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A
Preface
Preface This Project is a part of 1203302 Project Feasibility Study and Evaluation
Course in the second semester of 2010. In this project is studying the feasibility of jewelry
and gem business in Chiang Mai, which is include generally of jewelry and gem business,
management in jewelry and gem business, competition analysis and marketing feasibility, the
technical process in jewelry and gem business, the financial feasibility of jewelry and gem
business, and risk of jewelry and gem business.
This project makes everyone who interested to get knowledge and information about
jewelry and gem business before make decision to investment, including preoperational
process and operation process of jewelry and gem business, for the benefit to investment and
profit of doing this jewelry and gem business.
We expect that our project will provide benefit more and more interested person,
more over, if they are any error in this project or whatever, our ground made an apology at
this opportunity.
Group members
Miss Nattida Bua-ngam
Miss Nartnarin Suksao
Miss Nopphawan Klabdi
Miss Piyaporn Nojit
Miss Ulaikorn Singsook
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B
Table of Content
Title Page
Preface.................................................................................................................................... A
Content................................................................................................................................... B
Chapter 1 Introduction............................................................................................................1
1.1 Background and Significance of the project..........................................................2
1.2 Project objectives...................................................................................................2
1.3 Benefits of project................................................................................................. 3
1.4 Operations methods...............................................................................................4
1.5 Time frame of study.............................................................................................. 5
Chapter 2 Industry Profile....................................................................................................... 6
2.1 Nature of Industry................................................................................................. 7
2.2. Situation of Industry........................................................................................... 10
2.3 Product and Service..............................................................................................20
2.3.1 Hand craft............................................................................................. 20
2.3.2 Fashion.................................................................................................. 24
2.3.3 Order......................................................................................................28
2.4 Vision................................................................................................................... 28
2.5 Mission..................................................................................................................28
2.6 Strategy................................................................................................................ 28
2.6.1 Corporate Level......................................................................................28
2.6.2 Business Strategy....................................................................................29
2.6.3 Functional Strategy................................................................................ 29
Chapter 3 Marketing Feasibility Study.................................................................................. 31
3.1 Marketing Analysis..............................................................................................32
3.1.1 General Environment of Chiang mai....................................................32
3.2. General Environment Analysis............................................................................37
3.2.1 Political Analysis..................................................................................37
3.2.2 Economic Analysis...............................................................................43
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3.3 Competition Analysis........................................................................................49
3.4 Customer Analysis.............................................................................................51
3.5 Competitive Analysis..........................................................................................53
3.6 STP Analysis.......................................................................................................54
3.6.1 Market Segmentation...........................................................................54
3.6.2 Target Analysis....................................................................................55
3.6.3 Position Analysis..................................................................................55
3.7 Marketing Mix Strategy Analysis.......................................................................56
3.7.1 Product strategy...................................................................................56
3.7.2 Price strategy........................................................................................58
3.7.3 Place strategy.......................................................................................62
3.7.4 Promotions strategy.............................................................................62
3.8 Sales Forecast/Profit Estimation........................................................................63
3.9 Marketing Expenses...........................................................................................71
3.10 Conclusion in market feasibility......................................................................73
Chapter 4 Technical Feasibility Study................................................................................75
4.1 Production and Operation Analysis...................................................................76
4.1.1 Product characteristics........................................................................76
4.1.2 Service Process...................................................................................81
4.1.3 Location............................................................................................. 82
4.1.4 Facility Layout................................................................................... 84
4.1.5 Machine/Tools/Equipment..................................................................86
4.1.6 Logistics Management........................................................................97
4.1.7 Machine/Tools/Equipment..................................................................100
4.2 Cost of Investment........................................................................................104
4.2.1 Pre- Operating Cost............................................................................104
4.3 Investment Cost................................................................................................ 108
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4.3.1 Equipments & Tools...........................................................................108
4.3.2 Depreciation.......................................................................................109
4.4 Management Analysis.......................................................................................115
4.4.1 Organization Management.................................................................115
4.4.2 Organization Chart............................................................................ 116
4.4.3 Administration Cost.......................................................................120
4.5 Technical Feasibility Conclusion......................................................................121
Chapter 5 Financial Analysis...............................................................................................123
5.1 Income Statement............................................................................................. 126
5.2 Balance Sheet....................................................................................................131
5.3 Statement of Cash Flow................................................................................... 136
Chapter 6 Risk Management...............................................................................................142
6.1 Risk analysis.................................................................................................... 143
6.1.1 External Forces...................................................................................143
6.1.2 Internal Forces................................................................................... 148
6.2 Conclusion of Risk Management..................................................... .155
Chapter 7 Summary..............................................................................................................156
7.1 Summary of project feasibility study................................................................ 157
Reference............................................................................................................................ 160
Appendix............................................................................................................................ 161
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Chapter 1
Introduction
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Chapter 1 Introduction
1.1 Background and Significant of the Project
The wordjewelry is derived from the wordjewel, which was Anglicized from the Old
French "jouel" circa the 13th century. Further tracing leads back to the Latin word "jocale",
meaning plaything. The first jewelry was worn by the Cro-Magnons, ancestors of Homo
sapiens. Their jewelry included crude necklaces and bracelets made of bone, teeth and stone
stitched to animal sinew. Jewelry was made for practical uses such as pinning of clothes
together. It was used not only for decoration but was also considered as a status symbol.
Jewelry had various functions to serve. Its main purpose, in ancient times, was to ward off
evil. People have paid dowries with jewelry. It was also created to be used as currency for
trading goods, evident from the use of slave beads. It also was a distinguishing mark between
the ruler and the ruled. (www.fashion-era.com/jewellery.htm)
Jewelry making is an old craft that has been in existence since ancient times. Many
centuries men and women both liked to adorn themselves with jewelry items. Thailand in
recent years has extended its range and scope of traditional handicraft products. Thai
handcraft jewelry is saliently because Thailand is famous in handcraft and art. It is special
identity and differentiation and the products which made by handcraft are attract foreigners.
