THE DEVELOPMENT OF DISTRIBUTION CHANNELS FROM...
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THE DEVELOPMENT OF DISTRIBUTION CHANNELS FROM TRADITIONAL TO MODERN TRADE: A CASE STUDY OF THE THAI OLYMPIC FIBRE CEMENT CO., LTD. SITTI JITTICHANON A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE MASTER DEGREE OF BUSINESS ADMINISTRATION GRADUATE SCHOOL OF COMMERCE BURAPHA UNIVERSITY JUNE 2015 COPYRIGHT OF BURAPHA UNIVERSITY
Transcript of THE DEVELOPMENT OF DISTRIBUTION CHANNELS FROM...
THE DEVELOPMENT OF DISTRIBUTION CHANNELS FROM
TRADITIONAL TO MODERN TRADE: A CASE STUDY OF
THE THAI OLYMPIC FIBRE CEMENT CO., LTD.
SITTI JITTICHANON
A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE MASTER DEGREE OF BUSINESS
ADMINISTRATION
GRADUATE SCHOOL OF COMMERCE
BURAPHA UNIVERSITY
JUNE 2015
COPYRIGHT OF BURAPHA UNIVERSITY
ACKNOWLEDGEMENT
I would like to express my sincere gratitude and deep appreciation to my
major advisor, Dr. Suthasinee Susiwa, for all of their guidance, and valuable advice
throughout this study. Great appreciation is offered to all committee members and all
experts involved in validating the instrument, thank you very much for your support,
attention, and motivation.
I also would like to thank for the Chief executive officer of the Thai-olympic
fibre cement Co.,Ltd.,Ms. Ongon Taechamahaphant who give me permission to
conduct research and the unofficial interviewed in many times. The TOFC colleague
and customers who collaborated in the long time interview. I am gratefully indebted
for all the Graduate school of commerce, Burapha University officers who
participated in this study.
Finally, great respect to my beloved family; for your loving, patience,
caretaking, attention, and support throughout my study.
Sitti Jittichanon
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56710008: MAJOR: GLOBAL BUSINESS MANAGEMENT; M.B.A. (GLOBAL
BUSINESS MANAGEMENT)
KEYWORDS: RELATIONSHIP MARKETING/ DISTRIBUTION CHANNEL
DEVELOPMENT/ TRANSFORMATION FACTOR/ STRATEGIC PLAN
SITTI JITTICHANON: THE DEVELOPMENT OF DISTRIBUTION
CHANNELS FROM TRADITIONAL TO MODERN TRADE: A CASE STUDY OF THE
THAI OLYMPIC FIBRE CEMENT CO., LTD. ADVISORY COMMITTEE: SUTHASINEE
SUSIVA, Ph.D. 201 P. 2014.
The Purpose of this thesis was to study the development of construction material
distribution channel from traditional trade to modern trade by a case of The Thai Olympic fibre
cement co.,ltd. The study contains 1) the generalize of distribution channel network in Thailand,
2) similarities and differentiation of modern trade and traditional trade, 3) factors of business
model transformation and 4) strategic plan to transforming and 5) completed transform modern
trade. This qualitative research used the purposive sampling and then snowball sampling method
by individual interview with semi- structure questionnaire from nationwide customers of the
company and its employees.
The distribution network of construction materials in Thailand describe by sales type
such as retails, wholesales, project sales and modern trade sales or by product brand from
manufacturer and Portland cement factory which own each other brand, the differences network
have their own regulation but mostly network in the country have no more strong regulation to
enforce the customers therefore the brand, product substitution, channel overlapped and conflict
were plenty in the market. The differentiation and similarities of two trading model were have
their strong point such as the close relationship with long term coordination in local area of
traditional trade or the systematics back and front office of modern trade which make each model
survived in the heavily competition environment. In the changing world of business, the
proliferation of customers' needs was the main factor that affects the firm to transform itself
to increase the competition capabilities, changing in customer expectation, the buyers with more
knowledgeable and many branches diversification to the major cities were the factors of business
model transformation. Laos’s construction materials distribution market should be develop the
business model in briefly years depending on the socialism government to open for the capitalism
in future. Some firms in Laos were developed themselves with extant resources.
The two strategic plan of transformed and transforming modern trade were concentrate
on the relationship marketing which were the way to maintain the customer loyalty and modify
the suitable business relationship of the company with the customer. The evaluation and the
contingency plan were contained in this thesis.
CONTENTS
ABSTRACT ............................................................................................................... iv
CONTENTS ............................................................................................................... v
LIST OF TABLES ..................................................................................................... vii
LIST OF FIGURES ................................................................................................... xii
CHAPTER
1 INTRODUCTION .............................................................................................. 1
Background of the study ............................................................................. 1
Problem statement....................................................................................... 6
Research objective ...................................................................................... 7
Research question ....................................................................................... 7
Conceptual framework ................................................................................ 8
Research contributions ................................................................................ 9
Scope of study ............................................................................................. 9
Terminologies ............................................................................................. 9
2 LITERATURE REVIEWS ................................................................................ 12
Business-to-business marketing .................................................................. 12
Business products classification ................................................................. 15
Distribution channels of the business to business marketing ..................... 16
Pricing in business to business marketing .................................................. 19
Business marketing communication ........................................................... 20
Business relationships ................................................................................. 21
Business networks....................................................................................... 25
Business models .......................................................................................... 26
Strategic plan .............................................................................................. 28
Articles and other related research summarizes: Traditional trade
and modern trade ........................................................................................ 29
3 RESEARCH METHODOLOGY ....................................................................... 34
Research design .......................................................................................... 34
Populations and sample design ................................................................... 34
vi
CONTENTS (Con.)
CHAPTER Page
Data gathering methods .............................................................................. 35
Questionnaire design................................................................................... 35
Validity and reliability test ......................................................................... 35
Data processing and analysis ...................................................................... 38
4 RESEARCH RESULTS .................................................................................... 39
Part 1 Presents the external participants' research result and data
analysis........................................................................................................ 39
Part 2 Presents the internal participants' research result and data
Analysis ......................................................................................................103
5 CONCLUSION DISCUSSION AND RECOMMENDATION ........................150
Part 1 Conclusion ........................................................................................150
Part 2 Presents the strategic recommendations ...........................................162
Part 3 Recommendation for further study...................................................167
BIBLIOGRAPHY ......................................................................................................168
APPENDIX ................................................................................................................173
APPENDIX I ........................................................................................................174
APPENDIX II .......................................................................................................189
BIOGRAPHY ............................................................................................................201
vii
LIST OF TABLES
Table Page
1-1 Gross domestic product originating from construction at current market
prices .............................................................................................................. 2
2-1 Differences between business and consumer markets ................................... 13
2-2 The sixteen detailed business model archetypes ............................................ 27
4-1 External participants' organizational data ...................................................... 40
4-2 Thailand's distribution network description ................................................... 42
4-3 TOFC's distribution network description ....................................................... 44
4-4 TOFC's distribution network classification ................................................... 46
4-5 Business competition situation analysis......................................................... 47
4-6 Business categorizes ...................................................................................... 48
4-7 The benefit aspects as TOFC's distribution network member gained… ....... 49
4-8 The independently business operation aspects of TOFC's distribution
network member ............................................................................................ 50
4-9 The TOFC's network member be the member of another company .............. 52
4-10 Customer satisfaction and the reasons ........................................................... 53
4-11 The problem as the member of TOFC distribution network.......................... 54
4-12 The modern trade aspects............................................................................... 56
4-13 Business model description............................................................................ 58
4-14 The description of traditional trade ................................................................ 60
4-15 The description of modern trade .................................................................... 62
4-16 The similarities of traditional trade and modern trade ................................... 63
4-17 The differentiation of traditional trade and modern trade .............................. 64
4-18 The main forces of traditional trade transforms to the modern trade ............ 66
4-19 The construction material demand ................................................................. 68
4-20 The modern trade influences the construction material distribution
market ............................................................................................................ 70
4-21 The level of emphasize in the transformation ................................................ 72
4-22 The level of TOFC’s emphasizing in the transformation .............................. 73
viii
LIST OF TABLES (Con.)
Table Page
4-23 The level of TOFC’s emphasizing in the transformation compare
with the rival in the industry .......................................................................... 74
4-24 The inter-relationship between TOFC's distribution network member ......... 75
4-25 The benefit to business result in relationship of TOFC’s distribution
network member ............................................................................................ 76
4-26 The most evidence with business relationship of TOFC's distribution
Network.......................................................................................................... 77
4-27 How the TOFC builds the business relationship with customer .................... 78
4-28 The importance with TOFC relationship ....................................................... 80
4-29 How customer builds relationship with TOFC .............................................. 81
4-30 The results of the relationship with TOFC .................................................... 83
4-31 The level of business relationship with TOFC .............................................. 85
4-32 The relationship aspects between TOFC and the customers ......................... 86
4-33 The view point of two relationship aspects .................................................... 87
4-34 The most beneficial relationship in the business short term .......................... 88
4-35 The most beneficial relationship in the business long term ........................... 89
4-36 The business value added from TOFC relationship ....................................... 90
4-37 The most effective marketing activities ......................................................... 91
4-38 The differences definition of public modern trade and Localize
modern trade .................................................................................................. 92
4-39 The most potential modern trade merchandisers in Thailand………….. ...... 94
4-40 The consideration factors of modern trade customer ..................................... 95
4-41 The marketing mix to modern trade............................................................... 97
4-42 The marketing activities to modern trade ...................................................... 98
4-43 The inappropriate marketing activities for modern trade .............................. 99
4-44 The most effective communication tools for modern trade ...........................100
4-45 The business survival in competition .............................................................101
4-46 The ideas to TOFC with business network development ..............................102
ix
LIST OF TABLES (Con.)
Table Page
4-47 The ideas to TOFC to make our network more competitiveness ...................103
4-48 Respondent Individual questions ...................................................................104
4-49 Thailand's Distribution network description ..................................................106
4-50 TOFC's distribution network description .......................................................108
4-51 TOFC's distribution network classification ...................................................109
4-52 Business competition situation analysis.........................................................110
4-53 Business categorizes ......................................................................................111
4-54 The difference aspects of the modern trade and traditional trade ..................112
4-55 The description of traditional trade ................................................................114
4-56 The description of modern trade ....................................................................115
4-57 The similarities of traditional trade and modern trade ...................................116
4-58 The differentiation of traditional trade and modern trade ..............................117
4-59 The main forces of traditional trade transforms to the modern trade ............119
4-60 The construction material demand .................................................................120
4-61 The modern trade influences the construction material
distribution market .........................................................................................121
4-62 The level of emphasize in the transformation ................................................122
4-63 The level of TOFC’s emphasizing in the transformation ..............................124
4-64 The level of TOFC’s emphasizing in the transformation compare with
the rival in the industry ..................................................................................125
4-65 The way of TOFC gives the importance to customer relationship ................127
4-66 How TOFC builds relationship with customer ..............................................128
4-67 The results of the relationship with customer ................................................129
4-68 The inter-relationship of TOFC customer......................................................130
4-69 The beneficial from customer inter-relationship ............................................131
4-70 The level of business relationship with TOFC ..............................................132
4-71 The relationship aspects between TOFC and the customers .........................133
4-72 The view point of two relationship aspects ....................................................134
x
LIST OF TABLES (Con.)
Table Page
4-73 The most beneficial relationship in the business short term ..........................135
4-74 The most beneficial relationship in the business long term ...........................136
4-75 The business value added from customer relationship ..................................137
4-76 The most effective marketing activities .........................................................138
4-77 The differences definition of public modern trade and localize modern
Trade ..............................................................................................................139
4-78 The most potential modern trade merchandisers in Thailand ........................140
4-79 The consideration factors of modern trade customer .....................................141
4-80 The marketing mix to modern trade...............................................................142
4-81 The marketing activities to modern trade ......................................................143
4-82 The inappropriate marketing activities for modern trade ..............................144
4-83 The most effective communication tools for modern trade ...........................145
4-84 The business survival in competition .............................................................146
4-85 The ideas to TOFC with business network development ..............................147
4-86 The ideas to TOFC to make our network more competitiveness ...................148
4-87 The economic worthwhile of company's policies with modern trade............149
5-1 Shop descriptions ...........................................................................................150
5-2 Years of established .......................................................................................151
5-3 Business owner’s generation..........................................................................151
5-4 Years of TOFC's distribution network ...........................................................151
5-5 Working level.................................................................................................152
5-6 Years of working............................................................................................152
5-7 Years of current position ................................................................................152
5-8 Related with sales department .......................................................................153
5-9 Related with modern trade sales ....................................................................153
5-10 Description of Thailand’s construction material distribution network ..........153
5-11 Differentiation of the business model between the traditional and
modern trade by internal respondents ............................................................155
xi
LIST OF TABLES (Con.)
Table Page
5-12 Differentiation of the business model between the traditional
and modern trade by external respondents .....................................................156
5-13 Similarities of the business model between the traditional
and modern trade by internal respondents .....................................................156
5-14 Similarities of the business model between the traditional
and modern trade by external respondents .....................................................157
5-15 The factors and its reasons of transformation ................................................158
5-16 TOFC’s SWOT analysis ................................................................................161
xii
LIST OF FIGURES
Figures Page
1-1 Conceptual framework ..................................................................................... 8
2-1 Routes to business markets .............................................................................. 17
2-2 Pluralistic multi-channel system ...................................................................... 17
2-3 Monolithic multi-channel system .................................................................... 18
2-4 Communication mix and customer acquisition process .................................. 20
2-5 The uncertainties of customers and suppliers .................................................. 23
2-6 The development of customer-supplier relationship ....................................... 24
2-7 Branches of home improvement stores in provinces with high potential ........ 33
CHAPTER 1
INTRODUCTION
Background of the study
Thailand first cement factory founded in 1913, names Siam Cement Group,
or SCG (The Siam Cement Group, 2014). Under the royal command of King Rama
the sixth to reduce the importation of the cement from overseas, which marked
significant born of the construction industry in Thailand. Its establishment occurred
the new business form in Thailand. The construction materials merchandiser networks
in Thailand had been enduring with the construction industry through hundred years.
In 1917 Siam Cement exported cement to Singapore, Penang and the northern
Malaya; these were the first construction materials commercial in the country.
Nevertheless, the first official marketing and sales firm had been established in 1962
that take responsibility for the SCG trading business. Therefrom many construction
materials manufacturers were founded in Thailand’s construction materials trading
war i.e. Siam City Cement Co., Ltd in 1969, The Thai Olympic Fibre-Cement Co.,
Ltd in 1974 and TPI Concrete Co., Ltd in 1991, etc.
Since the year 2000 Thai Gross Domestic Product (GDP) originating from
construction at current market prices indicator had been increasing, which illustrate
that the construction industry of Thailand was successive growth (See Table 1-1).
In 1997, the indicator fell down first time since 1990; it’s a sign of
economics recession. For 4 years ago the GDP had been increasing until now. In
2012, the indicator of GDP originated from construction both private construction and
public construction was nearly 350,000 million baht, which is double figure from 12
years ago.
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Table 1-1 Gross domestic product originating from construction at current
market prices
Year Private construction Public construction Total value added
1990 102,326 33,251 135,577
1991 123,857 43,985 167,842
1992 129,540 57,851 187,391
1993 152,279 69,814 222,093
1994 176,928 92,607 269,535
1995 195,509 111,323 306,832
1996 202,360 146,897 349,257
1997 104,433 162,150 266,583
1998 54,127 132,207 186,334
1999 42,129 126,520 168,649
2000 49,110 103,214 152,324
2001 53,416 101,614 155,030
2002 65,816 100,903 166,719
2003 79,463 96,127 175,590
2004 93,284 103,730 197,014
2005 104,819 121,835 226,654
2006 110,744 134,473 245,217
2007 111,617 151,771 263,388
2008 119,934 147,009 266,943
2009 114,446 156,811 271,257
2010 131,150 171,641 302,791
2011 147,447 159,392 306,839
2012 163,498 175,553 339,051
Source: Office of the National Economic and Social Development Board, National
Income of Thailand; 2013
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The construction industry makes a vital contribution to the competitiveness
and prosperity of the economy. A modern, efficient infrastructure is a key driver of
productivity, and the construction industry has a major role in delivering the
built infrastructure in an innovative and cost effective way (Lawson, 2013). The
construction industry is one of the major key drivers in Thai economy. The upstream
stage in the construction industry may also a construction materials supplier who has
provided raw materials to contractors or other business. So the construction materials
supplier was the protagonist of the construction industry supply chain. “A supply
chain consists of all parties involved, directly or indirectly, in fulfilling a customer
request” (Chopra & Meindl, 2004). A variety of stages in supply chain include
components or raw materials, manufacturers, wholesalers or distributors, retailers and
customers. Once we focused on the bond or relationship between manufacturers
and distributors in this supply chain. Companies cannot choose whether to have
relationship because a company cannot exist without relationship or interaction with
another. “Interaction can be interpreted as a confrontation process that occurs between
companies and which changes and transforms aspects of the resources and
activities of the involved companies and of the companies themselves” (Ford,
Gadde, Håkansson, Snehota, &Waluszewski, 2010). The interaction between
members in the business network was normally run on day-to-day basis but the
changing of business environment affected more on some firms either positive
or negative.
For the industry, the key of business insistent is the distribution networks
that are the intermediary between manufacturers, customers and end users. This
middle man has a massive role in Thai construction industry, for example, distributing
the products throughout the country, keeping stocks locally, and the most important
one is interacting with the customers and end-users. In 1997, the biggest financial
crisis in Asia, especially in Thailand had happened, which knew as Tom Yum Kung
crisis, The Thai construction materials manufacturers had suffered with many issues
such as debt restructuring, refinancing and sale the stock to the foreign investors.
After that the scrabble to business survive have many solution, one route to business
existence eternally is developed.
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The marketing mix is the critical instrument of marketers which often
referred as 4P’s, product, price, promotion and place. The products would develop
internally the business organization or sometime co-creation with outsider, the prices
shall be set from marketing department and modify from related people sometimes
and the promotions are the same. The development of place, marketing channel or
distribution channel must be sustain from many sectors in the supply chain as the
sales policy from manufacturer, the empathy from customer and recognize of
changing in business world from entrepreneur.
According to the information above, the distribution channel owners must be
modulate their own business apposite to transformed commercial. The highlight of
changing in marketing place is the procreation of modern trade, especially in
construction materials merchandisers, the major brands of modern trades just
established not over 20 years ago. For example, HOMEPRO was established
in 1995 with the first branch situated in Rangsit area and 64 operating branches
(Homepro, 2014), The Global House was found in 1997 with the first branch located
at Roi-et province and 31 operating branches (Globalhouse, 2014), HOMEWORK
was established in 2001 with the first branch on the 5th
floor of Central plaza Bangna
and 7 operating branches (Homework, 2014), DO HOME was found in 2008 with
the first branch located on Nakornratchasima province and 5 operating branches
(Dohome, 2014) and the latest one, Thaiwatsadu established in 2010 with the first
branch located at Bangbuathong Nonthaburi and 28 operating branches around the
country (Thaiwatsadu, 2014). The unforgettable marketplace of the construction
materials merchandisers was the traditional trade which have operated their business
successfully for long-standing. At the present the business environment of
competition changed, the traditional trade may have to reform themselves in order
to survive the business environment. These trading patterns modification may be
influence by customer behavior, supplier’s negotiation or other factors that are the
beneficial changed to the entire supply chain member.
One of the first construction materials distribution network in Thailand
belong to the SCG. The long lasting trader network survived the abundant obstacles
of Thai economy. Nowadays SCG is the largest construction materials distribution
chain that transformed their authorized dealers to modern outlets. The SCG’s
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authorized dealers transformation is the remarkable situation which many researchers
studied their business approaches. The business development of SCG illustrated that
the expansion of the retail business with the warehouse store format by acquired a
31% stake in Siam Global House Public Company Limited to enhanced the
capabilities and opportunities for future business expansion as well as increasing
operating efficiency, the development of dealers continually by upgrading all HOME
MART stores to have the same standard interior features, store management, and
service format, development of potential wholesale dealers by managing the supply
chain and supporting promotional activities targeted at sub-dealers and the
development of project dealers using project management system as one stop solution
that provides real time services and enables SCG's customers to effectively manage
product flow in each construction project (The Siam Cement Group, 2014).
All development activities showed the SCG’s authorized dealers have to follow
their management policies.
The Thai Olympic Fibre-Cement Co.,Ltd. or “TOFC”, the manufacturer and
trader of the products under the names SHERA and HAHUANG. The TOFC had been
managing the distribution channels in Thailand and exporting the products to foreign
country especially the border country around Thailand. The fifty years old company
had established with the strong relationship with the customer, the intimate trading
milieu and the familiar contract which were the key success of this business
organization. As time passes the variable of business environment have been changing
so the familiar business process could not endure and the professional implementation
must be replaced. The distribution channels management process of TOFC provide
the independent business operation to every authorized dealers but some dimension
of marketing approaches, the TOFC probably interferences direct or indirect way such
as the pricing policies, customer relationship management, after sales services and the
products guarantee etc. Many TOFC’s authorized dealers are the potential distributor
in their neighborhood and some are strong in the nationwide therefore the CEO’s
vision is not enforces any authorized dealers to do something but the TOFC will
suggests and advises the customer to modify their business personally
(Taechamahaphant, 2014)
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Intentionally the marketing strategies of TOFC emphasize in pricing
strategies as the special discount, the product innovation and the trading promotion
with authorized dealers. Unprecedented the channel strategies are remarkably less
concern by almost marketing procedure. Inattentiveness one of the marketing mix,
place is the essential composition for providing the product at a place which is
convenient for consumers to access. (Kotler, 1960) Whilst traditional trade of
construction merchandisers will modify, the national brand modern trade will
increasingly born. One of the problems with the traditional trade survival is the
competition adaptable whether the outlet modify, sales process or any reformation,
the entrepreneurs must be pursue the evolution of business. However the expansion
of modern trade or the transformation of traditional trade, the market place of
construction material merchandiser in Thailand and ASEAN is one of the marketing
topics which interested for the way that going to be and the final result.
Problem statement
The conditions for conducting business in the retailing industry are changing
rapidly, as they are in many other industries. Driven by a complex mix of
technological, social, economic and political factors, mergers, acquisitions and
internal restructuring have reshaped the competitive environment of retailing industry
(Hingley, Taylor, & Eillis, 2007).There is no one motivation or pleasure that effects
the distribution to transform itself into modern trade. There are many factors that
influence the primitive distribution channels to evolve their business. The
fundamental of ownership data, business model, the business operation and the
business relationship in Traditional trade and Modern trade those have any point
differences or similarities. The factors of loyalty in each form of commercial are vary.
