marketing strategies supporting national plans

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MANAGEMENT SCHOOL

Marketing Strategies Supporting National PlansContributions of Universities

Anuwat Srikaew and Steve Baron

No. 2007/35

Research Paper Series

Management SchoolUniversity of Liverpool

Liverpool, L69 7ZHGreat Britain



Marketing Strategies Supporting National Plans:

Contributions of Universities

Anuwat Srikaew

Chiang Mai Rajabhat University, Thailand

Steve BaronUniversity of Liverpool, UK

Abstract

The paper explores the potential for university knowledge transfer in the development

of marketing strategies of rural community businesses as part of a nation’s plan that

aims to make the community businesses self-reliant within a given timeframe. Itreports on findings from reactive participant research with community businesses in

the Chiang Mai province of northern Thailand. Using a cooperative marketing

strategy framework, facts, perceptions and potential conflicts are identified from a

study of the dynamics of community businesses which produce and sell cotton and

silk fabrics and clothing. It is concluded that the university role should be that of co-

producer, rather than catalyst, and that sustainable marketing strategies require a

bottom-up approach that is dependent on the abilities of community business leaders

to become rounded managers with a global view of the marketplace. The findings are

relevant to all situations where marketing strategies are required to fit with multiple

measures of performance that are laid down by a super-ordinate strategy.

Keywords

Marketing Strategy; Thailand; Universities; Knowledge Transfer; Qualitative

Research



Introduction

It is recognised in the marketing literature that governments have adopted strategies

aimed at promoting their country’s image (see, for example, Foster, 1999; Olins,

2002; Kotler and Gertner, 2002). Additionally, where a country’s economy is

especially dependent on small businesses operating in rural communities,governmental strategies have included specially designed plans that promote the

products of community businesses, knowing that purchasers of community business

products will also be engaging in the cultural heritage of the country. The Thai

Government produced such a plan in 2001, which was labelled the One Tambon1

One

Product (OTOP) project. While this paper will focus on elements of the OTOP project

in Thailand, and address the specific role of universities in enabling marketing

strategies that support the plan, it should be noted that a similar plan is being adopted

in the Philippines (also called OTOP, but in this case meaning ‘one town one

product’) and that the original idea came from Japan (where it was known as OVOP,

‘one village one product’).

In Thailand, there are approximately 7,419 tambons, or sub-districts, each of which

produces a range of unique items of a local product (for example, handicrafts,

cotton/silk goods, foods, pottery) using individual labour. The tambon community

members work together to produce the particular product. They operate as a

community business (CB). Approximately 1.5 million people work in the community

businesses. The OTOP project is a governmental strategy that seeks to sustain CB

jobs and income, encourage CB self-reliance, increase capabilities of the workers,

maintain Thai cultural associations with the products, and encourage the creativity of

the CBs. What is of particular importance to the research reported in this paper is that

the OTOP project has, built into it, specific requirements of knowledge transfer from

universities, and one of the identified areas for university help and intervention is the

development of a marketing strategy for CBs.

The paper provides some insights into the process of offering university knowledge to

facilitate the development of a marketing strategy for CBs, based on research carried

out in Thailand between 2004 and 2007. Although the data are context-specific, the

findings have relevance to any situation where marketing strategies must be consistent

with a super-ordinate strategy (one of a national government, in this case). The paper

is structured as follows. First, schematic representations of the Thai Government’s

OTOP plan are presented, and the roles of universities within the plan are explained.

Second, using qualitative data collected on CBs in northern Thailand, the cooperativemarketing activities of CBs are evaluated in the context of the national OTOP plan

and its intended outcomes. Third, building on the findings of the qualitative research,

the roles of universities in the knowledge transfer process – ‘reactive participant’,

‘catalyst’, ‘supporter’ – are critically assessed. The final section relates the findings to

a more general discussion of the inputs of universities to marketing strategy

development of small businesses or business units.

1

Thailand is divided administratively into provinces, then into amphurs (districts), then into tambons(sub-districts), and then into villages.

2



A Visualisation of the OTOP Project

Figure 1 presents the essence of the OTOP project2, as outlined by the National

Executive Committee of OTOP (2004)

Figure1: Key Features of the OTOP Project

Outcomes

ProductsSupporting

Institutions •Natural raw materials

into high quality

products

Enablers

•Quality services

•Updated

knowledge

management

Government •Local and global

markets•Local

•Promote Thai culture•National

•Applied

technology

Community

BusinessesPrivate Sector

•Independent, creative,

original ideas•Marketing

•Motivated to be self

reliantUniversities

•Supported, notsubsidised

The outcomes of the OTOP project represent multiple dimensions of performance

relating to the CBs and the products which they produce. Underpinning the plan is the

requirement that CBs ultimately become self-reliant and not subsidised, and that this

entails creativity and innovation on their part. They must be able to turn natural raw

material into high quality finished products, and this should be supported by equallyhigh quality services to their customers. The products represent Thai culture and

should meet global as well as local needs. The outcomes may well be very difficult to

achieve for many CBs and so enablers have been identified to help them in their

quest. It is recognised that CBs need updated knowledge management, access to

successful examples of appropriate applied technology in their product field, and help

with marketing. In this latter respect, the CBs will be expected to articulate and

implement an appropriate marketing strategy. The providers of the enablers include

the national and local government, private sector organisations and universities.