Thai handmade products are now being made to cater for western tastes and to a much higher
western quality. Therefore Soul of Beauty jewelry offer the Thai handcraft jewelry which is
salient, special identity and various designs to customers.
Chiang Mai is center of North, Thailand and has distinguish culture, identity and
traditional. We selected Chiang Mai, Thailand to launch the business because it is important
of tourism industry in Thailand and has much tourist in every year. Moreover, Chiang Mai is
traditions reflect the charm of the region namely diverse dialects, cuisine, handicrafts,
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festivals and architecture. Therefore Soul of Beauty company try to be combine Lanna art
and jewelry together to design the quality of product and has identity, difficult to copy
because our purchase of genuine handicraft products can really make a difference to some
Thai artisans out in the countryside. Our company reminds in detail of product and neatly
design and customer can preorder and design their own jewelry.
So we are interested in study feasibility jewelry business in Chiang Mai, opportunity
to access the market, risk and barrier and etc.
1.2 Project objective
-To study feasibility of jewelry business
- To study market activities.
- To study trend and situation of jewelry market
- To study finance feasibility
- To study risk analysis and sales forecast of jewelry market.
- To study behaviors of customer
- To study new channel of distributions.
- To study the way to success goal of our business.
1.3 Benefit of project
- To gain more knowledge in jewelry market.
- To know customer behavior and demand of jewelry
- To know about business cycle of jewelry business
- To know about customer demand and the way to satisfy them.
- To get a structure that suitable for jewelry market in Chiang Mai.
- To gain profit from business.
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1.4 Operating Methods
Brainstorming to find project and topic
Collect data and information searching
Discuss and conclude the business
To specify business structure and create prominent point for our business
Discuss about background of business
Create project objective, benefits and create project time frame.
Industry profile discussion
Create Product/Service, Situation mission, Vision and Strategy.
Discuss about Market Feasibility.
Create Market Analysis, Marketing Mix, Strategy and Sales Forecast.
Discuss about Technical Feasibility Study and Financial Analysis.
Create Production and Operations Analysis, Pre-Operating Cost, Investment Cost,
Operating Cost and management analysis.
Create Statement, cash flow and balance Sheet
Create Advertising
Review all part of project.
Prepare final report draft
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1.5 Time frame of study
Table 1.1 Time frames, since November 2010 - February 2011
Operation Method November December January February
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1. Brainstorming to find project and topic
2. Collect data and find information.
3.Discuss and conclusion about our
business
4.To specify business structure and create
prominent point for our business
5.Discuss about background of business
6. Create project objective, benefits and
create project time frame.
7. Discuss industry profile.
8. Create Product/Service, Situation,
Mission, Vision and Strategy.
9. Discuss about Marker Feasibility.
10. Create Market Analysis, Marketing
Mix, Strategy and Sales Forecast.
11. Discuss about Technical Feasibility,
Study and Financial Analysis.
12. Create Production and Operations
Analysis, Pre-Operating Cost, Investment
Cost, Operating Cost and managementanalysis.
13. Create Ad.
14. Review all part of project.
15 Prepare draft of final report.
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Chapter 2
Industry Profile
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known treasures of the pharaohs, emeralds, rubies and
sapphires were seldom used, while turquoise, jasper, lapis
lazuli, carnelian and rock crystal played a substantial role.
Since color was all important, diamonds were quite
unknown. The use of gemstones and precious metals during
this time were not limited, but spread lavishly about
wherever ornament was desired. Moreover, jewelry advanced from a simple ornamental or
amulet stance to a more practical one. It became used as a symbol of rank, wealth and social
standing. When taking on this role, they became an investment of marketable value. This
economic aspect of easily liquidating these possessions became an essential part of the
politics of Europe when Francis I instituted the crown jewels as legal entity. For his
successors these jewels were often used during the religious wars to guarantee foreign loans.
The three basic roles that jewelry has played, the ornament, the amulet and the symbol of
wealth, have remained constant to the present time.
Diamonds
Diamonds are perhaps the most sought after and most valued in all kinds of gemstone
jewelry. A diamond is also the hardest known substance and represent of gemstone of Venus.
Although diamonds are extremely expensive, these are
not exactly rare. This is solely due to the fact that there
are many numbers of diamonds being mined throughout
the year. Of course, large diamonds, which are of a very
high quality, are rare. In the ancient days, diamonds were
known to be as a way of protection for the wearer.
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Diamonds also remain to be the focal point in most engagement rings. The wearers of
diamond can be saved from ominous things and evil spirits such as witches, ghosts, black
magic and even the effect of poison also decreases. Diamond gemstone increases the stamina
and makes the marital life happy and permanent. Diamond gemstone also improves health,
checks untimely death also. Diamond gemstone is advantageous in diseases like epilepsy,
impotency, rheumatism, shortage of semen and other sexual diseases.(http://crystal-
cure.com/diamond.html)
Ruby
Ruby is a pink to blood-red colored gemstone its color
varies from deep cochineal to pale rose red, in some cases with
a tinge of purple; the most valued is a pigeon-blood red and
also known as the Lord of the Gems. Be it the beauty or the
uniqueness of this gemstone, it has found quite a few admirers
till date. This gemstone is known to symbolize love and
friendship. Some of the finest and most exotic of all rubies are found in Burma.
