Discuss about the market analysis of Thailand.
Thailand is a country situated at the centre of the Indo-china peninsula in South East Asia. The capital of the country is Bangkok which is the political, commercial, industrial as well as cultural center of the country. The political background of Thailand follows constitutional monarchy and the country is headed by the King. The politics of Thailand is presently carried out within the framework of constitutional monarchy, wherein, the Prime Minister is the head of the government and a hereditary monarch is the head of the state. The economy of the country is determined by the manufacturing sector. The economy of the country is highly based on the export business that accounts for two-third of the domestic product. Thailand promotes a peaceful social living along with quality growth and sustainability (Naran Lala School of Industrial Management & Computer Science, 2013).
Strategic Market Analysis
(i) Economic environment
There were financial crisis that took place in Thailand in 1997-98. The economic recovery from the crisis due to the strong exports was risen up to 3.7% GDP growth till 2011 (Market Research Reports, 2016). The economy is very well driven by the banking sector with estimated financial sector assets at 200% of GDP. The economy of Thai recovered in 2015 after a short fall induced due to the political uncertainty. The real GDP growth is estimated at 3% in 2016 and 3.2% in 2017. (Sullivan, 2016) Though, the escalating fiscal deficit by the government is a problematic situation. The economy of the country is based on the manufacturing industry. Agriculture was also affected by the droughts and floods that occurred in 2010. The production of corn, fruits, sugarcane, rice etc. have decreased due to this reason. The economy of Thailand has developed a lot due to the agriculture sector. Thailand plays a very active role in the international trade. (Poapongsakorn et al., 2016) In order to develop free trade, these points must be considered such as there is more efficiency in the regional deals and contains several advantages also instead of bilateral deals; empowerment of the agricultural production sector as well as free trade agreements that include non-tariff barriers (Huang et al., 2014). There was a great expansion in the employment sector of commerce, transport, and other related services. The jobless development is taking place in Thailand for the reason that the labor-intensive expertises are still extensively used and there is large quantity of labor availability in Thailand without the requirement of higher wages. The international reputation of Thailand is spoiled due to the widespread allegation of labor abuses in fruit processing industries of Thailand. Thailand will maintain its status as a key Asian provider of agricultural products in the upcoming years as the agricultural sector possesses strong opportunities in export and the support of government too. The forecast of BMI on universe agricultural business market value for the year 2016 states that the growth rate will be 4.9% average on the annual basis between the year 2016 and 2020 (Store.bmiresearch.com, 2016). This shows that the market economy of Thailand is accelerated and more likely to grow at strong rate in the first quarter of this year (Focus-economics.com, 2016).
(ii) Political environment
The politics of Thailand are currently conducted with the support of a constitutional monarchy, wherein, the Prime Minister is considered as the head of the government while the hereditary monarch is the head of the state. There is no reliance of judiciary on executive and legislative branches. There is multi-party system in Thailand which constitutes of five parties i.e. Coalition government, Opposition, extra parliamentary, Defunct parties and Banned or Dissolved Parties. The four major concepts followed in the politics of Thailand are; the status of the monarch as head of the armed forces and supporter of Buddhism and all other religions also, the legislative branch, the executive branch, and the Western democratic system. The current government plans to boost the competitiveness of Thailand by expansion of market access for businesses as component of its economic policies. The government favors the promotion of trade and investments, involvements in free trade agreements. It prevents corruption and believes in raising the standard of people of Thailand. These practical policies are expected to assist in the development of the country. Thai government has encouraged public investments to a greater extent to enhance the rapid economic growth of the nation. The government schemes of the tax incentives have developed an increased interest.
(iii) Social or Cultural environment
There has been an extensive growth in the economic sector of the capital of the country. (Kerdsriseam & Suwanmaneepong, 2015). Due to this fact, there is considerable income disparity such as the average income of employees contributing in the public and private sectors in the north-east are around three times less than the employees in Bangkok. (Market Research Reports, 2016). The per capita expenditure of the government in the north-east region on health and agriculture is also low than other regions. The social security system of the Thailand is really strong but increasing disparity in income and development affects the growth of the country. The government is making several strategic plans to make Thailand a welfare society in the coming year. (Wossen et al., 2015) The capital of the country i.e. Bangkok is getting prosperous day-by-day but the other regions are facing under privileged conditions (Abdullah & Shamsher, 2011).