Finally through this study, the researchers summarize any result.
In this study, The Thai Olympic Fibre-Cement Co.,Ltd. or “TOFC”
which the researcher has been working need to develop the marketing strategy
that implements to the two form of trading with B2B marketing and relationship
marketing. The TOFC was founded with the aim of producing fibre cement roofing
under the brand "Ha Huang" (meaning 'five circles' in Thai), which served as the solid
foundation and the source for nurturing the commitment, inspiration and skills among
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staff from generation to generation. These efforts contributed to making the dreams of
Thai people come true. The last 38 years of commitment has seen significant growth.
The company has expanded to a number of plants serving Thailand and the Asian
region and it has taken part in ensuring growing quality of life not only for Thai
society but also for the region. The company has grown significantly under the brand
"SHERA", which is not limited only to roofing but has extended its range to fiber
cement materials for walling, ceiling, flooring and furniture. “We will continue our
commitment to upgrading building standards in a sustainable manner for people
around the globe” the vision of TOFC that drive the organization with inspiration
of all parts to success (The Thai Olympic Fibre-Cement, 2014).
The construction materials merchandiser distribution network studies, the
differences or similarities of two trading firm and the factors of transformation to next
generation business model. All studies issue in this document have only one purpose
that the most important. The strategic plans of Business-to-business , they have a
single destination to improve sales operation with the extremely understanding.
Research objectives
1. To study the distribution network of the construction materials
merchandiser in Thailand.
2. To understand the differences and similarities of the business model
between the traditional and modern trade in the construction materials merchandiser
in Thailand.
3. To identify factors influence the transformation of the traditional
merchandiser to the modern trade in the construction materials industry in Thailand.
4. To lies a Business to Business strategic plan to encourage traditional
trade with transformation to modern trade.
5. To draw a Business to Business strategic plan to modern trade.
Research question
The research questions that are going to determine in this study are as
follows:
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1. What is the distribution network of the construction materials
merchandiser in Thailand?
2. What business models are suitable to distribution network of the
construction materials merchandiser in Thailand?
3. How differences and similarities of the business model between the
traditional and modern trade in the construction materials merchandiser in Thailand?
4. What are the factors that influence the traditional trade transforms into
the modern trade?
Conceptual framework
Figure 1-1 Conceptual framework
Construction materials merchandiser distribution network
1. The distribution network generalization
2. The network paradigm
(Kotler & Armstrong, 2008; Piercy & Cravens, 1994)
Traditional trade
1. Business model
2. Owner personal data
3. Business network
4. Business network dynamics
5. Relationship management
6. Derived demand
(Ford, 2013)
Modern trade
1. Business model
2. Stakeholder data
3. Business network
4. Business network dynamics
5. Relationship management
6. Derived demand
(Ford, 2013)
Strategic plans
1. B2B with transformed modern trade
2. B2B with traditional trade to transformation
(Chernev, 2012; McDonals, 2006)
Transformation factor
1. Proliferation of customer’s
need
2. Shift in balance of channel
power
3. changing strategic priorities
9
Research contributions
The research aims to study on expectations and perceptions of the
distribution network of the construction materials merchandiser in Thailand towards
transformation of the business model and the new role that the organization will
handle as follow:
1. The better understanding of the distribution network of the construction
materials merchandiser may lead to the improvement of the companies in response
to the transformation of the customer’s nature of the business.
2. This study was expected to provide a factors influence the transformation
of the traditional merchandiser to the modern trade in the construction materials
industry in Thailand.
3. This study was anticipated to organize the strategic plans that maintain
customer loyalty of the transformed customers.
Scope of the study
1. Scope of content
This study is conducted to investigate the distribution network of the
construction materials merchandiser, how the traditional business model and the
modern trade difference or similar, the factor of modernization and the strategic plans
to entrepreneurs.
2. Scope of population and sample size
The population of this study was 1,038 outlets of The Thai Olympic Fiber-
cement customers and 625 employees of the company as of March 15, 2014. The
sample size was 10 external respondents including 2 Laos’s customers and 15 internal
respondents.
3. Scope of time
The research will collect data and analysis until March to September, 2014.
Terminologies
Authorized dealer is the distributor which received the allowance from the
manufacturer company to trade and distributed their goods to customer. Under the
10
regulation, sales and marketing, the authorized dealer must be followed the company
policy.
Business model describe of the different parts of a business or organization
showing how they will work together successfully.
Business regulation describes the rules of each distribution network that
enforce the network member to follow the company policies or the principle of
working together.
Business Relationship is an association between individuals or companies
entered into for commercial purposes and sometimes formalized with legal contracts
or agreements. Many senior corporate executives maintain a friendly business
relationship with an extensive network of other executives, business people and
contractors that they can call upon for advice or for other business purposes.
Channel development the situation when a company tries to increase its
sales through a particular distribution channel, combination of channels or business
capabilities expansion.
Distribution channel is the intermediaries which deliver a good to the end
customer. A distribution network can include wholesalers, retailers, and even the
distributors that indirect forms of merchandiser.
Distribution network entire chain of distribution intermediaries from the
supplier to the consumer. A strong and efficient distribution network is one of the
most important assets a manufacturer can have, and is the biggest deterrent that faces
the new competitors.
Home solution is the TOFC’s policy with new business model to develop
the customer in the traditional trade model to modern trade, the business process, the
back and front office renovation and sales presentation style would be develop by the
company pattern.
Localize modern trade, defined by SHERA’s CEO is the business model of
construction material merchandiser which develop themselves from the traditional
trade model to modern trade approach and increase the number of branches
nationwide or the same region such as DoHome Tor watsadu and Kanyong.
Merchandiser is the indirect sales force that offer support to retailers for in-
store activities, such as shelf location, pricing and compliance with special programs.
11
Mixed model refer to the business model that developed but some aspects
should not such as the outlet display renovated to modern trade style but the sales
process operate with manual operate.
Modern trade as opposed to traditional retail shops refers to a full range of
sale methods based on marketing techniques: for instance in self-service shops you
have no more sales attendants.
Non-SCG Distribution network excluded the SCG distribution network
which trades the construction materials from manufacturers to end-user or business
customers such as SCC, TPI and Mahaphant channel network.
Public modern trade is the business model of construction material
merchandiser which establishes as the modern trade style and increase the number
of branches nationwide or cross country investment such as HomePro and
ThaiWatsadu. The definition by SHERA’s CEO.
SCG distribution network is the construction materials distribution channel
network of Siam Cement Group that authorized to buy and sell the products under
the brand SCG or Chang with supervision by the company. A developed distribution
channel network as we known SCG Home mart and SCG Home solution.
Strategic marketing plan is a systematic process of envisioning a desired
future, and translating this vision into broadly defined goals or objectives and a
sequence of steps to achieve by implement the marketing strategy.
TOFC refer to The Thai-Olympic fibre cement company limited. The
SHERA and HaHuang brand of construction materials manufacturer and trader which
manage their own distribution channel network.
Traditional trade is the construction materials merchandiser business model
that runs theirs firm as a personal business not perform likes a professional
entrepreneur in any viewpoint of business process.
Transformed modern trade is the traditional trade that transform to modern
trade model already. Not congenially modern trade since the firm established.
Transformation is the process of changing completely the character or
appearance of something in order to improve
12
CHAPTER 2
LITERATURE REVIEWS
This chapter is explaining the literature including the theoretical
consideration and articles related to this research, which are summarized into the
following topics:
1. Business to business (B2B) marketing
2. Business products classification
3. Distribution channels of the business to business marketing
4. Pricing in business to business marketing
5. Business marketing communication
5.1 The appropriate communication tools with the customer acquisition
process
5.2 Roles of advertising, sales promotion and public relations in the
business communication mix
6. Business Relationships
6.1 The substance of business relationships
6.2 The facets of a relationship
7. Business networks
8. Business models
8.1 Definition of business model
8.2 MIT business model archetypes
8.3 The two business models by Viswanathan (2011)
9. Strategic plan
9.1 Three key principles in writing a marketing plan
9.2 The key components of the marketing plan
10. Articles and other related research summarizes: Traditional trade and
modern trade
13
Business-to-business marketing
In the business world, one of the most important aspect with interaction
between organizations or business firms. The organization as a customers have the
difference buying behavior, communication, relation and marketing approaches.
Business marketing is marketing products or services to other company, government
bodies, institutions and other organizations (Dwyer, Tanner, & John, 2006). The
differences between business markets and consumer markets have three dimensions
(Brennan, Canning, & McDowell, 2011) that show in table2-1 Differences between
business and consumer markets.
Table 2-1 Differences between business and consumer markets
Market structure differences
dimension
Business marketing Consumer marketing
Nature of demand Derived Direct
Demand volatility Greater volatility Less volatility
Demand elasticity Less elasticity More elasticity
Reverse elasticity More common Less common
Nature of customers Greater heterogeneity Greater homogeneity
Market fragmentation
Greater
fragmentation Less fragmentation
Market complexity More complex Less complex
Market size Larger overall value Smaller overall value
Number of buyers per seller Few Many
Number of buyers per segment Few Many
Relative size of buyer/seller Often similar Seller much larger
Geographic concentration Often clustered Usually dispersed
14
Table 2-1 (Com.)
Market structure differences
dimension
Business marketing Consumer marketing
Buying influences Many Few
Purchase cycles Often long Usually short
Transaction value Often high Usually small
Buying process complexity Often complex Usually simple
Buyer/seller interdependence Often high Usually low
Purchase professionalism Often high Usually low
Importance of relationship Often important Usually unimportant
Degree of interactivity Often high Usually low
Formal, written rules Common Uncommon
Marketing practice
differences
Dimension Business Marketing Consumer marketing
Selling process System selling Product selling
Personal selling Used extensively Limited
Use of relationships Used extensively Limited
Promotional strategies Limited, customer-
specific
Mass marketing
Web integration Greater Limited
Branding Limited Extensive,
sophisticated
Market research Limited Extensive
Segmentation Unsophisticated Sophisticated
Competitor awareness Lower Higher
Product complexity Greater Lesser
Derived demand
The indirect demand of the firms that buy goods or services from
manufacturers and sales it to end users. Normally the direct demand is supposed that
15
consumers only buy goods to satisfy their need and want so the business which serve
their need get the wholly demand from many customers. For example, the direct
demand of houses creates a derived demand for Portland concrete, steel, timber wood,
tiles and brick. The derived demand for tiles creates many more forms of derived
demand, including transport services, raw materials, production machine and more.
All of derived demand in the chain is influence by direct demand from consumers.
Business products classification
The quite separation of business products is the difference from the
consumer products. The product is part of the organization’s final product or
facilitates the organization’s activities (Dwyer et al., 2006). Raw materials,
component parts, capital equipment and maintenance, repair and operations products
are the products that involving in the process of production. Raw materials are the
products which manufacturer buys to produce the goods to offer the next participant
in supply chain. Buyers used the materials in processing of final product. Component
parts or OEM parts are the products used to installation with final products or part of
final products. For example, roof tiles install with screw and truss then complete with
the accessory equipment. Capital equipment is the large equipment which the firms
buy to install or use in the production process. For example the roofing industry buys
the robot for the production line to increase production efficiency or the construction
contractors buy crane to easier elevate the construction materials. Maintenance, repair
and operations products or facilitating supplies is the supporting products that not
including in the final products of business but it supports the firm to produces. Such
as air conditioner, office supplies or any services. Similarly the standard approach to
separate the business products from consumer products based on the use to which the
products are put, and the extent to which they are incorporated into the final product
(Brennan et al., 2011). This can classify into six sub groups as installation, accessory
equipment, maintenance, repair and operating supplies, raw materials, manufactured
materials and parts and business services. In contrast the classification system above,
the buyer’s evaluation of the effort involved in acquiring the product and risk of
making a poor decision. Both considered to be the cost of decision and the effort is a
16
viable which buyer pay to gain a product such as money, energy and time (Murphy &
Enis, 1986). First the convenience products which buyer pays an effort and takes risk
for a little. MRO supplies are including in this group. Preference products is a little
more effort and risk which buyer will pay to get it. The buyer pays a little more
expensive cost but the greater chance to make a wrong decision. Shopping products is
like an accessory equipment, materials and parts of the classification above that the
buyer pays higher price and associates risk with possibly making the wrong decision.
Last the specialty products, the highest rank of risk and effort to gain it. Buyer must
prepare to invest in specialty products with more time and energy because it is
important to make a right decision in high value purchasing.
Distribution channels of the Business to business marketing
The distribution channels in the business to business dimensions provided
the three categories except the internet site channels. Normally different industries
vary unique of the distribution channels. In this study, the researcher aim at the
distribution channels of Thailand’s construction materials study. So the business to
business distribution channels theories will focus that related only in the distribution
channels of Thailand’s construction materials. The complexity of business to business
distribution channels divided into three major system as following (Brennan et al.,
2011)
1. Single route to multiple routes is the basic distribution system. First
the producer direct to industrial customer is a very simple approach to use their
producer’s sales force straightly to industrial customers. Then if the products were
more famous in the market but the producer less capabilities to reach or handles it,
franchisee is the one method to solved problem by gives the right to sell products or
services in the specific area. The two routes of business markets are agent and
distributor, which some homologous activities and heterologous business process
such as the right to sell goods from producer is similar but the range of sell service or
benefits are difference. The last route of business market is the producer to agent then
sell to the distributor after that the firm’s customer is the last one. The agent respond
to sell to the distributor then it gain the profits from selling. See Figure 2-1
17
ProducerIndustrial customer
ProducerIndustrial customer
Franchisee
ProducerIndustrial customer
Distributor
ProducerIndustrial customer
Agent
ProducerIndustrial customer
DistributorAgent
Figure 2-1 Routes to business markets
2. A pluralistic multi-channel system, the multiple routes to distinct market
segment and product groups. Cooperation between the channels concerned, such as
the reference of customer to another or assisted to win the customers in another must
be emphasizes. See Figure 2-2
Producer
Border distributors
Modern trade distributors
Distributors
International distributors
Direct sales
Industrial Customers
Industrial Customers
Industrial Customers
Industrial Customers
Industrial Customers
Figure 2-2 Pluralistic multi-channel system
18
3. A monolithic multi-channel system, the single one structure of direct and
indirect channels to gain the markets. Business provide their own sales force to
approached with the main distributors and then each distributors connected to another
distributors that separated by different market segmentation. Finally the distributors in
each segment sold to the firms. See Figure 2-3
Producer
Sales Forces
Main distribution
channel
Distributors
Distributors
Distributors
Industrial Customers
Industrial Customers
Industrial Customers
Figure 2-3 Monolithic multi-channel system
Both routes of business markets affected the business marketer’s operations
in different indicators. The Marketing overhead costs, field coordination of producers
or resellers, abilities to differentiate technical service and the development of selling
expertise of pluralistic multi-channel system are higher than monolithic multi-channel
system. But the flexibility in customer buying pattern of monolithic multi-channel
system is higher.
19
Pricing in business to business marketing
When the firm setting prices to business customer, the classic factors of
consideration are three C’s. Costs or break-even, the firm’s pricing also calculated
from the average production cost plus standard profits. To business survival, the
marketers had to parsimoniously concern about the overall costs and the effect of
prices setting with the sales and marketing. Customers and demand analysis is
changes by pricing decision. The demand elasticity, normal demand and perverse
demand or elastic and inelastic demand are the factors which price setting people
must considers carefully. The last C is competitors whether the oligopoly and
competitive market or price leader and followers, the competition environment is
the key of pricing in business markets.
1. Business to business pricing in relational aspects
1.1 The pricing effects of long-term buyer and supplier relationship
The stable relationship between buyer and seller generated higher benefits
to both such as inventory cost reduction, higher sales growth and decrease transaction
costs. Long-term relationship of participants in business is the source of new product
idea, new product co-creation and help to attract new business. Price concession from
the suppliers is may be occur when the price increasing or decreasing. Normally long-
term customer relationships place suppliers under price pressure but pay off in terms
of profitability.
1.2 Supply chain pricing
More pricing collaboration of member in the supply chain will increase
their profitability. The traditional pricing approach as win or lose or zero - sum games
were obsoleted. Two concepts of pricing in supply chain are, ensure of realize value
from sales goods is optimized and how to distribute the values within the supply
chain’s members.
20
Business marketing communication
In each stage of customer acquisition process and communication objectives,
the company has the appropriate communication tools step by step.
Figure2-4 Communication mix and customer acquisition process
(Anderson & Narus, 2004)
The communications mix was the promotional tools that the business
marketer use to achieved the communication objective or the customer use to make a
decision of purchasing. The promotional mix was vary depending on the category of
products. The promotional mix comprised of personal selling, the most importance of
every product type such as the major capital equipment minor capital equipment
materials, component parts and supplies, tradeshow, sales promotion, direct mail,
technical literature and trade advertising.
Advertising strategy has the process that consisting of, first to setting
advertising objective by aware the performance goals and the target audience. Second
formulate the creative plan with developed the message that communicate to the
target audience then select the media which the target audience can reached whether
the broadcast media digital media or display advertising the selection must be match
to the objective and the budget, finally evaluate the advertising effectiveness.
Communucation objectives Target segments Communication tools
Awareness Leads
Advertising,Direct
mail,publicity e.g. industry
conferences
Interest Enquiries
Brochures,Videos,Recorded
demonstrations,Website,Tra
de shows
Evaluation ProspectsTelemarketing,Field sales
visits
Trial New customers Inside sales calls
Purchase Established customersTransactional and
relationship sales teams
21
Sales promotion in the business market comprised of the sales personnel
with offered the incentives to gain the short term targets of the organization. The
intermediaries were the push sales strategy by offered the incentives or promotional
pricing. Company provided informational materials to the distributors for preliminary
sales. The incentives used for business customer to attract them win the targets.
Public relations (PR), the marketing tools used to manage the organization
image by attract and keep the good employees, handle issue and overcome
misconceptions that relate to the organization, build the goodwill among publics,
build prestige and reputation of the organization and promote the products.
Business relationships
In the business competitive environment each business organization must be
survive by interdependence with another, to fulfill or compensate the lack of some
capabilities in the firm. Relationships is one of the key factors to success the business
purpose as the partner, joint venture, alliance or any business relations or individual
relations. The development of relationship will be increase or decrease, it depend on
the members involved. This study is to find the relationship in the construction
materials distribution network’s background, development and the future of
distribution channel’s relationship. In the relationship dimensions, the issues are
following:
1. The substance of business relationships
1.1 Characteristics of business relationship
The business relationship characterized to four different aspects:
Continuity: The business relation of two companies built up from a
limited association to a very close involvement, not only one transaction but often
stretch over a long period with business proceed. The age of the relationship is the
one indicator which precondition for change and development.
Complexity: The element of complexity is the number, type and the
contract pattern of individuals involved in the relationship, the different status,
organizational roles and personal background are another factor. Complexity in
another aspect is the scope and use of established relationship.
22
Symmetry: The members in the business relationship tend to have
resources and capabilities that are more balanced. Symmetry of business relationship
present in term of resources and initiative of the parties involved.
Informality: The formal contracts are common, often limited, and
ineffective with uncertainties, conflicts and crises taking care to the member in
business relationship. The closely relationship build on such as trust and confidence
which related to the time dimension.
1.2 Business relationship process characteristics can be classified by
interactions of three elements as followed;
1.2.1 Interaction between actors. This topic concentrates on the
individual contract between two or more actors from difference companies. It will be
consider on the distance between the actors (Johanson & Wiedersheim-Paul, 1975)
The social distance, culture distance, technological distance and time distance
between the actors will influence them by each factors. Interpersonal interaction
cannot be separated from its social context through which people get to know each
other in the meeting room or on the golf course. When it is effective, interpersonal
interaction leads to the formation of actors bonds between the individual, based on
their mutual learning, trust and commitment.
1.2.2 Interaction between activities. Relationship start operating to
achieve their purpose when activities are undertaken that deliver that purpose,
whether it is design activity from a supplier or requests for information from a
customer. Typically, an activity cycle between two companies would commence
with an order and end when it is delivered. However, depending upon the nature of a
relationship it may be that other activities are worthy of note in a network diagram,
such as a joint research project or combined promotional activity. The consequence of
mapping the link between the parties in the network is an indication of the range of
activities that are taking place and the relative role that the focal company has in this.
1.2.3 Interaction between resources. Resource are used by actors, but
many also be created as part of the relationship exchange. The resource may be used
by actors on their own or combined with the resource of other parties to create a
shared resource. For instance, there may be design inputs from a variety of network
actors making use of a shared design system.
23
2. The facets of a relationship
2.1 The relationship as a device
2.1.1 To increase efficiency
2.1.2 To achieve innovation
2.1.3 To influence other.
Need, Network and fulfillment uncertainties---------------------------------
Problem solving and fulfillment abilities
Capacity, application and fulfillment uncertainties
---------------------------------Problem solving and fulfillment abilities
Customer Supplier
Figure 2-5 The uncertainties of customers and supplier
The customers and the suppliers each have uncertainties situation and each
fulfill each other with their abilities that involved in the relationship. For one activity
of one side effect to another one in the relationship and that activity influence another
one to acts something.
2.2 The relationship as an asset
2.2.1 Managing relationship assets over time.
24
Pre-relationship stageHigh inertia
Question -What will we both get? -How much investment
-What adaptation?-What learning
Exploratory stageInvestment of time for learning and distance
reduction no routine or commitment.
Developing stageIntensive mutual learning building trust
through investment and informal adaptation
Stable stageRoutine and institutionalisation
Wider experienceChanged requirementInsufficient resourcesLack of commitment
Figure 2-6 The development of customer-supplier relationship
The development of customer-supplier relationship has four stages; pre-
relationship stage, exploratory stages, developing stage and stable stage are in
difference situation of interaction. Any stages have their relation management in each
process. To examine the process of relationship change and development and
highlight the management tasks involved by considering the difference stage that a
relationship can be in and how it moves between these stages (Ford, 1980).
