ECONOMIC ANALYSIS THAILAND

I.

Introduction

In these section, there will be presented the full economic analysis for the country chosen
to export Bon bon bum and Arequipe (Colombina products) that is Thailand. As a start of
the economic analysis, the investigation follows the population facts that are highly related
to the economic factor. With this said growth rates will be observed as well as the
distribution of the population.
After what was mentioned before, the economic statistics such as the GDP, distribution of
wealth, communication systems and working conditions between many others. Also the
activity of Thailand that takes in consideration factors as the principal industries, the
international trade and the trade restrictions in order to realize the what helps or favors the
company, and what are the obstacles Colombina will face when they decide to enter in
Thailand.
To end, it will be shown the investigation of developments in science and technology, the
distribution channels and the media. And how it is to be expected, the influence they have
in how the products of Colombina will be delivered and promoted.
II.
Population
a) Total: The last census made in Thailand showed a total population of 65.479.453.
The estimates made for 2014 show that approximately the actual population of the
country is around 67.741.401. This population shows a big potential of sales for
Colombina Company.
I.
II.
III.

IV.

Growth rates: The growth rate for Thailand is estimated in 0.35% in the
year in currency.
Birth rates: It is 11.26 births per 1.000 of population, is the estimated for
the year 2014.
Mortality rates: 7.72 deaths per 1.000 of population. When it is compared
with the birth rate, we can see that is a potential of new buyers for
Colombina because the country have much more births that deaths when a
specific population is taken. In this way Bon bon bum that the group
perceived as a product for everybody will have a strong future demand.
Fertility rates: There are 1.5 births per women in Thailand, what shows
that are a country that gives importance to family that is how the group
expects to sell Arequipe; as a family product.

b) Distribution of population: This distribution will be over the age, sex, geographic
areas, migration rates and ethnic groups.
I.

Age: 0-14 years: 17.6% (male 6,117,993/female 5,827,981)

15-24 years: 15% (male 5,194,332/female 4,999,669)
25-54 years: 46.9% (male 15,685,882/female 16,097,245)

II.

III.

IV.
V.

55-64 years: 10.9% (male 3,468,620/female 3,893,925)

65 years and over: 9.8% (male 2,830,418/female 3,625,336) (2014
est.)
They have a median age of 36.2 years where the male average is 35.3 and
female average is of 37.2 years of life.
Sex: (male 6,117,993/female 5,827,981)
(Male 2,830,418/female 3,625,336)
(Male 15,685,882/female 16,097,245)
(Male 3,468,620/female 3,893,925)
(Male 5,194,332/female 4,999,669)
Also the sex ratio at birth is:
0-14 years: 1.05 male(s)/female
15-24 years: 1.04 male(s)/female
25-54 years: 0.97 male(s)/female
55-64 years: 0.97 male(s)/female
65 years and over: 0.82 male(s)/female
Total population: 0.98 male(s)/female (2014 est.)
Geographic areas (Urban, suburban and rural density and
concentration): The urbanization in Thailand is of 34.1% of the total
population, what means that the people concentrated in rural places are
the 65.9%. The population is distributed in very few places, to not say it is
in only one. The most of the people concentrates in Bangkok that is the
capital of Thailand of a population of 8.426 million and the next is Samut
Prakan with 1.212 million. This facts explain why the group decided to
launch the two product in Bangkok only because of the great difference
between the two more populated cities.
Migration rates and patterns: Thailand has a migration rate of 0 migrants
per 1.000 population, that is the estimated for 2014.
Ethnic groups: Thailand has one major ethnic group that is the Thai, as
the official language, and represents the 95.9% followed by Burmese that
is just 2% and ending with other 1.3% and unspecified 0.9%.