2 There may be more than one product produced in a tambon. There should be at least one excellent

product to represent each tambon according to the OTOP Executive.

3



It is seen, therefore, that there is a planned and specific role for universities to play in

achieving the desirable outcomes of the OTOP project. Table 1 demonstrates more

specifically what the role entails over an extended timeline. Universities (as well as

private sector organisations) are expected to begin as reactive participants, become

catalysts for developments and finally offer support to the CBs, with the ultimate aim

that the CBs will eventually become self-reliant. In particular, as far as marketing isconcerned, universities are envisaged to actively develop appropriate marketing

strategies for CBs during the catalyst period, and offer subsequent support for the

implementation of the strategies. Prior to these two stages, universities, as reactive

participants, need to find out, in some depth, the nature of the internal and external

factors that impact on the CBs themselves.

Table 1: Role Changes of Key Institutions Over Time in OTOP Project

Period

Institution2001-05 2006-10 2010

Government Catalyst Supporter Facilitator

Private Sector and

UniversitiesReactive Participant Catalyst Supporter

Community Businesses Aid-Reliance Key Driver Self-Reliance

In this paper, the data collected on CBs, through the role of university as reactive

participant, are analysed on the clear understanding that further university inputs will

be required as the OTOP project develops over time. One of the authors is employed

by a university in northern Thailand. The OTOP project has been the impetus for his

current research (in conjunction with UK academics), and he will continue to be

involved with the OTOP project as it reaches its later stages.

Reactive Participant Role: Methodological Considerations

As illustrated in Figure 1, any developing marketing strategy of CBs is expected to

contribute to the CB- and product-related outcomes defined by the overarching OTOP

plan. At the time the OTOP plan was published, it was assumed that CBs either did

not have any clearly defined marketing strategy, or, if they had, it was not articulated,

and good practice was not readily shared. Given the relative lack of shared agreementon marketing strategies of CBs, we decided that further understanding was required of

the existing micro-dynamics of the CBs, especially relating to their interactions with

customers. This represents a bottom-up approach to marketing strategy (Mattson,

Ramaseshan and Carson 2006), and requires research, in the role of reactive

participant, that captures the everyday activities of CBs. Consequently, one of the

authors spent two periods in northern Thailand in 2006: period 1, January to March

2006; period 2, September and October 2006. The Chiang Mai province of Thailand

was chosen for the research; a province that consists of 228 CBs. Only CBs producing

cotton and silk products were considered at this stage of the research (these products

are produced by 56 CBs in Chiang Mai province).

4



In period 1, a pilot qualitative study was carried out, consisting of ten focus groups;

five focus groups at the Chom Thong District of Chiang Mai province, and five focus

groups at the Mae Chaem District of Chiang Mai province. Each focus group

consisted of five participants; three leaders and two members. The purpose was to

identify common problems and opportunities faced by the CBs, as articulated and

discussed by leaders and members of several CBs, and to prepare a preliminarycoding framework for the further, more detailed qualitative research that was to

follow in period 2. It is seen, even through the preliminary research undertaken at

period 1, that, although each CB is in competition with the others, cooperation

between the CBs is expected in the context of the OTOP plan. It is unsurprising,

therefore, that the findings from period 1 substantiate, to a large extent, the conceptual

model of cooperative marketing strategy proposed by Dickinson and Ramaseshan

(2004). An adaptation of the model (presented here as Figure 2) was employed,

therefore, as a mechanism for facilitating the coding of the data captured in period 2.

In period 2, semi-structured, in-depth interviews were carried out with ten leaders and

members of CBs in the Chom Thong and Mae Chaem districts of Chiang Mai, tengovernment and private sector supporters, and ten customers of CBs (see Table 2). All

the data transcripts were imported into NVivo 2 (Thai version), and phrases, sentences

and paragraphs were coded, initially using headings derived from Figure 2. In the

cases where new codes were introduced, they were done so in order to aid

interpretation of CB activity in relation to, and in the context of the OTOP plan.

