MAYRAH IN BANGKOK

International expansion and market entry strategy

AUGUST 28, 2016

BY STARKS
Group Report
Gagandeep Kaur Virk 18191758
Saad Aqeel khan 18514706
Momina Arshad 18555208
Potkhajorn kulnil 18302442

Table of Contents

Why Bangkok, Thailand? ............................................................................................................... 2

Market Entry Strategies .................................................................................................................. 2

Market intelligence plan ................................................................................................................. 4

Marketing Plan ............................................................................................................................... 6

Legal requirements ......................................................................................................................... 9

Communication issues and problems in the host-country working environment .......................... 9

The concerns of the host country and solution ............................................................................. 10

Conclusion .................................................................................................................................... 10

10

References ................................................................................................................................. 12

11

Appendix ................................................................................................................................... 15

Why Bangkok, Thailand?

Kingdom of Thailand is one of the exquisite tourist attractions with the statistics of 29.6 million tourists
per year, contributing 14.5 per cent to Thai GDP with an expectation of increase in number to 32
million in 2016 (The Nation 2015) would evidently be a potential business prospect for Mayrah.
Mayrah's unique categories of clothing line such as the "Glamour Resort" and "Weekend Casual" that
are designed classically with very light and summery material would be perfect attires for beach
outings and even travelling around the country keeping Thailand's warm weather in mind. However,
we are initially suggesting Mayrah to consider a startup at the capital of Thailand i.e. Bangkok as it
would be the first and final stop for every tourist no matter where they plan to travel in Thailand.
As per the statistics by Nesdb, Thailand, there has been a major increase in consumer expenditure from
1211330 THB Million in the fourth quarter of 2015 to 1221754 THB Million in the first quarter of
2016 with an average of 898780.35 THB Million since 1993 until 2016 (Figure 3). This subsequently
led to an average growth in the Thai GDP from 0.94 percent from 1993 until 2016 with a high rise in
the Thai disposable personal income according to Nesdb, Thailand. Therefore, it is essential for
Mayrah to consider the ever growing Thai market for potential success. The fact that 46.21% of women
add up to employment rate in Thailand, Mayrah's trendy fashion items comprising of formals for
working women, casuals for everyday wear and exclusive collection for special occasions will not only
indulge foreign visitors but may also target Thai women who like to be trendsetters and be aware of
fashion from all over the world. As Thai women prefer spending on westernized products be it clothes,
spirit and many others (Santender 2016), Thailand may just be the right place for growth that Mayrah
adheres to achieve. Additionally, the fact that there is a rise in the minimum wage, adducing higher
income for the middle class with more disposable income, there is higher demand of western products
(Santander 2016). This leads to fierce competition nonetheless, there is huge potential for foreign
retailing investments in Thai market as it is not saturated and therefore, is open to growth along with
its ever rising economy (Santander 2016).

Market Entry Strategies

It is imperative for Mayrah to understand the Thai market before it sets foot. Thus we are suggesting
Mayrah to employ a team of Thai representatives who are familiar with Thai market practices, for
example, highly appreciated free give away campaigns to consumers; conventional success achieved
via word of mouth recommendations from suppliers (Santender 2016) and finally, understand legal

implications and trade agreements regulated under the Thailand Australia Free Trade Agreement
(TAFTA) 2010, providing reduced tariffs for imports and exports between the countries (Australian
Trade and Investment Commission 2016). The information acquired would assist Mayrah to develop
and implement strategies accordingly in order to gain sustainability in the unexplored market.
a) Partnership as a startup

After acquiring the information required, Mayrah's primary step would be to engage local sales agents
to establish business models to launch its products. Therefore, we are suggesting Mayrah to associate
with local departmental stores in Bangkok to measure the demand for its products among Thai
consumers. Subsequently, it may also implement further alterations or customization according to the
consumers' desires. Partnership is not only a good initiation in terms of business analysis but will be a
meaningful method for survival financially as it would be not being wise to invest heavily at the
beginning of its journey in a strong competitive retail market.

b) Foreign Direct Investment(FDI) in the near future

FDI would advantage Mayrah as it would be entitled to ownership directly either by forming a new
entity or acquiring an existing one. FDI will also allow transfer of technology, capital and
representatives easily. (Strategic Management 2010).

c) E-commerce strategy

Associating with online stores such as Lazada, Zazora and Weloveshopping will increase business
opportunities for Mayrah as recent findings suggest that e-commerce has contributed to a significant
growth of 30% in the market (Australian Trade and Investment Commission 2016).