III

Economic statistics and activity

Gross national product (GNP or GDP)

i)

Total

Thailands Gross National Product was at 4.693,36 Bath at the end of 2013 which equals
145,40 Billion US Dollars (calculated with an exchange rate of 32,28 Bath per USD). At
the same time Thailands Gross Domestic Product stood at 387,25 Billion USD.
ii)

Rate of growth (Real GNP or GDP)

(1)

Personal income per capita

The GNP per capita of the Thai population stood at 5.370 USD at the end of 2013 with a
growth rate of 2,3% between 2012 and 2013 and an extraordinary high growth rate of
13,6% between 2011 and 2012. As well in 2013 the GDP per capita stood at 5.779 USD
with growth rates of 5,5% to the former two years.
(2)

Average family income

The last official data about the average family income are from 2013. In 2013 the average
income per household, which most of the times represents a family, was at 23.236 Baht
per month over the whole kingdom, this equals approximately 720 US Dollar per month.
According to the overall growth rate of the Thai-economy and the rising salaries, this
number trends to go up as well.
b

Distribution of wealth

i)

Income classes

Thailand, as many other countries, consists of three big income classes with more or less
significant differences. There exist the upper income class with a share of 47,21% of the
total income in Thailand. This category can be also split in another income class the rich
people who hold a share of 31,45% of the income. There also exists a relatively big
middle income class which account for 46,12% of the overall income and the lower
income class which mostly consist of people from very rural areas with an equity of
6,67% of the GNI.
ii)

Proportion of the population in each class

The higher income class in Thailand consists of 20% of the whole population, with a
share of the rich people of about 10%. The really high number represents the wealth
which can be found nowadays in the Thai-society. The middle income class has a share
of 60% of the population, as well an indicator for a well performing society. The lowest
income class consists of approximately 20% and the poor people got a share of more or
less 10% of the population.
iii)

Is the distribution distorted?

The income distribution in Thailand shows a relatively big upper income section and as
well a big middle income section which represents the growing welfare of the country. By
now you cannot compare Thailand in terms of welfare with western countries but rising
wages and a growing economy let the country and the people become wealthier. The
distribution is not as distorted as in many other rapidly developing countries, where much
bigger percentages belong to a smaller number of people. The above mentioned income
are going fluently into one another, so drawings of exact lines between these classes are
difficult. But in terms of distribution the biggest share belongs to the middle income class
which is an indicator for a not distorted income distribution among the society.
c

Minerals and resources

Thailand has a large and rich number of different minerals. These minerals became more
and more important as basic materials for the industry, as well as for construction
purposes. Thailand uses its mineral recourses to compensate its own demand and as
well exports a large number of minerals to all over the world. Among the most important
metallic minerals are Zinc, Gold, Iron and Stibnite, while Fluorite, Barite, Potash and
Rocksalt count for the most important non-metallic minerals out of Thailand. According to
experts the most important exporting minerals are diamonds which can be found in
jewellery and also in high technology industrial products all over the planet.
Other very important resources of Thai economy are alluvial soil and natural gas deposits
which reduces the dependency on imported petroleum. Thailand is also rich in natural gas
reserves out of huge mining facilities all over the country.
Rice and Rubber account for the most important agricultural resources with large exports
to the European market and other international markets. But the country also is rich in
swamps and jungles where really woods grow, for example the ebony tree which is used
to build luxury furniture.
d

Surface transportation

i)

Mode

A large number of transportation modes are available in Thailand. In terms of air

transportation the airports Suvarnabhumi (Bangkok), Chiang Mai and Phuket account for
the most important ports. Domestic, as well as international flights are start and land at
these airports. The main inner-Thailand transportation mode are the public highways. The
country has 9 public highways which account for the routes linking each of the 77
provinces, regions and cities. As well there exist some high speed highways which link
big cities in Thailand, but these highways account for a much smaller number than the
public highways. People who doesnt own a motorcycle or a car can use the railroad
system. By far the most important system in this segment is the State Railway of Thailand
which links the major cities in the country. As well two inner-Bangkok railway systems, the
Bangkok Mass Transit System and the Mass Rapid System, are available to move people
around the town. Also very common inner city modes are the motorcycle (very common
mode), buses, taxis and the traditional tuk-tuks.
ii)