2.2.2 Relationship assets within a portfolio
2.3 Relationships as a problem
2.3.1 Relationships are unruly
2.3.2 Relationships are undetermined
2.3.3 Relationships are demanding
2.3.4 Relationships are exclusive
2.3.5 Relationships are sticky
25
Business network
The network derives from centralizing phenomena or of productive
decentralization (Powell, 2001) there are no constraints in its formation in terms of
size: company networks are formed both by small business realities, as well as by
large companies (Grandori, 1999). From this point, the phenomenon of company
networks represents an opportunity for encounter and growth. The company network
is a free business association, able to create structures and processes capable of joint
decision making and of integrating the efforts of members to design and produce
goods and services, to develop new processes, to reduce times needed for innovation
or for entry into the market, to exchange information and other resources
(Trequattrini, Russo, & Lombardi, 2012). Business networking is the process of
establishing a mutually beneficial relationship with other business people and
potential clients and/or customers (Ward, 2013). A collection of people, preferably
with a broad array of experience and knowledge, to which an individual is in periodic
contract (Byham, 2009)
Business network have the two common things. First the networking
involves others. No company can live alone, all interdependence with other. Changing
in one company impacts another in the network. Second networking is never limited
to a single relationship. All companies are intermediaries for others. The two issues
of networking approached which identify the key aspects of networking:
Networking with whom? The “whom” in this question is the counterpart in
the relationship who has an important to another involved or someone that influence
members in the network. But all operation in the company is not related with another,
the company tried to find only one or a few aspects of matching. The single company
success in networking, they can divide into two tasks. First is to search for the
dimensions that relate to the three or more companies that are involved and the second
is to establish cooperation with the counterparts based on those identified dimensions.
What the network about? The potential change in activities or the resources
of the members in network is the basically finding of all networks. Combination in
activities or resources of members in network will be worthy if lower costs or higher
revenues.
26
Business model
Weill and Vitale (2001) include “roles and relationships among a firm’s
customers, allies, and suppliers, major flows of product, information, and money, and
major benefits to participants” in their definition of a business model. Business
models emphasize the design of the transactions of a firm in creating value (Amit, &
Zott, 2001), the blend of the value stream for buyers and partners, the revenue stream,
and the logical stream (the design of the supply chain) (Mahadevan, 2000), and the
firm’s core logic for creating value (Linder, & Cantrell, 2000). In contrast, Magretta
(2002) argued that the strength of a business model is that it tells a story about the
business, focusing attention on how pieces of the business fit together - with the
strategy describing how the firm differentiates itself and deals with competition.
Business models have the added attraction of being potentially comparable across
industries.
The MIT Business Model Archetypes (BMAs) based on two fundamental
dimensions of what a business does. The first dimension, what types of rights are
being sold, it gives rise to four basic business models: Creator, Distributor, Landlord,
and Broker. The second dimension, what types of assets are involved distinguishes
among four important asset types: physical, financial, intangible, and human. This
distinction leads to four subcategories within each of the four basic business models
for a total of 16 specialized business model types. Of these 16 possible business
models, only 14 are common use in the business world. (Weill, Malone, D’Urso,
Herman, & Woerner, 2005)
27
Table 2-2 The sixteen detailed business model archetypes
Basic business
model archetype
What type of asset is involved?
Financial Physical Intangible Human
Creator Entrepreneur Manufacturer Inventor Creator*
Distributor Financial
Trader
Wholesaler/
Retailer
IP Trader Human
Distributor*
Landlord Financial
Landlord
Physical
Landlord
Intellectual
Landlord
Contractor
Broker Financial
Broker
Physical
Broker
IP Broker HR Broker
The wholesaler or retailer is the distributor of goods, who have right in the
goods that they sold to the customer and the goods that they sold, is a physical thing.
For another concept presents the business model, there are from the Indian
academic. Business model defines what a business does and how it makes money
doing that. (Viswanathan, 2011). In this article separate the business models to 2
main categories.
1. Traditional business model
Create a physical good, a service or a virtual good : movie, music. This is
the most fundamental business model. Create a product or service and sell it, either
directly to the customer or to a distributor. The primary challenge here is building the
right product and finding the right channel partner. There are three variants of this.
First direct Marketing to consumer. Second sell it to distributors and retailers. Last the
exclusive rights to certain distributors. The creators limit the distribution to only one
or a few distributors.
Distributor of goods and services. The goal of distributors is to connect the
creator and the consumer. The distributors aggregate goods from various creators and
bring economies of scale in distribution and logistics. The general purpose retailers,
28
focusing on a specific niche, private sales club, one product a day model or bricks and
Clicks model are in this type.
Franchisee model, razor and blades model is the seller sells one product for
free or very low cost, brokerage/Marketplace model, landlord model, advertisement
based models, subscription based model that gets a period fee from the user, lead
generation and affiliate marketing. In this model, a business offers a service to the
user and as a byproduct generates a lead to another business and gets a commission
from them and the multilevel marketing. This is a model that converts part of the
consumers into salespeople. There could be multiple levels of customers in a
distribution hierarchy with consumers who bring in more people into the distribution
network rewarded more.
2. New Business model
Listing fee model, selling customer data, micropayment for content,
freemium model, crowdsourcing model, open source customization and maintenance,
no-frills model, network effect model, pay with social currency, in-app commerce,
groupon model, customer rating & support, certification & verification and the
sponsorship model are the new business model which the Indian academic classified.
Strategic plan
Mintzberg (1994), illustrated the definitions of strategic planning in
“The rise and fall in strategic planning” that strategic planning is the future thinking
which controlled the future of business organization and including the integrated
decision making of formalize method to create articulate consequence. The
accomplishment plan depend on recognize the future, estimate the current situation
by strength and weakness firm assessment and the management ability of business
environment fluctuation in the future. The process of strategic planning in marketing
articles of John F. Dix and H. Lee “Buck” Mathews presents 10 steps of planning
process since the introduction to strategic planning until the summary and conclusion
of all process. Current situation analysis, segmentation analysis, SWOT Analysis,
core competencies analysis, key success factors, business unit strategy / business plan,
balanced score card and evaluation. The current situation analysis contains the vision
29
and mission statement which consist of description and understanding to all
employees especially the management level in the organization, the external
organization environment such as economic, politics and legal that affects the
business should be analyses in this step. Step two the segmentation analysis this
process is to match the company’s current or prospective products and services with
the market’s potential. SWOT analysis consist the external and internal organization
analysis to identify the relative position of the firm to the market, the customer and to
the competition. Key success factors define by the customer or market which is the
functions, activities or business practices of the firm. The six steps described the
analysis that needs to be undertaken to be in a position to develop a clear, distinctive
and differentiated strategic statement for the business. The measurements by financial
and non-financial targets are the effective method to evaluate the planning
achievement. The selected both financial and non-financial measures must be a
balanced mix and must be few but important to the sustainability of the business.
The evaluation process needs to be on going and continuous. The evaluation process
provides a check-up on the progress of the business compared to both the short term
business plan and the long term strategic plan.
Articles and other related research summarizes: Traditional trade
and modern trade
“One of the most important retail trends is the consolidation of fragmented
retail outlets into powerful retail chains and super stores. In addition to creating large-
scale mass merchandisers, this consolidation has produced a number of specialized
retailers concentrating on a single category.” (Chernev, 2012)
Khuntee and Leopenwong (2000), studied the operation of construction
material on traditional trade in Mueng district, Udornthani province, the impact of the
entering of construction material on modern trade to traditional trade, buying
behavior of customer on construction material, the important factor to construction
material buying and proposed the reforming approach and development direction of
construction material on traditional trade in order to bring forward. The
questionnaires of data record from 46 entrepreneur representative samples, opened
30
more than 10 years and 1 million or more of Start-up capital. And 400 customer
representative samples from all of 397,291 population in study area.
The result of the study showed that the participation of modern trade varied
the sales and impacted on the management of traditional trade with their continue
marketing promotion, bargaining power with supplier, new technology to use,
appropriate location advantageous, Systematic administration, product has a category.
Make it interesting and attractive to consumers and Result in changes in consumer
attitudes. Also found that mainly representative sample buy construction material
from modern Trade, as customer estimate the modern trade has variety of product
more than traditional trade. So in order to survive of construction material on
traditional trade, Should be gathered for create the authority to negotiate with
supplier, conflict high product cost and can Competitive with modern trade. The
traditional trade should be adapted about operation, marketing promotion and
consumer behavior track, because the most impact derives from customer behavior.
The SCB Economic Intelligence Center expose the business article on
23 April 2013 that:
Higher consumer purchasing power and rapid expansion in residential
property developments trigger the strong growth potential for home improvement
retailers. However, competition is high and rising as big players continue to roll out
new stores, especially in upcountry, and to tailor their business models to meet local
demand.
Home improvement retailing, which focuses on sales of building materials
and interior decorative goods, is growing significantly thanks to higher household
purchasing power and a growing consumer preference for modern trade stores. During
the past three years, starting before the floods of late 2011, demand for these products
has grown steadily. The sector's major players have enjoyed growth in sales by up to
16% each year from 2009 to 2012, far above the average 3% growth rate for non-
grocery retail sales in general. One reason is higher incomes both in Bangkok and the
provinces. Bangkok's population having middle income and above (over 15,000 Baht
per month) has increased from 37% of the total in 2007 to 46% in 2011, while in the
outer provinces the share has risen from 14% to 19%. By 2020 the middle-income-
and-up share of the national population is expected to grow to 40%, from 20% today.
31
The rise in purchasing power will propel this sector, as seen in well-established
trends. During 2007 to 2011, for example, the housing expenditure has increased by
33% per year among consumers in Bangkok and 10% per year in other provinces.
Another factor supporting growth is a rising consumer preference for convenience and
product varieties, which favors modern trade retailers. And consumers are
increasingly adopting a do-it-yourself approach to home improvement, boosting
demand.
The other big supporting factor is growth of the real estate sector in
Bangkok and other major provinces. Housing projects in these areas have shown
obvious growth during the past three years. In 2013, the large developers plan to
continue their expansions, especially in major provinces. Sansiri PCL, for example, is
planning 60 billion Baht in project investments, 73% of it in Bangkok and 23% in
major provinces. Land and Houses PCL plans to invest 43 billion Baht, 80% for
Bangkok and 20% elsewhere. The provinces outside Bangkok that have drawn the
most attention from developers include Phuket, Chonburi, Hua Hin, Chiang Mai,
Khon Kaen and Udon Thani. This will boost demand for home improvement products
as well.
Beyond these major provincial areas, other provinces will also generate
opportunities for these retailers. Among these are Chanthaburi, Trang, Lopburi,
Chachoengsao, Chiang Rai, Samut Songkhram, and Ang Thong. These provinces
have few home improvement retailers despite their population density. Moreover,
many of the provinces mentioned above also have higher rates of electricity usage per
household compared to the national average of 1,600 Kilowatts per hour per user,
which reflects higher spending on household and electrical goods. Not only that, some
provinces like Chiang Rai and Chanthaburi are located in the border areas and could
attract customers from neighboring countries as well.
Major players, especially Big-box model, are rapidly adding branches to
conquer prime locations. Possessing the prime location is extremely advantageous
because good sites near cities and residential areas are hard to find and rising in price.
Building a branch requires approximately 6-9 months of construction, so faster
expansion means faster access to consumers nearby, especially in locations without
modern trade competition. The 'first mover' advantage is especially significant for
32
companies operating home centers or big-box stores, which have more than 50,000
SKUs. All of these players are competing for locations nationwide. Home Pro plans to
expand by at least eight branches, Siam Global House will add 10-12 branches and
Thai Watsadu plans 10 new branches. Furthermore, specialty retail stores, like
Boonthavorn and Index Living Mall, are also expanding in 2013. Boonthavorn plans
two new branches in Chiang Mai and Phuket, while Index Living Mall will add three
stores.
Home improvement chains are now competing to reach consumers in
segments where they lack market share. Purchasers of home improvement products
can be split into two types, namely consumers and contractors or developers.
Consumer turn to specialty stores when they have specific needs, such as buying tiles
at Boonthavorn or furniture at Index Living Mall. However, if they seek convenience,
they will go to one store where they can get many products, like Home Center format.
However, operators have begun to diversify in response to demands from another
segment. One successful model addresses market segmentation, such as the Central
Retail group investing in construction materials store in order to expand their
customer base into all segments, including contractors, rather than their original
model of Homeworks, which focused on retail consumers. Recently, Home Pro,
which deploys the big-box format, has planned to target the builder and contractor
market by opening a new store format under a brand called Mega Home, which
focuses on bricks, cement, sand and other basic construction materials. At the same
time, Home Pro will continue to add branches to further penetrate the retail consumer
segment.
Retailers can differentiate by developing new and better services and loyalty
programs. Relevant services include design, installation and repairs/renovation.
Repair and renovation services are significant because independent workers and
contractors are increasingly hard to find. Some operators are developing more on-site
home services to attract consumers, such as monitoring, cleaning and replacing
products as well as painting and renovations. Even though this income is not a main
part of total revenue generated by the retailers, it is a selling point that can attract new
customers and develop loyalty through customer satisfaction. Another strategy that
should not be overlooked is a good loyalty program. Because purchases of home
33
improvement products are not as frequent as for other consumer goods, a loyalty
program or membership card can help attract customers to return to the same store.
Figure 2-7 Branches of home improvement stores in provinces with high potential
Source: EIC analysis based on data from company reports and media
34
CHAPTER 3
RESEARCH METHODOLOGY
The researcher wants to identify the model of distribution channels of
construction material in Thailand and its development affects the business strategies.
The study consist the qualitative research which contains the element of the study
as follow:
1. Research design
2. Populations and sample design
3. Data gathering methods
4. Questionnaire design
5. Validity and reliability test
6. Data processing and analysis
Research design
This research section consist the complements of the study with
qualitative interviews and qualitative documents (Creswell, 2014) that the researcher
conducts face to face interviews with participants, telephone interviews or engages
in focus group. These interviews involve semi-structure and generally open-ended
questions. The qualitative documents, that the researcher investigates the public
document (article, journals, newspaper, official report) or private documents (personal
journals, letters, e-mails). To examine the construction materials merchandiser
distribution network in Thailand with the distribution network generalization and
the network paradigm. After that observed the traditional trade and modern trade
in the dimension of ownership’s data, business model, business network and
relationship. Finally to investigate the 3 main factors of transformation.
Population and sample design
Population of this study is the traditional and modern trade authorized
distributor of TOFC throughout Thailand. The research is to purposefully select
35
participants by researcher judgment until the data is saturated, then the researcher stop
collecting data.
Data gathering methods
The researcher divided the data gathering methods into two segments as
following:
1. Review data: The researcher investigates the public documents as the
related research, articles, newspaper and internet website or private documents as
the internal documents of TOFC.
2. Field Data: The researcher collecting the data by in-depth interview
with the face to face participation to know the attitude, inspiration and opinion
of interviewed. The semi-constructed interview is selected method of unofficial
interview with define the question that extensive and according to the study objective.
Among the interviewing, the researcher asks for allowance to sound record and
transcription.
Questionnaire design
The semi-structure questionnaire will be divided into 5 parts as follow:
Part 1 contains question about Individual data of business owner and the
TOFC employees.
Part 2 contains questions about the distribution channel network and
construction material business model in Thailand.
Part 3 contains questions about business model.
Part 4 contains questions about the relationship management.
Part 5 contains question about the strategic plan.
Validity and reliability test
1. Validity Test
In the study researcher actively incorporates validity strategies with multiple
approaches. The eight primary strategies, organized from those most frequently used
36
and easy to implement to those occasionally used and more difficult to implement
(Creswell, 2014):
1.1 Triangulate difference data source of information by examining
evidence from the source and using it to build a coherent justification for themes.
If themes are established based on converging several sources of data or perspectives
from participants, then this process can be claimed as adding to the validity of the
study.
1.2 Use member checking to determine the accuracy of the qualitative
finding through taking the final report or specific descriptions or themes back to
participants and determining whether these participants feel that they are accuracy.
1.3 Use a rich, thick description to convey the findings.
1.4 Clarify the bias the researcher brings to the study.
1.5 Also present negative or discrepant information that runs counter
to the themes.
1.6 Spend prolonged time in the field. The more experience that the
researcher has with participants in their setting, the more accurate or valid will be
the findings.
1.7 Use peer debriefing to enhance the accuracy of the account.
1.8 Use an external auditor to review the entire project.
After the process of validity strategy, the researcher will present the
questionnaire from related research to discuss with adviser then considers the content
validity, the wording that should be revising before gathering the actual data.
Step 1 content validity test
Researcher wills the precision of the content (Content validity) with 3
experts’ to ensure that the questionnaire measurement can cover all the contents
below:
1. Mr.Patchara Mahaburapha Vice President Sales Department
2. Mr.Suchat Kasapsan Assistant Vice President Sales
Department
3. Mr.Apisade Maichan Assistance Vice President Project sales
4. Dr.Tongkarn Kaewwchalermtong Graduate school of Commerce,
Burapha University
37
5. Dr. Krit Jarinto Graduate school of Commerce,
Burapha University
The questions in this part should have all content completed, that are
provided in the research by considering the following:
1. The contents of questions in each part can be complete with the related
theories.
2. The topic in the questionnaire should separate into main topic follow
by second topic and sub topic.
3. The texts in questionnaire associated with the content which considering
of content coverage, concordance between sub subject and main subject, and the
concordance between content, objective by analyze one by one item and determine
the score each item as below:
3.1 The question is appropriated to the objective will score 1 point
3.2 The question is in appropriated with the objective will score -1 point
3.3 Uncertain with the objective will score 0 point
After that the researcher will use this final score form all expertise to
measure index Item-object of concordance: IOC (Rovinelli & Hambleton, 1977)
by calculating formula as follow:
N
RIOC
Which ΣR is the total score by all expertise committee
N is number of expertise committee
The result meaning will be interpret to the below criteria
1. The result of IOC between 1 to -1,
2. The questions that relate to the content will close to 1.00
3. The questions that relate should be less than 0.5.
38
2. Reliability Test
The qualitative reliability procedure (Creswell, 2014):
2.1 Check transcripts to make sure that they do not contain obvious
mistake made during transcription.
2.2 Cross-checking with another people, advisor or specialist. Miles and
Huberman (1994) recommended that the consistency of agreement at least 80% of
the time for good qualitative reliability.
Data analysis and interpretation
The study will collect data of a population from interviews by develop
descriptions and themes from the data, to present these descriptions and themes that
convey multiple perspective from participants and detailed description of the setting
or individuals. The results provide an in-depth analysis of the interviewed data.
The data analysis and interpretation process need to include the following steps:
1. Interpret the tape recording to each questionnaire one by one of all
participants.
2. Reading through all data to summarize into the topics and the reasons
of some data by the table to categories all information.
3. Coding the data by tick into the table if some data are duplicated.
4. Conclude the data by interpret the meaning of themes and description
on the high scores to lower topics or reason in every table.
5. After that discuss the data from the research objective on the conclusion
before.
39
CHAPTER 4
RESEARCH RESULTS
This research adopted the qualitative analysis applying in in-depth interview
as data collection tool. The data collection used purposive sampling and snowball
sampling method by individual interview with semi- structure interview guide
from nationwide customers of the company and its employees.
Part 1 presents the external participants' research result and data analysis.
Section 1 results of analysis about external participants’ organizational
data.
Section 2 results of analysis about distribution channel network and
construction
material business model in Thailand data.
Section 3 results of analysis about business model data.
Section 4 results of analysis about relationship management data.
Section 5 results of analysis about strategic planning data.
Part 2 presents the internal participants' research result and data analysis.
Section 1 results of analysis about internal participants’ personal data.
Section 2 results of analysis about distribution channel network and
construction
material business model in Thailand data.
Section 3 results of analysis about business model data.
Section 4 results of analysis about relationship management data.
Section 5 results of analysis about strategic planning data.
Part 1 Presents the external participants' research result and data
analysis
Section1 results of analysis about external participants’
organizational data.
40
40
Table 4-1 External participants' organizational data
Respondent Shop description Years of
established
Generation Authorized
capital
(Million฿)
Number of
employees
IT used Member of
TOFC's
distribution
network
Years of
TOFC's
distribution
network
E 1 Modern trade 41 First 250 150 Yes Yes 25
E 2 Mixed model 41 Second 250 150 Yes Yes 25
E 3 Home solution 2 First 1 5 No Yes 2
E 4 Hardware shop 9 First 50 500 Yes Yes 9
E 5 General retail shop 30 Second 50 200 Yes Yes 12
E 6 General wholesales 22 Second 10 45 Yes Yes 7
E 7 Home decoration shop 8 First 250 260 Yes Yes 4
E 8 General wholesale and retail 31 Second 1 70 Yes Yes 20
E 9 General wholesale and retail 24 Second 50 50 Yes Yes 12
E 10 General wholesale and retail 41 Second 5 50 Yes Yes 25
E 11 General retail shop 21 First 1 30 Yes Yes 12
E 12 Modern trade 14 First na. 150 Yes Yes 7
41
Table 4-1 shows 12 external respondents or customers of the company, two
of the respondents described their shop as the modern trade because the renovation of
show room to sales the products directly to consumer and emphasized on retails, one
of the customer said their shop was a mixed model which were the aggregation of
modern trade style and traditional trade style such as the customer take caring closely
like a traditional trade but systematics business processing like a modern trade. The
home solution was the one of the TOFC’s policies, the description illustrate the shop
like a product show room emphasized on the presentation of product application. One
of the participant said they was the hardware shop which focus on hardware products,
the construction materials was the minor products line in the shop. Home decoration
shop was the outlet sells the sanitary ware, floor and wall tiles and the general whole
sale and retail shop was the old style outlet sells the completely products line, the
decoration, sanitary ware , hardware and construction materials in one place. The age
of the business from 8 to the oldest 41 years old. The researcher interviewed the
business founder and the successors in a 50 percentages. The authorized capital at
least was 1 million baht and the highest investment was 250 million baht for 3 outlets.
The number of employees 50 percent were 100 employees and 50 percent were less
than 100 employees. Only one participants’ shop was not used IT with their shop,
almost participants were used IT in the shop. All participants said they were a
member of TOFC's distribution network. Ultimately the age of TOFC's distribution
network member were 4 to 25 years such as 20 years TOFC’s member was the
general wholesale and retail shop that inherit their business from their parents and
their known many aspects of opportunities and problem of the TOFC network.
Section2 results of analysis about distribution channel network and
construction material business model in Thailand data.