(http://crystal-cure.com/ruby.html)
Emerald
This green gemstone is popular because of the intense green shade, which lends a
unique kind of a beauty to all types of gemstone jewelry. The
emerald is the sacred stone of the goddess Venus. It was
thought to preserve love, Lucky for love, give your lover an
emerald to stay faithful. In several cultures the emerald was the
symbol for fertilizing rain. In the Christian faith it is the symbol
of faith and hope. It is considered by many to be the stone of
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prophecy.
For some the emerald acts as a tranquilizer for a troubled
mind. The emerald is said to bring the wearer reason and wisdom.
The strongest time for the powers of the emerald is said to be
spring. One may think the emerald to be a really hard gemstone but
if you own gemstone jewelry set with emeralds, and then does treat
it with care as it may chip easily. Emeralds have been worn since ancient days to cure health
related issues and also as a way to protect one from spells. (http://crystal-
cure.com/emerald.html)
Opals
Opals are available in a variety of options, such as the
common opals, the precious opal etc. The name opal has been
derived from the Latin word Opalus; this symbolizes a change in
color. This is because, opals always sparkle differently in various
angles and this dazzling beauty attracts many to own any
beautiful jewelry that makes use of opals. Although initially, opals were associated with
many stories that kept people away from these gemstones, they later became a symbol of
fidelity and even assurance.
Moreover, opal is said to be many things including the most powerful of healing
stones, the stone of hope, the stone of great achievement and even the "stone of the Gods". It
is said to be the stone of love, but only to faithful lovers. The opal will bring misfortune to an
unfaithful lover.
(http://crystal-cure.com/opal.html)
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Sapphire
A sapphire means blue in Greek. The blue goes from dark blue almost black to pale
blue. The finest blue sapphires are a strong blue. The star sapphire is very valued. The deep
blue shaded gemstone is also found in other shades but the finest of all sapphires are known
to be those with a shade of blue. Sapphire also remains to be
the choice of many in England as an engagement stone. It is
also believed that the Sapphires were deeply respected by
ancient priests. The sapphire was called the "Stone of
Destiny". Sapphires contribute to mental clarity and
perception. They can promote financial rewards. Moreover, sapphire is the symbol of heaven
and joyful devotion to God. Sapphire is associated with Aquarius, Virgo, Libra and
Capricorn. It is the birthstone of September and has been the birthstone of April. Sapphire is
the symbol of Saturn (dark blue) and Venus (light blue). (http://crystal-
cure.com/sapphire.html)
Aquamarine
Aquamarine is a blue-green stone that comes from Colombia and Brazil. It has been
called "Water of the Sea", because of its color. Aquamarine
is quite popular as it is known to compliment all types of
skins and complexions. Aquamarines can be seen in a
beautiful shade of blue or even green. The name, Aquamarine
is derived from the Latin word, which means seawater.
Aquamarine is most powerful as a meditation stone,
as it brings a great peace and serenity. Some people can meditate on an Aquamarine to
receive the wisdom to see truth, but this is a very advanced meditation. It will protect against
gossip. It is also said the aquamarine will pick up spirits. It is an excellent stone to use for
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meditating. The Romans used the aquamarine for diseases of the stomach, and believed it
could cure liver and throat troubles.
(http://crystal-cure.com/aquamarine.html)
Turquoise
Turquoise is an opaque, blue-to-green mineral
that is a hydrous phosphate of copper and aluminum. It
is rare and valuable in finer grades and has been prized
as a gem and ornamental stone for thousands of years
owing to its unique hue. Turquoise is one of the oldest
protection amulets, and was also known as a symbol of
wealth in many ancient cultures.
Turquoise is a stone that has been prized for many years. The
ancient Egyptians used turquoise in jewelry. The name means "Turkish stone" as it came to
Europe by way of Turkey. Turquoise was mined more than 6,000 years ago in Sinai. The best
turquoise comes from Iran, but not much is exported now. Much turquoise comes from
Mexico and the United States today.
This stone is a very personal and meaningful stone to one who wears it. Turquoise
takes on the characteristics of the owner. Turquoise carries
great wisdom of basic truth within it. It is one of the oldest
stones known. This is a stone that a person must learn to
attune to instead of the stone attuning to the person. It is
important that the owner of a Turquoise give it the proper
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attention. If given a turquoise by a loving friend, that stone would protect the wearer from
negative energy and bring good fortune. The turquoise is the symbol of friendship. It also
brings peace to the home. (http://crystal-cure.com/turquoise.html)
Topaz
Topaz occurs in a range of different colors: deep golden
yellow (Imperial Topaz), blue, light to medium brown
(Champagne Topaz), pink, and white, or clear topaz. It can be
found in Brazil, USA, Sri Lanka, Myanmar, former USSR,
Australia, Tasmania, Pakistan, Mexico, Japan and Africa. Topaz
is a soothing, empathetic stone that will direct energy to the
place it is most needed. It heals and energizes. Topaz is a promoter of truth and forgiveness.
Use it to find your own path. (http://crystal-cure.com/topaz.html)
Garnet
Garnets are a related group of minerals. Members of this group include: almandine
(red to violet red); spessartite (yellow, rose, or orange to reddish-brown); pyrope (deep red);
grossular (white, yellow, yellow-green, and brownish-red,
orange or black); andradite (colorless, yellow-green, or brown
to black). The most prized garnet is an emerald green variety
called demantoid and is a member of the andradite group.
Currently, the world's largest supply of garnets is the continent
of Africa. In December 1996, a student in Central Australia
discovered what is thought to be the largest single garnet ever found - measuring nearly one
hundred feet across! Other sources of garnet include India, Soviet Union, Brazil and the
United States. A garnet is known as the stone for a successful business. If your business is
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not as good as it should be, just put 3 or more garnets on your
desk. It is believed that if a garnet is put under a pillow it will
cure depression. Garnets can be used to make a person popular
and have self-esteem when worn as jewelry. It helps protect one
on trips. Garnets bring constancy to friendships. Garnets are also
known for stimulating success in business. (http://crystal-cure.com/garnet.html)
Amethyst
Crystalline quartz in shades of purple, lilac or
mauve is called amethyst, a stone traditionally worn to
guard against darkness and to instill a sober mind. The
word amethyst comes from the Greek meaning "without
drunkenness" and amethyst is believed to protect one from
poison. It is used as a dream stone and to help insomnia.