Availability

The availability of each transportation mode depends on the income or wealth of each
individual or family. The domestic and international airports are mostly only available to
the higher income classes of the society. As well the high speed highways and the public
highways are only available to people who own a car or at least a motorcycle which can
be used for longer journeys. The poorer Thai-people move between cities with the
national railroad system which is available at comparatively low price. The inner-city
transportation is highly marked by sometimes two or three people on one motorcycle.
This mode account traditionally for the most important because motorcycle prices are low
and they are used for a long time. The wealthier people for example in Bangkok move

around in one of two metro systems. Its quite common to see a large number of business
people move around with this mode, as it is much more comfortable than the crowded
streets full of motorcycles and tuk-tuks.
iii)

Usage rates

Unfortunately exact usage rates of each mentioned transportation mode dont exist. In
terms of inner city transportation the biggest transportation share goes to the rail
transportation such as metro trains. As well a very high share goes to small motorcycles
which are traditionally are really common transportation mode. A much smaller share
goes to the bus system and to cars because of the sometimes horrible traffic which is
inside the cities. The most common touristic transportation mode are traditional tuk tuks
which are mall motorized vehicles. In terms of transportation between cities and regions
in Thailand the biggest share goes to the car. Thailand has an improving highway and
high speed highway system which makes it attractive to use a car for travelling. A slightly
smaller share goes to the rail transportation, as the network is now not fully established in
each region, but it should be mentioned that the rail transport trends to carry more and
more passengers. The wealthier people travel by air plane between cities, as Thailand
has a relatively good airport system which consist of 101 airports around the country.
e

Communication systems

i)

Types

The main communication system in Thailand is based on telephone networks. Two

different types of these networks exist in the country. One is a fixed line system which
consists of land-lines, international connections, public phones and the internet
connection. The second is the wireless system which consists of mobile phone
connections, pagers and the radio connection. These two communication modes account
for the most important as they are available nearly all over the country, except from some
very rural and undeveloped regions that accounts for a small minority of the country. The
radio communication is marked by the big state owned broadcasting station Radio
Thailand which informs the people with news made by the government. As well there
exists a large number of small public and commercial radio stations which are mostly
regional based. Also the television system is mostly operated by the government, with
national networks accounting for 12 television station in each region of the country. As in
other rapidly developing countries the internet becomes are more and more common and
important communication in Thailand. It gained a connection to the internet in 1995 and
statistics show the increasing importance. For faster connections to the internet a state
owned public company installed a fibre cable system which connects Thailand with its
neighbour countries and the world with fast internet connections. As well a satellite
system was established and gains more popularity over the time.
ii)

Availability

The last mentioned communication system, the satellite system and the fibre cable
system (which is mostly used by companies) are nearly only available to the richer

segment of the Thai-society but gain a higher importance over the time as more and more
people gain a wealthier status and get access to these communication types. The rural
and poorer Thai-people mostly use the radio to get informed about news and actions
happening in Thailand and in the world, while the television system is still not available to
everyone as parts of the population cannot afford to buy TV-system. But these system as
well gain a higher popularity and importance. To communicate between people the Thaisociety uses mostly public telephones, when people cannot afford to have own
telephones and the mobile connection system which are mostly used by wealthier and
more urbanized people.
iii)

Usage rates

The communication between people is highly marked by mobile phones and the internet
as more and more people gain access to these channels. As well as in the transportation
section, exact usage rates unfortunately dont exist. Poorer people use the public
telephones to communicate, but these phones trend to lose their usage share. In terms of
advertising and information as well a very high share goes to the internet and as well to
the satellite television system. Usage rates in both sectors trend to go up and the share of
the radio is declining, as nearly everywhere in the world. Bigger companies in Thailand
use more and more fibre cable system which guarantees them a fast and safe way of
communicating domestically as well as internationally.
f

Working conditions

i)

Employer-Employee relations

The Employer-Employee relationship in Thailand is, as it is quite common in Asia, a more

formal one, combined with a high power distance. This is highly the case in the more
crowded and urbanized regions of the country. In some rural areas you can also find
more informal relationships, but the majority of working relations in Thailand is marked by
a strict hierarchy. This trend goes back to former times when master ruled the country
and the workers were there to serve them. The current relationship is not as harsh as a
master and server relationship, but a clear hierarchy can be found nearly everywhere.
The Thai government tried to adapt the labour contract law to western standards with the
introduction of the Thai Labour Protection Act. This act clarifies the rights and obligations
between employers and employees. As well it sets a maximum working time of eight
hours per day, whereby overtime works are generally prohibited and only allowed in very
exceptional cases. As well the relation is marked by peace and harmony as most Thai
people live under Buddhist values.
ii)

Employee participation

In general Thai people are really conscious about their work relations. A study of
Hofstede showed that Thai people have a high uncertainty avoidance, which means that
dont want to get in trouble neither in their personal life, nor in their working life. Therefore
the employee participation in Thailand is very high, as it is nearly generally in Asia.