Throughout the data collection and analysis at this stage, no attempt was made to

enact the role of catalyst for the marketing strategies of the CBs. Only reactive

participation was undertaken, in order to get close to the marketing reality of the

chosen CBs (Gummesson 2007) by exercising cooperation and reflection that are

characteristic of the early stages of a management consultancy process (Johannson

2004).

Findings from the Period 2 Research

The textual data collected in period 2 amounted to almost 42,000 words of transcripts

and observations, and was supported by 109 photographs of the production processes

employed in the selected CBs. It provided a very detailed picture of the marketing-

related activity of cotton and silk product CBs at the point in time (late 2006), set in a

framework guided by Figure 2. In particular, the interpretation of informationcontained within the data suggested three categories that overlay the elements in

Figure 2: facts (especially relating to components of the cooperative marketing mix),

perceptions of the three sets of ‘players’ (CB members/leaders, OTOP supporters,

customers), and potential conflicts (in trying to achieve OTOP outcomes). The inter-

related aspects of these categories are illustrated by taking examples of the facts and

perceptions from a component of each of the cooperative marketing mix elements,

and then identifying, through the use of these examples, some of the potential

conflicts with the achievement of the OTOP outcomes. This will, in turn, inform the

subsequent discussion on the knowledge transfer role of universities with regard to

marketing strategy.

5



Figure 2: Conceptual Model of Cooperative Marketing Strategy

Cooperative Marketing Mix Strategy

Adapted From Dickinson and Ramaseshan (2004)

CommunityBusiness

Characteristics

Internal Factors

Co-Products

•Product Categories

•High/Low Turnover Products

•Product Design

•Colour

•Packaging

•Product Quality

Customers

•Who they are

•Where they are from

Co – Promotion

•Types of Promotion

•Successful Promotions

•Unsuccessful Promotions

Co- DistributionCo-Pricing •Intermediaries•Price setting

•Reasonableness

•Successful channels

•Unsuccessful channels



Table 2: Period 2 Interviewees

Producers – CB Leaders and Members

Interviewee Code Gender Position in CB Location of CB

P1 Female Leader Chom Thong



P4 Female Member Chom Thong

P5 Female Member Chom Thong

P6 Male Leader Mae Chaem

P7 Female Leader Mae Chaem

P8 Female Leader Mae Chaem

P9 Female Member Mae Chaem

P10 Female Member Mae Chaem

Supporters from Government Organisations (GO) and Private Sector (PS)

Interviewee Code Gender Organisation Location

S1 Male Industrial Promotion

Centre Region 1 (GO)

Chiang Mai

S2 Male Industrial Promotion


Chiang Mai

S3 Female Industrial Promotion


Chiang Mai

S4 Male Office of Community

Development (GO)

Chiang Mai

S5 Male Office of Agricultural

Affairs (GO)

Chiang Mai

S6 Male Office of Commercial

Affairs (GO)

Chiang Mai

S7 Female Chiang Mai University

(GO)

Chiang Mai

S8 Female Chom Thong District

Office (GO)

Chom Thong, Chiang

Mai

S9 Male Mae Chaem District

Office

Mae Chaem, Chiang

Mai

S10 Male Thai Lanna Industry

Association (PS)

Chiang Mai

Customers of CB Products

Interviewee Code Gender Age Home Location

C1 Female 60 Chiang Mai

C2 Male 42 Lampoon

C3 Female 57 Chiang Mai

C4 Female 34 Chiang Mai C5 Male 28 Chiang Mai C6 Female 45 Bangkok

C7 Male 21 Nan

C8 Female 47 Tarang

C9 Female 32 Chiang Rai

C10 Male 55 Bangkok

7



Facts and Perceptions - Co-Product: Colour

Traditionally, naturally-sourced dyes (normally from the bark, core, roots and fruit of

local trees) are used in the dyeing process for cotton and silk. More recently,

chemical, synthetic dyes are being brought into the local fabric industry. The facts are

that the naturally-sourced dyes have certain disadvantages as they are used currentlyin the production processes. They provide a limited range of colours (for example red

from the morinda root, yellow from turmeric, light gold from the egg tree (ma-phud),

and green from the myrobalan bark); are relatively expensive to produce (involving

crushing, pounding, boiling materials in water and fermentation of resulting liquid);

have unpredictable shades (due to age of tree, moisture level, health of bark, and

season of the year (rainy/dry)), making it difficult to match dye-lots and attain colour

brightness; and they lack colour-fast properties (the colour runs when washed). The

synthetic dyes have a wider range of colours, are less expensive to source and

produce, have standardised dye-lots, maintain their brightness and are colour-fast. In

short, the process of making synthetic dyes is less labour intensive and more suited to

mass production. Two negative facts associated with some synthetic dyes are thatsome ingredients in them have been shown to have carcinogenic factors, and the

pollutants from such dyes are not bio-degradable at the beginning, so that, for

example, the European Union (EU) has sought to implement restrictions on their use

in imported these fabrics. The supporters who are aware of this problem have tried to

educate CB producers, and there is an increased awareness of EU restrictions on Azo

ingredients (Cotton and Silk Project, Chiang Mai University 2004).