Market intelligence plan

The main purpose of a marketing intelligence map is to characterize the market in which the company
wants to operate. It should analyze the Macro and micro environment, supply chain, external market,
competition and trends.

a) Market understanding

This will cover the business environment and the critical operational factors. Thailand, currently
aiming to be the ASEANs fashion hub, is a challenging market for new entrants. The entrant barriers
being low, there is a high number of competitor to deal with. The capital needed for entering the market
is relatively low and there are several governmental supports that can be obtained by new entrants
(Garde 2013).
The revenues from the fashion segment are expected to be 449, 9 mUSD in 2016. The market is
expected to continue growing with reaching 1483, 9 mUSD in 2020. The most revenues generated in
this industry are still by China. (The statistics portal, 2015)
As the report shows that there is a substantial increase of independent designers in Thailand as recently,
they have renovated the department store to be more modern and more than 20% of that store consist
of young designers fashion store. Additionally, there are plenty of sewing shop in local area who can
cut and sew the outfit following specific design. Fragmentation lead to high substitutional threat (Garde
2013).
Mayrah should emphasize the strategy on rivals to be the leader in the industry because the
competition in market will be higher when it is easy to entry and it may launch the limit number for
each collection to make the customers feel the products are special only for them
The competitors intelligence can be described as a process of monitoring rivals and helps to identify
their plan and make effective decisions (Arik, 2010). Currently there are approximately 20 biggest
fashion brands in Thailand. The market is however experiencing a big boom in terms of new fashion
brands approaching Thailand, such as H&M, Mango or Uniqlo, Zara, H&M or Mango. (National news
bureau of Thailand).
b) Customer understanding

The growth of the fashion industry in Thailand is also caused by the raising income of the middle class
(Figure 1). A growing tendency can be noticed on the interest of the middle class on fashion garments.
This brings more purchasing power to Thai people and research shows that more than 90% of Thai
people spend most of their income on fashion and costumes (Polkuamdee 2010). Especially, people in
Bangkok usually spend leisure time on shopping even weekend or weekday after work
(Wattanasukchai, 2006). Also, tourists, which is the one of the largest GDP contributor in Thailand
with 10% approximately share in total GDP. (Focus Economics 2016). The buyers are fragmented and
has no high loyalty to the brands. (Thailand board of investment, 2015)

c) Product intelligence

There is a good quality of the local supply chain. Thailand, being a great manufacturer of textile and
garments, offers a plenty of suppliers to choose from with low switching costs. High threat from
substitutes and fake-branded product is often preferred by the locals. At the same time local fashion
brands has to also compete with the imported Korean or Chinese garments.
5

Marketing Plan

Once the market Analysis is done, the management can plan marketing strategies and set its long term
vision and short term objectives and goals
a) Vision
To deliver Australias unique designer ready to wear fashion clothes for modern women.
b) Objective

To establish the brand image of MYRAH in the Thailand market.

c) Short term objective

Target 50 department stores and fashion boutiques in Bangkok metropolitan region by 2018.
d) Long term goals

To capture a significant market-share as a Maryah unique designer brand.