Official numbers of average illness or missing-days among the whole Thai-society dont
exist, but studies show that the Thai workforce is among the most diligent in the world.
iii)

Salaries and benefits

The Thai salaries nowadays are marked by talent shortages in the society. Specialist or
high responsibility jobs, for example Sales and Marketing Directors, as well as Financial
Managers in Thailand get a minimum salary of 120.000 Baht per year, which equals
approximately 3.700$ per month. While simple workers such as Facilities Technicians or
Technical Officers, where these shortages dont exist, earn a minimum salary of
approximately 370$ per month. But this salary system also means that no one how works
has to fear that its not enough to live from that. As well Thai-companies, especially big
companies, started introduce benefit system for their staff. The companies established for
example preventive measures for the health of their employees. Some, but not every
company, also provide health risk assessments and engage their workers to participate in
social groups or clubs. Employee assistance plans in stressful times are as well becoming
more and more popular, especially in the management segment. There exists a general
trade in Thailand of rising wages and benefits.
g

Principal industries

i)

Which proportion of the GDP does each industry contribute?

Data from 2013 show that the main Gross Domestic Product proportion in Thailand is
contributed by the service sector with a ratio of 44,2%. This proportion shows that
Thailand is quite developed country because of the big service sector which is mostly an
attribute of developed countries. The service sector s followed by the Thai-industry with a
proportion of 43,6% which is marked by the big mineral and resource assets of Thailand.
The smallest sector is the agriculture sector with 12,1%, which is also an indicator for
their development status.
ii)

Ratio of private to public owned industries

The ratio of public owned enterprises is decreasing over the last 20 years. The rapidly
economic development of Thailand lays in the hands of privatization plans of the
government. The only industry which is more than 40% public owned is the financial
sector, but this share is also declining in order to make finances more liberal. In terms of
the industry-, the agriculture- and the service sector, the share of public ownership used
to be more than 50% of all companies. Over the last 20 years this share has fallen to
about 15-20% of the enterprises in this area and this figure trends to decline further.
h

Foreign investment

i)

Opportunities?

With the privatization of more and more industries in Thailand, the country becomes more
and more attractive for foreign portfolio as well as direct investments. A factor that also

speaks for Thailand is its enormous economic growth rate. The country also offers scale
production capacities, a good infrastructure and highly attractive tax and duty incentives.
These factors guarantee long term business and investment opportunities and offer high
return on investments.
ii)

Which industries?

There exist several interesting industries to invest in. One of them is the aerospace
industry. Bangkoks airport is one the busiest in the world and the usage rates are getting
higher with the further development of the country. Another very attractive sector is the
electronic and software industry. Thailand produces more than 40% of the worlds Hard
Drive Discs as well as a large proportion of compressors, motors, plastic and metal parts
for electronic devices. Also Thailands software industry is becoming one of the world
leaders in software development. For our purposes the government also offers tax and
duty incentives for investing in the agriculture and food processing industry. Some
established food business giants offer attractive investment opportunities as well as
partnership chances for taking our products abroad.
i

International trade statistics

i)

Mayor exports

The mayor exports of Thailand are Computers, as well for personal purposes and industry
products, with a share of 8,8%. This segment is followed by rubber seal with 4,2%,
delivery trucks with an equity of 3,5%, refined petroleum with 3,3% and gold with 3,0%.
(1)

Dollar value

Computers

$19,108,404,281.25

Rubber seal

$9,106,712,597.90

Delivery Trucks

$7,539,899,379.69

Refined Petroleum

$7,195,694,105.22

Gold

$6,451,086,147.86

(2)