The perceptions of local customers of the dyes used for colour are mostly affected by

the observable properties.

“The products that contain natural colours have a problem – they always

run when washed and the colour is no longer bright ” (C1)

“Where chemical colours are used, you achieve a bright colour in the

fabric” (C7)

From the supporters’ perspective, the negative aspects of chemically-based dyes can

take on greater importance.

“The difference between chemical colour and natural colour is that the

chemical colours seem to adhere to the fabric. Some chemically-dyedfabrics that have Azo can cause cancer in consumers. The natural colours

do not have an effect on the body because the colours come from different

parts of trees and other plants. The big problem is that those colours run

out of the fabric” (S5)

Views from representatives of the two CBs demonstrate perceptions that are attuned

to customer demand.

“ I use both chemical and natural colour to add more variety to the

products” (P10)

8



“ Booth exhibition organised by the government is very successful,

particularly OTOP fair at Meungthong Thani [in Bangkok], because there

are lots of tourists and the products are sold at nearly two million baht a

month” (P1)

“The best seller channel of distribution for groups of producers is theexhibition organised by the government. For example the Industrial

Promotion Center Region 1 exhibition takes place twice a year, with

public relations supported by government ” (S3)

Equally, there is a shared perception of all the ‘players’ that selling products at the

source of production is the least successful from a financial point of view.

“The sales from sources of producers are not good since they are far

away from cities. They are also not the areas for tourism. Products are

sold as just one or two pieces…most income is from ‘made-to-order’”

(P10)

“The least successful channel of distribution is the sources of producers

because customers don’t know the sources. Besides, there are no show

rooms for products” (S2)

“ …I strongly believe that the sources of producers generate significantly

lower sales, since they are far away from cities…they are unknown places

and just middle man traders buy products there” (C7)

However, although the channels of distribution organised by the government are

successful, it should be noted that these channels are held on only five to seven times

a year; created events or festivals, such as New Year, Christmas, Songkran festival.

Furthermore, the duration of each organised event is relatively short (a week or a

month). The shops at the sources of production seem to be the least successful on an

income per day basis, but they have a continuation of income throughout the year

from made-to-order customers and consumers, and so, on average, sales from these

shops contribute between 60% and 70 % of a CB’s annual income.

Facts and Perceptions – Co-Pricing

Most producers, and groups of producers, set their prices on a very traditional ‘costplus’ basis. Therefore, the price differentiations result from varying labour, material

and transportation costs.

“The strategy for price setting is computed from all costs: raw materials,

labour cost expense for water and electricity…” (P1)

“The method of price setting is the combination of all costs: materials,

labour, other expenditures and profit. The profit is set in consideration of

the marketing situation. Normally, the price is set to be optimum; not too

cheap, not too expensive. The estimated profit is approximately 10-20%”

(P6)

10



There is a high level of competition between CBs.

“Currently, there are lots of groups of producers, owing to government

support and promotion… In general, products from most groups of

producers are similar. Most groups of producers try to create products

that are unique to Chiang Mai and Lanna. They have produced commonplace products, as learning has been passed down through

generations. Above all, they have the same target customers. This leads to

serious competition now” (S3)

In addition, imported products, from neighbouring countries, such as Myanmar, Laos

and China are sold in Thailand, and are affecting the prices charged for cotton/silk

fabrics.

“ Most of the imported products produced by weavers are from Myanmar,

China and Laos. They are sold around borderlands, in Chiang Mai city

and in other big cities in Thailand. Normally, the quality of most imported products is inferior so that of products from Chiang Mai, but cheaper ”

(S6)

Furthermore, there are small business enterprises, who have replaced the traditional

hand-weaving with machines. As was indicated above, prices of fabrics produced with

chemical-based dyes are lower than those produced with traditional, plant-based dyes,

because of the cost savings of sourcing and production.

“They have factories and use machines to produce fabrics. Most of them

locate in the city and Sankampang districts of Chiang Mai. They are high

production capacity. Moreover, their products reach the appropriate

standards and have pretty designs. Overall, they are not much different

than products from groups of producers” (S10)

The perception of some producers is that there is a danger of a price war, resulting in

price cutting strategies being employed because of the highly competitive

environment.