To open 10 exclusive boutiques under the name of Mayrah in main cities of Thailand with
largest population like Bangkok, Pattaya, Koh Samui, Krabi Phuket.
Introducing smart phone Maryah App for buyers which will keep track of buying history and
give personalized offers to customers according to items they buy or liked on App.

e) Growth strategies
Expending product line horizontally in other life style products like home-wares, sleepwear,
accessories and jewelry (Chun 2010).
Vertical diversification into production as Thailand is well known for its quality of clothes and
domestic silk production (Chun 2010). Board of investment in Thailand helps new entrepreneurs to
establish in Thailand and also do corporate social responsibility to reduce carbon footprints and fuel
wastage in transportation and give employment to locals.

f) Marketing and sales strategy

The basic idea of marketing is to achieve a sustainable competitive advantage, achieving sales targets
therefore marketing strategies and goals should be aligned with the companys objective (Kotler &
Armstrong 2016). Once the budget is planned by finance department then the marketing strategies will
be planned accordingly. According to Ansoffs Matrix the existing product line of Mayrah is planning
to enter into new geographical market Bangkok, Thailand and this lead to new distribution channels
and different pricing and promotional strategies and company has planned to do niche marketing
(Guild T 2009).

g) Market Segmentation
Maryah is targeting contemporary women from age 21 to 39. The brand is designed for niche market.
Brand is targeting Bangkok local customers and domestic and international tourist.
Marketing mix 4 ps is a guide to build action plan (Goi, C 2009).
Product
Mayrah is a unique indigenous Australian brand designed by Julie Shaw and inspired from aboriginal
spirit of Australia is ready to wear collection for females. In Bangkok to target local customers,
Mayrahs exclusive designs will be offered in more options of colors, many shades of yellow, pink,
red, orange, green as Thai people like colorful dresses like any other Asian country. (Goi 2009).
Asian tourists are mainly from china (27%) whereas western tourist are mainly from United states
(3%), Russia (6.5%), Australia (3.4%) and UK (3.7%) and modern designer wear is common in these
countries (Pimpa 2012).
Price
Pricing strategy is value based for customers who value the uniqueness and creativity of designer.
Customers who appreciate and feel proud in wearing exclusive collection of designer not mass
production. Dresses will vary from 2000 Baht to 8000 Baht (Pimpa 2012).
Place
Thai people mostly shop from department stores (40%), local market (26%) and online (15%) therefore
products are available in Bangkoks metropolitan region in department stores like Siam square,
paragon, central world, platinum fashion mall, emporium department store and also in local high end
boutiques (Ferida 2016). Maryah website also offer online shopping.
Market penetration and building loyal customer base is difficult in Bangkok because of many local
and international competitors (Garde 2013).

 Promotion
Traditional media is effective as Thai people follow celebrities and they are influenced from TV shows
or Thai dramas (Global 2016). Endorsing a young female celebrity Araya A Hargett will help to
promote the brand. Updating Fashion blogs, sponsoring exclusive collection on special events to
celebrities, using digital media creating followers on Facebook page, tweeter, Pinterest, Instagram,
snapchat. In Physical environment trade shows, camping, fashion shows, posters and banners on
special events will create brand awareness. Personalized advertisements to potential customers by
knowing their click-through intentions and giving offers on their liked items. Promotional merchandise
by giving gift to celebrities on award shows or film festivals and clicking pictures for promotion of
brand. Christmas and New Year is the good time to attract western tourist with special offers and Thai
people like discounts too (Ferida 2016).

h) Sales channels
Indirect selling (B2B) is preferred way of reaching to the customers (B2C) first time, it is cost effective
and locals know the market better in Thailand. Distributing agent will be appointed who have
experience of local market and have established network and relationship with stores and retailers in
Bangkok which is important for Thai people to build relationship and trust. Registering with online
sellers on their websites is free and they take care of stock, shipment and customer service like Zalora
and Lazada. Mayrahs website and App for all smart phones also offer online buying options to the
target market (Yin & Jin-Song 2014).

i) Sales promotions
For customers
Offering price deals: First buy offers like get 50% off on second item bought., gift voucher,
festival specials, seasonal offers.
Loyalty rewards: Loyalty discounts, credit card options, membership discount and reward
points.
Direct selling: Asian customers are not easily influenced by virtual media therefore direct
selling by point of sale display and a sales girl informing customers about special offers for
upselling can influence the buyers decision (Goi 2009).

j) For Traders
Trade allowance: Special discounts for retailers bulk order and also for first time displaying
the designs and stock up.
Trade contest: Rewarding the seller who sold most number of items (Goi 2009).