Trends

The established segments as mentioned above trend to grow further. As well, Thailand
trends to export more and more services around the world as the service sector is the
fastest growing in the country. In the industry sector the country trends to export a
growing number of gems, as well as already processed jewellery. Another growing export
goods are precision stones for the high tech industry around the world.
ii)

Mayor imports

The mayor imports of Thailand are Gold with a share of 5,6%, Crude Petroleum with
4,5%, vehicle parts, for trucks and as well for cars, with an equity of 4,2%, Petroleum Gas
with 2,6% and Computers with a ratio of 2,3%.
(1)

Dollar value

Gold

$10,718,391,541.04

Crude Petroleum

$8,590,449,213.72

Vehicle parts

$8,069,524,849.70

Petroleum Gas

$5,027,488,533.39

Computers

$4,386,513,006.90

(2)

Trends

The Thai industry trends to import more goods related with the service industry, such as
specific software (which is not developed in their own market) and computers. This trend
is also marked by the rising number of call centers in Thailand. Another big trend is the
importation growth of parts for the sustainable energy production, as this whole industry
trends to grow over the last few years. Other trends are related with the above mentioned
industries and according to the overall growth and development of the industry,
specifically the high tech industry.
iii)

Balance-of-payments situation

(1)

Surplus or deficit?

The balance-of-payments which is calculated by the Bank Of Thailand showed a trade

surplus of 6.661,17 million US Dollar in 2013. This number underlines the heavy exports
orientated Thai-economy. The net services, primary and secondary income had a deficit
of 9.112,93 million USD and the current account balance as well a deficit of 2.451,76
million USD.
(2)

Recent trends

Since 2005 the balance-of-payments situation fluctuated a lot. For example the trade
surplus between 2005 and 2007 rose by 783% (from 3,401,87 million USD to 26.640,30
million USD) and then decreased by 154% again to 17.348,11 million USD. But the trade
surplus is constantly declining since 2009, so forecast show that the Thai balance-ofpayments surplus could slide into a deficit in the next 2 or 3 years. Their growing industry
needs more and more external resources to keep the development stable and according
to this a deficit is very likely.
iv)

Exchange rates

(1)

Single or multiple exchange rates?

Thailand uses a single currency, the Thai Baht. In terms of the Colombian Peso no
commercially offered exchange rate exist, so that would have to face multiple exchange
rates according to offerings from different banks. When using the US Dollar invoicing our
transactions we would only have to deal with one exchange which is internationally
offered, with some minimal differences between some financial institutions.
(2)

Current rate of exchange

For our purposes we will focus in this sections on the most important currencies for our
business (the US Dollar and the Colombian Peso), as well as some other major
currencies. Unfortunately a direct exchange rate between the Colombian Peso and the
Thailand Baht does not exit, therefore our business could be valued on any of the major
world currencies of the world. All following rates are from the 23rd October of 2014:

USD/THB

32,3740

JPY/THB

29,9217

EUR/THB

40,9447

MYR/THB

9,8881

(3)

Trends

Speaking of the US Dollar which represent the most important currency in international
trade, the pair USD/THB have showed some normal fluctuations over the last five years.
The highest point was in 2010 with a value of nearly 33,5 THB per USD and with a lowest
point in May 2013 with approximately 28,8 THB per USD. Till this date high value date for
the Thailand Baht the currency is trending to depreciate, but showed a quite stable value
since the beginning of 2014 of between 32,5 and 33 THB per USD. This trend is likely to
continue with some normal fluctuation of maximum 2,5 THB per USD.
j

Trade restrictions

i)

Embargos

Over the years Thailand relaxed its embargoes so that today no significant embargo,
which would restrict our business, exists. Thailand remains some embargoes in terms of
arms with countries from the Middle East. But in terms of food and agricultural products
no embargo exists.
ii)

Quotas

In this section we are focussing on the most important quotas for our (Colombinas)
business, the food and agriculture business. Thailand has been constantly reducing its
import quotas since 2005. In 2014 the main import quotas are on non-concentrated milk
and cream products with a maximum import of 140,40 metric tons. The next biggest
quotas lay on fresh or chilled onions and shallots with 56,62 metric tons and on fresh or

chilled potatoes with 46,85 tons. The first quota may impact our business, but as the
figure shows a high value we shouldnt be affected in a bad way, especially when we are
establishing licensing practices inside the country and dont need to take care about this
import quota.
iii)