42
4
2
Table 4-2 Thailand's distribution network description
Thailand's
Distribution
network
description
Manufacturer's
brand
Cement
manufacturer's
brand
Brand
substitution
Channel
overlapped
Steady
customer
Segment by
customer level
Authorized
agent
Dependently
management
E 1 - - - -
E 2 - - - - -
E 3 - - - - - -
E 4 - - - - - -
E 5 - - - - - -
E 6 - - - - -
E 7 - - - - - -
E 8 - - - - - -
E 9 - - - - - -
E 10 - - - -
Percentage 90% 20% 10% 30% 20% 20% 50% 20%
E 11 - - - - -
E 12 - - - -
Percentage 100% 0% 100% 50% 0% 0% 100% 0%
43
Tables 4-2 Shows 90 percent of participants said the construction materials
distribution network divide by the brand of product manufacturers because it is the
clearest principal way to described. For example the SCG distribution network has its
brand on their own the business model, the business process or any aspects it has their
own style. 50 percent of participants comment that the firm must be authorized by the
manufacturer but they may sales products from other manufacturers in the industry for
30 percent of interviews. It means if the firms want to sale products from the
manufacturer, they must get the right from the company before. 20 percent said they
can describe Thailand's distribution network by Portland cement manufacturer's
brand, the steady customer that loyal to each brand, the customer level of each target
group and the independently management in each shop. 10 percent of participants
presented sometimes they describe the construction material distribution network by
brand substitution. 100 percent of Laos customers said the brand of product
manufacturers, brand substitution and the right of products selling were the distinct
descriptions. 50 percent said the distribution network in Laos generally overlapped.
44
44
Table 4-3 TOFC's distribution network description
TOFC's
Distribution
network description
Sales
SHERA
&
Hahuang
Able to
sales
Rival's
product
Long-term
relationship
Closed
relationship
Channel
overlapped
with rival
Policy
follower
Unlimited
work
process
creation
Innovation
product
sales
Company
well
support
Powerless
enforcement
E 1 - - - - -
E 2 - - - - - - - -
E 3 - - - - - -
E 4 - - - - - - -
E 5 - - - - - - - - -
E 6 - - - - - - - - -
E 7 - - - - - - - - -
E 8 - - - - - - - -
E 9 - - - - - -
E 10 - - - - -
Percentage 50% 40% 40% 40% 30% 20% 10% 20% 10% 20%
E 11 - - - - - - - -
E 12 - - - - - - - -
Percentage 100% 0% 0% 0% 0% 100% 0% 0% 0% 0%
45
Table 4-3 Shows the 50 percent of participants said the dealer must sales
SHERA and Ha-huang products. 40 percent described the channel able to sales rival's
products, the dealer and company has a long relationship and closed together. So the
overlapped with rival's channel can be occurred by 30 percent description. 20 percent
described the distributors must be the policy follower; sales the innovation products
and the company was powerless on enforce the channels. Ten percent of participants
think they can help the company to create working process together and they got
many well support from TOFC. 100 percent of Laos’s customer said the distributor
must sales SHERA and Ha-huang products and followed the company policies.
46
Table 4-4 TOFC's distribution network classification
TOFC's
Distribution
network
classification
Pluralistic
multi-channel
Monolithic
multi-
channel
Categorized
by target
group
Categorized by
demographic
E 1 - -
E 2 - -
E 3 -
E 4 - -
E 5 - -
E 6 - -
E 7 - - -
E 8 - -
E 9 - - -
E 10 - -
Percentage 90% 10% 80% 10%
E 11 - -
E 12 - - -
Percentage 0% 100% 0% 50%
Table 4-4 Shows TOFC's Distribution network classify by 90 percent of
participants said the company used a Pluralistic multi-channel and ten percent said
monolithic multi-channel because 80 percent explained the company categorize by
target group and ten percent think by demographic. Laos 100 percent participants said
the company used the monolithic multi-channel because the company authorized only
two dealers in Laos to sell the products, categorized by demographic factor from 50
percent of customer's opinion.
47
47
Table 4-5 Business competition situation analysis.
Competitio
n situation
Strongest
market leader
Regulation
enforcement
Brand
switching
freely
Product
substitution
Margin
negotiation
Knowled
gable
customer
Easy market
entering
Price
war
Many
opportu
nities
Service
competi
tion
Difference
targeting
Cross
country
competition
E 1 - - - - - - - - - -
E 2 - - - - - - - - - -
E 3 - - - - - - - -
E 4 - - - - - - - - -
E 5 - - - - - - - - - -
E 6 - - - - - - - - - - -
E 7 - - - - - - - - - -
E 8 - - - - - - - - - -
E 9 - - - - - - - - - -
E 10 - - - - - - - -
Percentage 30% 50% 20% 20% 10% 20% 40% 10% 10% 20% 10% NA.
E 11 - - - - - - - - - -
E 12 - - - - - - - - - -
Percentage 0% 0% 0% 100% 0% 0% 50% 0% 0% 0% 0% 50%
48
Table 4-5 shows 50 percent of participants said the regulation enforcement
affects the business competition situation. The easy market entering was the huge
factor of competition in 40 percent opinions and 30 percent said the strongest market
leader in sales and marketing performed. 20 percent said freely in brand switching, the
product substitution, knowledgeable customer and the competition in service were the
competitive situation. Ten percent said the margin negotiation, price war, differences
in business target and the plenty of business opportunities were the competition
indicators. 100 percent of Laos’s participants said the competition situation was the
product substitution and 50 percent said the easy market entering and cross country
competition were significant to Laos’s competitive environment.
Table 4-6 Business categorizes.
Business
categorize
Wholesales Retails Direct
sales
Modern
trade sales
Project
sales
Home
solution
Niche
market
E 1 - - - -
E 2 - - - -
E 3 - - - -
E 4 - - - - - -
E 5 - - -
E 6 - - - - - -
E 7 - - - - -
E 8 - - - -
E 9 - - - - -
E 10 - - - - -
Percentage 20% 90% 10% 40% 60% 10% 10%
E 11 - - - - -
E 12 - - - - - -
Percentage 50% 100% 0% 0% 0% 0% 0%
Table 4-6 Shows 90 percent of participants were reatil,60 percent were
project sales,40 percent were modern trade model, 20 percent were wholesale and
other ten percent categorized themselves into direct sale, home solution shop and
49
niche market provider. 100 percent of Laos’s collaborators were retail shop and 50
percent were wholesale.
Table 4-7 The benefit aspects as TOFC's distribution network member gained.
Benefit aspects
from company Branding
Sales
supporter
Internal
administrative Marketing Trading
Innovation
product
E 1 - - - -
E 2 - - - -
E 3 - - - -
E 4 - - - - -
E 5 - - - - -
E 6 - - - -
E 7 - - - -
E 8 - - - - -
E 9 - - - - -
E 10 - - -
Percentage 40% 30% 0% 50% 10% 40%
E 11 - - - - -
E 12 - - - -
Percentage 50% 0% 0% 0% 0% 100%
Table 4-7 shows the benefit aspects as TOFC's distribution network member
gained from the company by 50 percent answered the marketing knowledge, 40
percent said strong brand and innovative products which made more benefits to their
firm. 30 percent said they received the support from the company representative and
ten percent gained only the trading benefit from TOFC. 100 percent of Laos customer
said innovation products was the most beneficial to their firm and 50 percent show the
brand of TOFC was strong.
50
50
Table 4-8 The independently business operation aspects of TOFC's distribution network member.
Independently
operation
Independent (Non-
intervention)
(Non-punishment
rules)
Dependent (Pricing or
targeting)
(Company
policies)
Maybe
E 1 - - - - -
E 2 - - -
E 3 - - - - - -
E 4 - - - - -
E 5 - - - - -
E 6 - - - -
E 7 - - - - -
E 8 - - - - -
E 9 - - - - - -
E 10 - - - - -
Percentage 90% 60% 10% 0% 30% 10% 10%
E 11 - - - - -
E 12 - - - - -
Percentage 100% 100% 0% 0% 0% 0% 0%
51
Table 4-8 Shows 90 percent of customer said they have independently
operation and ten percent doubtful. The reasons were a non-intervention from the
company for 60 percent opinions and ten percent said there do not any punishment
rules for the network members. 30 percent think the pricing policy or targeting and ten
percent explained the company policies, sometimes enforce their business. 100
percent of Laos participants said they have the independently business operation on
their own because the company never intervene the business.
52
52
Table 4-9 The TOFC's network member be the member of another company.
Rival
member
No SCG SCC Diamond TPI Oranit Lack of
stock
More
margin
Relationship Products
fullfillment
Immoderate
stock
Brand well
known
E 1 - - - - - - - - - -
E 2 - - - - - - - - -
E 3 - - - - - - - - - - -
E 4 - - - - - - - - -
E 5 - - - - - - - - -
E 6 - - - - - - - - -
E 7 - - - - - - - - - - -
E 8 - - - - - - - - - -
E 9 - - - - - - - - -
E 10 - - - - - -
Percentage 30% 0% 0% 60% 50% 10% 30% 10% 30% 40% 10% NA.
E 11 - - - - - - - - -
E 12 - - - - - - - - - -
Percentage 0% 100% 0% 50% 0% 0% 0% 0% 0% 0% 0% 100%
53
Table 4-9 presents 60 percent were the member of Diamond, 50 percent
were the member of TPI and ten percent were the member of Oranit. Thirty percent of
participants were not the member of other company network. 40 percent gave the
reason to fulfill their products length, 30 percent said because the relationship and
lack of stock of TOFC. 10 percent said they gained more margin and immoderate
stock. 100 percent of Laos be the member of SCG network and 50 percent were the
member of Diamond because two brand were well known in Laos.
Table 4-10 Customer satisfaction and the reasons.
Customer
satisfaction
TOFC Rival Equivalent Long
relationship
Closer
coordination
Harmonious
policy
E 1 - - -
E 2 - - - -
E 3 - - - -
E 4 - - -
E 5 - - - -
E 6 - - -
E 7 - - -
E 8 - - - - -
E 9 - - - -
E 10 - - -
Percentage 40% 30% 30% 50% 80% 10%
E 11 - - - -
E 12 - - - - -
Percentage 50% 0% 50% 0% 50% 0%
Table 4-10 shows 40 percent of customers satisfied TOFC more,30 percent
said they appreciated rival more and 30 percent were equivalent satisfaction because
they have closer coordination for 80 percent explained, 50 percent said because the
long relationship and ten percent said they got a harmonious policies which match to
their company. 50 percent of Laos’s participants said they satisfied TOFC more and
50 percent said maybe because they got the closer coordination from the
representative.
54
54
Table 4-11 The problem as the member of TOFC distribution network.
Problem with
TOFC
Sales Marketing Cooperation Competition Company
policies
Delivery
process
Lack of stock Channel
conflict
E 1 - - - - -
E 2 - - - - - -
E 3 - - - - - -
E 4 - - - - - -
E 5 - - - - - -
E 6 - - - - - - -
E 7 - - - - - -
E 8 - - - - - -
E 9 - - - - -
E 10 - - - - - - -
Percentage 10% 10% 40% 60% 20% 30% 10% 20%
E 11 - - - - - -
E 12 - - - - - - -
Percentage 0% 0% 0% 0% 0% 100% 50% 0%
55
Table 4-11 presents 60 percent of network member thought the competition
capabilities were the network problem,40 percent said the cooperation with internal
process,30 percent said the delivery process,20 percent said the company policies and
the channel conflict and ten percent said sales, marketing and lack of stock were the
problem of the network. 50 percent of Laos participants said lack of stock and 100
percent said the delivery process were the big problem.
Section3 results of analysis about business model data.
56
56
Table 4-12 The modern trade aspects.
Aspects of
modern trade
Sizing Displaying Shop
counselor
Professional
management
Self service Emphasize on
price war
Large
investment
High
cost
Systematic
back &
front end
Non
pricing
war
E 1 - - - - - - -
E 2 - - - - - - -
E 3 - - - -
E 4 - - - - - - - -
E 5 - - - - - - -
E 6 - - - - - - -
E 7 - - - - - - - -
E 8 - - - - - - - -
E 9 - - - - - -
E 10 - - - - - -
Percentage 40% 80% 40% 20% 40% 10% 30% 20% 20% 20%
E 11 - - - - - - - -
E 12 - - - - - - - - -
Percentage 0% 100% 0% 0% 0% 0% 0% 50% 0% 0%
57
Table 4-12 shows 80 percent explained the modern trade display was
outstanding, 40 percent said the shop area size, shop counselor and self- services were
facets of modern trade model. 30 percent distinguish on a number of investments and
20 percent explained the management by professional, the high cost of operations, the
systematic back and front end and there were not price war. Ten percent thought
modern trade emphasize on price war only. 100 percent of Laos’s customer said the
display and higher management cost were the modern trade aspects.
58
58
Table 4-13 Business model description.
Business
model
Traditional
trade
Modern
trade
Mixed-
model
Show room Sales
process
Customer take
care
Show only
product
application
Systematic
back &
front end
Non pricing
war
E 1 - - - - - - -
E 2 - - - - - -
E 3 - - - - - - -
E 4 - - - - - -
E 5 - - - - - - -
E 6 - - - - - - -
E 7 - - - - - - -
E 8 - - - - - - -
E 9 - - - - - - -
E 10 - - - - - -
Percentage 50% 10% 30% 10% 80% 20% 10% 10% 10%
E 11 - - - - - - -
E 12 - - - - - -
Percentage 50% 50% 0% 0% 100% 0% 0% 50% 0%
59
Table 4-13 shows 50 percent of customer described their business as the
traditional trade, 30 percent as the mixed- model,10 percent as the modern trade and
ten percent as the show room of innovation products. The participants gave the
reasons of why they described , the sales process was the reason that 80 percent of
participants said, 20 percent said because their style of customer take care and 10
percent gave the reasons of non-price war, the systematic of business process and they
only show the product application not concentrate to sell. 50 percent of Laos customer
said they was the traditional trade and other 50 percent said they was the modern trade
because the sales process by 100 percent customer's opinion and 50 percent said
because their systematic of business process.
60
60
Table 4-14 The description of traditional trade.
Description of
traditional trade
Untidy display Selling process non-systematic
management
Long
relationship
Non-standard
pricing
Sales margin
concern
Service concern
E 1 - - - -
E 2 - - - -
E 3 - - - - -
E 4 - - - - -
E 5 - - - - - -
E 6 - - - - -
E 7 - - - - -
E 8 - - - - - -
E 9 - - - -
E 10 - - -
Percentage 60% 20% 60% 30% 40% 10% 10%
E 11 - - - - - -
E 12 - - - - - -
Percentage 50% 0% 50% 0% 0% 0% 0%
61
Table4-14 presents the characters of traditional trade by 60 percent of
customer considered on the untidy display in the shop and the non-systematic
management. 40 percent said traditional trade has non-standard pricing, 30 percent
said they have a long relationship with their customer, 20 percent considered in the
selling process and two ten percent looked at the sales margin and selling service. 50
percent Laos’s participants said the untidy display and non-systematic management
were the traditional trade characters.
62
62
Table 4-15 The description of modern trade.
Description of
modern trade
Remarkable
display
Selling
process
Systematic
management
Large
capital
Nationwide
branches
One pricing Customer
neglect
Low price
E 1 - - - - -
E 2 - - - -
E 3 - - - -
E 4 - - - - - - -
E 5 - - - - - - -
E 6 - - - - - - -
E 7 - - - - - -
E 8 - - - - - - -
E 9 - - - -
E 10 - -
Percentage 70% 30% 50% 20% 30% 30% 10% 30%
E 11 - - - - - -
E 12 - - - - - -
Percentage 50% 0% 100% 50% 0% 0% 0% 0%
63
Table4-15 presents the characters of modern trade by 70 percent of customer
considered on the remarkable display in the shop which give the shopping experiences
and the systematic management in the opinion of 50 percent of participants. 30
percent said modern trade has a nationwide branch, one pricing standard, low price
strategy and considered in the selling process. 20 percent said the large capital of
investment and ten percent said the customer neglect of modern trade that can find
normally in the shop. 100 percent Laos participants said the systematic management,
50 percent said the remarkable display and large capital of investment were the
modern trade characters.
Table 4-16 The similarities of traditional trade and modern trade.
Similarities of 2
model
Product Location Price war Developed
traditional trade
Shop design
E 1 - - - -
E 2 - - - -
E 3 - - - -
E 4 - - - -
E 5 - - - -
E 6 - - - -
E 7 - - - -
E 8 - - - - -
E 9 - - - -
E 10 - - -
Percentage 20% 30% 30% 10% 10%
E 11 - - - - -
E 12 - - - - -
Percentage 0% 0% 0% 0% 0%
Table 4-16 shows 30 percent of participants said the shop location of 2
difference models always placed in the same area likewise 30 percent of the
customer's opinion showed the price war was the tool of business competition. 20
percent said they sold the same products, ten percent said some shop designs were
similar and ten percent said many modern trades were the developed traditional trade.
64
64
Table 4-17 The differentiation of traditional trade and modern trade.
Differences
of 2 model
Customer
relationship
Marketing
tactics
Systematic
responsibilities
Systematic
management
Credit sales Selling price Shop feature
E 1 - - - - - -
E 2 - - - - - -
E 3 - - - - - -
E 4 - - - - -
E 5 - - - - - -
E 6 - - - - - -
E 7 - - - - - -
E 8 - - - - - -
E 9 - - - - - -
E 10 - - - -
Percentage 50% 20% 10% 20% 20% 10% 0%
E 11 - - - - - -
E 12 - - - - - - -
Percentage 0% 0% 0% 0% 0% 0% 50%
65
Table 4-17 presents 50 percent of participants explained customer
relationships were differ. 20 percent said the marketing tactics, the systematic
management and the credit sales were differ from one another. Ten percent said the
systematic responsibilities on their mistake and ten percent said the differences on the
selling price. 50 percent of Laos’s participants said the shop features were easiest
remarkable.
66
66
Table 4-18 The main forces of traditional trade transforms to the modern trade
Factors for
change
Proliferation
of customers'
needs
Shift in
balance of
channel
power
Changing
strategic
priorities
Expanding
capabilities for
addressability
and variety
Channel
diversity
Customer
expectation
Enhanced
bargaining
power
More
knowledgeable
buyers
Credible
threats of
backward
integration
External
pressure
E 1 - - - - - - - -
E 2 - - - - -
E 3 - - - - - - -
E 4 - - - - - -
E 5 - - - - - - -
E 6 - - - - - - - -
E 7 - - - - - - -
E 8 - - - - - - - -
E 9 - - - - - - -
E 10 - - - - - -
Percentage 90% 10% 20% 20% 10% 60% 10% 80% 10% NA.
E 11 - - - - - - - - -
E 12 - - - - - - - -
Percentage 0% 0% 50% 0% 0% 0% 0% 0% 0% 100%
67
Table 4-18 presents 90 percent of collaborators said the proliferation of
customers' need, 20 percent said the changing strategic priorities and ten percent said
the shift in balance of channel power were the factors which forced the business
model transformation. This is because of more knowledgeable buyers in 80 percent
opinion,60 percent said the changing in customer expectation,20 percent said the
expanding capabilities for addressability and variety, ten percent said the channel
diversity, ten percent said the enhanced of bargaining power and ten percent said the
credible threats of backward integration. 50 percent of Laos’s participants said the
changing strategic priorities because they faced with the external pressure from border
country by 100 percent of Laos customers' opinion.
68
68
Table 4-19 The construction material demand.
Demand Derived
demand
Decision
influencer
Direct
demand
Displaying
change target
group
Decoration
market
Similar
manner
Differ in each
customer group
E 1 - - -
E 2 - -
E 3 - - - - -
E 4 - - - - - -
E 5 - - - - -
E 6 - - - - -
E 7 - - - - - -
E 8 - - - - -
E 9 - - - - -
E 10 - - - - -
Percentage 80% 80% 20% 10% 10% 20% 10%
E 11 - - - - - -
E 12 - - - - - -
Percentage 0% 0% 0% 0% 0% 100% 0%
69
Table 4-19 shows the construction material demand were a derived demand
in 80 percent opinion because they were a influencer in decision making, the demand
was not directly from the consumers like 80 percent of participants said. 20 percent
said it was the direct demand which the same with other industry in 20 percent
opinion because in the decoration products market, the display in the shop can
change the decision making of consumer in 10 percent opinion and 10 percent said
it was different in each customer group.
70
70
Table 4-20 The modern trade influences the construction material distribution market.
Modern trade
influences market
Less Medium Most Unchanged
customer
behavior
Customer
behavior
changer
Customer
educators
cannot
indicate
market
Market
price
influencer
Reduce
market
margin
Much
more mkt.
activities
No
modern
trade rival
E 1 - - - - - - - - -
E 2 - - - - - - - - -
E 3 - - - - - - - -
E 4 - - - - - - - - -
E 5 - - - - - - -
E 6 - - - - - - - - -
E 7 - - - - - - - - -
E 8 - - - - - - - - - -
E 9 - - - - - - - - -
E 10 - - - - - - - -
Percentage 10% 20% 70% 10% 40% 30% 20% 10% 10% 10% NA.
E 11 - - - - - - - - -
E 12 - - - - - - - - -
Percentage 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% 100%
71
Table 4-20 shows 70 percent of participants said the modern trade influences
most of the construction material distribution market, 20 percent said in the medium
level and 10 percent said there were less influences. This is because of the modern
trade were the customer behavior changer in 40 percent opinion,30 percent said the
modern trade were the customer educator,ten percent said the influencer in market
price, reduced the sales margin and the modern trade have many marketing activities
which lead the rival to followed. In contrast the modern trade was not change the
customer behavior in ten percent opinion and not the market indicator in 20 percent of
participants' opinion. 100 percent of Lao participants said the modern trade was less
influences Laos market because there was not the real modern trade rival.
72
72
Table 4-21 The level of emphasize in the transformation.
Emphasize in
transformation
Less Medium Most Already changed Large investment Market trend Future plan
E 1 - - - - -
E 2 - -
E 3 - - -
E 4 - - - - -
E 5 - - - - -
E 6 - - - - - -
E 7 - - - -
E 8 - - - - -
E 9 - - - - - -
E 10 - - - - -
Percentage 20% 20% 60% 60% 20% 30% 30%
E 11 - - - - -
E 12 - - - - -
Percentage 0% 0% 100% 50% 0% 0% 50%
73
Table 4-21 presents 60 percent of participants gave most emphasized in the
transformation,20 percent were in the medium level and 20 percent were less
emphasized because 60 percent said they were already changed,30 percent said the
market environment forced them,30 percent said it was in the future plan of the
business and 20 percent said it was the large investment. 100 percent of Laos
participants said they were most emphasized on the transformation because 50 percent
said they were already changed and 50 percent said the modern trade transformation
were in the future plan of their business.
Table 4-22 The level of TOFC’s emphasizing in the transformation.
