Marketing the Nation

1
Marketing the Nation

• Philip Kotler, Ph.D.
• Kellogg School of Management
• Northwestern University
• CEO Forum
• Bangkok, Thailand
• October 18, 2001

2
Strategy Development

• Situation Analysis
• SWOT
• Objectives
• Strategies
• Implementation

3
Situation Analysis Past Policies

• Thailands annual growth was 8 between 1991 and
  July 1997 when the currency collapsed.
• 1960s Import substitution
• 1970s Export promotion
• 1980s Foreign direct investment
• 1990s Trade liberalization
• 2000s ???

4
Situation Analysis Strategy Dilemma

• Past growth was based on factor input growth, not
  productivity (Paul Krugman)
• Problem with factor-driven growth China and
  IndoChina will be cheaper.
• The nutcracker dilemma Thailand is caught in the
  middle between low cost-based competitors (China)
  and high value based competitors (Italy, Japan).
  
• Low cost based country stagnation, unemployment,
  shortage of hard currency, second class economic
  power.
• High value adding country develops sophisticated
  industries with differentiation and niche
  potential.

5
Situation Analysis Thailands Strengths

• Good natural resources
• Low labor costs
• Large internal market
• Democratic government, politically stable, safe
  haven (Switzerland)
• Good access for reaching other markets in
  Southeast Asia, China and India

6
Situation Analysis Thailands Weaknesses

• Bad bank loans
• Credit crunch
• Bankruptcies
• Weak capital inflow
• Unemployment

7
Objectives

• First, get out of the crisis.
• Second, improve international competitiveness.

8
Objective One Escaping from the Crisis

• Fighting Unemployment
• Many Thais may come back to Thailand from the
  Middle East
• Many unemployed Thais will go to villages
• Undergraduates should stay in school one extra
  year to pick up more skills
• Unemployed MBAs introduced to program for
  entrepreneurs
• Slow down company downsizing through consulting
  and subsidies.
• Start large scale government work projects
• Get banks on a sound footing. Thailand Assets
  Management Corporation.
• Companies need to revise their product mix,
  segment mix, customer mix, and marketing mix.

9
Objective Two Improving International
Competitiveness

• Thailand needs to improve productivity,
  innovation, and marketing.
• Examples of specific objectives
• Among top five trading countries in Asia,
• Occupy eight niches in world markets.
• Achieve three global brands.
• In top ten more favored countries to invest in.
• In top ten tourist destinations.
• In top ten with high quality of life.
• In top ten with social and political stability.

10
Strategies

• Choose the industries to develop.
• Improve the financial system.
• Facilitate entrepreneurship.
• Support small and medium scale enterprises.
• Help villages and cities develop place marketing.
• Consider import substitution.

11
Strategies Industries to Develop

• Tourism
• Green tourism, quality tourism, Japanese
  weddings, Second Phuket, Long stays for retired
  people, Be My Guest program
• Promote Thai food restaurants around the world.
• Promote entertainment industry in Thailand.
• Build auto industry make Thailand, Detroit of
  the East.
• Build natural foods industry.
• Apply biotechnology to agriculture.
• Some industries have to be extended (Thai foods)
  some strengthened (tourism, entertainment) and
  some started (Biotech)
• Two types of companies
• Physical based companies (speed, quality,
  delivery)
• Knowledge based companies (design,
  differentiation, branding, high value add)

12
Strategies Encourage Entrepreneurship

• Ministry of Entrepreneur Development. One stop
  service and lending and training.
• Micro-lending
• Druckers suggestion

13
Strategies Support Small and Medium Scale
Enterprises

• SMEs that feed into LSEs.
• SMEs that feed into international markets.
• SMEs that feed into local markets.

14
Strategies Build Places

• Places need to develop place marketing plans.
• One product, one village already 4,000 products.
  Marketing needed.
• A few products will end up in international
  market (Thailand Plaza) some in regional market
  many in domestic market most in local market.

15
Strategies Import Substitution

• Machinery (raise tariff)
• Grow flowers and fruit here that were imported
• Grow quality beef

16
Implementation

• Role of government
• Office of Opportunity Development

17
Implementation Governments Role

• Government should be the driver. Guided
  capitalism.
• Build infrastructure.
• Improve credit availability.
• Build public service information.
• Deregulate, privatize, where appropriate.
• Lower tariffs on luxury products.
• Reduce bureaucracy

18
Implementation Opportunity Development

• September 11 creates new opportunities for
  Thailand. Every sector must develop a list of
  opportunities.
• Needed Opportunity Development Salesforce
• Dont wait for industry and investors to come
  here. Go and market to them.

19
Conclusion

• Thailand is better situated that neighboring
  countries that went hi-tech.
• Thailand must position itself as a safe neutral
  haven in a troubled world.
• Government must apply business and marketing
  thinking to support recovery and competitiveness.
• Thailand must extend and strengthen present
  industries and build new ones that have high
  value-added, knowledge-added content.
• Thailand needs to apply marketing skills in order
  to turn ideas into results.