Import Taxes

Along with other import duties, which are mentioned below, every company that exports
goods to Thailand has to face a unified Value Added Tax of the export value of 7%. This
importation tax alone represents a quite low value of the exported and abroad imported
goods, but along with the other custom duties which will be raised on the overall value of
your operation, comparatively high taxes and duties have to be faced.
iv)

Tariffs

As well in this section we only want to focus on the most important import tariffs for our
two exporting products, Arequipe cream and Bon Bon Bum. In terms of the Arequipe
cream we have to face import tariffs of 30% of the exporting value. This tariff lays under
the fact that Colombia doesnt have trade agreement with Thailand but is a member state
of the World Trade Organization, which members are offered a unified tariff of 30% for
milk and cream products. In terms of our Bon Bon Bum lollipop we have to face tariffs of
40%, as well compiled on WTO members for sugar containing chewing gums and sugar
containing jellies and sweets.
v)

Licensing

Both of our products that we are trying to export to Thailand (Arequipe cream and Bon
Bon Bum) have to be licensed in Thailand. The amount of licensing fees depends and the
volume that is imported into the country. The licensing process in the kingdom consist of
five different sorts of control which aim to protect the Thai-consumers and ensure quality
and efficacy of healthy products. These are the five licensing controls under the Thai-law:

Pre-marketing control of the factory, product and advertising

Post-marketing control: regular checks of the previously controlled facilities and

products

Surveillance program for consumers safety once the product has been launched

Consumer Education: Is the information given to the consumer sufficient and

accurate?

Technical support and cooperation with other agencies

vi)

Customs duties

The Thai import duties for our business will contain of several kinds of duties. First of all
we have to face the import duty of 60% of the import value. On this 60% import will be

added a 20% special duty on the import duty. The next duty will be the so called excise
tax of 3% of the whole value of our exports. The interior tax will be valued with 10% of the
excise tax. Last but not leased an importing fee will be charged of 100 Baht.
k

Extent of economic activity not included in cash income activities

i)

Counter trades

(1)

Products generally offered for counter trading

Thailand usually offers products or resources where they own a big world wide share,
such as rare minerals (which are mentioned above), other types of resources, i.e. stones,
and agricultural products such as fruits and rice. Thailand doesnt have a big history of
countertrading, but one example which took place nearer past was a countertrading deal
between Thailand and McDonnell Douglas. Thailand received 18 strike aircrafts and in
return the country gave the company Thai rubber, ceramics, furniture and fruit, plus a
compensation payment of 578 million USD.
(2)

Types of counter trades requested (i.e. barter, counter purchase, etc.)

The above mentioned countertrade was so called a compensation trade, where goods
and currencies occur in a mixed trade. As also mentioned above, Thailand doesnt have a
big history of countertrading which mostly consist of these compensation trades, barter
trades and few documented switch trades.
(3)

Foreign aid received

In the history of the kingdom there dont exists large foreign aid helps because the
country always stood in a relatively strong position and usually where the ones to provide
financial help to others, mostly to their poorer neighbour states like Cambodia. With the
terrible flood in 2011 which destroyed large parts of the coast regions, Thailand were the
one to receive foreign aid. For example Japan donated 200 boat engines, 450 life vessels
and 390.000 USD in cash, New Zealand donated 75.000 USD and the Malaysian
government helped with 973.000 US Dollar.
According to the ongoing rebuilding of some coastal regions and other development
processes the Thai government received a total amount of 10.461.000 USD in 2013.
l

Labour force

i)

Size

In 2013 the Thai labour force consisted of 39,38 million people, which is the 17th biggest
labour force in the world. This also means that 58% of the overall population in Thailand
belong to the labour force. In terms of distribution, 48,2% of the labour force work in the
service sector, 38,2% in the agricultural sector and 13,6% in the industry.

ii)

Unemployment rates

In terms of unemployment Thailand takes a significantly good position in the world.

