THE STUDY OF CHIANG MAI COMMUNITY PRODUCT DEVELOPMENT STRATEGIES

Transcription

1 I J A B E R, Vol. 13, No. 5, (2015): THE STUDY OF CHIANG MAI COMMUNITY PRODUCT DEVELOPMENT STRATEGIES Ratthanan Pongwiritthon * Abstract: This study aims to examine Chiang Mai community product development strategies, target group of customers, development strategies concerning to customers behaviors and attitude. As well as to study about the connection between development strategies concerning to customers attitude and demographic characteristics of Chiang Mai community product customers. The research tool is a questionnaire that completed by 257 Chiang Mai community product artisans/ entrepreneurs and 850 Chiang Mai community product customers. The quantitative data was determined by using mean, percentage, frequency and standard deviation. The qualitative data was gathered from in-depth interviews with 24 community development officers. The data from interviewing was analyzed by content analysis. The results showed that most of the respondent was female, aged between 41 to 50 years old, primary school graduated, work as merchant and entrepreneur, monthly income less than 5,000 Thai baht. From the interview, Chiang Mai community product customers expressed their opinion with a medium satisfaction level regarding to Chiang Mai community product development strategies, particularly concerning the merchandise field. The differences of gender, age, education level, career and monthly income reflect a different intention to define Chiang Mai community development strategies with no statistical significance level at Keyword: Development Strategies, Chiang Mai, Community Product INTRODUCTION In 1997, the economic crisis caused Thailand s economy collapsed, which also leads the industrial sector to both scaled down their capacities and closed down their business. The agricultural product prices also were rapidly plunging. This economic recession caused the difficulty nationwide, which including income inequality and impoverishment. Then the Thai government was attempting to revive the economy from recession by starting the OTOP program as well as Thai community product supporting program with the target to start the local community resources and wisdom to produce quality and unique identity products which represent their geographical and cultural. The products can be available both domestic and international via various distribution channels including local shops, souvenir * Department of Management, Faculty of Business Administration and Liberal Arts, Rajamangala University of Technology Lanna, dr_tok2029@hotmail.com

2 3122 Ratthanan Pongwiritthon centers and online shop. The government also attempted to broadly support the community and people to become self-sufficient as well as could make a new pattern of income.nevertheless, the Thai community productproject still encounters the obstacle on producing, marketing, accounting, financial support and management.due to sudden higher production cost, the prices of Thai product became uncompetitive with same product range of other countries.moreover, the marketing of Thai community product was also limited to groups of customers with low to middle rate of income. The ambiguous job duties and staff ranked decision structure also cause the ineffective management. In addition, they fail to meet the standard of accounting also reflected unreliable accounting information. Lastly, they had insufficient financial support and ineffective financial asset management. As the problems discussed earlier, it was led Thai community product artisans the requirement on development strategies to not only to resolve the difficulties, but also to improve the business into the forthcoming worldwide marketplace. Therefore, this study aims to examine Chiang Mai community product development strategies concerning to two aspects which are customers opinions as well as strategies related to government policies. The outcome of the study will be used to draw up the development strategies for Chiang Mai community product. RESEARCH OBJECTIVES The research objectives are included; to study Chiang Mai community product target groups of customers, to study Chiang Mai community product development strategies concerning to customers behaviors and attitude. As well as to study about the connection between development strategies concerning to customers attitude and demographic characteristics of Chiang Mai community product s customers. METHODOLOGY The research tool is a questionnaire that completed by 257 Chiang Mai community product s artisans/ entrepreneurs and 850 Chiang Mai community product s customers. The quantitative data was determined by using mean, percentage, frequency and standard deviation. The qualitative data was gathered from indepth interviews with 24 community development officers. The data from interviewing was analyzed by content analysis. RESEARCH RESULTS The results of the research of Chiang Mai community product development strategies were described as in Table 1.

3 The Study of Chiang Mai Community Product Development Strategies 3123 Table 1 An analysis of Chiang Mai Community Product Development Strategies No Strategies Operated by Artisans X S.D. Levels of and Entrepreneurs 1 Manufacturing High 2 Marketing High 3 Management High 4 Accounting High 5 Finance High Total Mean High As in Table 1, the results showed that in the analysis, Chiang Mai community product development strategies are in high level. By the way, the manufacturing aspect showed the highest level. Table 2 Chiang Mai Community Product Development Strategies concerning to the Manufacturing Aspect No Strategies Operated by Artisans X S.D. Levels of and Entrepreneurs 1 Manufacturing and Planning Units High 2 Manufacturing Facilities High 3 Quality Control High 4 Manufacturing Improvement High Total Mean High As in Table 2, the results showed that in the analysis, Chiang Mai community product development strategies concerning to the manufacturing aspect overall was at a high implementation level. By the way, the quality control aspect showed the highest level. Table 3 Chiang Mai Community Product Development Strategies concerning to the Marketing Aspect. No Strategies Operated by Artisans X S.D. Levels of and Entrepreneurs 1 Product Medium 2 Price High 3 Distribution High 4 Marketing Promotion Medium Total Mean High In accordance with Table 3, the results showed that mainly Chiang Mai community product development strategies reflected the marketing aspect at a high level. By the way, the price aspect gained the highest mean.