Put an amethyst under your pillow to bring about pleasant dreams, or rub it across your
forehead to offer relief from a headache.
The amethyst is known as the Bishop's Stone and is still worn by Catholic Bishops.
The amethyst symbolizes piety, humility, sincerity and spiritual wisdom. It is thought the
amethyst is the perfect stone to symbolize The Age of Aquarius. (http://crystal-
cure.com/amethyst.html)
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2.2 Situation of industry
Nowadays, there are many jewelry businesses in Thailand. Those do for export and
sale in the country. Jewelry has many price ranges depend on material, quality and design.
Jewelrys Thailand made from gems, color stones, pearl and zirconium so customer can
choose as needed. Customers buy jewelry for wearing or colleting. Design of jewelry is
important to attract customers want but depend on preference of each individual too. Design
of jewelry for male is different female. Jewelry shop must be having many design of jewelry
if other shops have more design that is attract customers to buying. In this business trusting is
important because most customers are concern about quality. They thing when they pay too
much, they want to get high value. Many companies try hardly to create their own strategies
to compete with each other such as competition in price, quality of service and the special
promotion in discount or premium to motivate the customers and after-sales service.
(Source:http://www.manager.co.th/SMEs/ViewNews.aspx?NewsID=9530000168902,
http://www.gotomanager.com/news/details.aspx?id=49902)
When business about jewelry import material from another country to made Jewelry,
the business isnt pay for VAT because Thailand has exemption of VAT for import jewelry to
driving toward to center of strong Thai gems and jewelry.
(Source: http://news.impaqmsn.com/articles.aspx?id=275187&ch=ec1)
Export value of Thailand is 304,361,845,140.00 baths and Import value is
294,710,817,092.00 baths in 2010 that is higher from 2009 so Jewelry business in Thailand is
grown continuously in future. (Source: http://gemandjewelrydb.git.or.th/gem/home.asp)
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Thailand Export Statistics
HS 71 : Gem & Jewelry
January-October , 2009 to 2010
No. Product2009 2010 Change
(%)Value (Baht) % Value (Baht) %
1 Pearls 266,175,299.00 0.09 394,309,510.00 0.13 48.14
2 Diamonds 22,376,999,413.00 7.43 28,934,451,830.00 9.51 29.30
3
Precious Stones
and Semi-Precious
Stones
12,101,929,012.00 4.02 13,075,337,850.00 4.30 8.04
4
Synthetic or
Reconstructed
Precious and Semi-
Precious Stones
1,727,025,343.00 0.57 2,108,381,177.00 0.69 22.08
5
Dust and Powder of
Natural or
Synthetic Precious
or Semi-Precious
Stones
16,638,033.00 0.01 8,406,159.00 0.00 -49.48
Total 36,488,767,100.00 12.12 44,520,886,526.00 14.63 22.01
6 Silver 1,359,277,070.00 0.45 287,908,917.00 0.09 -78.82
7
Base Metals cladwith Silver, not
further worked than
semi-manufactured
343,571.00 0.00 0.00 0.00 -100.00
8 Gold 185,144,520,369.00 61.50 169,220,676,271.00 55.60 -8.60
9
Base Metals or
Silver, clad with
Gold, not further
worked than semi-
manufactured
5,459,070.00 0.00 4,546,717.00 0.00 -16.71
10 Platinum 56,995,548.00 0.02 79,718,699.00 0.03 39.87
11
Base Metals, silver
or gold , clad with
Platinum
7,587,051.00 0.00 1,154,531.00 0.00 -84.78
12 Waste and Scrap 644,937,651.00 0.21 675,362,350.00 0.22 4.72
Total 187,219,120,330.00 62.18 170,269,367,485.00 55.94 -9.05
13 Articles of Jewelry 70,133,275,185.00 23.30 81,263,993,724.00 26.70 15.87
14
Article of
Goldsmiths' or 359,384,534.00 0.12 313,617,068.00 0.10 -12.73
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Silversmiths'
Wares and Parts
15
Other Articles of
Precious Metal orof Metal clad with
Precious Metal
586,827,109.00 0.19 187,564,542.00 0.06 -68.04
16
Articles of Natural
or Cultured Pearls,
Precious or Semi-
Precious Stones
177,131,923.00 0.06 201,923,813.00 0.07 14.00
17 Imitation Jewelry 6,025,911,013.00 2.00 7,585,843,333.00 2.49 25.89
18 Coin 36,903,884.00 0.01 18,648,649.00 0.01 -49.47
Total 77,319,433,648.00 25.68 89,571,591,129.00 29.43 15.85
Grand Total 301,027,321,078.00 100.00 304,361,845,140.00100.00 1.11
Table 2.1 Thailand Export Statistics
(Source: GIT with collaboration of Thai Customs Department)
Thailand Import Statistics
HS 71 : Gem & Jewelry January-October , 2009 to 2010
No. Product2009 2010 Change
(%)Value (Baht) % Value (Baht) %
1 Pear s 448,138,194.00 0.30 510,696,740.00 0.17 13.96
2 D amon s 23,482,227,532.00 15.52 22,325,126,036.00 7.58 -4.93
3Precious Stones and Semi-
Precious Stones 7,184,400,536.00 4.75 7,819,439,904.00 2.65 8.84
4
Synt et c or Reconstructe
Precious and Semi-Precious
Stones
1,489,279,230.00 0.98 1,820,194,073.00 0.62 22.22
5
Dust and Powder of Natural or
Synthetic Precious or Semi-
Precious Stones100,150,262.00 0.07 181,338,310.00 0.06 81.07
Total 32,704,195,754.00 21.62 32,656,795,063.00 11.08 -0.14
6 S ver 14,365,849,094.00 9.49 19,929,112,206.00 6.76 38.73
7
Base Metals clad with Silver,
not further worked than semi-
manufactured1,214,285.00 0.00 3,867,450.00 0.00 218.50
8 Go 86,200,233,066.00 56.97 223,185,995,299.00 75.73 158.92
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First prize for Vol.1 hot 2009 and 2010
A survey of the latest industry jewelry that silver jewelry is a product sold best during
the economic downturn and the price of gold higher, while this respect, the survey found that
sales of silver is increasing in the last 3 years. Expected in 2011, Silver jewelry would still
sell well because of silver jewelry is lower price of gold and diamonds jewelry. Products with
new format are particularly popular with teenagers. Silver jewelry containing pearl,
zirconium and beads are popular and Vendor jewelry more recently in small time. The
competition between the retail sales increases. (Source: http://www.depthai.go.th Dec, 1,
2010, http://www.ryt9.com/s/expd/1040150)
Chiang Mai is the economic center of the Upper North. Therefore, it has several
advantages of geographic location with an area of contact with neighboring countries. Ease of
moving goods transportation growth of several types of business hotel, restaurant, Jewelry
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and others these reflects the overall availability of commercial development in the future.