Thailand has the third lowest unemployment rate in the world with an unemployment rate
of only 0,7% in 2013.
m

Inflation rates

The current inflation rate in the country is at 1,75% which stands for a well performing and
stable economy. Thailand historically had some with the devaluing of their currency when
the Asian financial crisis took place with an inflation rate of nearly 25%. Over the last 5
years the inflation rate remained more or less stable with rates between 1,75 and 4,1%.
IV. Developments in science and technology
a) Current technology available (computers, machinery, tools etc.)
Presently, Thailand promotes and supports scientific and technological research under
three broad topics, namely genetic engineering and biotechnology, metallurgy and
material science, and electronics and computers, emphasizing the integration of research
that is in line with national development policies and strategies, along with pure research
as academic achievements for Thailands sustainable development.
b) Percentage of GNP invested in research and development
(0.3% of the GNP)
c) Technological skills of the labor force and general population
There were 38.95 million employed persons, which 16.22 and 22.73 million were in
agriculture and non-agriculture sectors, respectively. Comparing with August in 2012, it
was shown that the number of employed persons in agriculture sector decreased by 0.24
million and non-agriculture sector decreased by 0.35 millions
V.

Channels of distribution (macro analysis)

This section reports data on all channel middlemen available within the market. Select a
specific channel as part of your distribution strategy for your marketing plan
a) Retailers
Retail sector in Thailand is worth approximately Baht 1.4 trillion (Modern Trade
40% and Traditional Trade: 60 %) and it is one of the important components of GDP.

i) Number of retailers

ii) Typical size of retail outlets

iv) Methods of operation (cash/credit)
The general method of operation of the retailers are both cash and credit card depending
if they are big or if they are smaller, the biggest retailers use both of the methods looking
for the commodity of the buyers in their stores.
v) Scale of operation (large/small)

Traditional Trade
Traditional trade operators consist of Mom and Pop stores, street vendors and wet
markets that are distributed country wide. These are usually small establishments
operated by local family owners. This segment is estimated to have the biggest market
share in the retail sector with approximated number of operators to be in hundreds of
thousands.

Modern Trade
1. Superstore/Hypermarket
A superstore/hypermarket is a very large retail facility which carries an enormous range of
products under one roof, including full lines of groceries and general merchandise which
allows customers to satisfy all their shopping needs in one trip. In the
superstore/hypermarket segment, there are only 2 major players, Tesco Lotus and Big
C. Major players continued to diversify their store formats as opportunities for

development of large hypermarket store has been impacted by the Zoning Law and
Building Control Act
b) Wholesale middlemen
i) Number and size the
The wholesalers in Thailand are big, theres not a number stablished of wholesalers in
Thailand
iii) Method of operation (cash/credit)
More by credit because they manage a huge amount of products and more of the
customers that they have because most of the times they dont have the enough money
to pay for all they are asking for, thats why they pay by credit
c) Import/Export agents
Thailand have a very big variety of import and export agents that helps a lot to the
persons that want to export or import something from Thailand, in this agents we can
name some ones that are the most important agents like: Bangkok shippingKPS, Anthom.
The heavy dependence on exports is evident, as the export industry makes up about 60%
of Thailands GDP and is also the source of foreign currency used in importing
merchandise into Thailand.

d) Warehousing
The warehousing in Thailand is very huge, theres a lot of warehousing offer there, and
they offer different spaces to store the products you exported to that country
Finally we decide that the most effective is to export to a retailer a big retailer for the
Arequipe, and also the most effective for the bon bon bum the most effective way is to
export it to a small retailer
VI.