4 3124 Ratthanan Pongwiritthon Table 4 Chiang Mai Community ProductDevelopment Strategies concerning the Management Aspect No Strategies Operated by Artisans and X S.D. Levels of Entrepreneurs 1 Making a clear organizational structure Medium 2 Making clear job responsibilities High 3 Having transparent organizational elections High or appointing qualified persons who fit the job qualifications and the organization s regulations. 4 Declaring clear rules and regulations to staff High to be able to do their duties 5 Presenting clear payment rates for the job High 6 Granting fair benefits for members High 7 Staff has sufficient knowledge of their High responsibilities 8 The staff attends the seminar or training that High provides the best management practice by both public and private organizations Total Mean High As in Table 4, the results showed that Chiang Mai community product development strategies concerning to the management aspect was at a high level. By the way, granting fair benefits for members aspect showed the highest mean. Table 5 Chiang Mai Community Product Development Strategies concerning the Accounting Aspect No Strategies Operated by Artisans X S.D. Levels of and Entrepreneurs 1 Staff has sufficiently qualified for an High accountant position 2 The accounting staff attends the training High practice by both public and private organizations 3 Accounting records were held in an High up-to-date practice 4 Accounting records were directly recorded High in systematic practice 5 Accounting documents were classified into High monthly and annual records 6 Accounting records were audited regularly High 7 Accounting system showed accounting Medium protocol standard Total Mean High

5 The Study of Chiang Mai Community Product Development Strategies 3125 In accordance with Table 5, the results showed that Chiang Mai community product development strategies concerning to the accounting aspect was reflected a high level. By the way, accounting records were held in an up-to-date practice and accounting records were directly recorded in systematic practice gained the highest mean. Table 6 Chiang Mai Community Product Development Strategies concerning the Financial Aspect No Strategies Operated by Artisans and X S.D. Levels of Entrepreneurs 1 Product cost was examined frequently High 2 Continue the break-even point analysis High 3 Continue the return on an investment High analysis 4 Obtain financial support from external Medium organization such as banks, village funds and so on 5 Present financial plan through rising an Medium investment volume from the members, such as asking for more stocks from holders Total Mean High As in Table 6, the results showed that Chiang Mai community product development strategies concerning to the financial aspect was at a high level.by the way, product cost was examined frequently aspect showed the highest mean. In addition, varied indexes of Chiang Mai community product customers behavior were also observed. For instance, wine, herbal soap, pork rind, handmade rattan baskets and textile for traditional skirt were the most commonly purchased items. The purpose of purchasing has been for household devouring with the purchasing frequently more than 6 times per year, purchased 1-2 items with the value below 500 Thai Baht each time. The other purchasing purpose was for seasonal gifts for the New Year, Songkran and other special events.the considerable influencing element in the purchasing decision making was the product exclusive identity. The channel to approach the merchandise for customers was self-access to the production area. The way customers became acquainted with the merchandise also was indicated by self-decision to buy and repurchase the merchandise. Moreover, the majority of Chiang Mai community product customer target groups were female aged between 41 to 50 years old with primary school graduated and work as a merchant and entrepreneur with monthly income less than 5,000 Thai baht.