Chiang Mai has potential to earn the support of travel abroad to travel to throughout the years
in business, jewelry in Chiang Mai is the competition is quite high because it is a tourist
destination of tourists coming through and has the capacity to purchase high. Allowing
operators have increased rapidly as well.
(Source: http://gotoknow.org/blog/export/111495?class=yuimenuitemlabel)
2.3 Product and Service
There are 3 main product of our company, which are hand craft, fashion and order. In
each type of product we design in various styles such as necklace, bracelet, ring, and earring
2.3.1 Hand craft
Product deign neatly by using handmade under the concept of Lan-na or Thai design
to conserve concept of Lan-na and Thai style
Necklace
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Bracelet
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Earring
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Ring
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Bracelet
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Earring
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Ring
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2.3.3 Order
This type of product is customer can design product by them self. The company
concern on satisfy of customer need the pre-order product our designer will help the customer
design what they want.
2.4 Mission
Our company focuses on customer; we offer honest service, the best in jewelry
selection and takes great inspiration from the indigenous cultures found throughout the north
of Thailand attention to detail and respect for the highest standards in all activities of the
company.
2.5 Vision
Brings the place where dreams come alive throughout our jewelrys designs,
Combined the modern style and soul of indigenous cultures style for the best classic beauty.
You can touch the value we deliver.
2.6 Strategy
2.6.1 Corporate Strategy
Soul of beauty is a new jewelry shop in Kalare Night Bazaar Chaing Mai. Our
company wants to be a well know in jewelry business so we choose best strategy for ultimate
success. In Corporate Level Strategy, we decide to use Concentration Strategy because our
company is a new business we need to maintain existing customers, create new product to
increase sale and expand the market widely to increase a new customer. In the future, if Soul
of beauty have strong customer base, we try to use Backward Strategy that we own design
and produce by our company without Third Party Company.
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2.6.2 Business Strategy
Soul and Beauty is a new brand in the market so we need to create the differentiation
and build brand identity to make the customer remember our brand Soul of Beauty. We
need to improve capability in creativity and up to date design of fashion. From the survey we
found the most jewelry shop in Thailand is small size and number, because there are few
jewelry manufactures in Thailand. Almost jewelrys price in the market is not different, so it
makes us to select Focused Differentiation for our Business Strategy because we have only
one shop in Chiang Mai province, this is specific place and we serve the best quality product
to our customers.
2.6.3 Function Level
Marketing Mix Strategy
Product-Building brand and logo which salient and easy to remember
-Product is a high quality and high standard
-Customer can design jewelry individually
-Product guaranteeing
Prices-We use cost based pricing strategy because we set the prices from the cost.
- Skimming price strategy because our product is a high quality jewelry and emphasis on
luxury.
PlaceWe select Kalare Night Bazaar Chiang Mai location because this place is shopping
bazaar with a unique combination of cultural- performances open and it is a center of Thai
and foreigner Tourists with high purchasing power. Most customers will buy as souvenirs.
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Promotion-Advertising in Tour Guide Magazine
-Brochure
-Bill board
-Customers can clean jewelry free.
--In festival we have promotions such as free gifts warping.
-Couple ring discount
Human Resources StrategiesWe emphasize to salesperson performance because they can influence customer
decision, they need to develop themselves all the time, grooming, appearance, speech, service
mind and etc. for satisfy customer, make customer impressive and increase the sale volume.
There are many reasons that we select this strategy;
1. Training and repeating all staffs to be always ready to work.
2.Motivating salesperson by high commission.
3.Salesperson can speak several languages. Financial Strategy
We have financial strategies to analyze revenue, company expense, and operation by
consider form all financial resource.
1.Provide the financial management to improve circulation in business every month.2.Making shop account.3.Financial must be clear.4.Analyzing financial situation and planning to reduce financial risk
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Chapter 3 Market
Feasibility Study
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Chapter 3 Market Feasibility Study
3.1 General information of Chiang Mai
Figure 3.1 the symbol of Chiang Mai
LocationChiang Mai valley averages 310 metres (1,027 feet) above
sea level, and the province covers 20,107 square kilometres
(12,566,910 rai). The widest point of the province measures 136
kilometres (85 miles), and the longest 320 kilometres (200miles).