TOFC's
Emphasize in
transformation
Less Medium Most Unhelpful
facilities
Non
substantial
policy
E 1 - - -
E 2 - - -
E 3 - - -
E 4 - -
E 5 - - - -
E 6 - -
E 7 - - -
E 8 - - -
E 9 - - - -
E 10 - -
Percentage 90% 10% 0% 40% 70%
E 11 - - -
E 12 - - - - -
Percentage 50% 0% 0% 0% 50%
Table 4-22 shows 90 percent of participants thought the TOFC pay less
emphasized in the transformation and ten percent said in the medium level because
there were non-substantial policies in 70 percent opinion and 40 percent said there
were unhelpful facilities. 50 percent of Laos participants said TOFC pay less
74
emphasized in the transformation because there were non-substantial policies in 50
percent opinion.
Table 4-23 The level of TOFC’s emphasizing in the transformation compare with
the rival in the industry.
Rival comparison Less Medium Most Helpful
facilities
Slow moving
development
E 1 - - -
E 2 - - -
E 3 - - -
E 4 - - - -
E 5 - - -
E 6 - - - -
E 7 - - - -
E 8 - - -
E 9 - - - -
E 10 - - -
Percentage 70% 10% 20% 50% 10%
E 11 - - - - -
E 12 - - - - -
Percentage 0% 0% 0% 0% 0%
Table 4-23 shows 70 percent of participants thought the TOFC pay less
emphasized in the business model transformation than the rival, 20 percent said
TOFC emphasized in transformation most more than the rival and ten percent said in
the medium level because there got the helpful facilities from the company in 50
percent opinion and ten percent said there were slowly moving development in their
firm.
75
Section4 results of analysis about relationship management data.
Table 4-24 The inter-relationship between TOFC's distribution network member.
Customer inter-
relationship
Yes No Private
relationship
Private
limitation
Customer
pass on
Channel
conflict
E 1 - - - -
E 2 - - - -
E 3 - - -
E 4 - - - - -
E 5 - - - -
E 6 - - - - -
E 7 - - - -
E 8 - - - -
E 9 - - - -
E 10 - - -
Percentage 60% 40% 60% 20% 10% 10%
E 11 - - - - -
E 12 - - - - -
Percentage 0% 100% 0% 0% 0% 0%
Table 4-24 Shows 60 percent of collaborator’s thought they has inter-
relationship between network member, whereas 40 percent think not. The reasons
were they have private relationship together by 60 percent said,20 percent said they
have private limitation to associate with another and last two reasons ten percent said
they always pass on the customer to their friends and they have conflict with other
TOFC dealer. 100 percent of Laos’s participants said they do not have any inter-
relationship between TOFC network in Laos.
76
Table 4-25 The benefit to business result in relationship of TOFC’s distribution
network member.
Inter-relationship
benefit
Yes No Encourage
between
member
Data
exchange
Customer
pass on
Reduce
channel
conflict
E 1 - - - -
E 2 - - - -
E 3 - - - -
E 4 - - - -
E 5 - - - -
E 6 - - - -
E 7 - - - -
E 8 - - - -
E 9 - - - -
E 10 - - -
Percentage 100% 0% 20% 40% 30% 20%
E 11 - - - - -
E 12 - - - - -
Percentage 0% 100% 0% 0% 0% 0%
Table 4-25 Shows 100 percent of participants’ opinion that the relationship
of TOFC’s distribution network member is beneficial to business result because they
can exchange the business data by 40 percent said, 20 percent said they can pass on
the customer in difference area to their friends and 20 percent said they want the
encouragement between network members and reduce the channel conflict. 100
percent of Laos’s participants said they do not have any inter-relationship between
TOFC networks in Laos.
77
Table 4-26 The most evidence with business relationship of TOFC's distribution
network.
Evidence of
relation with
TOFC
Normal
trading issue
Patronize Private relation
with employee
Personal
relation
disappear
Close
coordination
Unsubstantial
relation
E 1 - - - -
E 2 - - - -
E 3 - - - -
E 4 - - - -
E 5 - - - - -
E 6 - - - -
E 7 - - - - -
E 8 - - - -
E 9 - - - -
E 10 - -
Percentage 50% 20% 50% 20% 50% 10%
E 11 - - - -
E 12 - - - - -
Percentage 100% 0% 50% 0% 0% 0%
Table 4-26 shows 50 percent of participants show the most evidence with
business relationship of TOFC's distribution network were the issue of normal process
in trading and the private relationship with TOFC employee. The business patronizes
between company and customers were the most evidence of 20 percent opinion. Why
they gave that reason, 50 percent said because the close coordination, 20 percent said
the disappearance of personal relation and ten percent said the relationship were
unsubstantial for them. 100 percent of LAOS collaborators said the normal trading
issue was the most evidence with business relationship of TOFC's distribution
network in LAOS and 50 percent show they has only private relationship with
TOFC's representative.
78
78
Table 4-27 How the TOFC builds the business relationship with customer.
How TOFC
build
relationship
Personal
coalition
Improve agility
of routine work
Sales visit TOFC owner/
high mgt visit
Data support Less attentive Set annual activities for
member
E 1 - - - - -
E 2 - - - - -
E 3 - - - - - -
E 4 - - - - -
E 5 - - - - -
E 6 - - - - - -
E 7 - - - - -
E 8 - - - - - -
E 9 - - - - - -
E 10 - - - -
Percentage 50% 10% 20% 40% 30% 10% 10%
E 11 - - - - - -
E 12 - - - - - -
Percentage 0% 0% 50% 50% 0% 0% 0%
79
Table 4-27 In customers opinion 50 percent said the personal coalition was
the one way that company use to build the relationship with customer, 40 percent said
they want the TOFC owner or any high level management to visit their firm,30
percent said TOFC gave the data to support their business decision, 20 percent said
only sales visit in monthly routine can build the relationship and three last way were
to improve agility of routine work, set annual activities for member in network and
pay less attentive to their firm can build the relationship with them. 50 percent of
Laos’s participants said the TOFC owner or high level management person visiting
and representative visiting monthly can build the relationship with them.
80
80
Table 4-28 The importance with TOFC relationship.
Important with TOFC Important Unimportant Long relationship Patronize Product strengthen Key success
E 1 - - -
E 2 - - -
E 3 - - -
E 4 - - - -
E 5 - - - -
E 6 - - - - -
E 7 - - - - -
E 8 - - - - -
E 9 - - - - -
E 10 - - -
Percentage 100% 0% 20% 40% 10% 30%
E 11 - - - - -
E 12 - - - - - -
Percentage 50% 0% 0% 0% 0% 0%
81
Table 4-28 presents 100 percent of customers gave the importance in the
relationship with TOFC because they were the together contributor by 40 percent
opinion. The relationship with TOFC is the key success of their business in 30 percent
participants' opinion and 20 percent said the prolonged relationship, ten percent said
because the relationship with the company will strengthen the product and its
marketing. 50 percent of Laos’s collaborators shown the relationship with TOFC was
importance to their business.
Table 4-29 How customer builds relationship with TOFC.
How customer
build relationship
with TOFC
Met and receive
any TOFC data
Complaining any
problem
Together
development
Market data
interchange
E 1 - -
E 2 - -
E 3 - -
E 4 - -
E 5 -
E 6 - -
E 7 - - -
E 8 - -
E 9 -
E 10 - -
Percentage 100% 30% 40% 40%
E 11 - - -
E 12 - - - -
Percentage 50% 0% 0% 0%
Table 4-29 shows 100 percent of participants said they can kept the
relationship with TOFC by meet and receive any TOFC data from the representative
monthly.40 percent made relationship with company by give many ideas of
development and interchange the market data together. The problem complaining was
82
the one way that 30 percent of customers made relationship. 50 percent of Laos’s
participants said they can make the relationship with TOFC by monthly meet and
receive any TOFC data from the representative.
83
8
3
Table 4-30 The results of the relationship with TOFC.
Result of
relationship
Positive Negative Problem
proved
Prove by higher
level
Product knowledge
improvement
Market data
interchange
Policy poor
communication
E 1 - - - - -
E 2 - - - -
E 3 - - - - -
E 4 - - - -
E 5 - - - -
E 6 - - - - -
E 7 - - - - - -
E 8 - - - - - -
E 9 - - - -
E 10 - -
Percentage 90% 20% 40% 10% 40% 20% 30%
E 11 - - -
E 12 - - - -
Percentage 100% 0% 100% 50% 50% 50% 0%
84
Table 4-30 presents the positive results of relationship with TOFC was the
answer of 90 percent of participants. 20 percent gave the negative results of the
business relationship. The most two famous reasons were the problem proved and
they can improve their product knowledge from any connection with the company, 40
percent of each participants said. 30 percent said they received the poor
communication of company policy.20 percent of collaborators described they can
interchange the market data with company representative and ten percent explain their
problem can be proved by the higher level officers in TOFC. 100 percent of Laos’s
collaborators said they get the positive result from the relationship because their
problem always proved and 50 percent explained the management level always solved
their problem, improved their products knowledge and interchanged the market data
in LAOS with company delegates.
85
85
Table 4-31 The level of business relationship with TOFC.
Level of
relationship
Repeat customer Clients Advocates Partners Data
interchange
Introduce to
another
Problem solving
together
E 1 - - - -
E 2 - - - - -
E 3 - - - -
E 4 - - - - - -
E 5 - - - - - -
E 6 - - - - -
E 7 - - - - - -
E 8 - - - - -
E 9 - - - - -
E 10 - - -
Percentage 10% 10% 20% 60% 50% 20% 30%
E 11 - - - - -
E 12 - - - - - -
Percentage 0% 100% 0% 0% 0% 50% 0%
86
Table 4-31 shows the most appropriate relationship level was partner that
60 percent gave and advocates of the company was 20 percent from participation. The
clients and repeat customer were ten percent by each participant. And why they gave
that level, 50 percent said they have interchange the data between them and the
company, 30 percent said they get the problem solved from TOFC and 20 percent said
they introduce the company to another. The 100 percent of LAOS’s participants said
they were the clients but sometimes they introduced TOFC to another in the opinion
of 50 percent collaborators.
87
87
Table 4-32 The relationship aspects between TOFC and the customers.
Relationship
aspects
Business tools Business assets Problem of
business
Business co-
creator
Cause of
customer lose
Closer
coordination
Business
value added
Unimportant
with business
E 1 - - - - -
E 2 - - - -
E 3 - - - - - -
E 4 - - - - - -
E 5 - - - - - - -
E 6 - - - - -
E 7 - - - - - -
E 8 - - - - - - -
E 9 - - - - - -
E 10 - - -
Percentage 60% 60% 20% 20% 10% 30% 30% 20%
E 11 - - - - - - -
E 12 - - - - - - - -
Percentage 50% 0% 0% 0% 0% 0% 0% 0%
88
Table 4-32 shows the same level, 60 percent of participants’ show the
relationship aspects of them with TOFC were the business tools and the business
assets. Therefrom 20 percent said it is the problem of business because it was
unimportant with them, 20 percent of participants said. The reasons of any
relationship aspects that 30 percent gave, they have closer coordination with TOFC
more the rival and gain the business value added from the relationship. 20 percent
said they are the business co-creator with TOFC and ten percent answered that
relationship were a cause of customer lose. 50 percent of LAOS participants said the
relationship with the company were the business tools which used to achieved the
business target.
Table 4-33 The view point of two relationship aspects.
View point of two
relationship
Difference Similarity cannot
separate
Difference positive
viewpoint
E 1 - -
E 2 - -
E 3 - -
E 4 - -
E 5 - - -
E 6 - - -
E 7 - -
E 8 - - -
E 9 - - -
E 10 - -
Percentage 20% 80% 40% 20%
E 11 - - -
E 12 - - - -
Percentage 0% 50% 0% 0%
Table 4-33 shows 80 percent of participants show the organizational and the
personal relationship were similar but 20 percent said there are distinguish. 40 percent
said they cannot separate the differentiation of both and 20 percent shown there are
89
many difference viewpoint such as the private trust and the business rules that is the
difference kind of relationship. LAOS 50 percent participants said it is the similar
aspects of two kind of relationship.
Table 4-34 The most beneficial relationship in the business short term.
Short term Organizational Personal facile routine work Interpersonal trust
E 1 - - - -
E 2 - - -
E 3 - - - -
E 4 - - -
E 5 - - - -
E 6 - -
E 7 - -
E 8 - - -
E 9 - - - -
E 10 - -
Percentage 10% 50% 10% 20%
E 11 - - -
E 12 - - - -
Percentage 0% 50% 0% 0%
Table 4-34 shows, in short term 50 percent of participants said personal
relationship were beneficial to their firm more organizational relationship that ten
percent of participants said. The reasons were to facile the routine work with TOFC's
officer for ten percent answering and they trust the interpersonal relationship for 20
percent. Finally 50 percent of LAOS participants said the personal relationship was
more beneficial.
90
Table 4-35 The most beneficial relationship in the business long term.
Long term Organizational Personal Long term
familiar
Future planning
together
E 1 - - - -
E 2 - -
E 3 - - - -
E 4 - -
E 5 - - - -
E 6 - -
E 7 - -
E 8 - - -
E 9 - - - -
E 10 - -
Percentage 30% 30% 30% 20%
E 11 - - -
E 12 - - - -
Percentage 0% 50% 0% 0%
Table 4-35 in the same result 30% of participants said the organizational
and personal relationship were both beneficial to their business in long term at the
same level. 30% said because long term gets a familiar coordination and 20% want to
plan the business future with TOFC. 50% of LAOS’s customers said in long term the
personal relationship of them and TOFC's representatives were more beneficial to
their firm.
91
9
1
Table 4-36 The business value added from TOFC relationship.
Value added of
business
Can Cannot Must be
adjustable
Two way
communication
Develop business
knowledge
Develop new
product
dissatisfy current
situation
E 1 - - - - -
E 2 - - - - -
E 3 - - - -
E 4 - - - - -
E 5 - - - - -
E 6 - - - - -
E 7 - - - - - -
E 8 - - - - -
E 9 - - - - - -
E 10 - - - -
Percentage 90% 10% 10% 10% 50% 10% 20%
E 11 - - - - -
E 12 - - - - - -
Percentage 100% 0% 0% 0% 50% 0% 0%
92
Table 4-36 shows 90 percent of participants said the relationship between
their business and TOFC will make the business value added but ten percent were not.
50 percent gave the reason of business knowledge development and ten percent
suggest developing new product for the network. And other 2 reasons said by ten
percent of each topic, the current relationship must be adjustable and inter-
relationship could be the two way communication. Customer dissatisfy in current
situation is the reason of 20 percent participants said. 100 percent of LAOS’s
participants said the relationship between their business and TOFC will make more
value added.
Table 4-37 The most effective marketing activities.
Effective activities Private meeting Co-meeting Customer seminar
E 1 -
E 2 - -
E 3 - -
E 4 - -
E 5 - -
E 6 - -
E 7 - -
E 8 - -
E 9 - -
E 10 - -
Percentage 40% 10% 60%
E 11 - -
E 12 - -
Percentage 50% 0% 50%
Table 4-37 shows 60 percent in the interview offered the customer seminar
is appropriate to their firm, they recommend only knowledge interchange seminar not
to product sales or company policy seminar were more effective. 40 percent of
participants said private meeting or dinner is necessary to their business. The co-
meeting between customer's key person and management team of TOFC is
93
appropriate in ten percent participants' opinion. LAOS’s participants wanted the
private meeting and customer seminar in the same level at 50 percent.
Section5 results of analysis about strategic planning data.
Table 4-38 The differences definition of public modern trade and Localize
modern trade.
Modern trade definition Yes No Ambiguous meaning
E 1 - -
E 2 -
E 3 -
E 4 -
E 5 - -
E 6 - -
E 7 -
E 8 - -
E 9 - -
E 10 - -
Percentage 30% 70% 40%
E 11 - -
E 12 - -
Percentage 0% 100% 0%
Table 4-38 shows 70 percent of participants said No because the
ambiguously meaning like 40 percent suggest. 30 percent understand the meaning
of two definitions. 100 percent of LAOS’s customer said they do not know at all.
The CEO’s definitions was not recognize generally but it was the important way to
specify the differences of modern trade model.
94
94
Table 4-39 The most potential modern trade merchandisers in Thailand.
Most potential
modern trade
Homepro Thaiwatsadu Global House Difference
target group
High end
market
Large capital Diverse many
branch
SCG
E 1 - - - -
E 2 - - - - -
E 3 - - - - - -
E 4 - - - - -
E 5 - - -
E 6 - - - -
E 7 - - - -
E 8 - - - - - - -
E 9 - - - - -
E 10 - - -
Percentage 80% 50% 10% 60% 50% 30% 60%
E 11 - - - - - - -
E 12 - - - - - - -
Percentage 0% 0% 0% 0% 0% 0% 0% 100%
95
Table 4-39 shows HomePro was the most potential modern trade
merchandisers in Thailand by 80 percent of external participants said. 50 percent said
Thaiwatsadu and ten percent said Global House. The reasons are the diversification of
branches and they have difference target group in the market from each 60 percent
gave the opinion. 50 percent said the modern trade potential measured from its stayed
in the high end market. Finally 30 percent said the large capital to investment is the
potential measurement. 100 percent of LAOS’s participants said SCG is the most
potential modern trade merchandisers in Thailand.
Table 4-40 The consideration factors of modern trade customer.
Factors of
together work
Branding Business
policy
Company
vision
Competitive
capabilities
Sales margin
E 1 - - -
E 2 - -
E 3 - - -
E 4 - - -
E 5 - -
E 6 - - - -
E 7 - - - -
E 8 - - -
E 9 - -
E 10 - - -
Percentage 70% 50% 10% 30% 50%
E 11 - - - -
E 12 - - - -
Percentage 100% 0% 0% 0% 0%
Table 4-40 shows the brand was the famous factors of 70 percent of
participants consider when they want to work together with TOFC. 50 percent
answered business policy and 50 percent said sales margin are the two factors that
they consider. The competitive capabilities of company were the factor which 30
96
percent chose. Ten percent said the company vision is the considered factor. 100
percent of LAOS’s participants think branding is the major factor that they considered
when they want to join the network.
97
97
Table 4-41 The marketing mix to modern trade.
Marketing mix with
modern trade
Pricing Promotion Up to date
segmentation
Product Reduce price
war
Reduce channel
conflict
Product
diversity
Product
specify
E 1 - - - -
E 2 - - - - - -
E 3 - - -- - - -
E 4 - - - - - -
E 5 - - - - - -
E 6 - - - - - -
E 7 - - - - - -
E 8 - - - - - - -
E 9 - - - - - -
E 10 - - - - - -
Percentage 40% 30% 10% 30% 40% 20% 30% 10%
E 11 - - - - - - -
E 12 - - - - - - -
Percentage 0% 0% 0% 100% 0% 0% 0% 0%
98
Table 4-41 shows 40 percent preferred pricing to TOFC to improve or
progress with modern trade.30 percent said product and promotion were the two
marketing mix, that TOFC will used. And ten percent of participants said TOFC must
to re-thinking about the market segmentation. Why the participants preferred each
marketing mix,40 percent wanted to reduced price war,30 percent commend the
product diversity will segment the customer into each group,20 percent wanted to
reduce conflict in network and ten percent said product specify by customer group is
the reason of them.
Table 4-42 The marketing activities to modern trade.
Marketing activities to
modern trade
Local co-
advertising
Outstanding
display
Product
counselor
Media
advertising
E 1 - - -
E 2 - -
E 3 - - -
E 4 - - -
E 5 - -
E 6 - - -
E 7 - - -
E 8 - - - -
E 9 - -
E 10 - -
Percentage 20% 60% 30% 20%
E 11 - - -
E 12 - - - -
Percentage 0% 50% 0% 0%
Table 4-42 shows the outstanding display in the shop is marketing activities
of 60 percent prefer to TOFC to modern trade. 30 percent said the product counselor
is the one way of TOFC worked with modern trade. The local co-advertising and
media advertising, the two marketing activities which 20 percent preferred.
99
Table 4-43 The inappropriate marketing activities for modern trade.
Marketing activities not
to modern trade
Premium special
discount
Privilege Discount promotion
E 1 -
E 2 - -
E 3 - -
E 4 - -
E 5 - -
E 6 - -
E 7 -
E 8 - -
E 9 - -
E 10 -
Percentage 80% 20% 30%
E 11 - - -
E 12 - - -
Percentage NA. NA. NA.
Table 4-43 shows 80 percent of participants’ said premium special discount
is not appropriate marketing activities to provide with modern trade like the
promotion that reduce modern trade cost like 30 percent opinion. And 20 percent
said the privilege of any business process with the company were not appropriate.
100
Table 4-44 The most effective communication tools for modern trade.
Effective
communication
tools
Street
banner
Pricing
promotion
User seminar Mass
advertising
POS
marketing
activities
E 1 - - - -
E 2 - - - -
E 3 - - - -
E 4 - - - -
E 5 - - -
E 6 - - - -
E 7 - - - -
E 8 - - - -
E 9 - - - -
E 10 - - -
Percentage 30% 10% 10% 30% 40%
E 11 - - - - -
E 12 - - - - -
Percentage NA. NA. NA. NA. NA.
Table 4-44 shows the most effective communication tools in 40 percent of
participants’ opinion is POS marketing activities which attracted the consumer in the
sales area. 30 percent gave street banner and mass advertising is the potential Medias
to consumer. Ten percent said pricing promotion is most effective and ten percent
said the product user seminar.
101
101
Table 4-45 The business survival in competition.
Business
survival
Survive Give up More closer with
steady customer
Avoid to another
product
Be the
manufacturer
Find the way to
fight with mega
capital
Continuous
developing
E 1 -
E 2 - - - - -
E 3 - - - - -
E 4 - - - - -
E 5 - - - - -
E 6 - - - -
E 7 - - - -
E 8 - - - - - -
E 9 - - - - -
E 10 - - - -
Percentage 100% 0% 30% 10% 10% 40% 70%
102
Table 4-45 shows 100 percent said if traditional trade do not developed the
business, they survived in the world of competition because they still develop the firm
continuously in the opinion of 70 percent of participants’. 40 percent said they can
find their own way to fight with the mega capital from large investor.30 percent will
keep the relationship with steady customer closer. ten percent of participants avoided
another related products in the industry and ten percent will be the manufacturer in the
same related industry.
Table 4-46 The ideas to TOFC with business network development.
Ideas to
developed
Company
advise
SHERA home
center
Tangible
policy
Product
specify by
each model
Local
collaboration
supporter
Develop on
their own
way
E 1 - - - - -
E 2 - - - - -
E 3 - - -
E 4 - - - - -
E 5 - - - -
E 6 - - - -
E 7 - - - - -
E 8 - - - - -
E 9 - - - - -
E 10 - - - -
Percentage 70% 20% 20% 10% 10% 20%
E 11 - - - - - -
E 12 - - - - - -
Percentage NA. NA. NA. NA. NA. NA.