“ Nowadays, I have lots of competitors, since there are new groups of

producers in Chiang Mai and up-countries. They try to imitate my

products. Moreover, they tell customers that their products are from mygroup, but sell them at a cheaper price. Owing to the resemblance of their

products to mine, some customers strongly believe them. Products from

new groups of producers are substandard since the fabrics produced by

their weavers are not meticulous. As a result, it may affect my group’s

reputation, because customers may think that products from my group are

sub-standard ” (P7)

“ My group has had a good reputation for a long time…production staff

from my group are invited by the government sector to be guest speakers

to teach the methods of weavers and product designs to other groups, or

new groups of producers. As a result, their products are similar to mine.They are not modified in order to make product differentiation. This leads

11



automatically to increased competition. It is very difficult to sell products

now because of cutting prices” (P6)

This perception is shared, to a large extent, by supporters.

“The price set by groups of producers is no longer reasonable and is toocheap. Perhaps it is the high competition in the market now” (S10)

Generally, the customers who were interviewed thought that the prices charged by

CBs are reasonable, with one dissenting voice.

“ I strongly believe that prices are reasonably set by groups of producers.

It is computed from costs plus profit, competition and market demands.

When you compare the price to product features, it is balanced and

reasonable” (C10)

“There is no deceptiveness of product price among the groups of producers. Products are sold almost at the same price…” (C9)

“ In my opinion, products which I buy from groups of producers are too

expensive…when you compare the quality, the price should be reduced. I

am not satisfied with the price setting of groups of producers” (C5)

Facts and Perceptions – Co-Promotion

The current promotional tools are:

• CB brochures

• CB name cards

• CB leaflets

• CB signboard

• Package advertising

• Local radio

• PR and advertising by private and government sectors (TV, radio, newspaper,

internet, booth exhibition).

Apart from the last named, the other tools tend to be used at the initiatives of

individual CBs or groups of producers. They have widespread usage.

“Currently, promotion activities that I have done are, for example, name

cards, brochures, signboards at home and at shops, local radio

communication, and direct selling to customers” (P1)

“ My group has conducted promotion activities by distributing brochures,

name cards and paper bags made from the paper mulberry with log, name

and address of my group…” (P9)

“Currently, promotion by advertising is very rare for groups of producers.

Generally, most of them use name cards, brochure, leaflets, signboards”

(C6)

12



PR and advertising support is given when, for example, booth exhibitions take place,

and it is normally paid for by the organisers, i.e. government and private sector. One

producer observed:

“There are few promotional activities from my group. Most promotionactivities are supported by government ” (P3)

There is a large amount of agreement amongst all parties that brochures, name cards

and the government/private sector PR/advertising represent the most successful

promotional tools. The perceptions of the producers, supporters and customers are

represented by the following quotes.

“ Now the best promotion activity is the brochure as it contains many

pictures, information on processes of production, together with the

business’s story and product information…cost of production of

brochures is not high” (P10)

“The most successful marketing promotion is brochures with name cards.

They are distributed to customers when producers participate in booth

exhibitions and fairs…” (P2)

“Promotion activities are name cards, brochures and local radio. Name

cards and brochures are the most successful, since customers can find

addresses and information from them. Public relations, supported by

government, is successful as well, because customers are attracted to visit

booth exhibitions and buy products later ” (S1)

“Public relations, organised by government via television or newspapers

or fairs are successful. Successful promotion activities that groups of

producers have done are name cards and brochures. Customers can know

production information and the producer’s address. As a result, groups of

producers can gain substantially more customers” (C2)

The two tools that are perceived to be the least successful are local radio

communication, as it only reaches people in the local communities and lacks a visual

stimulus, and CB leaflets as they are deemed to be less professional (and so less

official), and it is felt that customers throw them away.

Potential Conflicts

The facts and perceptions above, relating to co-products, co-distribution, co-pricing

and co-promotion, imply strongly that, in attempting to achieve the outcomes of the

OTOP plan (as in Figure 1), any marketing strategies that are to be adopted by CBs

must take account of several potentially inhibiting conflicts. Five potential conflicts,

which are inferred from the period 2 analysis, are highlighted below.

13



Cooperation versus Competition

CBs are expected to cooperate with each other within the OTOP plan for the ‘general

good’ that can result from sharing business, social and technological knowledge and

expertise. Yet, at the same time, they are competing with each other for customers.

There are, undoubtedly, success stories associated with cooperation amongstenterprises in an industrial cluster, but it is also noted that “firms whose outputs

complement each other are more likely to cooperate than firms with near identical

products” (Schmitz 2000, p325). The accounts of what is happening with CBs making

cotton/silk fabrics in the Chiang Mai province demonstrate that, not only are the

products similar, but also the government-encouraged sharing of good practice is

increasing the amount of imitation of products and production practices. This is

resulting in a perception of a price war, especially as more CBs are created and

encouraged, and the failure of many CBs to develop the independent, creative and

original ideas expected of them in the OTOP plan.

