90 per cent of the population, Islam, Christianity, Hinduism and other faiths are also represented. Thailand has nearly 94.6% Buddhism, 4.3% Islam and 1% Christianity, mainly belonging to the Theravada school (including the Traditional Thai Forest and the Dhammayuttika Nikaya and Santi Asoke sects). In addition, there are also Muslim minorities in Thailand (5-6%), Christians (1%) and other religions. Buddhism in Thailand is strongly influenced by the traditional beliefs related to ancestral and natural spirits, which have been incorporated into Buddhist cosmology. Most Thais have installed divine houses (Thai: ศาล พระภูมิ; RTGS: san phra phum), miniature houses outside their dwelling, where they believe that family spirits live. They offer food and drink to these souls to make them happy. If these souls are unhappy, it is believed that they will dwell in the house and cause chaos. These god houses can be found in public places and on Thai streets where the public makes offerings. Customs: One of the most distinctive features of the Thai custom is bow (Thai: wai), almost like the way of bowing by the Indians (Hindi: namaste). This gesture is used when meeting, breaking up, or confirming, with various forms depending on the person's social position, but in general it is usually a ceremony-like gesture with hands clasped and head down. Another Thai custom is bun khun, which is indebted to the births, as well as guardians, teachers, and people who have taken care of them. This custom includes emotions and actions in reciprocal relationships. In addition, stepping on Thai baht is also extremely disrespectful because the first image of the king appears on Thai coins. When sitting in temples, people should avoid pointing at pictures and statues of Buddha. Temples in Thai residences are built in such a way that the feet are not pointed directly to the symbols of worship - for example, do not place a temple for a bed if the house is too small, there is no other place to place a shrine. Thailand is a collectivist society, which dictates that the needs of the group are placed ahead of those of the individual. Subtlety and indirect forms of communication are highly valued in Thai society which, as in the case of many others across Asia, is hierarchical. Individuals are viewed as being either higher or lower in status, measured between one another in relative terms – younger or older, weaker or stronger, junior or senior, subordinate or superior, and rarely equal. As a result, young Thais grow up needing to learn appropriate behaviour within the confines of the existing hierarchy, taught to recognise the difference between ‘high place’ and ‘low place’, particularly in regard to the roles in society of adults and children, or teachers and students. In such a hierarchical society, status is important. Such a ranking can be determined simply by someone’s clothing and general appearance, their age or job, education, family history, as well as their wealth and social connections. Status dictates that subordinates will generally listen to and accept advice and direction from his or her superior without question. But this courtesy imposes on superiors an unstated obligation to lead and to be mentors in return. 3.3.1.6 Technological Environments Thailand is gradually becoming a country with advanced technology. Government encourages new organizations to adopt technology. The investment of Thai companies into new change and corporate infrastructure is also worthy of attention. Therefore, the country is expected to witness an increase in e-commerce and similar technology activities in the coming years. Thai companies now provide technology products and services overseas. For example, CCS Advance Tech (a Thai company) manufactures and supplies aerospace and aerospace components to global companies including Boeing and Airbus (Lowe, 2019). Thailand is also the Southeast Asian country at the forefront in the use of social media. Facebook, YouTube, Line (a Japanese company), Instagram and Twitter are the most used social media in the country. However, trustworthy activities are mainly focused on Bangkok. 3.3.1.7 Natural Environments Thailand is a country rich in natural resources, has played an important role in supporting local livelihoods and promoting economic growth. Management of natural resources and the environment has not been effective, and has revealed the conflict between environmental conservation and economic development. Natural disasters tend to occur frequently, threatening agricultural production, food and energy security, health and quality of life. Rapid economic development has affected natural resources. Biodiversity loss, air and water pollution, deforestation, water scarcity and desertification are some of the major environmental challenges facing Thailand today and protecting the environment has become one of the top priorities of the country. 3.3.2. Nature of Demand Sneakers and athletic shoes play an important role in footwear. Thai people, especially young people, normally like to wear casual shoes and simple sandals, and many of them keep sneakers in their shoe cabinet to wear both when doing exercise and in their daily routine, as the athleisure trend continued to be strong in 2019: Some people tend to wear sneakers to work, as many offices allow a relaxed dress code on some days. Given that consumers are also participating in more sports activities, they are therefore interested in purchasing sports footwear or sneakers in response to their healthy lifestyles. A number of men are interested in purchasing sneakers or sports footwear, they wear sneakers more often, pairing casual street sneakers or gym sneakers with their daily outfits, including jeans, shorts or trousers. So, when fashion style influences purchases, the decision becomes more complicated. In terms of distribution: Footwear specialist retailers, mainly located in department stores and shopping centres, are the places consumers normally look when wanting to buy a pair of shoes. Footwear sections in shopping centres provide a range of brands