Web advertising design for ‘One Tambon One Product’ products for Thailand’s entrepreneurial small and medium enterprises
Wirachat Banyan1, Chantana Viriyavejakul2 and Thanin Ratanalarn3
1,2,3 Department of Industrial Education
Faculty of Industrial Education
King Mongkut’s Institute of Technology Ladkrabang, Bangkok, Thailand
Reference to this paper should be made as follows:
Banyan, W., Viriyavejakul, C., & Ratanalarn, T. (2016). Web advertising design for ‘One Tambon One Product’ products for Thailand’s entrepreneurial small and medium enterprises. Asian International Journal of Social Sciences, 16(4), 97 – 114.
Since 2001 Thailand has enabled entrepreneurial small and medium enterprises to sell their home-grown/made products through a program called ‘One Tambon One Product’. Study research outlines the steps and process methodologies and Web advertising design factors needed to bring together the Web 2.0 enabled resources to market and sell OTOP products through an online Website e-commerce/m-commerce portal. From the research literature, texts and relevant sites, a framework was created which included the following elements: 1) website information that should be available for commercial purposes, 2) features supporting the OTOP concept and 3) the construction of the portal embracing Web 2.0 concepts and properties. Three additional advertising components are also involved including 1) mass media 2) persuasion and 3) both real and supposed reasons for purchasing OTOP products. Product examples include food and beverages, cothing, handicrafts and souvenirs, herbs and non-food products.
Keywords: OTOP, portal, SME, smartphones, Thailand, WEB 2.0, website
The global number of smartphone users is expected to reach 2.5 billion by the end of 2015 with around 34.7 percent of the world’s 7.2 billion population estimated to have access to the Internet by then. This is up from only 1 billion users in 2012 (TNA, 2014). Thailand’s smartphone ownership is expected to reach 100% in the next four years and reshape the mobile landscape and consumer behavior (Kewaleewongsatorn, 2015). In Southeast Asia alone smartphone owners spent on average more than three hours per day on their smartphones in June 2013, with activities such as chat apps, social networking and entertainment activities like games and multimedia driving the highest levels of engagement (Nielsen, 2014).
In Thailand, the average Thai spends nearly four hours a day on a smartphone, using it for communications (94 minutes), apps (62 minutes), entertainment (54 minutes), web browsing (14 minutes) and device management (8 minutes). The use of mobile apps for banking and financial services surged from 8% in 2015’s first quarter to 31% as of March 31, while mobile shopping users rose from 11% to 23% (Kewaleewongsatorn, 2015).
Coincidentally, at the end of 2015 is the beginning of the integration for the ASEAN (Association of Southeast Asian Nations) Economic Community (AEC). With Thailand’s entry into the ASEAN community promising a unified market and production base, the movement of goods, services, investment, capital and skilled labor has become freer and more open (Chia, 2013). Thailand which sees itself as the ‘hub’ of this community and as a founding member is looked upon by many as a leader in this integration and the policies that other nations should follow (Meesrijan and Fongsuwan, 2015). Regional integration and emerging business opportunities are providing an impetus not seen before in driving intra-regional investment. As more ASEAN companies position and prepare for AEC 2015, this intra-regional investment wave is likely to gather force and is therefore important that research be undertaken to understand Thailand’s policies and processes in the integration of this $2.5 trillion dollar economy with 600 million consumers (Mirza and Wee, 2014).
One component of the ASEAN economic community is Thailand’s ‘One Tambon One Product’ (OTOP) program which is a local entrepreneurship stimulus program similar to Japan’s JETRO (Japan External Trade Organization) (JETRO, 2015). OTOP is the brand of products under the ‘One Tambon, One Product’ project, a nationwide sustainable development initiative launched by the Thai government in 2001 (Phangphol et al. 2012)
Both programs are aimed at supporting locally made and marketed products and in Thailand each tambon or ‘sub-district’ draws upon its local resources to market and sell a selected product and ‘brand’. These programs received their inspirations from Japan’s successful ‘One Village One Product’ (OVOP) program begun in Oita Prefecture in 1979 (Igusa, n/d).