Production Efficiency versus the Maintenance of Thai Cultural Associations withProducts

It is clear that the costs of production of fabrics made by weavers using the traditional

Thai methods and natural dyes are higher than those made with machines and

synthetic dyes. The OTOP plan looks to encourage the use of natural raw materials in

the production of high quality products, in order to promote Thai culture. Yet the CBs

striving to do this are faced with the knowledge that consumers may not associate the

use of natural raw materials with high product quality, if quality is judged by the

brightness of the colours, or colourfast properties. And the prices of their products,

calculated on a cost-plus basis, are generally higher than those of products that

incorporate chemical dyes in their production processes.

Government Subsidies versus Self Reliance

From 2010 onwards, it is intended, through the OTOP plan, that CBs should be self-

reliant. However, ultimate self-reliance may be more difficult because of government

support that is being given during 2004-07. For example, the most successful co-

distribution of the products is perceived to be the booth exhibitions that are organised,

and subsidised by government. Additionally, the PR and government-subsidised

advertising for booth exhibitions are perceived to be some of the most successful

forms of co-promotion. If the government subsidies for booth exhibitions werewithdrawn, then the continuation and the organisation of them would be left to the

CBs. If so, it will be necessary to clarify the notion of ‘support but not subsidy’ that is

specified in the OTOP plan, and also consistent with research findings on industrial

clusters that advise that, although protective measures may be of benefit at the outset,

in the longer term state subsidies will not result in CBs being proactively market

related (Morosini 2004).

Local versus Global Markets

There are at least three potential conflict issues associated with CBs meeting both

local and global markets. The first is that products that sell particularly well to Thaicustomers may not be those that are popular with customers from other countries,

14



especially in the case where the consumers themselves would have to have creative

skills to make items from the pieces of fabric. The Pha Sin, the traditional Thai tube

skirt, is a case in point.

“The most well sold product now is ready-to-wear clothes such as

trousers, ladies clothes and Pha Sin, because they are popular amonglocal people. Women love wearing them – especially blouses and Pha Sin”

(P7)

“ I like buying formed cloth because I can use it to make Pha Sin or

household articles. Additionally, I buy it for my relatives” (C4)

Second, the notion of what is ‘local’ may not be universally agreed. Wattanapun,

Wattanapun and Srijumnong (2001) suggests that local woven products may be

characterised by antique design, or contemporary design. With antique design, ‘local’

refers exclusively to the method of production: traditional weaving methods and

materials, and plant-based dyes. The Teen Chok fabric from Mae Jam, Chiang Mai isan example. With contemporary design, ‘local’ includes the recognition of Thai

customer demands, and products are designed to reflect current and fashion trends.

Producers choose colours to match current styles and practices, and are prepared to

use chemical dyes for colouring. It is argued by Wattanapun, Wattanapun and

Srijumnong (2001) that contemporary designs link unique local culture with the

broader Thai culture.

Third, the current, long-standing concentration on the local or national market has

resulted in distribution mechanisms where the customer must travel to the point of

sale (booth exhibitions, night bazaars and markets, sources of producers), and in a

high concentration, by producers, on personal selling skills associated with

interpersonal interactions at these venues. While this may satisfy the tourist market, it

is not sufficient for a global marketing strategy. Offering the products to customers

across the globe will mean on-line promotion and selling, with a commitment to

quality of service (an OTOP plan intended outcome) that goes beyond interpersonal

selling. The literature on technology-based services, including that on service failures

and recovery methods (for example, Forbes, Kelley and Hoffman 2005), suggests

strongly that the issues that result in customer (dis)satisfaction with on-line services

are not the same as the ones that result in customer (dis)satisfaction on-site.

Day-to-day Operations versus Learning New Skills

Finally, an issue that is not unique to Thai CBs, and one that affects small businesses

in whatever country, is how the CB leaders and members can afford to spend time

away from labour-intensive, day-to-day work, and thus find time to be taught new

skills that encourage them to be creative and innovative. As one supporter observes,

“Our organisation tries to develop CBs by arranging many projects, such

as product design, packaging design, colours and dyes. However, only a

minority of producers are interested in these specialist training

programmes, even though it is free training…” (S3)

The leader of a CB in Mae Chaem explains the problem,

15



“ My group is very far from Chiang Mai, and it takes a long time to travel.