To the north, a 227 kilometre (141.88 miles) stretch of
mountains divides Chiang Mai's northern districts of Fang and Mae
Ai from the region around Kengtung in the Shan State of Myanmar (Burma). On the east,
Chiang Mai is bordered by Chiang Rai, Lampang and Lamphun provinces. The Mae Tuen
River, Ream Mountains and Luang Mountains separate Chiang Mai's south from the province
of Tak. Some stretches of Chiang Mai's south also border Lamphun province. To the west,
Chiang Mai is bordered by Mae Hong Son province.
Geography
Chiang Mai province is about 700 km from Bangkok and is situated on the Mae Ping
River basin and is 300 m above sea level. Surrounded by high mountain ranges, it covers an
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area of approximately 20,107 km. The district is covered by many mountains, chiefly
stretching in the south-north direction. The river Ping, one of the major tributaries of the
Chao Phraya River,originates in the Chiang Dao mountains. The highest mountain of
Thailand, the 2,565 meter high Doi Inthanon, is located in the province. Several national
parks are in the district: Doi Inthanon, Doi Suthep-Pui, Mae Ping, Sri Lanna, Huay Nam
Dang, Mae Phang, Chiang Dao.
The mountainous terrain is mainly jungle, parts of which are within national parks
which are still fertile and verdant with plentiful flora and fauna. There are many sites and
locations where tourists prefer to visit to study the lifestyle of the tribal people who live on
high hills.
Population
As of December 2004, Chiang Mai has a population of 1,603,220. (790,107 males and
813,113 females) The average population density is 80 inhabitants per square kilometer and
the total number of households is 551,696.
There are 1,251 villages of highland communities scattered across many districts in
Chiang Mai, making up 70,820 households or 312,447 inhabitants. The majority of them are
from 13 ethnic backgrounds including Karen, Musoe, Hmong, Leesaw, Akha, Yao, Lua,
Chinese, Burmese, Palong, Tai Yai and Tai Lue. The majority of people living in Chiang Mai
are Buddhist (around 91.8%). 1.17% of people are Muslim, 5.6% Christian, and 0.02%
Brahmin, Hindu or Sikh. 1.41% subscribe to other religions and beliefs.
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Education
Some cities seem to have been created to be seats of learning - ideal places both for
teachers and students. Chiang Mai is such a city.
Chiang Mai is home to six universities,
Buddhist and Christian seminaries, technical colleges,
six international schools and one German one, a large
university teaching hospital and several private ones,
some with nursing schools. There are also many private language schools as well as the
AUA, the British Council, Australian and New Zealand centers and the Alliance Franoise.
All this means that there are many opportunities for native English language
teachers, especially if they have a university degree and teaching qualifications. The many
Thai schools are hungry to employ English teachers.
The international schools cater for the children of expatriates living in Thailand and
are increasingly attracting Thai children and those from neighboring countries, whose parents
want them to be educated in English. Universities are offering more and more courses in
English and are anxious to establish exchange programs for overseas students and lecturers.
All this activity results in a stimulating environment - students exchanging ideas at the
food stalls around the university or picnicking beside the lake at the foot of the mountain;
English teachers relaxing after a hard day's work in the quiet bars and restaurants along the
banks of the River Ping.
In the age of cyberspace and satellite dishes, Chiang Mai, only one hour's flight from
Bangkok, is no longer an isolated outpost. It is, in fact, a regional centre of communications,
the gateway to Burma, Laos and southern China.
Chiang Mai is a safe, healthy and stimulating place for students and a low cost,
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convenient and idyllic heaven for teachers.
Six years of primary education are compulsory and free for all Thai children, although
there are certain small expenses for uniforms, books and writing materials. Some children fall
through the net either because their parents can not afford even these expenses, because they
live far from any school or because they do not have Thai citizenship.
There is government and private charity scholarships that help poorer children
complete their secondary education. Many of the schools in Chiang Mai are excellent - four
of the best were founded by Christian missionaries, although there is no religious pressure on
the children. Universities, technical colleges and vocational schools offer a wide range of
subjects for those who wish or are able to go on to further education. Fees are not high but are
still out of the reach of many, but again there are government and private charity
scholarships.
Basic Infrastructures
TransportationBy Car
Take Highway No. 1 (Phahonyothin Road) and turn to Highway No. 32 (Asia Highway)
passing Ayutthaya, Angthong, Nakhon Sawan, then by Highway No. 11, from Tak,
Lampang, Lamphun to Chiang Mai: a distance of 696 kilometres or 9 - 10 hours.
By Rail
Express and rapid trains leave for Chiang Mai from
Hualamphong Station several times daily and the trip takes
about 12 - 15 hours depending on the class. It is
recommended to reserve seats in advance, especially for
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sleepers.
For further information please contact Tel. 0 2220 4334 or call 1690 or visit
www.railway.co.th Chiang Mai Railway Station Tel. 0 5324 2094
By Air
Chiang Mai International Airport is the center for air
travel in the north and is the second largest airport in Thailand
after Bangkok International Airport. It is the main airport in the
Northern Region and the hub for inter provincial flights from
other regions, as well as international flights from other countries in Asia and Europe.
InfrastructureElectricity
Electricity service in Chiang Mai province is provided in 22 districts, 2 sub-districts
and 1,892 villages, comprising 92.61% of all villages. Villages without electricity are located
in jungles, forest conservation areas and national parks. In 2004 there were 496,448
electricity consumers, a 10.98% increase on the preceding year. Total electricity consumption
in the province was 1, 630. 46 million units, a 7.11% increase on the year before. The major
consumer of electricity is offices and factories, using 878.99 million kilowatts per hour,
followed by residential users, government offices and public utilities using 621.24, 100.60
and 29.63 million kilowatts per hour respectively.