Oita prefecture’s ‘One Village One Product’ (OVOP) movement provided an important model of success in Japan’s regional development policy. The movement encouraged and empowered local citizens to unearth opportunities for economic growth and develop local industry with a global outlook. The principles behind this movement, and the efforts of the local citizens which sustained it, have attracted attention from across Japan and from many other Asian countries, and the movement is now often presented as a new paradigm for regional development (Igusa, n/d).
Similarly, Thailand’s OTOP program encourages village communities to improve the local products’ quality and marketing, selecting one superior product from each tambon to receive formal branding as its “starred OTOP product”. It provides both a local and national stage for the promotion of each sub-district’s products. OTOP products include a large array of local products, including traditional handicrafts, cotton and silk garments, pottery, fashion accessories, household items and food.
JETRO has been introducing local specialty products from the ‘One Village One Product in Thailand to the Japanese market since March, 2002. The range of products includes textiles, hand-made papers, basketry made of bamboo and other plants, ceramics and wood products. Experts who are active in the field of artifacts in Japan have been coming to Thailand to take part in the search/development of products that fit the life style in Japan. The expert team, comprising designers, buyers and magazine stylist has visited Nan, Chiang Mai, Lumpun, Roi Et, Surin, Burirum, Ang Thong, Suphanburi and Chonburi Provinces. The collected product samples totaled 600 items including (OTOP, 2003):
1. Fabric (silk/cotton): 130 items
2. Basket: 110 items
3. Saa Paper: 80 items
4. Ceramic: 180 items
5. Wooden product: 100 items
In 2013 the Thai government was projecting OTOP revenues in 2015 to be as high as 100 billion baht ($USD 3 billion) (Areva, 2013) although due to various economic and political issues, these projections might be difficult to achieve for 2015. Another reason that is contributing to target shortfalls is the lack of promotion and marketing.
Marketing success stories from Internet portals and search engines are many but in Asia, one only needs to look at the recent spectacular success of China’s Jack Ma and his Internet commerce portal site ‘Alibaba’ to get a sense of what is possible with vision, planning and proper execution of a website/portal for e-commerce doing business to business transactions.
In 1999 Alibaba was a barely known Chinese e-commerce start-up whose main founder was an equally little-known Jack Ma. By 2015, China has by some estimates soared past the U.S. as the world’s largest e-commerce market making Jack Ma the richest man in Asia. Alibaba, is currently 22% owned by Yahoo and 34% held by Softbank, and is already worth more than $USD 120 billion (Flannery, 2014). Speaking at the 45th World Economic Forum Annual Meeting Jack Ma, who is now also China’s richest man, said he aims to serve 2 billion consumers and help 10 million small businesses outside China sell their products through the Internet (Rose, 2015). According to the Alibaba Group founder, as many as 300 million people in 2015 are currently transacting through its web portals and about a third of them are chalking up 60 million transactions daily, with 10 million small businesses, mostly within China (Rose, 2015).
While mobile commerce (m-commerce) in the majority of Asia Pacific markets is still largely un-tapped, Korea and Japan are well-progressed, with close to nine in 10 (89%) Japanese consumers and around two thirds (67%) of Korean consumers are participating in m-commerce activities each month. Outside of these two markets, Singapore, Hong Kong, Malaysia and Australia exhibit the strongest m-commerce up-take (31%, 28%, 27% and 25% of consumers in these markets respectively participate in m-commerce each month). In less developed markets, m-commerce activity trails at just eight percent in India, seven percent in Thailand and Indonesia, and three percent in the Philippines (Nielsen, 2014).
Smartphone owners in Asia Pacific markets are relatively receptive to mobile advertising. In China, nine in 10 (90%) smartphone owners click on a mobile advertisement each month, as do 87% of smartphone owners in India, and 78% in Japan and Hong Kong. Smartphone owners in Thailand and Indonesia exhibit the highest level of resistance to mobile advertising – 53% and 56% respectively click on mobile advertisements each month. In-app advertising is the most prevalent form of mobile advertising in all Asia Pacific markets (Nielsen, 2014).
As can be seen from the examples and statistics above, website advertising and marketing success is possible. It does require understanding the consumer’s demographics and maybe slightly more importantly, the device they are using to access the m-commerce website portal. Marketing your business is about how you position it to satisfy your market’s needs (Ehmke et al. 2005) and if properly promoted to consumers, it can allow your buyer to make and educated and informed decision while choosing the right product (Prashar, 2013)
There are four critical elements in marketing your products and business. They are the four P’s of marketing (McCarthy, 1964).
