DR KIATANANTHA Lounkaew, dean of the Faculty of Economics at Dhurakij Pundit University, believes that finding a marketing strategy that works is a big challenge for Thai SMEs, of which there are some 2.7 million around the country.
A great many of them are concentrated in relatively few sectors – agriculture, simple agricultural processing, crafts, furniture, textiles and clothing, retail, tourism and tourism-related businesses – therefore it is inevitable that many of the products or services offered tend to bear some resemblance to each other.
At the same time, they have to compete with big players in the market – companies that seem to have an unfair advantage.
Yet, even in such a hostile environment, great numbers of SMEs have managed to thrive.
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Having been involved in both research and coaching of SMEs, he shared five observations on what in his view constitutes successful marketing strategies for small players.
First, successful SME owners personify their products, and they themselves become the brands. This is the beauty of being small. Why? Because customers feel more attached to a product that can be linked to a human face.
So, make sure that customers can have personal experience with you, he said. When they think about a product in your category, they will be more likely to think of you.
Second, successful SMEs find a niche that is intentionally overlooked by the big players. Being big means they are forced to leave some section of the market unserved, as the return from doing so is not commensurate with the size of their companies.
Crafting a marketing strategy is much easier when you know exactly who your customers are. A niche market offers you just that, he said.
Third, put a touch of innovation on your product. You can’t sell something that isn’t in anyway unique.
“We are not talking about world-changing innovation,” he stressed. “Just a good gimmick to distinguish you from the rest is enough. And be sure to stress this unique feature when you market the product.”
Fourth, use the right online tool with the right content at the right online time.
Online marketing is a favourite option for small business. This is due to its being budget-friendly and the flexibility it offers. However, only a few succeed in using the tool to its full potential.
Going online alone is not enough. You must craft your content to both feed your target customers’ curiosity and at the same time make them aware of your product, he suggested.
In addition, good content is meaningless if no one reads it. So, getting the timing right to promote your content is critical. Find out when your customers go online and make sure your ads are online at that particular time. Online marketing tools allow to you customize the time of your communication for this reason.
Finally, while online gets you far, online with on-land gets you even further, the academic said.
One mistake that happens frequently is the perception that online marketing can be a perfect substitute for everything else. Well, that’s not how successful SMEs see it, he added.
Online marketing can be more powerful when combined with a traditional on-land move. A kiosk at a trade fair may be a good first contact point because potential customers can have first-hand experience of your product; opportunity to communicate with you in person is also a plus in this regard.
These prior experiences will reinforce the recall of your customers when they come in contact with your marketing communication.
Dr Buppa Lapawattanaphun, lecturer at the Department of Strategic Communication, School of Communication Arts, the University of the Thai Chamber of Commerce, said that based on her enriched experience in being a marketing expert in modern marketing and brand-building techniques, and having had the chance to coach small and medium-sized enterpreneurs both in Bangkok and upcountry, she puts the main marketing challenges faced by today’s SMEs into three major areas.
The first is that local SMEs have good products and services. However, they don’t know how to build brands and communicate them to be known and recognised by potential customers.
“The real problem of SMEs is not that they don’t have a good product or service. They actually have products that are cool. Some products have won awards in both local and international competitions. Nevertheless, it is unfortunate that they don’t know how to build brands and communicate them to potential clients,” she said.
Nowadays, most SMEs are still messing around in the same place, concerning themselves with their artwork activities – especially on the designing of logo and packaging – rather than focusing on the key elements in making a good brand: that is, to provide good experiences to individual customers via all touch points.
Having a good brand story will also add to the experiential value, she said.
Second, many SMEs have relied heavily on the trend of online shopping, without realising clearly whether the trend is appropriate to the nature of their business.
Before entering into online business, they should ask themselves what is the product or service they are selling – and who are their major customers.
Is it necessary for most SMEs, which have a limited budget, to conduct e-commerce, as everything will add to their costs? Those SMEs need to be certain and knowledgeable about online business, as well as ensure the readiness of their back-up staff to go online.
Last but not least, SMEs need to stick to their own competency.
Currently, there are many SMEs that have been following other players in the market who are successful in making good sales and profits. These SMEs then tend to fall into their own trap by following a price-cut strategy amid cut-throat competition.
However, despite facing a host of business obstacles and challenges, many SMEs have benefited from plenty of hidden opportunities, Buppa said.
The government is providing serious support to SMEs, including a tax exemption, plus assisting business preparation for start-ups – from ideas to business execution and launching products into the market.
Such support also includes business coaching, giving financial consulting and granting loans.
The move by the government will allow local SMEs to improve productivity and sustain their business in a competitive market place, she said.
Dr Punyapon Tepprasit, marketing academic and chief executive officer of MVP Consultant, described the Asean market as an extremely competitive environment, with more rivals from within the region, as well as from outside Asean – with those countries’ SMEs often having many differences in values from their Thai counterparts.
The marketing challenge for Thai SMEs is a one-sentence question that they must answer: “How to be the order winner?” Being an order winner means having the competitive advantages that cause a company’s customers to select that particular business’s products or services, he said.
As to how SMEs can overcome the challenge, “I advise four key success factors for SMEs in Asean’s competitive market place that can help and support entrepreneurs and companies to be order winners in their line of business.”
First, there is the vision. The company and entrepreneur have to create a complete and smart vision. Good vision will drive a company to business success.
Second, acquire the critical skill of crisis management and resolution.
“Initiatives by SMEs in the Asean market entail many business problems and threats. Critical skills for resolving a business problem or beating off a threat is no less important than any knowledge-related criteria. Such critical skills will create the experience for business-issue resolution that can drive the company to discover the edge of its power potential,” he explained.
Third, build a network. Nowadays, business competition isn’t necessarily a matter of one company doing battle with others in the same field, as businesses will more frequently encounter a group of companies or a supply chain, which is a prevailing competitive trend.
Each SME must therefore build a business-alliance network for information- and knowledge-sharing, because the possession of significant data and knowledge will help provide a day-to-day edge that can beat off the competition.
Fourth is corporate citizenship. This is a modern management concept that’s as important as any other concept in the 21st century, he said.
The SME must identify a ‘do’s and don’ts’ checklist for business process and operational improvement that conforms to the concept of sustainability.
Each company should in fact develop a business process akin to the [MVP Consultant-designed] MEST model, which consists of Merit, Ethics, Safety and Transparency, Punyapon said.
To sum up, a small business or entrepreneur that wants to beat off threats and answer the question “How to be the order winner?”, needs to follow the four key success factors of having a complete and smart vision, acquiring critical skills, building a network, and achieving corporate citizenship by following the MEST model,