6 3126 Ratthanan Pongwiritthon For beverages range, it was discovered that the target group of Chiang Mai community product customers were female aged between 41 to 50 years old with a primary school graduated and own their business with less than 5,000 Thai baht average monthly incomes. Furthermore, Chiang Mai community product customers also included domestic and foreign clients as Hong Kong, China, Malaysia, Taiwan, United State and so on. Regarding to textile for traditional skirt range, it was found that most of the customers were female age 41 to 50 years with a primary school graduated and work as employees and farmers with monthly income less than 5,000 Thai baht. Moreover, there were textile retailers who bought Chiang Mai community product regularly to sell in their store as in Bangkok, Ubonratcchathani and so on. For tools and wares product range, Chiang Mai community product target group were female age 41 to 50 years with a primary school graduated and work as farmers with monthly income less than 5,000 Thai baht. Furthermore, Chiang Mai community product customers also included domestic and foreign clients as Lao, China and so on. For the herbal product range, Chiang Mai community product customer target group were female aged between 41 to 50 years old with bachelor degree graduated and own their business with less than 5,000 Thai baht monthly income. Furthermore, herbal product also included favored among domestic and foreign clients as Lao, China and so on. For the food range, Chiang Mai community product target customer group were female aged between 41 to 50 years old with primary school graduated and own their business with less than 5,000 Thai baht monthly income. Moreover, Chiang Mai community product in food range product also popular among domestic and foreign customers, especially China. It was remarkable that two major distribution channels for the five ranges of Chiang Mai community product were broker channel and both domestic and overseas exhibitions. In the overview, Chiang Mai community product customers showed medium satisfaction levels concerning to Chiang Mai community product development strategies, particularly, in term of merchandise aspect as it took the highest satisfaction level from customer. It was also outstanding that the sub-aspect of product that gained the highest mean was Chiang Mai community merchandise represent Thainess or state of being Thai by showing Thai arts, wisdom, culture and tradition. The service aspect also gained high satisfaction level from customer, especially the sub-aspect that took the highest mean was a delivery service for bulk buying.besides, the price aspect held a high satisfaction level from customers and the sub-aspect that gained the highest mean was a reasonable price for the merchandise quality.the distribution channel aspect as well as the marketing promotion aspect gained medium satisfaction level from customers while the sub-aspect of a marketing promotion as friendly personalities of the sales staff held the highest mean. In general, the customers attitude regarding Chiang Mai community product development strategies was varied among the respondents from different gender,

7 The Study of Chiang Mai Community Product Development Strategies 3127 but no statistically significant with the confidence level at.05.in the same way, the difference between customers from different background showed the different attitudes concerning the price, service, promotion and distribution aspect with no statistical difference at the confidence level at.05. Chiang Mai community product development strategies were supported by the local community while the role of the government sectors in relation to Chiang Mai community product development strategies was found productive as Chiang Mai community artisans be able to operate the marketing activities and create the sale broadly with the support from the government.chiang Mai community product merchandise had the dominant potential as it was high quality made, however, it was not attractive enough for the international market. Besides, the respondents gave comments concerning to Chiang Mai community product artisans and the government sector as follows: (1) Chiang Mai community product artisans had a deficiency of knowledge of businesses operating, then training Chiang Mai community product artisan resulted as a mean for this problem; (2) Insufficient funds to manage Chiang Mai community product sales activities, then the government financial support could solve this trouble; (3) The Chiang Mai community product activities operation had inadequate staff, therefore budget support could solve this problem; (4) The community didn t pay enough concern to the Chiang Mai community product projects, then Chiang Mai community product projects should be undoubtedly understand and announced to let all community members acknowledge and it resulted as benefits for the community. CONCLUSION Overall, Chiang Mai community product development strategies were resulted at a high level with the manufacturing aspect as the highest level. Chiang Mai community product target customers was female aged between 41 to 50 years old, primary school graduated, work as merchant and entrepreneur with average monthly income less than 5,000 Thai baht. In general, customer showed medium satisfaction concerning to Chiang Mai community product development strategies, anyway, the merchandise aspect held the customers satisfaction as the highest level. In general, customers demographic factor and their attitudes concerning to Chiang Mai community product development strategies were different but with no significant confidence level at.05. Chiang Mai community productartisans were able to operate the marketing activities and create the sale broadly with the support from the government. Chiang Mai community product artisans improved their producing ability to be able to do high quality merchandise but still not gain attention enough from international market.

8 3128 Ratthanan Pongwiritthon Moreover, there were problems, solutions and suggestions arise from Chiang Mai community product members. The main problem was Chiang Mai community product artisans had a deficiency of knowledge of businesses operating, management as well as not enough staff. The solutions were training community members about business management and operation. DISCUSSION In general, Chiang Mai community product customers showed their attitude on the merchandise aspect in high level with sub-aspect that gained the highest mean was Chiang Mai community merchandise represent Thainess or state of being Thai by showing Thai arts, wisdom, culture and tradition. This finding was quite consistent with the study of Wannaraksu, J. that the customers focused on information high level that OTOP symbol must be attached on the product. It can be seen that groups who buy Chiang Mai community products preferred Thainess, by the way, they still need a symbol to be sure about the product s origin. Chiang Mai community product artisans should find a balance between the Thainess of the product and the way to show community product symbol on their product. In the overview, Chiang Mai community product customers showed their high attitude on the price aspect with the sub-aspect of reasonable price of Chiang Mai community merchandise gained the highest mean. By the way, this was inconsistent with the study of Keawnaichit, P. that the OTOP producer in Phisanuloke preferred the one-price scheme that the product price was calculated from the making cost and plus 10% profit. However, as from this study, the customers preferred reasonable price and quality merchandise, then Chiang Mai community product artisans should consider about adopting new pricing strategies. In overall, customers gave their medium level of attitude on the marketing promotion with friendly staff as the highest mean on this sub-aspect. This finding contradictory with the study of Keawnaichit, P. that the marketing strategies were in high level on advertising and other media. It was also inconsistent with the study of Yukantawanitchai, T. which mentioned that the new trend of effective marketing communications should focus on reaching specific target groups more directly and intimately. Anyway, the study of Kumklam, S. which showed that the marketing communication including publication, personal sale, public relation, sales promotion and direct marketing were all related to the decision making of the customers to buy products. Then, Chiang Mai community product artisans should maintain their friendly staff while adopt more of marketing communications to gain more groups of customers. RECOMMENDATIONS The results showed that popular merchandise of Chiang Mai community product groups were alcohol drinks, pork rind, herbal soap, rattan basket and traditional