1. Product. The right product to satisfy the needs of your target customer.
2. Price. The right product offered at the right price.
3. Place. The right product at the right price available in the right place to be bought by
4. Promotion. Informing potential customers of the availability of the product, its price and
Competitive advantage in the past has come from increased productivity which transformed into additional capital. Today a nation’s competitiveness depends on the capacity of its industry to innovate and upgrade. Companies gain advantage against the world’s best competitors because of pressure and challenge. They benefit from having strong domestic rivals, aggressive home-based suppliers, and demanding local customers (Porter, 1990).
Communication helps businesses grow and prosper, creates relationships, strengthens the effectiveness of organizations, and allows people to learn about one another. Technology such as the Internet, and mobile phones, and social media affects the way we communicate and is changing the media landscape and the type of messaging strategy organizations use (Tanner and Raymond, 2012).
As can be seen from the above advancements of smartphone technologies and penetration rates into the Internet, new and innovative ideas such as Jack Ma’s Alibaba need to be employed to create a variety of ways to deliver information and provide products to a new generation of hi-tech and connected consumers, both within Thailand and outside its borders.
A web based system therefore needs to be devised to provide OTOP entrepreneurial SMEs and customer’s access to a web portal that is able to manage transactions, edit information, and allow online purchasing, payments and searching. The system must also be ‘user friendly’, implementing an environment which is graphical in nature (GUI-Graphical User Interface) and ‘smartphone friendly’. This will contribute to a more prosperous economy and contribute to a boost in sales and production base, contributing to Thailand’s competitiveness within the AEC. Thailand’s OTOP SMEs (Small and Medium Sized Enterprises) represented in the form of ‘One Tambon, One Product’ therefore need to accelerate their preparedness at providing access to the quality and uniqueness of the ‘Thai brand’ through the development and implementation of a comprehensive, easily accessible and easily navigable web e-commerce designed portal.
The research objectives of the proposed study are to evaluate the concepts and theory of media advertising and use this as a framework for creative advertising design for an e-commerce website portal for OTOP products.
Internet technology is an important tool in developing business innovation which has led many researchers to rethink the ways in developing innovation tools. Researchers in the past relied on information from books, newspapers, magazines and library aisles where today Internet-based communication creates a variety of ways to deliver and provide electronic resources for researchers. For this study, focus will be given to the theories about advertising and its use in newer communication and information technology mediums such as websites and video on demand services such as YouTube and their use with new access devices such as smartphones. Additionally, research will be undertaken to analyze the current OTOP online marketing mediums as well as ‘sister’ organizations such as Japan’s OVOP and JETRO. Additional focus will be given to the multi-lingual requirements of a Thai OTOP site.
From the past, it has been learnt that the essential elements of print advertisements include headlines, copy, illustrations, signature, and slogans. New digital marketing still uses the ‘Tried and True’ methods of the past but now includes mediums like local sites, blogs, social networks, banner ads, search engine results and much more. According to eMarketer, 2013 was the first year that people spent more time per day with digital media than any other media type (Bluewater, 2013). Smartphone penetration in Asia Pacific has continued to see exponential growth in recent years and in a number of markets is approaching saturation point and surpassing penetration in the US and many European nations (Nielsen, 2014). It therefore becomes necessary to understand what motivates and moves online consumers.
