MKTG1417 – Global branding – A2

 

I. Introduction

Smoothie Factory, founded in 1996 by Olympic athlete James Villasana, is a reputable retail brand of smoothies, fresh fruit juices, and snacks in the USA. The company has franchises in more than 18 countries around the world including Vietnam, Pakistan, China, and so on with different signatures, is considered to be the fastest-growing nutritional drink brand in the world. The company comes from the inspiration of the founder when he needed healthy food options with the highest quality ingredients for his career (Smoothie Factory nd). It can be said that the brand has become a pioneer in the field of healthy drinks and food. All the products are freshly made with real fruit without syrups or bottled flavorings, suiting every diet. The company has advantages of signature products with a high commitment for fresh fruits in all franchises along with high-quality recipes from the founder. With more than 18 countries in the world, along with the rise of healthy beverages in consumers, the company have the potential to develop in other countries, especially in Southeast Asia when this area has tropical weather, which is suitable for fruits and juices (Valente 2020; PS News Wire 2020). However, in terms of brand vulnerabilities, the price of the product is considered to be high in the market, which means customers will always expect higher quality from product, service and marketing activities. Moreover, the product of Smoothie Factory can be easily replaced in the market with a large number of competitors with more attractive prices. Therefore, customers can easily switch to other products if the brand has issues in the field of marketing, communication, or product.

 

In this report, Thailand would be the country chosen for Smoothie Factory to considering launching in the long term plan.

 

  1. Economic-Geographic Environment 
  • Geography

Thailand is considered to be in the heart of Southeast Asia, near Cambodia, Laos, Myanmar, and Vietnam. The country has a tropical climate, which means it is generally very hot all year round, especially from March to May Also, the country has rainy season and a dry and relatively cool season from November to February, which is suitable for the development of fruits. The country is also rich in natural resources, which have become an important part of local people’s livelihood. The country has a wide range of flora and fauna with more than 15,000 plants and three dominant types of tropical forest including monsoon, rain, and mangrove (climatestotravel nd; Open Development Thailand 2017).

 

  • Major product

Rice is the biggest agricultural product in Thailand when the country is always on the top one exporting rice to other countries. The country is also famous and has become the main exporter for other products such as rubber, sugarcane, cassava, fruit, cashew nuts, corn and so on. The company has also expanded organic farming due to the rise of exporting to the USA and Europe along with the health concerns of domestic consumers in the last few years (intracen nd).

 

  • Current economic conditions

Thailand is the 8th largest economy in Asia, with a GDP of 1$505 billion in 2018. The personal income of people is around $800 USD per month, have some of the highest average salaries in the region (Stoz 2020). Due to the current problem of COVID-19 along with the long strikes, the country economy has been hit hard with GDP shrinking 12.2% from a year ago, increasing the poverty and unemployment rate. However, it can be trusted that the country’s government is planning to have more support and aid for business, workers, and exports in the next time (Yuvejwattana & Knight 2020; Forbes 2018). 

 

  •  Infrastructure

The country has well-connected roads and highway networks across the country with the plan of building 4,150 km of motorways in the long term, which would be easy for companies to deliver products and communicate with people. This has become one of the important fields to boost the economy during the time of COVID-19 (PWC 2020; Brown 2020). In 2019, more than 70% of the population has access to the Internet and nearly 100% of them have access to television use (Statista 2020; The Nation Thailand 2021).

 

III. Social-Cultural Environment

  • Demographics

Thailand is among the top intense country in terms of population. The largest one stays from the age of 25 to 50 years old, which has been supposed to contribute to the labor force as well as the group with the highest consumption rate (Indexmundi 2020). 

 

Smoothie Factory can earn a big amount of profit with a great number of target consumers. Moreover, as more and more people live in urban areas, this would be a potential place for the brand to open stores to attract more people as well as tourists in Thailand in the long term. Thailand also has a 93.8% literary rate, which means the company can hire labor with high skills (Knoema 2020)

 

  1. Religions

Buddhism is the largest religion in the country and it can be said that this has a large impact on the culture, beliefs, and traditions in Thailand. There are countless festivals annually for the festival. With these two features, this can be a huge advantage for Smoothie Factory to enter the market with its smoothie products. 

 

  1. Language and systems

Besides Thailand, English is the most common language in Thailand with around 27%. Many young Thailand has learned English nowadays (thaiconsulate nd). Therefore, it is not difficult when it comes to business communication in the country.

 

  1. Social institutions 

Thailand is a very high-context country, which means it focuses on body language, tone, non-verbal setting, and other cues. Business in Thailand is formal, but people are a little relaxed and courteous (jobandwork nd). “Saving face” for the others is important in eh Thailand context and relationships need to take time to develop. Therefore, it is important to be careful when working with different stakeholders and organizations.

 

III. Political – Legal Environment

a. Type of Government

Thailand’s politics is operated under a constitutional monarchy structure of Government and the King has little power.  Until recently, along with the unstable country’s selection and the disbelief in the new King and his family, there have been more and more protests in Thailand, even at the moment. There has been strong violence across Bangkok recently (Murray 2019). This can last a long time in the future, decreasing the development rate of the economy and other factors.

  1. Trade barriers

The country has not had WTO Agreement on Government Procurement, which may lead to high tariffs in many sectors. The foreign owner can only own up to 49% of the company shares when doing business in Thailand. The company is ranked 21st in 190 countries when doing business (siam-legal nd)

  1. Promoting global business analysis

Thailand is also one of the countries having lots of initiatives for foreign investment. The country has introduced the package “Thailand Plus” with new tax incentives and deductions, expanding free trade networks, Development of new special investment zones, Amendment to the Foreign Business Act in order to attract more investors coming to the country (Medina 2019).

 

  1. Intellectual property 

Thailand’s law on intellectual property has been improving, so companies need to seek agreement or consult with Thai experts before giving their technologies or business information to local partners (Trade.gov 2019).

 

III. Evaluation

It can be seen that Thailand is a potential country for Smoothie Factory to enter in a long time due to several reasons. First of all, the country’s requirements for organic products are increasing with more people consider a healthy diet. Also, Thailand’s largest population is on the list of the main target audience and consumers of Smoothie Factory. Furthermore, the government is having more incentives for the development of foreign companies with attractive incentives. However, the country is currently experiencing a hard time of economic recession along with the instability of politics, which may decrease the economic levels and development of other fields in a long time.

 

When entering Thailand, the country should consider two main adaptation factors for long-term development: product and cultural factors. As Thailand offers a wide range of products for fruits, it is important to develop the signatures for Smoothie Factory that makes it oustanding in the market. Along with that, as Thailand is having a hard time with political stability along with the largest development of Buddhism, it is important to consider these two specific elements when doing promotional activities in the country.

 

Also, in terms of standardized factors, the company should consider using the same “healthy, fresh and organic” positioning image when doing branding activities in Thailand since the country’s requirements for these products are increasing. This could be done through image, content through promotional channels and activities related to the brand. Furthermore, the brand should keep the young, dynamic and supportive staff management system by hiring young people in order to keep the reputation consistent among customers’ minds.

 

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