Even though it is free training, the expenses for travelling, hotel, food and

so on are very high. Unfortunately we cannot attend the programmes that

are arranged by the government…” (P6)

Discussion

The section above is highly contextual, based on detailed information collected

through the role of reactive participant. Nevertheless, it highlights important generic

issues associated with both the role of universities in knowledge transfer and the

development of a marketing strategy that is expected to achieve multiple performance

dimensions that are specified in a super-ordinate strategy or plan.

The University Role: Catalyst or Co-Producer of Knowledge?

Explicitly contained in the OTOP plan is the role of universities as catalysts for thedevelopment of marketing strategies for CBs for the period 2006-2010. The

popularised definition of ‘catalyst’ is a person or thing that causes a change, and is

derived from an original definition of a catalyst as a substance that causes an increase

in the rate of a chemical reaction, without itself suffering any permanent chemical

change (Collins Dictionary). It is hard to conceive that, in the light of the content of

the previous section, representatives of universities are going to contribute to the

OTOP plan without themselves changing (through the specific knowledge acquired in

a form of work-based learning (Gustavs and Clegg 2005)) during the changes they are

expected to bring about. It would certainly be unwise to assume that templates of

strategic marketing management (for example, in Aaker 2007) that have been

developed to aid large companies in industrialised contexts, can simply be offered to

CBs to encourage the necessary changes.

So, maybe, catalyst is not the appropriate word, with its implication of universities

providing knowledge that brings about required changes. In the management learning

field, this has been labelled as ‘Mode 1’ knowledge (Gibbons et. al. 1994), which

makes an assumption that universities are privileged, elite sites of knowledge

production. The universities’ role, regarding the marketing aspects of the OTOP plan,

should better be considered as ‘Mode 2’ knowledge production, that according to

Starkey and Tempest (2005, p71), “…takes place in a growing variety of sites outside

the university and has as a prime characteristic the co-production of knowledge bymany knowledge workers addressing problems in the context of application and in a

manner that transcends disciplines”. The leaders and members of the CBs, the local

government office and private industry supporters and the customers of CBs are

knowledge workers involved with co-production of knowledge with university

representatives. The data collected in the reactive participant role serves to reinforce

the on-site, at-work knowledge base that exists. It is important, therefore, for

universities to redefine their role as co-producer of knowledge, rather than adopting

the more one-directional role of catalyst. By such a means, more flexible, and even

interdisciplinary approaches can be adopted to the opportunities or problems of

marketing for the CBs.

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In a different context, that of universities/firms co-producing ICT knowledge, Lam

(2007) provides evidence that an effective mechanism is for firms to set up university-

based research units that are partly or fully funded by the firm, and which consist of

academic and industrial researchers carrying out collaborative projects. Here firms

acknowledge the importance of an extended pool of resources and the continuity of

knowledge co-production. There may be parallels with the OTOP plan, given its long-term objectives. Government could support the creation and continuation of regional-

based research centres that facilitate the development of marketing strategies through

continued knowledge transfer between university academics, CB leaders and CB

supporters. Such centres could take on the responsibility for knowledge dissemination

and transfer at the province level. For example, universities could use their expertise

to carry out customers surveys on behalf of the CBs (an initiative that the authors are

currently undertaking), but the value of such surveys for CBs, in their development of

marketing strategies, will be very limited if the survey findings were presented as

‘Mode 1’- type knowledge, and only made available to relatively few CBs.

There are practical issues, in reaching CBs, which have been raised by CB leaders anddistrict officers.

“…From my point of view, training programs should be organised in the

Amphur because of convenient travelling and cost saving. Ultimately the

outcome will be better than the program organised in Chiang Mai city

centre” (P6)

“…The training venue should be in Amphur where it is the centre of each

zonal area. Therefore, it is convenient for entrepreneurs of the community

businesses to attend the training. Similarly the trainers from government

organisations would find it convenient to organise training, and it would

not be necessary to travel to every village…” (S9)

The producers and supporters are making reference to the convenience of the amphur

level for carrying out training, and similar issues would need to be addressed if long-

term research centres with university involvement were to be set up at the level of the

province, rather than the amphur.

Marketing Strategy as Part of a Super-Ordinate Plan

It is clear that, in the OTOP plan, a super-ordinate or ‘grand’ strategy (Mattson,Ramaseshan and Carson 2006) exists, and that cooperative marketing strategies for

the CBs are expected to be devised so that they contribute to the grand strategy.

Furthermore, the OTOP grand strategy includes multiple performance dimensions,

some of which, as has been shown, result in potential conflicts.