for both men and women, and special promotions and price discounts are usually offered from time-to-time. Nonetheless, when it comes to sports shoes or sneakers, consumers tend to get products at sports goods stores in shopping centres. Some brands provide exclusive shops with independent space, whilst others are offered at sports footwear distributors, namely Sports World, Super Sports, Carnival Store, SneakaVilla and Hoops Shop. Distribution is expanding. As internet retailing is being developed, certain brands have developed their own websites for online transactions, whilst some brands rely on other retailers. There is an emerging trend of using the internet in footwear in Thailand. This is either as an alternative shopping channel for digital-minded consumers, or the use of digital marketing strategies with the purpose of getting connected to a modern target audience. IMPACT: Due to the strong athleisure trend amongst Thai consumers, their preference tends to be shifting towards casual fashion inspired by sports, as well as urban street fashion trends. Gym sneakers, running shoes, training shoes, as well as casual street sneakers, are becoming more popular and eroding the shares of the other types of footwear available in the marketplace, such as leather flats, high heels, boat shoes, loafers and boots. 3.4. Competitor Analysis Converse Converse is an American shoe company and was established in 1908. It creates brand trends in footwear, apparel and ice skates. Since 2003, it has become a subsidiary of Nike. Currently, Converse has been present in Thailand with more than 20 stores concentrated in the big city of the Golden Temple country today. According to the demographic segment, the market has been divided into three segments: under 13 years old, group 13-19 years old, age group 20-35 and over 35 years old, including both men and women. Income is also divided into no income (students) and middle and upper class people. According to the psychology segment, Converse targets ambitious people who are materialistic, receptive and visual. Converse has also analyzed people's activities on the web and targeted behavioral segments like fashion, outdoor sports enthusiasts, and more. This brand is positioned as a retro modern subculture and is a classic shoe for the younger generation. High quality, carefully selected price range, the picture has got a good position in the minds of buyers. Vans Vans is an American manufacturer of skateboarding shoes and related apparel, started in Anaheim, California, and owned by VF Corporation. The company also sponsors surf, snowboarding, BMX, and motocross teams. Since the late 1960’s Vans has targeted Core Sports athletes, enthusiasts and followers and this has not changed much to today. With significant diversification of their product range Vans nowadays target males and females between the ages of 15-24 years who have an interest in action sports and lifestyle fashion. Vans however can cater to a much broader market with over 200 shoe styles, size from infants to adults, as well as apparel items and accessories including watches, belts, hats, bags and clothing. Vans heavy involvement in the youth music scene with the Vans Warped Tour has added another dimension to their target market, while still maintaining the same youth culture and style. Rompboy Rompboy was founded by Tanan Boonyatanapiwa. The brand started as a clothing label but shortly finds its way into the streetwear game with great success. Heavily influenced by tennis and badminton shoes from the 1960s, Tanan Boonyatapiwat handmade his first pair of shoes in 2015. Each pair highlights the vintage-inspired design made by hand from high-grade material and the craftsmanship of the team of experienced shoemakers. At first, the brand offered only a limited number of shoes and made them only available through the online store. The vintage styling and minimalistic appearance added with appealing little details on each pair sparked extreme interest among sneakerheads, causing the shoes to sell out in no time and cementing the brand’s reputation in the realm of sneakers. Building on their success, Rompboy now has its outlet and new product lines in fashionable leather shoes and student kicks. Mitzahai Mitzahai, translating to friends or companions in Thai, is a Thai footwear brand that focuses on vintage-style sneakers inspired by the events of World War 2 from the 1940s. Originally a footwear company focusing on vintage-style sneakers, the brand has since expanded its range of products to include comfortable tees, shirts and hats. Mitzahai’s footwear and apparel are sold at CAZH outlets in Siam Discovery and ICONSIAM. It also offers worldwide shipping for purchases made via its online store. The assortment of color options allows you to mix and match Mitzahai shoes with any style of clothing. Their sneakers come in all types from regular running shoes to high-tops. Each creation features an iconic wavy pattern on the curved toe cap made from rubber and lightweight materials that are easy to put on and extremely durable. The iconic gimmick of a printed brand-name in Thai-style font incorporated on the designs of their upper and soles. Truly Another sneaker brand for all the fashionable men out there. Truly comes with a health-centric concept that pays attention to the wellness of your feet and making sure that you get the most comfortable yellow-colored sole for one foot and a red-colored sole for the other foot, a creative gimmick that is still talked about today. Furthermore, the GUM collection uses pure Para rubber and unbleached canvas fabric that offers superb softness and flexibility, reducing stress on the feet and helps with shock absorption as you walk. Materials used for every collection are all homegrown, with the meticulous production process ensuring that an international standard of quality is met in every pair. 4. SWOT Analysis STRENGTH: 20 years experience of the shoe factory has cooperated with many famous brands such as Puma, Reebok, Keds, Burberry, Ananas flagship product is the vulcanized shoe