Creating awareness for the Thai OTOP brand online is an important component in building a complete website portal. One proven way is display advertising which can be an effective way at ‘pushing’ traffic to a site. Google has become the leader in this and primarily generates revenue by delivering relevant, cost-effective online advertising (Google, n/d). Businesses use Google’s AdWords program to promote their products and services with targeted advertising. So just what else is expected on a website portal used in e-commerce and m-commerce? It can consist of the following:
E-commerce (electronic) and m-commerce (mobile) today has evolved and humanized beyond just convenience shopping and it is therefore imperative that website developers stop seeing people who land on a site as ‘traffic’; but as real human visitors. Consumers are coming to a website to engage at various levels which for purposes of this research will be referred to as ‘touch points’. With each word that visitors read and with each media pixel they view at these ‘touch points’, they form a picture of the content and underlying organization/business in their minds (Prasher, 2013). And based on whether or not they like the final picture, they make a decision about buying from the portal or exiting and going to a competitor’s. Therefore, the basic information that should be available on the OTOP website portal for e-commerce and m-commerce users should include some if not of all the following (Prasher, 2013):
Home Page Optimization
Product Search Optimization
Product Page Optimization
Touch Point Optimization
Information Touch Points
Load Speed Optimization
Shipping and Returns
OTOP Website Portal Features and Functions
Electronic Commerce (e-Commerce) comprises a broad range of activities and information technologies (IT) that an organization can potentially deploy to meet this goal. However, before any business implements an e-Commerce strategy, it needs to articulate clear objectives and expectations to proscribe that course of action. Goldberg and Sifonis (1998) noted that companies have entered this medium in a haphazard way because senior management never made a conscious decision to move in this direction. In many instances, Internet sites of even very large companies are mere “brochureware,” providing little more than basic information about the firm’s products and services (Straub and Klein, 2001). The conduct of net-enabled business, known variously as electronic commerce (EC) or e-Business, has changed the landscape and opportunities for IS research by shifting the focus from internal to customer/partnering systems (Straub and Watson, 2000).
Miller and Cross (2012) discussed business and e-commerce law in their book, ‘The Legal Environment Today: Business in Its Ethical, Regulatory, E-Commerce, and Global Setting’ and adopted the following details and concepts concerning e-commerce:
- The e-commerce market is a virtual market using virtual storefronts.
- The e-commerce market is behaviorally segmented.
- E-commerce makes use of personalized marketing.
- E-commerce customers come from around the world using the Internet and other computer networks.
- E-commerce makes use of Web contacts and social media.
- The types of goods and services was a factor in the buying decisions of consumers using Electronic Data Interchange (EDI).
- E-commerce is a two-way communication process between buyers and sellers that allows them to interact with each other instantly. This can also be thoughts of as Business-to-Business buying and selling.
Laudon and Traver (2013) discussed e-commerce, business, technology and society in their most recent update (9th ed.) to their book’s research, it was indicated that:
Social networks such as Facebook, Twitter, and LinkedIn will continue their rapid growth, laying the groundwork for a “social e-commerce platform” and continued expansion of social marketing opportunities with the number of mobile Internet users expected to grow to more than 75% of all Internet users in the United States, about 200 million people, by 2016.
The mobile Internet platform composed of smartphones and tablet computers will continue to explode and becomes a major factor in search, marketing, payment, retailing and services, and online content. Mobile device use however poses new security and privacy issues as well.
The mobile platform provides the foundation for a number of unique new services such as location-based services which will lead to explosive growth in local advertising and marketing.
Belch and Belch (2003) discussed ‘Advertising and Promotion: An Integrated Marketing Communication Perspective’ and stated that advertising is undergoing dramatic changes that are changing advertising and promotion forever. Research indicates that:
The media strategy must be designed to supplement and support the overall marketing and communications objectives. The objectives of this plan are designed to deliver the message the program has developed.
Advertising is a formal communication process (mass media) that aims to publish the proposal with consumers being the target audience by use of various forms of media, such as text, graphics, logos, videos, etc. that can support the sale of goods and services to the masses through a wide variety of channels.
Advertising involves persuasion as an incentive in purchase behavior, so advertisers need to focus on only the good features of their goods and services. It is said that advertising is only ‘half-truth’ and sometimes advertisers will sometimes use half-truths. It’s against the law in many countries however to make false claims so advertisers try to mislead you with the truth. An ad might boast, “Nine out of ten doctors recommend Yucky Pills to cure nose pimples.” It fails to mention that they only asked ten doctors and nine of them work for the Yucky Corporation. This kind of deception happens too often. It’s a sad fact of life: Lies are lies, and sometimes the truth can lie as well.
Advertising is motivated by practical reasons (real reason) and hypothetical reasoning (supposed reason), motivated by the fact that means the feature is a benefit of the product.
Advertisers (among others) love invoking “experts” out of context, relying on the fame, rather than the expertise, of the advocate.
Platform design for an OTOP website e-commerce/m-commerce portal should embrace Web 2.0 features. Web 2.0 describes World Wide Web sites that emphasize user-generated content, usability, and interoperability (O’Reilly, 2005). The term was popularized by Tim O’Reilly and Dale Dougherty at the O’Reilly Media Web 2.0 Conference in late 2004, though it was first coined by Darcy DiNucci in 1999 (Franks, n/d).