There are three top most companies of fresh mangoes in the market and they are even exporting mangoes outside the country. (Fruits-vegetables.europages, 2016) They are as follows:
(i) Shalimar Thailand Plants & Trees - The Company is responsible for the production and export of best quality mangoes as well as other fruits from Thailand to the Middle-Eastern, South Asian and European markets.
(ii) KKK Fresh Fruit Chiangmai Limited Partnership - The Company holds the production and export of fresh fruits. They are known for their fresh fruit selection and their packaging.
(iii) Puttha Bucha International Trade Co. Ltd. - The Company supplies fresh mangoes and other fruits in the market of Thailand.
The following mentioned companies are the huge competition to our export of Australian fresh mangoes as they are settled in the market for so many years. Their quality and prices are well known to the inhabitants of Thailand (Shahzad, 2014). Therefore, we have to plan our market strategies for the best sale of our fruit in the market of Thailand.
Recommendations for the Key strategies
(i) Pricing strategy
The production of mango in Thailand is very high. These are considered to be one of the major crops of the country. The average cost of the fruits in the market varies from 30 baht to 60 baht. (Greslikova, 2016) It largely depends upon the size of the fruits, quality of the fruits and their demand in the market too. There are several other companies in the market from which the competition of our sale would have conflict. The prices of the fruit should be kept in between the ranges decided by other competitors so that it will be affordable by the maximum number of consumers (Seemanon & Sanguanwongse, 2015). Therefore, we have to keep our prices in the range so that the consumers may also get attracted towards this specific variety of fruit i.e. Australian fresh mangoes.
(ii) Distribution strategy
It is to be kept in mind that there is a major market of suppliers of a variety of mangoes in Thailand. Therefore, we have to contact the current distributers of the fruits in the market for the sale of our fruit too. As we know that the quality of our fruit is best, it will easily attract the attention of the consumers once they will purchase it. (Burnett, 2015) The local suppliers should be contacted and some new suppliers should also be given the contract to sale our fruit. As mango is also the major crop of Thailand, people over there are addicted to the varieties growing in Thailand (NatedaoTaotawin & PreukTaotawin, 2015). So we have to concentrate our selling of the fruit by making certain selling points or places also to approach the sale of our fruit to the maximum number of consumers. The supply of the fruit to the best selling regions of the fruits specifically, mango will be found beneficial for our business. It will be better to supply the fruit on every point from local markets to the malls for the maximum supply of our fruit.
As we know that mango is the major producing fruit of Thailand, we have to promote our fruit in various ways for the betterment of our business. We can use the strategies of advertisements through televisions and other entertainment media. The sale of fruit can also be increased by the distribution of the pamphlets mentioning the quality and prices of the fruit. The strategy of discounts on the purchase of certain amount of the fruit will also prove to be beneficial to our business. It is clear that the quality of our fruit is good; therefore, it will be easier to enhance the sale when it will once reach to the consumers.
The market analysis of Thailand proves that the market conditions are excellent for our fruit. Moreover, the government of Thailand supports the investment business in the country. Therefore, after this analysis, the recommended key strategies are to be followed and the proper implementation of these strategies will be beneficial for our business. There are several topmost companies which are of great competition to our business but we have to work hard to flourish our business in Thailand. After all, the quality of Australian fresh mango is the best and once it will reach the market, the demand will automatically increase due to its best quality.
Abdullah, M.N. & Shamsher, R., 2011. A Study on the Impact of PEST Analysis on the. Journal of Modern Accounting and Auditing, pp.1446-56.
Burnett, D.J.W., 2015. Moving to A Free Market Agriculture Policy. Free Market Agriculture Policy , pp.1-23.
Focus-economics.com, 2016. Thailand Economic Outlook.
Fruits-vegetables.europages, 2016. Euro Pages.
Greslikova, I., 2016. Our Favourite Healthy And Delicious Fruits In Thailand.
Huang, X.L., Ruangkanjanases, A. & Chen, C., 2014. Factors Influencing Chinese Firms’ Decision Making in Foreign Direct Investment in Thailand. International Journal of Trade, Economics and Finance, 5(6), pp.463-71.
Kerdsriseam, C. & Suwanmaneepong, S., 2015. Organic Agricultural Producer Strategies in Supply Chain ofSustainable Agriculture Network, Chachoengsao Province,Thailand. Journal of Agricultural Technology, pp.1-12.
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Shahzad, A., 2014. The Business Competitiveness of Thailand in the ASEAN Region. Business and Economic Research, pp.1-22.
Store.bmiresearch.com, 2016. Thailand Agribusiness Report.