with a minimalist design that is easily combined with many different types of outfits. Website with many eye-catching colors, bringing a youthful and dynamic look Colors range from monochrome to ombre. This makes Ananas no need for sophisticated motifs but still able to conquer the most demanding customers. WEAKNESS: Lack of experience in new markets, especially international (Thailand) markets. A new brand in customer's perception Ananas has yet to build relationships with partners in Thailand OPPORTUNITIES Thailand has undergone rapid urbanisation with a sustained improvement in household incomes, this will support the growth of consumer spending on discretionary items, such as lifestyle products and services The rapid adoption of e-commerce in Thailand help the company reach target customers more easily and less costly Thai society maintains good values and culture. These factors contribute toward social cohesion and reduce the negative influences of modernization and conflicts in Thai society. THREATS Concentrated spending patterns due to high household debts and a slow recovery of household income Uncertainties from the upcoming national election which will significantly affect consumer and investor confidence as well as future economic policy. Various problems of national security have been increasing at an alarming rate due to political unrest, terrorism, economic crisis and international competitions There is still a lack of law enforcement to prevent piracy. Thailand is becoming an ageing society due to changes in population structure, characterized by the increase of older persons while the size of younger population and workforce decrease Severe natural and man-made disasters are likely to have greater impacts in the future. 5. Objectives With being a new foreign product in the market and facing competitors that are local and foreign brands that already have a presence and a certain market share. The basic and most important goal when Ananas enters the Thai market is increase market penetration and increase product awareness, attract new consumers to use products that combine strong and continuous communication. 6. Recommended Marketing Strategy 6.1 Target Marketing Identification and Segmentation Strategy Demographics Gender: Both male and female Age: 18 - 25 Income: >= 2604.27 THB/month (86.30 USD/month) Occupation: College students and newcomers to the workforce Geographics: Urban area - Bangkok Psychographics: Personality: Youthful, dynamic and active Lifestyle: Extrovert, enjoying experiences and participating in outdoor activities, having a healthy lifestyle Behavior: Buying places: supermarkets, shopping centres, online Behavioral Occasion: Regular occasion: go to school, work or hanging out Special occasion: As gifts on important occasions such as birthdays, anniversaries, ... Benefit: Looking for a shoe that is comfortable and suitable for school, work or hanging out. No shoelaces Easy to slip on and off Easy to map. Usage rate: medium or heavy (use everyday) User status: daily user 6.2 Marketing positioning Reasonable price - Good quality; Good customer service 6.3 Market Entry Strategy: → Exporting: Direct sales (e-commerce website) Use of an intermediary (retailers) 7. Marketing Mix Strategies and Tactics 7.1 Product 7.1.1. Core product: Vulcanized shoes Overall, Vulcanized shoes overall have two main parts: Upper and Sole in which Upper are all the components located in the upper body while Sole is the rubber-made foundation below. FIGURE 7.1- Vulcanized shoes (1) Vamp: toe box - the front part of the shoe, a hard covering to protect the toes in a shoe (2) Tongue: A shoe tongue is a strip of leather or other material located under the laces of a shoe. The tongue sits on the top center part of the shoe on top of the bridge of the foot. It's attached to the vamp and runs all the way to the throat of the shoe. (3) Stamp: The pineapple logo stamp is sewn or heat-pressed directly on the tongue. (4) Eyestays: is the part that contains 2 rows of shoelace holes. Shoes may or may not have these depending on the intentions of the design. (5) Eyelets: Eyelets are usually holes in a shoe through which shoelaces are threaded, allowing the shoes to be tightened. Eyelets are found at the throat of the shoe which is located along the top of the foot (6) Stitching: decorative stitches used to attach discrete parts together (7) Laces: shoelace - the composition is familiar and can be changed easily. (8) Aglets: a metal or plastic tube fixed tightly around each end of a shoelace. (9) Heel counter: heel counter - heel fixer for the shoe (inside) and heel decoration (outside). (10) Heel strap: also known as rear brace. The main use is to increase the aesthetics of the product. This component may not be available in some shoe styles and styles. (11) Lining: also known as the body lining - the inner lining of the shoe body. In item number (12) Insock: the first layer that your foot touches when you wear the shoes. Insock in some shoe models will be used to keep warm, deodorize while others are parts to create a smooth wearing and limit friction with the Sole (sole). (13) Insole: insole - the part below the Insock, not visible from the outside because it is hidden. (14) Outsole: outsole - the only part of a shoe in direct contact with the ground. Because the part that bears a lot of friction while the shoe is used, the sole material must also be a material with high durability. (15) Foxing: the rubber is glued to the shoe for reinforcement, connecting the Upper and Sole, this is the detail that makes it easy for you to recognize Vulcanized shoes and differentiate them from Cold Cement shoes. (16) Bumper: Bumper is often used to reinforce the foxing more firmly. Depending on the purpose of decoration, the material / color of the bumper may be different from the overall foxing. You can clearly see this through the products in the Basas Bumper Gum set that was released not long ago by Ananas. (17) Heel label: the heel stamp - the highlight is no less important because it conveys the message of the brand. 7.