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Water
There are 7 waterworks in the province capable of producing 49,546,800 cubic meters
of water per year. In 2004, total water production was around 32,644,289 cubic meters. There
were 76,939 consumers of mains water, an increase of 5,710 consumers over the preceding
year.
Telecommunications
In 2004 there were 251,501 fixed telephone lines in the province; an increase of 9,780
lines over the previous year is total of 211,405 lines. The ratio of telephone lines to
inhabitants is 1:6.
(Source: www.chingmaiinfo.com; www.cmcity.go.th )
3.2. General Environment Analysis
It consists of the actors and forces outside marketing that affect marketing
managements ability to build and opportunities and threats to our business.
3.2.1 Political Analysis
Political situation is directly affect to the jewelry market in Thailand because the
demand of product depend on tourist and power purchasing and two factor will decrease if
political not stability.
Political situation of Thailand in presently is the lack of stability. That factor affects to
demand of product and the purchasing power because the customers have more concerning
about spending and choosing products or services. In domestic market is people worry about
stability that make they reduce unnecessary spending such as unnecessary product, traveling
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that make our value sale and profit decrease. In traveler market is directly affect about
political problem because if political not stability they may change their minds and travel to
other countries they see as more peaceful and safety. So revenue from this target market will
be losing.
Thailand: Tourist Arrivals from 1998 till 2010. Quarterly Data 2007-2010
International arrivals to Thailand from 1998 to 2009 show a significant rise from
1998 onwards. There are significant dips with the SARS epidemic, and after the Tsunami of
end 2004.
From end 2008 political events in Thailand have influenced tourist arrivals. While
total number of arrivals in 2009 was only mildly down on the year before, the tourist industry
surely had expected more revenue. Probably a potential additional number of 1 to 2 million
visitors elected not to come to Thailand.
Both the Office of Tourism Development and the National Economic and Social
Development Board (NSDB) provide arrival statistics, though not always timely or easy to
find. We almost accidentally found the best updated files eventually on the Office of Tourism
Development website (follow the little banner on the left saying: Tourism Statistics, on this
otherwise Thai language website).
Since somewhere in the middle of 2008 a severe worldwide recession dampened the
desire to travel. Thailand furthermore suffered from political instability, starting with the
closure of Suvarnabhumi Airport (26 november 2008, by the Yellow Shirts protesters). A
Red Shirt mob invaded the East Asia Summit in Pattaya on 11 April 2009, leading to a
cancellation of the summit, with world leaders scurried away to safety. This was followed by
violent riots the next day (during Songkhran) and the declaration of a state of emergency by
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Prime Minister Abhisit Vejjajiva. The protesters withdrew and the state of emergency was
lifted on 24 April.
On top of all that, flu cases emerged in March and April of 2009 in Mexico, with the
official first announcement of the new H1N1 flu on 23 April. On 12 May, it was made public
by Health Minister Witthaya Kaewparadai that two Thais who returned from Mexico had
been infected with swine and subsequently recovered. Fortunately while infections became
epidemic, the resulting health risk of H1N1 infection proved to be less serious than expected
by some.
The graph below shows the evolution of international visitors to Thailand between
1998 and 2009. We made the graph but the data come from the Tourism Authority of
Thailand.
Despite the serious disturbances in April 2009, tourism arrivals for the whole year
were only mildly affected, with a significant upturn (+28%) in the last quarter of 2009, when
compared to the last quarter of 2010. The first quarter of 2010 was very promising, but
serious demonstrations by the Red Shirts happened in April and May 2010, with serious
repercussions for arrivals in the second quarter of 2010.
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Interestingly, the tourism sector does not only depend on foreign visitors. The number
of domestic tourists actually dwarfs the number of foreign tourists. But domestic tourists
(mostly Thais) do spend much less per day and their trips are shorter, on average two days
and a half. In 2007 there were reportedly more than 83 million in-country travel trips. This
created 380 billion baht in revenue.
Average daily expenditure was around 1770 baht per person in 2007 (as compared to 4120
baht per person for international tourism).
In 2008, 52.37 % of international tourists were East Asian, with Malaysia and Japan
providing the most visitors. Close to two million Malaysians visited Thailand. We assume
they take short trips over the Thai-Malaysian border, and we think the number of Malaysian
visitors, unduly inflates the total number of international visitors.
Europeans provided close to 4 million visitors in 2008, about 27.22 % of the total. The
number of visitors from the Americas, South Asia and Africa, is much smaller. However,
close to 700,000 Australians visited Thailand, which is actually an enormous number, when
taking the total population of Australia into account. The downturn in the second quarter of
2009 was expected by the prime minister (as reported in April 2009) to cost the country
something like 4 billion U.S. Dollar.
Arrivals from 2007 to 2010 per quarter
The number of tourist arrivals in the first quarter and second quarter of 2009 were 3.64
million and 2.96 million respectively. These figures were lower than during the first 2
quarters of 2007 or 2008. In the third quarter of 2009 we see that the number of visitors is
similar to the number of visitors in both 2007 and 2008, suggesting that the worst was over.
In the 4th quarter of 2009, we saw more arrivals than in 2007 and 2008. See the yellow line
crossing over in the graph below.
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The first quarter of 2010 saw a significant increase of tourist arrivals, especially in January
and February.
Related to the political disturbances during April and May 2010, the second quarter
arrivals of 2010 were low (but not much lower than in the second quarter of 2009, which also
was characterized by riots and demonstrations. However, tourism rebounded strongly during
the third quarter of 2010, with arrivals higher than in any of the preceding years.
The surge in arrivals in the last quarter of 2009 and the first quarter of 2010 shows the
potential of the Thai tourism industry for sustained growth. However arrivals in both the
second quarter of 2009 and the second quarter of 2010 show the influence of political riots
and uncertainty. We figure that Thailand missed out on in between 1 and 2 million potential
extra visitors in both 2009 and 2010.