As Varadarajan and Jayachandran (1999, p133) observe “…alliances of various types

including those with a marketing thrust have become increasingly widespread (e.g.

joint product development, joint marketing, and reciprocal marketing alliances)”. This

is very much the case with the OTOP plan, but the alliances are encouraged as part of

a governmental plan rather than being created by the firms (CBs) themselves. The

recommendation, by Varadarajan and Jayachandran (1999, p138), that anunderstanding of alliances is “enhanced by studying them from a network perspective

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that views the actions of firms [in this case, CBs] as embedded in the social context”,

is endorsed by the findings of the reactive participation phase reported above, which

took a bottom-up approach to marketing strategy.

Grand, overarching strategies, such as the OTOP plan, can make synergies more

visible, be used to develop benchmarks and comparative measures, aid reorganisationof competencies, and support the generation of external networks (Mattson,

Ramaseshan and Carson 2006). However, the conflicts associated with meeting the

multiple performance dimensions, make cooperative marketing strategy-making very

difficult for the CBs if a totally top-down strategic approach is adopted. Furthermore,

ultimate self-reliance by CBS may require the development of marketing strategies

more grounded in the day-to-day experiences of the CBs, and, in particular, the roles

of the CB leaders.

If a bottom-up approach to strategy is to be considered, then the role of people at the

‘supervisory’ level is believed to be crucial. On the negative side, for example,

Gustavs and Clegg (2005, p27) have identified a principal barrier to cooperationbetween businesses and universities as “the supervisors who must play the role of

coach but are most reluctant to do so, seeing it as neither their core responsibility nor

as necessarily in their interests”. On the positive side, the CB leaders can be seen to

have the potential to develop strategy from the bottom up, precisely because of their

dual role; “interacting with customers and simultaneously organizing for

improvement” (Mattson, Ramaseshan and Carson 2006, p171). If the CB leaders can

be continual learners, partly through knowledge transfer processes with academic

marketers, then they can increase their capacity to move beyond production-based

issues to thinking long-term, and to communicating to their members the

consequences of the actions of their CB.

The creation of successful marketing strategies for the CBs is likely to depend on the

co-production of knowledge between the CB leaders and university marketers. As

government subsidy is withdrawn, the CB leaders, although still ‘supported’ by

government, will find themselves needing to make strategic marketing decisions as a

result of acquired learning and conceptualisation of complex interactions, rather than

through following templates of marketing strategy that are contained in text books. It

will require their judgement as to how they should prioritise the performance

measures contained in the OTOP plan, given the potentially conflicting issues

associated with the measures. In particular, it will require their judgement as to how to

deal with the cooperation versus competition conflict.

Conclusions

The sustainability of CBs is very important to the Thai economy. The OTOP project

plan was developed to focus the input of resources – government, private sector,

universities – on achieving desirable outcomes relating to the CBs and their products

over a period of more than ten years, after which point the CBs would be self-reliant.

The OTOP plan is an overarching strategy, within which the marketing strategies of

CBs are expected to be developed. The plan includes an expectation that universities

will play a significant role in enabling CBs to develop effective marketing strategies.

Given that there are nearly 20,000 community businesses in Thailand, employing 1.5million people, the complexities associated with the development of CB marketing

18



strategies that are consistent with the OTOP plan are widespread. Some of them have

been described above, in the section on the facts, perceptions and potential conflicts

that were highlighted in the qualitative research undertaken in the role of university as

reactive participant.

Preliminary findings suggest that

1. The future role of universities, insofar as the development of CB marketing

strategy is concerned, would better be seen as co-producer of knowledge, rather

than as a catalyst. The latter is believed to be too suggestive of a one-way flow

of knowledge. The practicalities of designing opportunities for knowledge co-

production need to be taken extremely seriously. One possibility is for the

government to create regionally-based research centres at each province that

encourage and allow knowledge co-production on a continual basis between

university academics, CB leaders and other interested parties.

2. Because of the potential conflicts in achieving all the performance measureslisted in the OTOP plan, a totally top-down strategy process is unlikely to

achieve the desired effects. Some form of bottom-up marketing strategy is

called for. This suggests a very important and different role for leaders of CBs;

potentially a move from producers to marketers. They appear to be key to an

effective implementation of a bottom-up marketing strategy, with their

knowledge of the production process and the local marketplace. It will be

difficult for universities and other enablers to engage in knowledge co-

production with CB leaders unless the leaders are prepared to give more priority

to regular attendance at the regionally-based research centres over their day-to-

day production activities. Financial support for such attendance could come

from government sources up until 2010. There must be a significant move on

the part of the CB leaders from a local to a global mindset.

The research being carried out by the authors is ongoing, and the findings are being

fed back to producers and supporters. The two underlying pillars of this work – the

role of universities working with businesses, and the development of a marketing

strategy within the context of a super-ordinate strategy - are common to many strands

of business and management research. It is hoped that the context and discussion in

this paper will provoke, and encourage further research.

19



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