9 The Study of Chiang Mai Community Product Development Strategies 3129 textile. Then both public and private sectors should support to merchandise development to get excellent quality and represent Chiang Mai s identity. By the way, herbal beauty products, silverware, silk products and so on were revealed that they were in a low level of popularity among Chiang Mai community product customers. Therefore, the relevant sectors should help to reach the other target groups of customers to maintain variety types of Chiang Mai community merchandise and keep local wisdom among the community. Both public and private sectors that related to Chiang Mai community product project should regularly train and evaluate groups of Chiang Mai community product artisans about competent business structure and standard accounting to help Chiang Mai community product artisans/ entrepreneur to be able to run their business smoothly. Chiang Mai community product artisans should find new marketing strategies to get new group of customers who have high monthly income and be able to buy more expensive product or be able to buy more amount each time of the purchase. Chiang Mai community product artisans should gather the groups of Chiang Mai community product artisans and set up community outlets to attract more customers to visit and buy merchandise. The Chiang Mai community product outlets might also help promoting unpopular merchandise to be seen by customers. Both public and private sectors should help promote Chiang Mai community product artisans to apply new technology such as internet to use as it is popular channel of distribution to modern customers. Most of Chiang Mai community product artisans are working within their household with smaller production, less marketing knowledge and have less funding than OTOP project. Therefore, both public and private sectors should help Chiang Mai community product artisans to develop their designs and quality to be able to meet the standard and need of the international market. The government should also supporting Chiang Mai community product artisans to promote artisans products, not only support group of OTOP or the manufacturer who has enough budget and knowledge to do their own marketing. References Armstrong, Gary, and Kotler, Philip. (2003), Marketing: An introduction. 6 th ed. Upper Saddle River, NJ: Prentice Hall. Kaeobunrueang, Chitsai. (2003), Operating of the Successful One Tambon One Product Projects in Changwat Lampang. Master s independent study, Graduate School, Chiang Mai University. (in Thai). Keawnaichit, Phitsanu (2004), Developing Marketing Strategies of One Tambon One Product Producer Group in Phitsanulok: A Case Study of Kwanchai Pattana Housewife Group, Wat Bod, Phitsanulok Province. Master s thesis, Pibulsongkram Rajabhat University.(in Thai).

10 3130 Ratthanan Pongwiritthon Kotler, Philip (2003), Marketing Management. 11 th ed. Upper Saddle River, NJ: Prentice Hall. Kotler, Philip, and Armstrong, Gary. (2001), Principles of Marketing. 9 th ed. Upper Saddle River, NJ: Prentice Hall. Kumklam, Siriporn. (2011), Marketing Communication Effecting Consideration of Buying Souvenirs of Tourists in Study Case of Angthong Ancient Places., Rajamangala University of Technology Thanyaburi. (in Thai). Pamapimai, Niran (2001), Community Business: A Case Study of a Group of Kanom Jean Baan Kradok, Tambon Mouwai, Muang District, Nakhonratchasima. Nakhon Ratchasima: Nakhon Ratchasima Rajabhat University. (in Thai). Peter, Paul J., and Olson, Jerry C. (2002), Consumer Behavior and Marketing Strategy. 6 th ed. Boston: McGraw-Hill. Pongpearchan, Purit. (2006), Approaches to Develop Khon Kaen Silk Cloths and Silk Products to Suit the Needs of Consumers. Master s thesis, Graduate School, Khon Kaen University. (in Thai). Seangsawan, Yotin. (2004), Development Business Strategies for One Tambon One Product Moo Kam, Tambon Najan, Muang District, Kalasin Province. Master s special problems, Mahasarakham University. (in Thai). Taulananda, Ajva. (2008), Management of Thai Firms in the New Millennium for Sustainability. University of the Thai Chamber of Commerce Journal 28, 2: 1-8. (in Thai). Wannaraksu, Janpen. (2013), The Influential Factor of Customer Satisfaction and Loyalty: The Case Study of One Tambon One Product of the central. Rajamangala University of Technology Suvarnabhumi. (in Thai). Yukantawanitchai, Tanaet. (2010), IMC (Integrated MarketingCommunications). University of the Thai Chamber of Commerce Journal 30, 2: (in Thai).