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Marketing techniques and the 'Egg of Thaksin'

February 9, 2001

SHORTLY after the election, Chuan Leekpai, the outgoing prime minister, poured scorn on Thaksin Shinawatra upon hearing that the leader of the Thai Rak Thai Party would run Thailand as a business enterprise. Thaksin had said that as prime minister, he would preside over the government as a CEO would run his company. Quipped Chuan: "Thailand is not a company. One cannot fire people the way a company does."

Having spent most of his career in the political arena, the bureaucratically-minded Chuan, of course, had no clue whatsoever about the real challenge he would be facing from his political opponent. In Thaksin he saw only money politics. In other words, the telecom billionaire was going to buy his way into power.

In politics, money is a big part, but it's not altogether the whole story. It's true Thai Rak Thai massively outspent its rivals. Yet the method by which Thaksin plotted his strategy, structured his political campaign and executed it, played an equally big part. It was a whole new ballgame, at least as far as Thailand was concerned. You may call it "social marketing" or "political marketing", and it resulted in phenomenal success for Thai Rak Thai at the polls. The party won 248 seats out of the 500 up for grabs, becoming the first in Thai history to almost grab an outright mandate.

In a way, Thaksin's rise to power mirrors that of former Italian prime minister Silvio Berlusconi. Berlusconi was a successful entrepreneur. He aimed to rid Italy of communism and bring its political system closer to the US model. He applied his business enterprise methods to the running of the government.

Over a period of two years in the run-up to the January 6 election, Thaksin worked on the politics of numbers. Thanks to his deep pockets, he brought incumbent politicians under his control. It was like undertaking business mergers and acquisitions, which he is good at.

He also brought into the equation political marketing. Marketing is a discipline that is a great invention of the Americans. But it is not limited to advertising or commercial research. In the "Egg of Berlusconi", a book written by Amedeo Nigara, "marketing means 'doing as you must in the market'. Which is to say trying to understand the end user and his needs. And create a product or a regulation that everyone can easily understand, without impositions, but just as you do in a handshake.'' (See www.egg-of-berlusconi.com)

Through marketing techniques, Thaksin's political team worked with potential voters at the grassroots, trying to understand the "end-users" or their needs. Market surveys were conducted about the voters' needs based on which the policies were drafted.

The strategists behind Thai Rak Thai's election victory were Pansak Winyaratn and Dr Somkid Jatusripitak. While Pansak is a journalist, Somkid is an academic. Along with his six staff, Pansak drew up a model for Thaksin and his Thai Rak Thai to win the election. The model is similar to social marketing, which seeks to address the needs of rural folk. If you want to take over the government, you have to win the hearts and minds of rural voters first.

From the surveys, Thai Rak Thai was able to identify the policies that struck a chord with the voters. Hence, the debt moratorium for farmers, the Bt1 million working capital for each village, the Bt30 medical treatment and the People's Bank. There was nothing totally new in these policies, except that they were repackaged to boost "buyer" appeal.

At the same time, the Democrats were shooting themselves in the foot. People were fed up with reform efforts and the slow pace of recovery. They wanted change. History shows that reformist governments are unpopular. While the Democrats stopped responding to the people's needs, Thai Rak Thai came up with new promises and pledged to deliver them on a grand scale.

There was also a distinct political ideology underlying Thai Rak Thai's policies. It was hardly apposite to the traditional economic growth model pursued by Thai governments over the past several decades. Past policies appeared to favour big corporations, big banks and foreign investors.

Thai Rak Thai would like to reverse this trend. At the centre of its policy are rural enterprises, followed at an upper level by small-and medium-scale enterprises (SMEs). These rural enterprises and SMEs have been left out in past development, but they ideally would become a new taxable base for the country. Thai Rak Thai would like to create a parallel financial system to support this rural economy, hence the People's Bank and the SME Bank, which would provide soft credit to help Thai entrepreneurs. The Bt1-million village fund is also part of this networking to rebuild rural enterprises and create one product from one tambon.

Pansak likes to compare Thailand with Italy. He says rural Thais are similar to rural Italians. Yet the Italians enjoy a higher living standard. For example, Italian farmers ship 35 different kinds of spaghetti to the cities. "Nothing special about that, it is just spaghetti,'' Pansak snapped.

In a way, Thai Rak Thai's policy sounds like "contractual socialism'', under which the government is obligated to look after the welfare of the majority of the people.

But you may be curious about Thaksin, who represents the modern sector. How come he is so interested in the plight of the poor? Will he try to please the financial markets too? Certainly he needs the support of the financial markets, but it is not yet clear how can he satisfy the rural sector and at the same time cope with the discipline of the financial markets.

It might be suggested that the core policies of Thai Rak Thai are inward looking, from attempts to water down the bankruptcy laws, easing bank regulations to protecting the Thai interests in some businesses. But don't rush to judgement. Let us wait and see how Thaksin is going to finance his populist programmes. The devil is not only in the details, but also in the implementation.




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