Legal requirements
a) Licensing and contracts

Import license is required from government body of Thailand known as Department of foreign trade
for importing readymade clothe items and must meet international and Thai laws (Don 2013). Mayrah
will apply for license prior to import and to protect the intellectual property, designs and trademarks,
contracts will be signed between the Mayrah and other parties.
b) Labor laws
According to law passed in 1st June, 2008 minimum wage rate varies from 203 Baht to 148 baht in
different region of Thailand e.g. minimum wage rate in Bangkok is 203 baht and in Phuket is 197 baht
(Figure 5). There is a law of maximum probation period of up to 120 days and the salary must be given
in the work premises unless the employer gets permission letter from employee to transfer in Bank
account (Chandravithun 2012). Mayrah will comply with all the laws when hiring employees and also
request its employees to give permission letter to transfer salary into bank account.
c) Labeling requirements
According to International Trade Administration, labeling the clothes with its origin, material, care
size in Thai language is mandatory therefore Mayrah will direct its supplier in China to label all items
in Thai language (ITA 2016).
7

Communication issues and problems in the host-country working environment

Generally, Thai people prefer to build relationship before business discussion and to develop the
relationships will be slow the manager may need several meetings to get start discussing about work
since Thais usually prefer working with people they respect (Commis CEO Global 2016). So that the
managers from abroad need to set the timeline of work longer at the beginning to build a trust and

relationship with employee before running the projects. for example, having lunch together can also
develop business relationships.

Hierarchy is very strong in Thai society. When Thai people deal with others, they usually view their
status (Asia link Business 2015). This will happen even in family, workplace, or society. The manager
will represent the people who are top of organization and social hierarchy, so Thai employee will
accept the command from the boss and tend not to refuse the managers (Pimpa 2012). According to
Yukongdi study (2001), Thai people tend not to confront others opinion to maintain harmony, even if
the problem remains unsolved. This makes difficult to get them involve in problem solving process
and suggestion therefore manager should provide in-house training for leadership skill to make them
more confident to give the suggestion or opinion. Making private conversation to get individual idea
is also helpful.
8

The concerns of the host country and solution

There is approximately 200 000 people employed in the 2000 textile companies (Velde, 2008) which
makes it important from employment perspective. Domestic producers offer best quality at lowest
price results in under paid labor. Another problem are the unequal treatment of women and men, unsafe
working environment, often overtimes, discrimination of foreign employees, child labor and others.
It is important to mention that Mayrah, being a socially responsible company, does not support
unethical behavior. Human Resources policies should be in place like equal opportunities and wages
for both genders and against child labor also, standard working hours and fully paid optional overtime.
Secured transport will be ensured for the employees to strengthen the safety of the employees
commuting for work at the night to avoid abuses and unsafe conditions.
9

Conclusion

There's a positive pathway to enter into the Thai market with some concern and challenges. textile
and garments industry is very vast therefore we can see the potential and growing tendency of the
fashion industry in Thailand.
Thai business culture might complicate to the foreign manager when Thai people would like to make
a strong relationship before dealing business so that building the trust with colleagues and employees
should be priority. Also giving opinion confidently is unusual in Thailand because Thais mostly
respect higher position people, thus the manager should give more opportunities for employees to

show their idea. Bangkok, Thailand may be a vigorously competitive market for Mayrah to penetrate
but factors like influx of foreign visitors each year will be a determinative business prospect for
Mayrah because the highly trendy attires which are very weather friendly and suitable for the Thai
tourist culture. Additionally, demand for westernized products particularly the working class women
and acceptance of novel products with an open mind just might trigger abundant success eventually
for Mayrah. However, Mayrah will need to be prepared with proper action plan and entry strategies
as mentioned above to gain the competitive advantage in the Thai market.

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11 Appendix

Figure 1

Figure 2

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Figure 4

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Figure 6

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Figure 8

Figure 9