Media

This section reports data on all media available within the country or market. Select
specific media as part of the promotional mix and strategy for your marketing plan.
a) Availability of media
Thai media have historically been relatively free, although the government and legislature
have always exercised considerable control, especially over broadcast media
b) Costs
i) Television

Television is by far the most popular medium in Thailand. Almost 80% of Thais are
estimated to rely on television as their primary source of news
ii) Radio
Thailand has 204 AM stations, 334 FM stations and six shortwave broadcasters (as of
2011). As is the case with television, radio broadcasting is supposed to be regulated by
the Broadcasting Commission (NBC). However, because of delays in establishing the
NBC, radio frequencies remain in the hands of a several governmental agencies,
including the military, state universities, the Posts and Telegraph Department, the Public
Relations Department (PRD) (National Broadcasting Services of Thailand), and MCOT.
These agencies operate several stations directly, while the remainder are leased out to
private content providers.[

iii) Print
In contrast to television, print media in Thailand are not subject to close government
supervision. Readers have a choice of numerous papers, ranging from sensationalist
mass-circulation dailies to newspapers specializing in coverage of political and business.
Thailand's so-called "business newspapers" also include substantial coverage of politics
and culture.

iv) Other media (cinema, outdoor etc.)

All films, VCDs and DVDs are placed under scrutiny of a censorship board. Until 2009,
films were regulated by the Film Act of 1930.
The first board of censors included both men and women and was drawn from the ranks
of aristocracy, the civil service and the police. Each film passed by the censors had to
include a stamp on each reel, and each item of printed advertising had to contain the
stamp, too. The National Police was responsible for screening films and videos until
September 2005, when the government's Ministry of Culture took over the function. Every
VCD and DVD sold for home viewing must bear a stamp that it has passed the
Censorship Board.
c) Agency assistance
In Thailand theres a lot of agency assistance in media, more in internet and also TV and
radio,

d) Coverage of various media

Finally looking the different things in the media, we decided that the most effective way to
reach the customers is by TV and by internet sources, because is the media that most of
the people use in Thailand, and internet is the cheapest one.
VII.

Executive Summary

After all the investigation has been done, there are factors that mainly affect the
organization performance in Thailand. To start the concentration of the geographic areas
in the country, represents a viable idea to enter only in Bangkok, this because the most
populated city is the one just mentioned with 8.426 million of people. With such an
amount of people, it would be a big enough market to launch Bon Bon Bum and Arequipe
as primary products as the company looks forward the introduce Coffee as well due to the
recognition of Asian countries of the Colombian coffee.
As well, the GNP per capita in Thailand is in 5.370 USD what gives an idea of the
purchasing power of the people. In this way Bon Bon Bum as a cheap product can be
easily accessible for all people. On the other hand the average family income is of 720
USD per month what could be a problem for Arequipe at the start, because the idea of
Arequipe is that people sees it as a family product. Although it is expected that after
people get to know the product the problem will disappear.
Moreover the upper income class that shares the 47.21% of the total income in Thailand
what means that the potential for adopt of the new products is really high. This without
saying that because of the great difference between Bangkok and the second most

populated city (Samut Prakan) in Thailand, the people with the purchasing power to buy
the products offer by Colombina Company is concentrated in the capital city of Thailand.
On the other side, the foreign investment in Thailand is not restricted by the government
because of the privatization of the economy. This gives a big opportunity to Colombina if it
looks to enter lately with a joint venture to establish a stronger brand in the country to
take a good part of the market share.
As we talked of the joint venture as a viable entry mode to Thailand, it will also help
reduce the import taxes that were discussed during the investigation. This import taxes
consists of a 30% tariff over the Arequipe cream and a 40% tariff over Bon Bon Bum
product. This tariffs are due to the fact that Colombia has not a free trade agreement with
Thailand, and because the home country is part of the World Trade Organization (WTO)
there is a unified tariff for this countries which is the expressed before.
Regarding the high tariffs they will need to be pay, the investigation group is sure that the
price of Bon Bon Bum will not go so high because of the low price of the product. This will
still make it accessible even though the trade barriers that make the product more
expensive.
To help the company export the products, there are agents present in the country that
makes it easier to enter Bon Bon Bum and Arequipe into Thailand. Never the less it is
necessary to be careful with the agents because some time they are present split
differences into them.
To end another important factor discussed over the investigation is the media availability
to promote the products. Thailand is consider to have let the media a relatively freedom,
although they have a considerable control specially when it is over broadcast media but
when it is compared to China where is a really strong control over the media, it is consider
to be free. Also to consider that the most popular media is the television what would be a
good opportunity to promote the products over the people of Thailand.
VIII.

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