Table 4-46 shows the business advised is the most famous propose idea
from 70 percent of customer. 20 percent need TOFC to provide the SHERA home
center concept on them and 20 percent need the company gave the tangible policy
what TOFC want to develop the dealer. Ten percent suggest TOFC must be the local
collaboration supporter. In products aspect, ten percent wanted the company to
specify some products group to sell in modern trade or traditional trade in one way. At
the last 20 percent wanted to develop their firm on their own way.
103
Table 4-47 The ideas to TOFC to make our network more competitiveness.
Competitive
ideas
Knowledge
seminar to agent
Co-promotion Company as
a mentor
Close private
relationship
E 1 - - -
E 2 - - -
E 3 - - -
E 4 - - -
E 5 - - -
E 6 - - -
E 7 - - -
E 8 - -
E 9 - - -
E 10 - -
Percentage 60% 20% 30% 10%
E 11 - - - -
E 12 - - - -
Percentage NA. NA. NA. NA.
Table 4-47 shows 60 percent of participants’ said the knowledge seminar
directly to dealer within network will make the competitive capabilities as the
business coach like 30 percent recommend. Co-promotion is the one of 20 percent
give the suggestion and closer private relationship with the distribution channels of
TOFC, it is the other proposition which make the network more competitive.
104
Part 2 presents the internal participants' research result and
data analysis.
Section1 results of analysis about internal participants’ personal data.
Table 4-48 Respondent Individual questions.
Respondent Working Level Years of
working
Years of
current
position
Related
with sales
department
Related with
modern trade
sales
I 1 Senior Management 26 2 Yes Yes
I 2 Senior Management 2 2 Yes Yes
I 3 Operation 7 7 Yes No
I 4 Operation 14 14 Yes No
I 5 Operation 17 5 Yes No
I 6 Middle Management 21 14 Yes No
I 7 Middle Management 18 5 Yes No
I 8 Middle Management 11 6 Yes Yes
I 9 Middle Management 2 2 Yes Yes
I 10 Middle Management 2 2 No Yes
I 11 Middle Management 9 4 Yes Yes
I 12 Senior Management 21 1 Yes Yes
I 13 Senior Management 9 2 Yes Yes
I 14 Operation 8 8 Yes No
I 15 Middle Management 23 2 Yes No
Table 4-48 presents the 15 respondents individual data, four were the senior
management position which determine the company policies, seven were the middle
management level which handle the department or team to achieve the company
target and four were an operation level which followed the policies to reach the
corporation target. The highest numbers of years of working was 26 years and the
lowest was 2 years, most of participants working in the company more than 10 years.
13 participants working in current position less than 10 years except 2 respondents.
14 of respondents were working related with sales department and 8 respondents work
related with modern department. The researcher intended to interview the employees
105
that working related with sales department because the main issue of this research is
about the sales and marketing only. But one of the respondents was not work related
with sales department because they worked in supporting with marketing data.
Section2 results of analysis about distribution channel network and
construction material business model in Thailand data.
106
106
Table 4-49 Thailand's Distribution network description
Thailand's Distribution
network description
By sales
type
Difference
profit gap
B2B
relationship
Business
regulation
Business legal
punishment
Brand
substitution
Channel
overlapped
Steady
customer
I 1 - - - - - - - -
I 2 - - - - - - - -
I 3 - - -
I 4 - - -
I 5 - - - -
I 6 - - -
I 7 - - -
I 8 - - -
I 9 - - -
I 10 - - - - -
I 11 - -
I 12 - -
I 13 - - - - -
I 14 - - - - - -
I 15 - -
Percentage 80% 47% 60% 33% 40% 53% 60% 27%
107
Tables 4-49 Shows 80 percent of participants said the construction materials
distribution network divide by the sales type. 60 percent of participants comment that
the firm has business to business relationship and some distribution were overlapped
together. 53 percent said in this industry were plenty of brand substitution, 47 percent
said the difference network were difference profit gap by each company policy. 40
percent of participants said some network has the strong business legal and
punishment with its own business regulation by 33 percent opinion. Finally the steady
customers that loyal each brand were the indicator of each network.
108
108
Table 4-50 TOFC's distribution network description
TOFC's Distribution
network description
Familiar
relationship
Non business
regulation
Strong sub
agent policy
High
Loyalty
Able to sales
Rival's product
Long-term
relationship
Policy
follower
I 1 - - - - - - -
I 2 - - - - - - -
I 3 - - - -
I 4 - - - - -
I 5 - - - -
I 6
I 7 -
I 8 - - -
I 9 - -
I 10 - - - -
I 11 - - - - - -
I 12 - -
I 13 - -
I 14 -
I 15 -
Percentage 80% 53% 27% 60% 40% 53% 33%
109
Table 4-50 shows the 80 percent of participants’ said the dealers have
familiar relationship with the company and they always have the high loyalty in 60
percent opinion. The same 53 percent said TOFC's network do not have business
regulation because the long relationship with coordination. 40 percent said the
customer able to sales rival's products, finally 27 percent said TOFC has a strong
sub agent policy.
Table 4-51 TOFC's distribution network classification
TOFC's Distribution
network classification
Pluralistic multi-
channel
Categorized by
target group
Categorized by
demographic
I 1 -
I 2 -
I 3 -
I 4 -
I 5 -
I 6
I 7 -
I 8
I 9 -
I 10 -
I 11 -
I 12 -
I 13 -
I 14 -
I 15
Percentage 100% 100% 20%
Table 4-51 Shows TOFC's Distribution network classify by 100 percent of
participants said the company used a Pluralistic multi-channel because 100 percent
explained the company categorize by target group and 20 percent thought by
demographic.
110
110
Table 4-52 Business competition situation analysis.
Competition
situation
Strongest market
leader
Best marketing
approach
Brand
switching freely
Product
substitution
Price war Service
competition
Comparative
advantage
I 1 - - -
I 2 - -
I 3 - - -
I 4 - - - -
I 5 - - -
I 6 - -
I 7 -
I 8 - -
I 9 - - - -
I 10 - - - -
I 11 - -
I 12 - - - -
I 13 - - -
I 14 - -
I 15 - - - -
Percentage 80% 73% 40% 80% 47% 40% 53%
111
Table 4-52 shows 80 percent of participants said the market leader were
strongest with the best marketing approach for every rival in the industry by 73
percent opinion. 80 percent said there were plenty of product substitutions. Every
rival have the comparative advantage of its own in 53 percent opinion and 47 percent
said the price war were the famous competition tools. Finally 40 percent said there
were allover freely in brand switching and service competition.
Table 4-53 Business categorizes.
Business
categorize
Wholesales Retails Direct sales Modern trade
sales
Project sales
I 1
I 2
I 3
I 4
I 5
I 6
I 7 -
I 8 -
I 9
I 10
I 11 -
I 12 -
I 13 -
I 14 -
I 15 -
Percentage 100% 100% 53% 100% 100%
Table 4-53 Shows 100 percent of participants' thought the customer can be
categorized into wholesale, retail, modern trade sales and project sales. 53 percent
were categorized the customer into direct sales.
112
112
Section3 results of analysis about business model data.
Table 4-54 The difference aspects of the modern trade and traditional trade.
Difference aspects Management
system
Sales system Display Sizing Self service Large
investment
High cost Shop
counselor
I 1 -
I 2 - - -
I 3 - - - - -
I 4 - - - - - -
I 5 - - - - - -
I 6 -
I 7 - -
I 8 - - - - -
I 9 - - - - -
I 10 - - -
I 11 - -
I 12 - - - -
I 13
I 14 - - - -
I 15 - - - - - -
Percentage 60% 80% 93% 47% 60% 20% 27% 60%
113
Table 4-54 shows the difference aspects of the modern trade and traditional
trade in 93 percent opinion was the display, 80 percent was sales system, three of 60
percent said the management system, self-services and shop counselor. 47 percent
said the shop area size, 20 percent concerned in the size of investment which larger
than traditional trade and 27 percent said the higher cost.
114
114
Table4-55 The description of traditional trade
Description of
traditional trade
High margin Private capital On profit
marketing
Untidy
display
Non-systematic
management
Long
relationship
Nonstandard
pricing
I 1 - -
I 2 - - -
I 3 - - - - -
I 4 - - - - - -
I 5 - - - - -
I 6 - - - -
I 7 - -
I 8 - - - -
I 9 - - -
I 10 - - - - -
I 11 -
I 12 - - -
I 13 - - -
I 14 - - -
I 15 - - - -
Percentage 40% 60% 40% 73% 60% 47% 27%
115
Table4-55 presents the characters of traditional trade by 73 percent of
customer considered on the untidy display in the shop and 60 percent said the non-
systematic management and the customer invest on their own private capital. 47
percent said they have a long relationship with their customer and 40 percent
considered in the high margin selling and the marketing practice depends on the
profit that the firm gained. Finally 27 percent said the traditional trade has no standard
pricing.
Table 4-56 The description of modern trade.
Description of
modern trade
Sales
facilitate
Retail price
determiner
Fully
product
Shopping
experience
Good
service
I 1 -
I 2 -
I 3 - -
I 4 - - -
I 5 - - -
I 6 - - -
I 7 -
I 8
I 9 - - -
I 10 - -
I 11 -
I 12 -
I 13 - - -
I 14 -
I 15 - - - -
Percentage 60% 40% 87% 47% 73%
Table4-56 presents the characters of modern trade by 87 percent considered
on the products full range in the shop and the good service in the opinion of 73
percent of participants. 60 percent said modern trade has many sales facilitate. 47
116
percent said they can received the shopping experiences in the shop and 40 percent
said the modern trade were the determiner of area retailing price.
Table 4-57 The similarities of traditional trade and modern trade.
Similarities of 2
model
Product Location Price war Developed
traditional
trade
Shop design
I 1 - - -
I 2 - - -
I 3 - - - -
I 4 - - - -
I 5 - - -
I 6 - - -
I 7 - -
I 8 - -
I 9 - - - -
I 10 - - -
I 11 - - -
I 12 -
I 13 - - - -
I 14 - - -
I 15 - - -
Percentage 67% 33% 60% 27% 13%
Table 4-57 shows 67 percent of participants said the products that sales in
two kind of shop were the same likewise 60 percent of the employee's opinion showed
the price war was the tool of business competition. 33 percent said they placed in the
same area, 27 percent said many modern trades were the developed traditional trade
and 13 percent said they were similar in the shop design.
117
117
Table 4-58 The differentiation of traditional trade and modern trade.
Differences of 2
model
Customer
relationship
Marketing tactics Systematic
responsibilities
Systematic
management
Credit sales Selling price Shop feature
I 1 - -
I 2 - - -
I 3 - - -
I 4 - - - - -
I 5 - - - -
I 6 - - - -
I 7 - - - -
I 8 - - -
I 9 - - - - -
I 10 - - - - -
I 11 - -
I 12 - - -
I 13 - - -
I 14 - - - -
I 15 - - -
Percentage 53% 47% 33% 60% 20% 33% 100%
118
Table 4-58 presents 53 percent of participants explained customer relationships were
differ. 47 percent said the marketing tactics, 60 percent said the systematic
management and 20 percent said the credit sales were differ from one another.33
percent said the systematic responsibilities on their mistake and 33 percent said the
differences on the selling price. All of participants said the shop features were the
easiest remarkable.
119
119
Table 4-59 The main forces of traditional trade transforms to the modern trade.
Factors for
change
Proliferation of
customers'
needs
Shift in
balance of
channel
power
Changing
strategic
priorities
Expanding
capabilities for
addressability
and variety
Channel
diversity
Customer
expectation
Enhanced
bargaining
power
More
knowledgeable
buyers
Credible threats
of backward
integration
I 1 - - - -
I 2 - - -
I 3 - - - - -
I 4 - - - - - - -
I 5 - - - - - -
I 6 - - - - - - -
I 7 - - - - -
I 8 - - - - -
I 9 - - - - - - -
I 10 - - - - - - -
I 11 -
I 12 - - - - -
I 13 - - - - - -
I 14 - - - - - -
I 15 - - - - -
Percentage 87% 13% 20% 20% 60% 80% 13% 60% 20%
120
Table 4-59 presents 87 percent of collaborators said the proliferation of
customers' need, 20 percent said the changing strtegic priorities and 13 percent said
the shift in balance of channel power were the factors which forced the business
model transformation. This is because of more knowledgeable buyers in 60 percent
opinion, 80 percent said the changing in customer expectation,20 percent said the
expanding capabilities for addressability and variety, 60 percent said the channel
diversity,13 percent said the enhanced of bargaining power and 20 percent said the
credible threats of backward integration.
Table 4-60 The construction material demand.
Demand Derived demand Direct demand
I 1 - -
I 2 -
I 3 -
I 4 -
I 5 -
I 6
I 7 -
I 8 - -
I 9 -
I 10 -
I 11 - -
I 12
I 13 -
I 14 -
I 15 - -
Percentage 73% 13%
Table 4-60 shows the construction material demand were a derived demand
in 73 percent opinion because they were an influencer in decision making, the demand
was not directly from the consumers whereas 13 percent said it was the direct
demand.
121
121
Table 4-61 The modern trade influences the construction material distribution market.
Modern trade
influences market
Most Market indicator Customer
behavior changer
Customer
educators
Market price
influencer
Reduce market
margin
Much more mkt
activities
I 1 - -
I 2 - -
I 3 - - - -
I 4 - - - - -
I 5 - - - - -
I 6 - - - - -
I 7 - - - -
I 8 - - - -
I 9 - - - -
I 10 - - -
I 11 - - - -
I 12 - - - -
I 13 - - - -
I 14 - - - - -
I 15 - - - - -
Percentage 100% 47% 40% 33% 13% 27% 40%
122
Table 4-61 shows 100 percent of participants said the modern trade
influences most of the construction material distribution market. This is because of
the modern trade were the customer behavior changer in 40 percent opinion, 33
percent said the modern trade were the customer educator, 13 percent said the
influencer in market price, 27 percent said the modern trade reduced the sales margin
and 40 percent said the modern trade have many marketing activities which lead the
rival to followed and be the market indicator in 47 percent of participants' opinion.
Table 4-62 The level of emphasize in the transformation.
Emphasize in
transformation
Most Learning
more
Give
information
to customer
Market
trend tracer
By researcher
observed
I 1 - - -
I 2 - - -
I 3 - - -
I 4 - - -
I 5 - - -
I 6 - - - -
I 7 - -
I 8 - - -
I 9 - - -
I 10 - - -
I 11 -
I 12 - -
I 13 - - -
I 14 - - -
I 15 - - -
Percentage 100% 33% 27% 47% 13%
123
Table 4-62 Presents 100 percent of participants gave most emphasized in
the transformation because 47 percent said they were the market trend tracer, 33
percent said they wanted to learning more about modern trade, 27 percent said gave
the information to their customer already and 13 percent the researchers observed that
they were most concerned on it.
124
124
Table 4-63 The level of TOFC’s emphasizing in the transformation.
TOFC's Emphasize in
transformation
Less Medium Most Trade marketing
department
Slowly develop Non substantial
policy
I 1 - - - - - -
I 2 - - - - - -
I 3 - - - -
I 4 - - - -
I 5 - - - -
I 6 - - - -
I 7 - - -
I 8 - - - -
I 9 - - - -
I 10 - - - -
I 11 - - - - -
I 12 - - - - -
I 13 - - - - -
I 14 - - - -
I 15 - - - - -
Percentage 27% 13% 47% 33% 7% 27%
125
Table 4-63 shows 27 percent of participants thought the TOFC pay less
emphasized in the transformation, 13 percent said in the medium level and 47 percent
said TOFC pay most emphasized in the transformation because there were non-
substantial policy in 27 percent opinion and 7 percent thought they were slowly
develop the organization to supported the change. 33 percent said TOFC set the trade
marketing department to support the new market trend.
Table 4-64 The level of TOFC’s emphasizing in the transformation compare with
the rival in the industry.
Rival
comparison
Less Medium Most Rival
tangible
policy
Slowly
develop
Co-development of
rival and its
customer
I 1 - - - - - -
I 2 - - - -
I 3 - - - - -
I 4 - - - - -
I 5 - - - - -
I 6 - - - - -
I 7 - - -
I 8 - - -
I 9 - - - -
I 10 - - - -
I 11 - - - -
I 12 - - - - -
I 13 - - - -
I 14 - - - - -
I 15 - - - - -
Percentage 40% 40% 13% 20% 27% 13%
Table 4-64 shows 40 percent of participants thought the TOFC pay less
emphasized in the business model transformation than the rival, 13 percent said
TOFC emphasized in transformation most more than the rival and 40 percent said in
the medium level because there develop slowly by 27 percent opinion, 20 percent
126
said the rival has many tangible policies of development and 13 percent thought the
rival have a co-development with their own customers.
Section4 results of analysis about relationship management data.
127
127
Table 4-65 The way of TOFC gives the importance to customer relationship.
Give importance
on relationship
DNA Promotion CRM
department
Sales promotion Sales routine
task
Benefit comparable
with rival
Customer
proritize
I 1 - - - -
I 2 - - - -
I 3 - - - - -
I 4 - - - - -
I 5 - - - - -
I 6 - -
I 7 -
I 8 - - - -
I 9 - - - -
I 10 - - - -
I 11 - -
I 12 - - -
I 13 - - -
I 14
I 15 -
Percentage 67% 67% 33% 47% 33% 40%
128
Table 4-65 presents the ways of TOFC gave importance to the customer
whom 67 percent said they created the DNA promotion and CRM department to do.
47 percent said they developed the sales routine task and 33 percent said the sales
promotion was the way that TOFC gives importance to the customer. The TOFC gave
the suggestion to the researcher, 40 percent wanted the company to allocate the new
customer priority and 33 percent noticed that the benefit must be comparable to the
rival.
Table 4-66 How TOFC builds relationship with customer.
How make
relationship?
Traveling trip Sales
routine task
Special occasion
gift
Product
innovation
introduction
I 1 - - -
I 2 - - - -
I 3 -
I 4 -
I 5 -
I 6 - -
I 7
I 8 - - -
I 9 - - -
I 10 - - -
I 11 - -
I 12 - -
I 13 - - - -
I 14 - -
I 15 - -
Percentage 40% 53% 33% 53%
Table 4-66 shows 53 percent of participants said they can kept the
relationship with customer by always talk about the new product or the innovation of
the company in the sales and marketing routine task.40 percent made relationship
129
with customer by company traveling trip and 33 percent by the special occasion gift to
the customer.
Table 4-67 The results of the relationship with customer.
Result of
relationship
Positive Moderate Negative Must closer Will be fixed
I 1 - - - - -
I 2 - - - - -
I 3 - - - -
I 4 - - -
I 5 - - -
I 6 - - -
I 7 - - -
I 8 - - -
I 9 - - -
I 10 - - -
I 11 - - -
I 12 - - -
I 13 - - -
I 14 - - -
I 15 - - - -
Percentage 7% 47% 33% 47% 27%
Table 4-67 presents the positive results of relationship with TOFC was the
answer of 7 percent of participants. 33 percent gave the negative results of the
business relationship and 47 percent said there were moderate. The most two famous
suggestion were the company must connected with the customer closer and the
relationship must be instantly reform.
130
Table 4-68 The inter-relationship of TOFC customer.
Relationship between
customer
Unofficial
introducer
Nationwide
seminar
Traveling
trip
I 1 - -
I 2 - - -
I 3 -
I 4 -
I 5 -
I 6 -
I 7 -
I 8
I 9 -
I 10 -
I 11 -
I 12
I 13 -
I 14 -
I 15 - -
Percentage 47% 60% 73%
Table4-68 shows 73 percent of participants said the traveling trip was the
one way that the customer will known each other, 60 percent said the company
nationwide seminar and 47 percent said the unofficial introduce from TOFC
employee were the way that the customer can be related.
131
Table 4-69 The beneficial from customer inter-relationship.
Benefits of customer inter-
relationship
Business role
model
To further
developed
Referrer to
another
I 1
I 2 - -
I 3 - -
I 4 - - -
I 5 - -
I 6 - - -
I 7 -
I 8 - -
I 9 - -
I 10 - -
I 11 - -
I 12 -
I 13 - -
I 14 - -
I 15 - - -
Percentage 20% 53% 33%
Table 4-69 shows the beneficial from customer inter-relationship by 53
percent said it can used to the further development in many business facet, 20 percent
said it can be the role model to other customer with their business successful story and
33 percent said sometimes the customer be the referrer to the new one.
132
Table 4-70 The level of business relationship with TOFC.
Level of
relationship
Partners Co-
developer
Data
interchange
Introduce
to another
Problem solving
together
I 1 - - - -
I 2 - - -
I 3 - - -
I 4 - - -
I 5 - - -
I 6 - - -
I 7 -
I 8 - - -
I 9 - -
I 10 - - -
I 11 - - -
I 12 - - -
I 13 - - -
I 14 - - -
I 15 -
Percentage 93% 40% 53% 13% 20%
Table 4-70 shows the most appropriate relationship level was partner that
93 percent gave. And why they gave that level, 53 percent said they have interchange
the data between them and the company, 20 percent said they get the problem solved
with their customer, 40 percent said they wanted the customer to be the co-developer
and 13 percent said they wanted the customer to introduce the company to another.
133
Table 4-71 The relationship aspects between TOFC and the customers.
Relationship aspects Business tools Business assets Problem of business
I 1 -
I 2 - -
I 3 - -
I 4 - -
I 5 - -
I 6 - -
I 7 - -
I 8 -
I 9 - -
I 10 - -
I 11 - -
I 12 -
I 13 - -
I 14 - -
I 15 - -
Percentage 60% 53% 7%
Table 4-71 shows 60 percent of participants said the relationship aspects of
them with the customer were the business tools and 53 percent said it was the
business assets. Therefrom seven percent said it was the problem of business.
134
Table 4-72 The view point of two relationship aspects.
View point of two
relationship
Difference Similarity cannot
separate
Private relation is
tactile
I 1 - - - -
I 2 - -
I 3 - -
I 4 - -
I 5 - -
I 6 - - -
I 7 - -
I 8 -
I 9 - -
I 10 - -
I 11 - -
I 12 - - -
I 13 - -
I 14 - -
I 15 - - -
Percentage 47% 47% 40% 40%
Table 4-72 shows 47 percent of participants said the organizational and the
personal relationship were similar likewise 47 percent said there are distinguish
because they cannot separate the differentiation of both in 40 percent opinion and 40
percent said the private relationship were tactile.
