Premium smartphone apps are approaching market saturation in the United States. In order to foster continued growth, this company must expand to accommodate a global market. Smartphone sales have been skyrocketing in Thailand and that will be the location of the first target international market (Huang, 2013).
Before any sort of plan is created, some cross-cultural differences must be addressed.
- This company has made a deep commitment to the environment and green computing as a cornerstone of its culture. Thai culture takes a much more laissez-faire approach to environmental controls, viewing themselves as merely a part of nature and ultimately not responsible for any environmental problems (Knutson, 1994). To ensure compliance with this company’s mission statement, any operations set up in Thailand will have to address this difference in paradigms.
- There are glaring interpersonal differences between Thai and American culture that will need solutions. Thais value social harmony and hierarchal interactions above all other things (Knutson, 1994). They feel that directness can be offensive and all conflict is negative. This will present obstacles as Americans value directness and equality in communications, especially as applied to a business environment. In addition to their basic duties, interpreters will need to serve as social arbiters to avoid cultural misunderstandings. American employees operating in Thailand will also need extensive cultural sensitivity training.
- Thai culture is collectivist versus American culture being primarily individualistic. It is important to remember that no one person is responsible for a problem to a Thai mindset (Knutson, 1994). This may present as a problem with motivation and goal orientation that will need to surmounted. Avoiding situations that will cause any one individual social discomfort will help here. In addition, allowing additional time for meetings and other group tasks will help with avoiding deadlines and other schedule conflicts that may come about.
While a marketing plan is developed, it is important to address some ground floor aspects of marketing logistics (McConnell, Brue, & Flynn, 2012).
Product: Smartphone apps are a highly successful market in the United States where millions of smartphones are sold every year. Sales of smartphones have been growing rapidly in Thailand, growing by 24 percent in the first quarter of 2013 alone (Huang, 2013). As they are complementary goods, the demand for smartphone apps will grow there as well. However, only a small portion of the population of Thailand speaks English. To make smartphone apps marketable there they will need to be in Thai. To create the initial marketing mix, existing apps will be researched for their universal appeal and translated to Thai. Once a marketing foothold is established, local talent will be recruited to create future sales with more geographically-based offerings.
Pricing: Comparisons will be drawn up to isolate price relationships between markets. Specifically, the price paid for an average smartphone here will be compared to the price paid for an average app to arrive at a percentage price based on the total cost of the phone. This formula will then be applied to the Thai market based on average smartphone prices there and adjusted as necessary to assign initial pricing to the premium marketing mix. Subsequent offerings will be priced accordingly as well.
Promotion: Since they have been the key to success in American markets, ad banners in both the smartphone and regular internet markets will be utilized as the primary marketing vehicle. Given the cultural differences noted in the first section between the American and Thai cultures, Thai focus groups will be enlisted to ensure the advertising material is culturally acceptable. Sales campaigns specific to both platforms as well as a Thai-language sales site need to be constructed on the Internet. Contracts for running the banners will have to be pursued with existing internet and cellular service providers. In addition, free “lite” versions of some apps will be promoted to establish brand awareness.
Place: Most aspects of this expansion can be handled on the Internet, including product delivery, the same as it is done for current markets. Business licensing, market research and local research and development teams will all need to operate in-country. As noted in the next section, there are some regulatory differences between the two markets that will have to addressed. The most critical of these will be compliance with the Thai Electronic Transactions Act. Where in America the internet marketplace is more or less unregulated, in Thailand numerous laws have been enacted to protect the consumer in the virtual environment. Lastly, critical to this growth will be establishing permanent contracts with internet and cell service providers in Thailand to ensure reliable virtual real estate from which to distribute products.
Expanding business to Thailand will have two legal or ethical ramifications that will need to be addressed specific to smartphone apps (Thailand Law).
Thailand has set up extensive consumer protections in the digital environment in their Electronic Transactions Act. A special internet business license must be obtained before any commercial website can be published. Unlike here, a website has to be certified by the government before any marketing or sales can take place. A thorough review of the law by counsel will be necessary to ensure full compliance.
Another aspect of the E-commerce laws in Thailand is a total ban on pornography in the digital environment. This is salient for the smartphone market as many of the apps available contain what could be construed as pornographic imagery. Care will have to be taken that no apps be marketed there that could contain any pornographic images.
Huang, E. (2013). Smartphones on the cusp of overtaking feature phones in Thailand. Retrieved from http://memeburn.com/2013/06/smartphones-on-the-cusp-of-overtaking-feature-phones-in-thailand/
Knutson, T. J. (1994). Comparison of Thai and US American cultural values:‘mai pen rai’versus ‘just do it’. ABAC Journal, 14(3), 1-38.
McConnell, C. R., & Brue, S. L., Flynn, S. (2012). Economics (19th ed., pp. 141-238). McGraw-Hill.
Thailand Law. (n.d.), E- Commerce Law In Thailand . Retrieved from http://www.thailandlaw.org/e-commerce-law-in-thailand.html