Web 2.0 is the move toward a more social, collaborative, interactive and responsive web. It is a change in the philosophy of web companies and web developers, but more than that, Web 2.0 is a change in the philosophy of society as a whole.
According to O’Reilly and Battelle (2009), Web 2.0 is all about harnessing collective intelligence. Collective intelligence applications depend on managing, understanding, and responding to massive amounts of user-generated data in real time. The “subsystems” of the emerging internet operating system are increasingly data subsystems: location, identity (of people, products, and places), and the skeins of meaning that tie them together. This leads to new levers of competitive advantage: Data is the “Intel Inside” of the next generation of computer applications.
The evolution/migration of Web 1.0 to Web 2.0 is depicted in Figure 1:
Figure 1 Web 1.0 to Web 2.0 (Source: O’Reilly, 2005).
Features of an OTOP website Web 2.0 portal could also include the following:
RSS is the acronym used to describe the de facto standard for the syndication of Web content. RSS is an XML-based format and while it can be used in different ways for content distribution, its most widespread usage is in distributing news headlines on the Web.
Tag or Tagging is commonly used in blogs where site authors attach keyword descriptions (called tags) to identify images or text within their site as a categories or topic. Web pages and blogs with identical tags can then be linked together allowing users to search for similar or related content. If the tags are made public, online pages that act as a Web-based bookmark service are able to index them. Tags can be created using words, acronyms or numbers. Tags are also called tagging, blog tagging, folksonomies (short for folks and taxonomy), or social bookmarking.
Social bookmarking is a centralized online service which enables users to add, annotate, edit, and share bookmarks of web documents. It can introduce sites to others with relevant tastes, drive traffic to your site, and valuable backlinks.
Embedded content and services which is where information hosted on other sites such as YouTube, Google Maps and Slideshare are transferred to another website or blog.
OTOP – Thailand’s ‘One Tambon One Product’ Products and Goods
According to Thaitambon.com there are about 100,000 products from the OTOP program on offer. From this large database, major potential products and categories for a Web 2.0 e-commerce/m-commerce website portal include the following:
- Fresh agricultural produce such as vegetables, fruits, etc.
- Processed and semi-processed foods for downstream industries such as pastes.
- Drinks such as alcoholic and non-alcoholic beverages, fermented liquor, distilled spirits and juices. Other items can include water, tea and herbal teas.
- Textiles and woven cloth woven and knit fabrics from natural fibers. Mixed fibers or natural fibers such as silk, satin, crochet, etc.
- Fashion clothing and jewelry from all types of materials such as scarves, hats, bags, belts, necklaces, earrings, shoes, etc.
- Office equipment, office furniture and home furnishings including computer utility products.
- Products from handmade weaving used in homes such as tables, chairs, flowers, etc.
- Handicrafts and souvenirs with reflect local culture and tradition.
- Herbal products such as soaps and oils.
Due to a combination of factors, Internet commerce continues to explode. In Thailand, research indicates that consumers are some of the most connected users on Earth, primarily through their nearly 4 hour of average daily use of smartphone technologies. In 2015, ASEAN Economic Community (AEC) integration becomes a reality and many trade and commerce barriers are swept aside. Competition becomes fiercer and technology plays a key role in winning the high ground.
As this paper has shown, OTOP is an important component of Thailand’s economy with projected revenues from Thai SME entrepreneurs in 2015 possibly reaching $USD 3 billion. The number of SMEs registered with Thailand’s Office of Small and Medium Enterprises Promotion (Osmep) Entrepreneur Services Bureau could reach 100,000 nationwide this year but actual numbers in existence could be as high as 2.7 million. Growing these numbers and expanding into an English speaking AEC community however will require the use of technology in the form a Web 2.0 enabled website e-commerce/m-commerce portal.
Consumers have embraced smartphone technology in a radical way and social media plays a crucial role in a vast percentage of the 600 million AEC consumers. OTOP entrepreneurial SMEs need to embrace this new environment and grow their businesses by marketing and advertising their products via an online website portal. The technology needs to be simple, easy to use and navigate, mobile based and affordable. With these items in place, maybe Thailand can produce a future OTOP Alibaba!
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