135
Table 4-73 The most beneficial relationship in the business short term.
Short term Organizational Personal facile routine
work
Interpersonal
trust
I 1 - - - -
I 2 - - - -
I 3 - -
I 4 - -
I 5 - -
I 6 - -
I 7 - - -
I 8 - -
I 9 -
I 10 - -
I 11 - -
I 12 - -
I 13 -
I 14 - -
I 15 - -
Percentage 20% 87% 53% 20%
Table 4-73 shows, in short term 87 percent of participants said personal
relationship were beneficial more organizational relationship that 20 percent of
participants said. The reasons were to facile the routine work with the customer and
TOFC's officer for 53 percent answering and they trust the interpersonal relationship
for 20 percent.
136
Table 4-74 The most beneficial relationship in the business long term.
Long term Organizational Personal Long term
familiar
Future planing
together
I 1 - - - -
I 2 - - - -
I 3 - -
I 4 - -
I 5 - -
I 6 - -
I 7 -
I 8 - -
I 9 -
I 10 -
I 11 - -
I 12 -
I 13 -
I 14 - -
I 15 - -
Percentage 87% 33% 47% 40%
Table 4-74 shows 87 percent of participants said the organizational were
beneficial more the personal relationship in long term as 33 percent said. 47 percent
said because long term gets a familiar coordination and 40 percent want to plan the
business future with together.
137
Table 4-75 The business value added from customer relationship.
Value added
of business
Yes Must be
adjustable
Two way
communication
Develop business
knowledge
Develop new
product
I 1 - - - -
I 2 - - -
I 3 - - -
I 4 - -
I 5 - - -
I 6 - - -
I 7 - - -
I 8 - - -
I 9 -
I 10 - -
I 11 - -
I 12 - - -
I 13 - -
I 14 - -
I 15 - - -
Percentage 100% 60% 20% 33% 27%
Table 4-75 shows 100 percent of participants said the relationship between
customer and TOFC will make the business value added. 33 percent gave the reason
of business knowledge development and 27 percent suggested to develop new product
for the network. And other two reasons 60 percent said the current relationship must
be adjustable and inter-relationship could be the two way communication in 20
percent of employees' opinion.
138
Table 4-76 The most effective marketing activities.
Effective
activities
Nationwide special
occasion party
Traveling trip High management
visit
I 1 - - -
I 2 -
I 3 - -
I 4 - -
I 5 - -
I 6 -
I 7
I 8 -
I 9 -
I 10
I 11 -
I 12
I 13 -
I 14 -
I 15
Percentage 87% 73% 33%
Table 4-76 shows 87 percent in the interview offered the customer seminar
is appropriate to their customer; they recommend the party, the knowledge
interchange seminar or special occasion party. 73 percent of participants said the
company traveling trip was necessary to their customer relation and the co-meeting
between customer's key people or management team of TOFC is appropriate in 33
percent participants' opinion.
Section5 results of analysis about strategic planning data.
139
Table 4-77 The differences definition of public modern trade and Localize modern
trade.
Modern trade definition Yes No Ambiguous meaning
I 1 - -
I 2 - -
I 3 - -
I 4 - -
I 5 - -
I 6 - -
I 7 - -
I 8 - -
I 9 -
I 10 - -
I 11 - -
I 12 - -
I 13 -
I 14 - -
I 15 - -
Percentage 73% 27% 13%
Table 4-77 shows 27 percent of participants said no because the
ambiguously meaning like 13 percent suggest. 73 percent understand the meaning
of two definitions.
140
140
Table 4-78 The most potential modern trade merchandisers in Thailand.
Most potential
modern trade
Homepro DoHome Thai watsadu Global
House
SCG Difference
strength point
Large capital Diverse many
branch
I 1 - - - - - - -
I 2 - - - - -
I 3 - - - - -
I 4 - - - - - -
I 5 - - - - -
I 6 - - - - -
I 7 - - - - -
I 8 - - -
I 9 - - -
I 10 - - - - - -
I 11 - - - -
I 12 - - - - - -
I 13 - - - - -
I 14 - - - - -
I 15 - - - -
Percentage 80% 27% 47% 13% 20% 33% 40% 47%
141
Table 4-78 shows HomePro was the most potential modern trade
merchandisers in Thailand by 80 percent of internal participants said. 47 percent said
Thaiwatsadu, 27 percent said Dohome,13 percent said Global House and 20 percent
said SCG. The reasons were the diversification of many branches for 47 percent said
and a large capital to invest or compete by 40 percent said. Finally 33 percent said
each modern trade has a different strength point.
Table 4-79 The consideration factors of modern trade customer.
Factors of
together work
Branding Business
policy
Company vision Competitive
capabilities
Sales margin
I 1 - - - -
I 2 - - -
I 3 - - -
I 4 - - - -
I 5 - - - -
I 6 - - - -
I 7 - - - -
I 8 - - - -
I 9 - - -
I 10 - - - -
I 11 - - -
I 12 - -
I 13 - - - -
I 14 - -
I 15 - - -
Percentage 53% 13% 7% 40% 47%
Table 4-79 shows the brand was the famous factors of 53 percent of
participants consider when the customer wanted to work together with TOFC. 13
percent answered business policy and 47 percent said sales margin are the two factors
that they consider. The competitive capabilities of company were the factors which 40
percent chose. Seven percent said the company vision was the considered factor.
142
14
2
Table 4-80 The marketing mix to modern trade.
Marketing mix
with modern trade
Pricing Promotion Product Reduce price war Product diversity Reduce channel
conflict
Product specify
I 1 - - - - -
I 2 - - - - - -
I 3 - - - - -
I 4 - - - - - -
I 5 - - - - - -
I 6 - - - - - -
I 7 - - - -
I 8 - - - - -
I 9 - -
I 10 - - - - -
I 11 - - -
I 12 - - - - - -
I 13 - - - -
I 14 - - - - -
I 15 - - - - - -
Percentage 67% 33% 33% 20% 13% 33% 7%
143
Table 4-80 shows 67 percent preferred pricing to TOFC to improve or
progress with modern trade.33 percent said product and promotion were the two
marketing mix which TOFC will used. Why the participants preferred each marketing
mix,20 percent wanted to reduced price war,13 percent commend the product
diversity will segment the customer into each group,33 percent wanted to reduce
conflict in network and seven percent said product specify by customer group is the
reason of them.
Table 4-81 The marketing activities to modern trade.
Marketing activities to
modern trade
Local co-
advertising
Outstanding
display
Product
counselor
Media
advertising
I 1 - -
I 2 - -
I 3 - -
I 4 - - -
I 5 - - -
I 6 - - -
I 7 - -
I 8 - -
I 9 - - -
I 10 - -
I 11
I 12 - - -
I 13 - -
I 14 - -
I 15 - - -
Percentage 27% 80% 40% 27%
Table 4-81 shows the outstanding display in the shop is marketing activities
of 80 percent prefer to TOFC to modern trade. 40 percent said the product counselor
is the one way of TOFC worked with modern trade. The local co-advertising and
media advertising, the two marketing activities which 27 percent preferred.
144
Table 4-82 The inappropriate marketing activities for modern trade.
Marketing activities
not to modern trade
Premium
special discount
Discount
promotion
Privilege Price compensate
I 1 - - - -
I 2 - - - -
I 3 - - -
I 4 - - -
I 5 - - -
I 6 - -
I 7 - - -
I 8 - - -
I 9 - - -
I 10 - - -
I 11 - - - -
I 12 - - -
I 13 - - -
I 14 - - -
I 15 - -
Percentage 40% 20% 7% 27%
Table 4-82 shows 40 percent of participants’ said premium special discount
is not appropriate marketing activities to provide with modern trade like the
promotion that reduce modern trade cost with 20 percent opinion. And seven percent
said the privilege of any business process with the company were not appropriate.
Finally 27 percent said the price compensate were really not workable.
145
Table 4-83 The most effective communication tools for modern trade.
Effective
communication tools
Street
banner
User seminar Mass
advertising
POS marketing
activities
I 1 - -
I 2 - -
I 3 - - -
I 4 - - -
I 5 - -
I 6 - - -
I 7 -
I 8 - - -
I 9 - -
I 10 - -
I 11
I 12 - -
I 13 - -
I 14 - -
I 15 - -
Percentage 60% 33% 47% 53%
Table 4-83 shows the most effective communication tools in 53 percent of
participants’ opinion was POS marketing activities which attracted the consumer in
the sales area. 60 percent gave the street banner, 47 percent said the mass advertising
was the potential medias to consumer and 33 percent said the product user seminar.
146
Table 4-84 The business survival in competition.
Business survival Survive Give up Outstanding
reduction
Carefully
developed
On target
demand
I 1 - -
I 2 - - -
I 3 - - -
I 4 - - - -
I 5 - - - -
I 6 - - -
I 7 - - -
I 8 - - -
I 9 - - - -
I 10 - - - -
I 11 - -
I 12 - - - -
I 13 - - -
I 14 - - - -
I 15 - - - -
Percentage 100% 0% 20% 27% 20%
Table 4-84 shows 100 percent said if traditional trade do not developed the
business, they survived in the world of competition because they still develop the firm
carefully in the opinion of 27 percent of participants. 20 percent said they can find
their own way which their target group's demand and 20 percent said the modern trade
will reduce the outstanding in the market in one day.
147
14
7
Table 4-85 The ideas to TOFC with business network development.
Ideas to
developed
Transportation
service
Increase
product variety
SHERA home
center concept
IT suggestion Systematically
management
Continuous
development
E 1 - - -
E 2 - - -
E 3 - - - - -
E 4 - - - - -
E 5 - - - - -
E 6 - - - - - -
E 7 - - - -
E 8 - - -
E 9 - - - - -
E 10 - - - -
E 11 - - - - -
E 12 - - - -
E 13 - - - -
E 14 - - - - -
E 15 - - - -
Percentage 13% 13% 33% 27% 33% 47%
148
Table 4-85 shows 33 percent need TOFC to provide the SHERA home
center concept to the market and 33 percent said the customer must to be the
systematically management on their firm likewise the IT in the shop 27 percent
suggested to every firms. The continuous development of the company or the
customer was necessary by 47 percent suggestion and two of 13 percent of
participants show the increasing in product variety and the developing in
transportation service as the multi drop that modern trade cannot were the one way to
develop the business network.
Table 4-86 The ideas to TOFC to make our network more competitiveness
Competitive ideas Knowledge seminar
to agent
Co-promotion POS Promotion
E 1 - - -
E 2 - -
E 3 - -
E 4 - -
E 5 - -
E 6 - -
E 7 -
E 8 - -
E 9 -
E 10 - -
E 11 -
E 12 - -
E 13 - -
E 14 - -
E 15 - -
Percentage 60% 20% 33%
149
Table 4-86 shows 60 percent of participants said the knowledge seminar
directly to dealer within network will make the competitive capabilities as the
business coach. Co-promotion was the one idea of 20 percent gave the suggestion and
POS promotions were the one best way.
Table 4-87 The economic worthwhile of company's policies with modern trade.
Economic worthwhile Worthwhile Future
investment
Market trend
follower
E 1 - - -
E 2 - - -
E 3 -
E 4 -
E 5 -
E 6 -
E 7
E 8 - -
E 9 -
E 10 -
E 11 -
E 12 -
E 13 - -
E 14 -
E 15 - -
Percentage 87% 67% 7%
Table 4-87 show 87 percent said the company's policies with modern trade
were worthwhile because it was the future investment in 67 percent opinion and it
necessary to follow the market trend.
CHAPTER 5
CONCLUSION, DISCUSSION, AND RECOMMENDATION
This thesis topic “The development of distribution channels from traditional
trade to modern trade: A case study of The Thai Olympic Fibre cement Co., Ltd” have
five objectives. This qualitative research was surveyed and observed by researcher for
12 external respondents and 15 internal respondents. Conclusion, discussion and
recommendation can be drawn as follows:
Part 1 Conclusion
The participants in this research were the customers and employees of the
company which concluded the external participants’ data as the table below:
Table 5-1 Shop descriptions
Shop descriptions Percent
general wholesale and retail shop 25%
modern trade shop 17%
general retail shop 17%
Mixed model between traditional and modern trade 8%
Home solution 8%
Hardware shop 8%
Home decoration modern trade 8%
General wholesales 8%
Twenty five percent of participants were the general wholesale and retail
shop, 17 percent were a modern trade shop and general retail shop, the other was a
mixed model between traditional and modern trade, home solution, hardware shop,
general wholesales and a modern trade home decoration shop.
151
Table 5-2 Years of established
Years of established Percent
over20 years 67%
below 20 years 33%
Sixty seven percent were established over 20 years and 33 percent have
found the business below 20 years.
Table 5-3 Business owner’s generation
Generation Percent
The business founder 50%
The business successor 50%
The researcher interview the business founder and their successor in second
generation by 50 percent to 50 percent
Table 5-4 Years of TOFC's distribution network
Years of TOFC's distribution network Percent
over10 years 58%
below 10 years 42%
Fifty eight percent of customers were the member of TOFC's distribution
network over 10 years and 42 percent were below. The internal respondents or
employees were concluded in the table below:
152
Table 5-5 Working Level
Working Level Percent
Senior Management 13%
Operation 27%
Middle Management 47%
Senior Management 13%
Forty seven percent of participants were the middle management level, 27
percent were the senior management and 27 percent were the operation level.
Table 5-6 Years of working
Years of working Percent
Not over 10 years 46%
10-20 years 27%
Over 20 years 27%
Numbers of working years 46 percent of participants were not over ten
years, 27 percent were ten to twenty years and 27 percent were over twenty years.
Table 5-7 Years of current position
Years of current position Percent
Not over 10 years 87%
Over 10 years 13%
The numbers of years in current position 87 percent were not over ten years
and 13 percent were over ten years held.
153
Table 5-8 Related with sales department
Related with sales department Percent
Related with sales duty 93%
Not related with sales duty 7%
Ninety three percent of participants' duties were related with sales
department and 7 percent were not.
Table 5-9 Related with modern trade sales
Related with modern trade sales Percent
Related with modern trade sales duty 53%
Not related with modern trade sales duty 47%
Fifty three percent of participants' duties were related with the modern trade
sales area whereas 47 percent of participants' duties were related with other.
The researcher studied the distribution network of the construction materials
merchandiser in Thailand.
Table 5-10 Description of Thailand’s construction material distribution network
Thailand's Distribution network description External Laos Internal
Manufacturer's brand 90% 100% -
Portland cement manufacturer's brand 20% - -
Brand substitution 10% 100% 53%
Channel overlapped 30% 50% 60%
Steady customer 20% - 27%
Segment by customer level 20% - -
Authorized agent 50% 100% -
Dependently management 20% - -
154
Table 5-10 (Con.)
Thailand's Distribution network description External Laos Internal
Business regulation - - 33%
Business legal punishment - - 40%
By sales type - - 80%
Difference profit gap - - 47%
B2B relationship - - 60%
Most of internal respondents separated the distribution network by sales type
such as retails, wholesales, project sales, modern trade sales and direct sales but the
external respondents described distribution network by product brand from
manufacturer and Portland cement factory which own each other brand. The internal
respondents said mostly distribution network in Thailand have only business
relationship and their channels were overlapped which affected to easily substituted
in brand. Each distribution network had their own identification, the obvious character
was the differentiation of profit gap which the market leader set the standard sales
prices or some player placed the high margin sales. The business regulation and
punishment of every distribution network was the indicator for relationship between
the network focal and member therefore the loyalty customer of distribution net
work was the last concerned from them. External respondent described the character
of distribution network from right to selling product from the manufacturer; the
authorized agent will get the privilege in their selling area without new authorized
dealer from the company unless the old one was closed or the company policy
untraceable. Generally the network member able to sell another product from the rival
in the same industry means no strong regulation forced the distribution channel to be a
single brand dealer, nevertheless only the industry leader enforced their dealer with
many business rules and punishment which discomfort some dealer and obstruct the
new customer to be the network member. The last 2 descriptions of construction
material merchandisers network in Thailand were the independently in business
management which many participants concerned and each distribution network were
155
divided from the level of each customer group, the market leader approached the
higher customer group and the follower committed with the lower group.
The differences and similarities of the business model between the
traditional and modern trade in the construction materials merchandiser in Thailand
from the research are summarized in the table below:
Table 5-11 Differentiation of the business model between the traditional and modern
trade by internal respondents
Internal result Percentage
Shop feature 100%
Sales system 80%
Systematic management 60%
Self service 60%
Shop counselor 60%
Customer relationship 53%
Marketing tactics 47%
Shop sizing 47%
Systematic responsibilities 33%
Selling price 33%
High cost 27%
Large investment 20%
Credit sales 20%
156
Table 5-12 Differentiation of the business model between the traditional and modern
trade by external respondents
External result Percentage
Customer relationship 50%
Credit sales 20%
Systematic management 20%
Marketing tactics 20%
Systematic responsibilities 10%
Selling price 10%
The results showed six similar aspects in the differentiation of the business
model from internal and external respondents as customer relationship, systematic
management, marketing tactics, systematic responsibilities, selling price and credit
sales. These were the six strengthen point of each model such as the closer customer
relationship was the strength of traditional trade which they have the long
coordination with their local customer as result to sell in credit term with regular
customers. The systematic management was the strength of modern trade model
which operated the large firm without difficulty.
Table 5-13 Similarities of the business model between the traditional and modern
trade by internal respondents
Internal result Percentage
Product 67%
Price war 60%
Location 33%
Developed traditional trade 27%
Shop design 13%
157
Table 5-14 Similarities of the business model between the traditional and modern
trade by external respondents
External result Percentage
Location 30%
Price war 30%
Product 20%
Developed traditional trade 10%
Shop design 10%
The five similar results from the research with internal and external
respondents presented there are no more similarities aspects of two business model,
top three most concerned topics were products price war and location. The products
result show each business model sell the same thing that influence the market cannot
escape the competition in price war so to avoid this competition environment, the
manufacturer and channels should be segment the products by each target group
separately. Famous place of commercial were attract the large or small players in the
market so the small and medium firms should find the newly location to other fresh
opportunities if there are the new face challenger with the large one.
Identify factors influence the transformation of the traditional merchandiser
to the modern trade in the construction materials industry in Thailand from the result
of research summarized in the table below:
158
Table 5-15 The factors and its reasons of transformation
Factors Internal External
Proliferation of customers' needs 87% 90%
Changing strategic priorities 20% 20%
Shift in balance of channel power 13% 10%
Reasons
Customer expectation 80% 60%
More knowledgeable buyers 60% 80%
Channel diversity 60% 10%
Credible threats of backward integration 20% 10%
Expanding capabilities for addressability and variety 20% 20%
Enhanced bargaining power 13% 10%
Over 80 percentages of respondents from 2 fields’ research showed the
consistent result was the proliferation of customers' needs be the most influence factor
of business model transformation after that two factors were not affected as expected.
The changing in customer expectation from more knowledge about the products and
market were lead the distributors to develop their business style and followed the
market trend intimately. Many branch diversification of public modern trade drive the
local players to transform themselves into any model which suitable to their resources
or capabilities.
The definition of modern trade as the public modern trade and localize
modern trade were recognized by external and internal respondents in the high
percentages, over 70 percentages of internal know the meaning but 70 percentages of
external do not know so the ambiguous meaning should be clear to any stakeholders.
Homepro was the most potential modern trade merchandisers in Thailand because its
branches diversification in nationwide and spread brand to different target. Branding
was the first consideration factors of modern trade by 70 percentages of external
participants’ opinion likes the company policies and sales margin which were in the
high percentages of considered. One last consideration factor from 40 percentages
159
of internal participants was the competitive capabilities which show the future
existence of each business. The highest percentages of marketing mix to approach
with modern trade was the pricing which the cause of pricing war, the reduction of
sales margin, the new price indicator in the market and the conflict between channels.
Outstanding display in the shop was the most appropriate marketing activities with
modern trade by express approval from 2 part of research fields. Inappropriate
marketing activities for modern trade were a premium special discount and price
compensate that affects the network member in wide area. Totally summarize of the
most effective communication tools for modern trade were the local marketing as
POS marketing activities, street banner and local user seminar should built the
modern trade stronger and the mass media advertising should make the network
more valuable. A hundred percentages of 2 fields’ research said every firm can be
survival in competition environment in condition of carefully continuous developed
and matched their capabilities to the appropriately resources.
A brief observation between interviews in Laos showed various information
about Laos distribution channel and selling system. 100 percentages of Laos’s
participants described the construction material distribution networks in Laos should
be authorized from the products manufacturer, it was the cause of every distribution
channel commit the selling products with the manufacturer’s brand and the similar
percentages showed there were simple in brand substitution. 50 percentages said there
were plenty of channel overlapped with the rival. As the member of TOFC’s network
they should be followed the company policies and the important things was they must
sell SHERA and Hahuang products, 100 Laos percentages said. 100 percentages of
Laos respondents clarified the distribution network of TOFC was a monolithic multi-
channel which means the company authorized few dealer to access the whole market with
every target group, the categorization by demographic factor was the simple one method of
50 percentages commented. In the competition analysis facet, Laos 100 percentages of
respondents said the product substitution was plenty in the market whether the Chinese
products, Vietnamese or Thai should compete in Laos market however in the different target
group. As the results of easy market entering by 50 percentages opinion, many foreign
products were popular with Laos people especially Thai products was the most recognized
to Lao. Cross country competition was the one of business environment that directs Laos
business competition from 50 percentages opinion. All of Laos participants were a retails
160
shop and 50 percentages was wholesales.100 percentages said the most benefits of being the
TOFC’s network member was the innovation products which they should offered their high
end customer in the country and 50 percentages said branding of the TOFC should made them
easier to present to their consumers. A hundred percentages showed they have independently
operation their firm because the company should not intervened any process and they were
the authorized dealer of SCG by 50 percentages were the Diamond authorized dealer also.
The reason of being another authorized dealer because that brand was well known in Laos.
Half percentages of Lao participants said they satisfied TOFC more than the rival likewise 50
percentages said they preferred equally by the closer coordination was the key that 50
percentages gave. The delivery process was the main trouble which 100 percentages showed
and 50 percentages said lack of products stock was the problem as the member of TOFC’s
network.
These interviews shows the results that the business model of modern trade in the
construction materials merchandiser in Laos was not explicit appeared but the stream of
development around the country made them learn more about the modern trade business
model. Differentiation of outlet features were the clearest outlook of Lao participants, 100
percentages said remarkable display in the shop, selling process and the systematic
management. The cost of management and the large capital were the description of modern
trade in 50 percentages opinion. 100 percentages Lao respondents said the external pressure
was the main factors of business model transformation then they paid most attention on it.
TOFC must provide the substantial policy and helpful facilities to Laos customer with 50
percentages opinion.
A hundred percentages of Lao participants said they have no business relationship
between the network member and they do not think that was beneficial to their business. Only
normal issue of trading was the most evidence with business relationship of TOFC by 100
percentages opinion and 50 percentages said they have only the private relationship with the
company employees by monthly visit and the TOFC’s owner visit but they prefer the close
relationship with the company was necessary to them. Positive relationship with the company
should make them prove the business problem, receive the market or corporate data and
improve product or business knowledge.
The most potential modern trade merchandiser in Lao participants’ opinion was
SGC because the brand is well known but they do not know the definition of modern trade for
100 percentages of interviewees. 100 percentages preferred the product mix to TOFC with
modern trade model and they thought the outstanding display was the most appropriate
marketing activities to modern trade. Researcher perspective of Laos interviews, first the
161
distribution network was belong to a few number of entrepreneur under the limitation of
socialism, it is the cause of imperfectly competitive market then the business development
should not expanding rapidly. Imperfectly competitive market affects Laos do not have many
kind of business model in distribution channel, the traditional trade model is plenty but the
modern trade is moderately found in the capital. Finally the external business pressure around
the country is the factor influence the transformation in Laos.
With every data from the interviews, the researcher evaluates the strength
and weakness of the company, the opportunities and threat of the external
environment as the table below:
Table 5-16 TOFC’s SWOT analysis
Strengths Weaknesses
~Knowledgeable customer ~Brand switching freely
~Strong brand ~Product substitution
~Strong marketing practices ~Marketing approaches
~Innovation product ~Independently business operation
~Independently business operation ~Lack of competition capabilities
~Plenty of products variety ~Cumbersome cooperation
~Closer coordination and long relationship ~Non substantial transformation policy
~The patronize relation of customer and
company
~Unhelpful transformation facilities
~Strong private inter-relationship of
customer
~Company policy poor communication
~The customer and company data
interchange
~Current situation dissatisfaction
~Interpersonal trust of the customer and
company
~Co-developed of business knowledge
~SHERA home center concept
~Market instruction from company advise
162
Table 5-16 (Con.)
Opportunities Threats
~Regulation enforcement ~Strongest market leader
~Abundant market opportunities ~Easy market entering
~Service competition ~Price war
~Difference targeting ~Helpful transformation facilities
~Customer behavior changer ~Modern trade cannot indicate market
~Customer educators ~Enhanced bargaining power
~Understanding of derived demand ~Credible threats of backward integration
~More knowledgeable buyers ~Large capital to investment
~Customer expectation ~Diversification of modern trade branches
~Expanding capabilities for addressability
and variety
~High end market accession
~Difference target group
~Reduction of price war
~Reduction of channel conflict
~The channel Development on their own
way
Strengths of the business were the strong branding, SHERA and Ha-Huang
were the reputation construction material brand in Thailand for 40 years, the brand
value and a massive loyalty customer show the strength point of the brand. The
products innovation and variety makes the company has many
Part 2 presents the strategic recommendation
First section recommends the business to business strategic plan with
transformed modern trade with the relationship marketing theory that has many
relationship aspects to improve and maintain the business relationship between two
parts in the network.
The corporate strategic is to set up the new department as the market
research and development department and reorganize the sales and marketing
163
departments to work around the customer relationship. The division strategic for sales
department is establishing a new division as the Localize modern trade division to
look after these groups of customers and develop the customer's information center.
And the functional strategic, the researcher presents 3 parts of the functional strategy
along the objectives as follow.
Business relationship continuity maintain by the business pioneer party and
business successor seminar which build up the chance of TOFC’s employees in every
level that related the customer interaction to meet face to face and make the closer
relationship with their customer.
The reformation of complexity in the task connection system and create the
symmetry in the organization between the company and target group by systematize
the customer interaction and set up the new sales department to operate with target
group. Finally the informality relationship was necessary so the high level executive's
visiting plan with target group should setting up like the research result before that 40
percentages of external participants said they wanted the TOFC’s owner or any high
management employee to visit, 50 percentages said the personal coalition was the
one way to build relation with the customers. The most evidence with business
relationship of TOFC’s distribution network was the private relation with TOFC’s
employees by close coordination as 50 percentages of customers answered. The 60
percentages of external participants showed the customer seminars were the most
effective activities to build the relationship and 40 percentages said the private
meetings were appropriate. Internal participants’ opinion illustrated the nationwide
seminar has been build the relationship from 60 percentages opinion and 87
percentages said the nationwide special occasion party was the most effective
marketing activities. Nearly a hundred percentages pointed the relationship with
TOFC can make the value added to the firm but should be adjust in some manner by
60 percentages said.
The second strategy to the transformed modern trade are to create the
business role model within target group member for encouraged interaction between
actors in the network as 20 percentages of internal participants shown. The 60
percentages of external participants said private relationship between network
members were practicable. The main supporter of local marketing with target group is
164
the interaction between activities of network members. 40 percentages of customer
presented the collaboration in business development was a choice to make the
relationship with the company and 50 percentages said the market data interchanged
was appropriate to their business.20 percentages of external participants and 27
percentages of internal respondents said the company should be the local co-
advertising. The region or sales area interchanged data seminar to sharing the business
knowledge between network members in the target group which raise the interaction
between resources of network member likes 60 percentages of external respondents
said they have the relationship between together in the network, 40 percentages
shown the data exchange was beneficially and 30 percentages wanted the company to
support the data in the market.
Eventually the strategy to the transformed modern trade are the development
of DNA and CRM system to match this customer group need, co-creation with the
shop display and training the shop counselor and co-invention the new products with
target group. All the strategies are the business devices which 60 percentages of
external and internal respondents illustrated. The 67 percentages internal participants
said the company gave the importance to customer relationship by DNA promotion
and CRM department set up, 53 percentages make the relationship with the customers
by introduce the innovation products, 40 percentages represented the level of
relationship with the co-developer partner and 27 percentages illustrated the
relationship will make more value added to the business by to be one part of new
products developer ,80 percentages said outstanding display and 40 percentages
preferred product counselor were the marketing activities to modern trade. The 90
percentages of external respondents said they got the positive results from relationship
with the company in term of improving the product knowledge in the opinion of 40
percentages, 60 percentages said they should be the business partner of TOFC, 20
percentages said they should be the business co-creator, 10 percentages clearly shown
the new product co-develop, 60 percentages said outstanding display and 30
percentages preferred product counselor were the marketing activities to modern
trade. Set the possible interesting benefits and obvious punishment specifically the
target group for established the new concerned customer group. As 40 percentages of
internal respondents shown the new customers prioritize was necessary to the
165
company, 53 percentages said TOFC have non business regulation which the dealers
independently operated the firm but many times the company’s policies was
impracticable likes 20 percentages external participants said the company has
powerless enforcement the network members.
Second recommendation is the business to business strategic plan with the
traditional trade to transformation, the corporate strategic is to setting up the new
department as the market research and development department and reorganize the
sales and marketing departments to work around the customer relationship. The
division strategic especially the sales department is to establish a new division as the
Localize modern trade division to look after these groups of customers and develop
the customer's information center. And the functional strategic statement, the
researcher presents 3 parts of the functional strategy as follow.
The nurture and enhancement of business relationship between the business
pioneer and the successor with the company are applying the characteristics of
business relationship theory which divided its characteristics into three manners:
continuity, complexity, symmetry and informality. The first strategy is the business
pioneer party and business successor seminars which build up the chance of TOFC’s
employees in every level that related the customer interaction to meet face to face
and make the closer relationship with their customer. As 60 percentages of external
respondents suggest the customer seminar was appropriate marketing activities and
60 percentages of internal respondents presents the business knowledge seminars to
agent was the most effective marketing activities.
The reduction and management of relation complexity within company and
dealers was the business advisor to develop the business model to modern trade or
SHERA home solution business model which matched the dealers’ business approach
to the company’s policy, these strategies should arrange the symmetry of relationship
in the same way. SHERA home solution center concept and the systematically
management were the two ideas which 33 percentages of TOFC’s employees offered
to their customers and 27 percentages suggested the information technology system.
70 percentages of customer requested the company’s advice and 20 percentages
agreed the SHERA home solution center concept with 20 percentages wanted the
tangible policy to obviously path of model development.
166
Finally the informality relationship was necessary so the high level
executive's visiting plan with target group should setting up like the research result
before that 40 percentages of external participants said they wanted the TOFC’s
owner or any high management employee to visit, 50 percentages said the personal
coalition was the one way to build relation with the customers. The most evidence
with business relationship of TOFC’s distribution network was the private relation
with TOFC’s employees by close coordination as 50 percentages of customers
answered. The 60 percentages of external participants showed the customer seminars
were the most effective activities to build the relationship and 40 percentages said the
private meetings were appropriate. Internal participants’ opinion illustrated the
nationwide seminar has been build the relationship from 60 percentages opinion and
87 percentages said the nationwide special occasion party was the most effective
marketing activities. Nearly a hundred percentages pointed the relationship with
TOFC can make the value added to the firm but should be adjust in some manner by
60 percentages said.
The second strategies to the transforming modern trade are focus on the
process characteristics of business relationship as interaction between actors, activities
and resources of the member in relationship. Create real time interaction system via
IT system between company and customer to raise the efficiency of coordination such
as factory stock, logistics and sales process. 53 percentages of internal respondents
showed the routine task should make the customer relationship effectively, 47
percentages gave importance to customer relationship by the sales routine task in
contrast to the result of relationship that TOFC’s employees said there were in
moderate level from 47 percentages opinion then they suggested to make closer
dealing. The next strategy is the local co-marketing by support the marketing
knowledge likes 40 percentages of external respondents said they wanted to
interchange the market data with the company, 50 percentages said the relationship
can make more value added to their business by develop business knowledge
themselves.
Finally the strategies to the transforming modern trade are set up the
marketing information center to services the customer of the network. 60 percentages
of customers said the relationship with TOFC was the business device which is the
167
key success and 60 percentages of employees said relationship with customers was
the business device which must to maintain and intimate. The financial supporting
program to the potential dealers that wanted to develop their business by introduce to
the financial institution or the company financial support. 60 percentages of customers
said the relationship with TOFC was the business assets which the portfolio of their
business to further investment and 53 percentages of employees said the relationship
with customers was the business assets too. Set the possible interesting benefits and
obvious punishment specifically the target group for established the new concerned
customer group. As 40 percentages of internal respondents shown the new customers
prioritize was necessary to the company, 53 percentages said TOFC have non
business regulation which the dealers independently operated the firm but many times
the company’s policies was impracticable likes 20 percentages external participants
said the company has powerless enforcement the network members.
Part 3 Recommendation for further study
The researcher has the following recommendations for future studies:
1. Studies should be conducted to determine the business to business
marketing to the localized modern trade.
2. Additional studies should be conducted on the other marketing aspects
except the relation marketing like this research such as marketing communication and
marketing strategy.
3. Derived demand in construction materials industry for distribution
channel is concern by many players in the market so the specific studied about this
will interested.
4. The company should concerned the differentiation of business to business
marketing and business to consumer marketing which approach the vary method.
168
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173
APPENDIX
174
Appendix I
Questionnaire
175
Semi-structure questionaire for external respondents
THE DEVELOPMENT OF DISTRIBUTION CHANNELS FROM TRADITIONAL
TO MODERN TRADE: A CASE STUDY OF THE THAI OLYMPIC FIBRE
CEMENT CO., LTD.
This is a semi-structure questionaire used for gathering required data to meet
a thesis's objectives in completion of the master of business administration-global
business management major, Graduate School of Commerce, Burapa University.
This research contains five objectives, which are as follow:
1. To study the distribution network of the construction materials
merchandiser in Thailand.
2. To understand the differences and similarities of the business model
between the traditional and modern trade in the construction materials merchandiser
in Thailand.
3. To identify factors influence the transformation of the traditional
merchandiser to the modern trade in the construction materials industry in Thailand.
4. To lies a Business to Business strategic plan to encourage traditional
trade with transformation to modern trade.
5. To draw a Business to Business strategic plan to modern trade.
This semi-structure questionaire comprises of 5 sections hereinafter:
Section 1 Oganizational questions
Section 2 Distribution channel network and construction material business
model in Thailand
Section 3 Business Model Questions
Section 4 Relationship Management Questions
Section 5 Strategic Planning Questions
176
Section 1 Organizational questions
1. Shop characteristics and descriptions………………………………………………
2. Years of established……………………Generation………………………………..
3. Authorized capital………………………No. of Employees……………………….
4. Does your business employ any IS/IT for internal management purposes?
…………………………………………………………………………………………..
5. Do you think, are you one of the members of TOFC distribution network?
…………………………………………………………………………………………..
6. How many years are you a TOFC's authorized dealer?
…………………………………………………………………………………………..
Section 2 Distribuiton channel network and construction material business
model in Thailand
1. Plesase describe the construction materials distribution network in Thailand, in
your opinion?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
2. Plesase describe the construction materials distribution network of TOFC?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. Please clarify the distribution network of TOFC?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
4. Please analyze the competitive situation in the business? I
…………………………………………………………………………………………..
…………………………………………………………………………………………..
5. Please describe about your business characteristics?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
177
6. As you are a member of TOFC distribution network, what is the most benefit that
you gained1;
…………………………………………………………………………………………..
…………………………………………………………………………………………..
7. As you are the member of TOFC distribution network, did you have independently
business operation1^
…………………………………………………………………………………………..
…………………………………………………………………………………………..
8. Are you the member of other construction materials distribution network?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
9. which one you are more satisfy, the TOFC distribution network or other
distribution network? And why^
…………………………………………………………………………………………..
…………………………………………………………………………………………..
10. Did you have any problem as the member of TOFC distribution networks
…………………………………………………………………………………………..
…………………………………………………………………………………………..
Section 3 Business Model
1. In what way do you know the modern trade in some aspect?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
2. Please describe your business model?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. Please describe the construction material distributors as the traditional trade by
your opinion?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
178
4. Please describe the construction material distributors as the modern trade by your
opinion';
…………………………………………………………………………………………..
…………………………………………………………………………………………..
5. Please compare the similarities of traditional trade and modern trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
6. Please compare the differnces of traditional trade and modern trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
7. What are the main factors that force the traditional trade transforms to the modern
trade? ll
…………………………………………………………………………………………..
…………………………………………………………………………………………..
8. Do you think, the construction material demand is difference from the other
industry1;
…………………………………………………………………………………………..
…………………………………………………………………………………………..
9. Do you think the modern trade influences the construction material distribution in
massive role1;
…………………………………………………………………………………………..
…………………………………………………………………………………………..
10. Do you think, you pay attention on the transformation of modern trade enough?
How^
…………………………………………………………………………………………..
…………………………………………………………………………………………..
179
11. Do you think, the TOFC pays attention on the transformation of modern trade
enough? How? And compare with the rival in the industry'
…………………………………………………………………………………………..
…………………………………………………………………………………………..
Section 4 Relationship management
1. Do you think the TOFC's distribution network members has some relationship
with each others?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
2. Do you think the relationship of TOFC's distribution network members is
beneficial to business result1;
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. What is the most evidence with business relationship of TOFC's distribution
network?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
4. How the company build the business relationship with customer?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
5. Do you give the importance in realtionship with TOFC?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
6. Currently, how do you make the relationship with TOFC?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
7. What is the results of the relationship with TOFC?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
180
8. What level of business relationship with TOFC that appropriate to your business?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
9. What relationship aspects are appropriate to your business and TOFC? I
…………………………………………………………………………………………..
…………………………………………………………………………………………..
10. Do you think the organizational relationship is differ from the personal
relationship? How different1?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
11. In short term, what is the most benefitcial relationship between organizational
and personal?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
12. In long term, what is the most benefitcial relationship between organizational and
personal1?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
13. Currently, do you think the relationship between your firm and TOFC will make
more value added to your business'
…………………………………………………………………………………………..
…………………………………………………………………………………………..
14. What is the most effective marketing activities that appropriate to your firm?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
181
Section 5 Strategic planning
1. Do you know the differences definition of Public modern trade and Localize
modern trade? Please describe1?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
2. What is the most potential modern trade merchandisers in Thailand?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. If you are the modern trade merchandisers, what factors do you consider to work
together1?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
4. What is the marketing mix that you will prefer with TOFC to modern trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
5. What is the marketing activities that you will prefer with TOFC to modern trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
6. What is the marketing activities that you do think not appropriate to modern
trade1?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
7. What are the communication tools that the most effective to modern trade firm?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
8. Do you think, if the traditional trade do not develop their firm, will they survive in
the business competition1?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
182
9. Do you have any propose ideas to TOFC with business network development1?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
10. Please you give at least 1 ideas for the TOFC to make our network more
competitive in the market1?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
183
Semi-structure questionaire for internal respondents
THE DEVELOPMENT OF DISTRIBUTION CHANNELS FROM TRADITIONAL
TO MODERN TRADE ะ A CASE STUDY OF THE THAI OLYMPIC FIBRE
CEMENT CO., LTD.
This is a semi-structure questionaire used for gathering required data to meet
a thesis's objectives in completion of the master of business administration - global
business management major, Graduate School of Commerce, Burapa University.
This research contains five objectives, which are as follow:
1. To study the distribution network of the construction materials
merchandiser in Thailand.
2. To understand the differences and similarities of the business model
between the traditional and modern trade in the construction materials merchandiser
in Thailand.
3. To identify factors influence the transformation of the traditional
merchandiser to the modern trade in the construction materials industry in Thailand.
4. To lies a Business to Business strategic plan to encourage traditional
trade with transformation to modern trade.
5. To draw a Business to Business strategic plan to modern trade.
This semi-structure questionaire comprises of 5 sections hereinafter:
Section 1 Oganizational questions
Section 2 Distribuiton channel network and construction material business
model in Thailand
Section 3 Business Model Questions
Section 4 Relationship Management Questions
Section 5 Strategic Planning Questions
184
Section 1 Respondent Individual questions
1. Respondent's Organizational level
peration Middle Management
Senior Management Other
2. Years of working in TOFC………………………………………………………….
3. Years of current position…………………………………………………………….
4. Does your work related with sales duty? Yes
No…………………………………
5. Does your work related with modern trade? Yes
No…………………………………
Section 2 Distribution channel network and construction material business
model in Thailand
1. Plesase describe the construction materials distribution network in Thailand, in
your opinion1:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
…………………………………………………………………………………………..
2. Plesase describe the construction materials distribution network of TOFC?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. Please clarify the distribution network of TOFC?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
4. Please analyze the competitive situation in the business?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
5. Please categorizes the TOFC's customer ?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
185
Section 3 Business Model
1. How difference about the modern trade and traditional trade as the construction
material distribution networks
…………………………………………………………………………………………..
…………………………………………………………………………………………..
2. Please describe the construction material distributors as the traditional trade by
your opinion1:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. Please describe the construction material distributors as the modern trade by your
opinion?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
4. Please compare the similarities of traditional trade and modern trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
5. Please compare the differnces of traditional trade and modern trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
6. What are the main factors that force the traditional trade transforms to the modern
trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
7. Do you think, the construction material demand is difference from the other
industry?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
8. Do you think the modern trade influences the construction material distribution in
massive role1:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
186
9. Do you think, you pay attention on the transformation of modern trade enough?
How1:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
10. Do you think, the TOFC pay attention on the transformation of modern trade
enough? How? And compare with the rival in the industry1]
…………………………………………………………………………………………..
…………………………………………………………………………………………..
Section 4 Relationship management
1. How TOFC gives the importance to customer relationship?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
2. Currently, how could you make the relationship with customer?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. What is the results of that relationship ?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
4. How the company build the relationship between its customer':
…………………………………………………………………………………………..
…………………………………………………………………………………………..
5. How TOFC used the relationship between its customer beneficially?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
6. What level of business relationship which TOFC expected from customer?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
7. What relationship aspects are appropriate to your customer, in your opinion?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
187
8. Do you think the organizational relationship is differ from the personal
relationship1:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
9. In short term, what is the most benefitcial relationship between organizational and
personal?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
10. In long term, what is the most benefitcial relationship between organizational and
personal1:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
11. Currently, do you think the relationship between your company and customer will
make more value added to your business1]
…………………………………………………………………………………………..
…………………………………………………………………………………………..
12. What is the most effective marketing activities that appropriate to your customer?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
Section 5 Strategic planning
1. Do you know the differences definition of Public modern trade and Localize
modern trade? Please describe?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
2. What is the most potential modern trade merchandisers in Thailand?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. If you are the modern trade merchandisers, what factors do you consider to work
together?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
188
4. What is the marketing mix that you will prefer with TOFC to modern trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
5. What is the marketing activities that you will prefer with TOFC to modern trade?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
6. What is the marketing activities that you do think not appropriate to modern
trade1:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
7. What are the communication tools that the most effective to modern trade firm?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
8. Do you think, if the traditional trade do not develop their firm, will they survived
in the business competition1]
…………………………………………………………………………………………..
…………………………………………………………………………………………..
9. Do you have any propose ideas to your customer to development their business?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
10. In your opinion, do you think the company's policies with modern trade are
economic worthwhile1:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
11. Please you give at least one ideas to TOFC to make our network more
competitiveness?
…………………………………………………………………………………………..
…………………………………………………………………………………………..
189
Appendix II
Index of item Objective Congruence
190
191
192
193
194
195
196
197
198
199
200
201
BIOGRAPHY
Name Mr. Sitti Jittichanon
Date of birth August 27, 1989
Place of birth Rayong,Thailand
Present address 2221 Moo.5 Sam Rong Nua, Mueang Samut
Prakan District, Samut Prakan, Thailand 10270
Positions held
2005-2006 Distribution Sales as Modern Trade division
The THAI OLYMPIC Fibre Cement CO., LTD.
2006-2007 Distribution Sales as Specialty store division
The THAI OLYMPIC Fibre Cement CO., LTD.
2007-2010 Project Sales Eastern of Thailand area
The THAI OLYMPIC Fibre Cement CO., LTD.
2010-Present Architect Relation Executive in Eastern of
Thailand area The THAI OLYMPIC Fibre
Cement CO., LTD.
Education
2001-2005 Bachelor Degree of Business Administration,
International Business Management,
Kasetsart University.
2013-2015 Master Degree of Business Administration,
Global Business Management, Graduate school
of commerce, Burapha University.
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