It is interesting to know that negative factors (the same happened with the various flu
scares) seem to loose influence in just 2 to 3 months each time, with visitors resuming their
interest in Thailand as a tourist destination.
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normal rate of 4.5 percent. This is great opportunity about increasing revenues and our
business growth.
Economic GrowthThai economy in 2011 is forecasted to grow at the normal rate of 4.5 percent per year
(or within the range of 4.05.0 percent per year). The main driver contributed to this growth
is domestic spending, both consumption and investment, which are projected to continue to
grow from 2010. Private consumption is forecasted to grow at 4.2 percent per year (or within
the range of 3.74.7 percent per year) as consumer confidence would pick up following an
ease in political tension. Private investment on the other hand is projected to grow at 5.9
percent per year (or within the range of 4.96.9 percent per year), with improving investor
confidence combined with higher capital utilization especially in export-oriented industry that
has stood high since 2010. Furthermore, the momentum from the persistent global economic
growth would also help supporting the growth of export of goods and services at the
projected rate of 5.4 percent per year (or within the range of 4.95.9 percent per year). This
high rate is however lower than in 2010 due to high base. Import volume of goods and
services is expected to grow at 8.3 percent per year (or within the range of 7.39.3 percent
per year). On the public spending side, public consumption is forecasted to grow at 6.4
percent per year (or within the range of 7.39.3), follows the constant budget disbursement in
2011. Public capital expenditure growth, on the other hand, is projected to slow down to 1.7
percentper year (or within the range of 0.72.7 percent per year) as the role of government in
supporting the economy begins to subside in the time when private sector is fully functioning
in driving the economy forward.
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Figure: 3.4 Forecasted Economic Growth in year 2011
Economic StabilityEconomic Stability On the internal stability, headline inflation in 2011 is
projected to stand at 3.5 percent per year (or within the range of 3.04.0 percent per
year), given oil price is still expected to remain steadily high. Unemployment is
forecasted to stand at the normal rate of 1.2 percent of total labor force (or within the
range of 1.11.3 percent of total labor force). On the external front, in 2011 Thailand
is projected to record a smaller current account surplus of 11.9 billion US Dollars,
equivalent to 3.4 percent of GDP (or within the range of 2.93.9 percent of GDP), as
trade surplus is expected to drop to 9.4 billion US Dollars (or within the range of 8.4
10.4 billion US Dollars). This is due to import growth which is expected to outweigh
export growth. More specifically, import value of goods is expected to grow at 13.2
percent per year (or within the range of 11.714.7 percent per year), while export
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value of goods is forecasted to grow at 12.0 percent per year (or within the range of
11.013.0 percent per year).
Figure: 3.5 Inflation Rate in year 2011
(Source:http://www.fpo.go.th/FPO/index2.php?mod=Content&file=contentview&contentID=CNT00
06204&categoryID=CAT0000028)
Social and Environment Analysis
Social includes the belief, value, and attitude of person in the social. The social is
reflected by culture, education, religious, and other social environments of other social. The
social condition is continuously changed because of person in the social need to control and
adapt you with the environment. When the social condition is changed, the need of person is
also changed such as dressing, hobby, even requirement of goods and service.
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Women and jewelry belong together for a long time ago, but not for only beauty or
attract the eyes only. But people believe it has hidden power of each type of gem stone or
jewelry .Especially in ancient time people believe gemstone cloud empower they lives and
rise they fortunes, as well as prevent them from any dangers and sickness. And represent love
for couple and has been used to denote status. All of things cloud add-value for our product
and attach customer so, it is opportunity for our business.
Figure 3.6: Nine star glittering gemstones
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Figure 3.7: The myth of gemstone
Figure 3.8: Birthstone
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3.3Competition Analysis
CompetitorFor the jewelry business, it has some competition. The competitors in the market try
to create their own identities for their brands and trust for customer. By emphasize the quality
of products and services and design of product. And tries hardly to create and design of
product. They are all having many interesting and attractive design and concern identity of
product to promote their brands. Most of our competitors have good locations and many of
them are the stores which were opened for a long time. So, they are well known for market
and customers want because of their have more experiences.
Five Force Model for Jewellery Industry
POTENTIALNEW ENTRY
INDUSTRY COMPETITORS
RIVARY AMONG EXISTINGFIRMS
BUYERSSUPPLIER
SUBSTITUTES
Figure 3.9: five force model
- Rivalry among existing competitors: Strong Slow market growth Sales highly fragmented among locally owned jewelry stores, retail jewelry store
chains.
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Jewelry product has demand always since the part to present. Jewelry product not only accessory but collectible.
- Bargaining Power of Suppliers High In jewelry industry the suppliers in domestic not much and more of supply produce
for export.
The suppliers in other country have more barriers to check grade of gemstone. Few Alternatives of cutting & polishing. In jewelry industry skilled labor is lack because they much have more experience in
this job.
Bargaining power of supply is enhanced because Thais gemstone is famous and havemore demand form domestic market and international market
- Bargaining Power of Buyers Medium
Divided in two types 1. Domestic buyers & 2. Foreign buyers Consumers can choose from many jewelry retailers if they are not satisfied Bargaining power of buyers is more because jewelry is high price product, so they
spend a lot of time and want satisfy service for make decision.
- Threat of Substitutes: Low Jewelry is value-product and less some product can be substitutes. Status and standard of living increase so demand is increasing at high rate.
- Barriers to entry Medium
High capital investment
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Skilled manpower is essential Existing jewelry retailers well know into international areas of business.
3.4Customer AnalysisMinistry of Tourism and Sports,Thailand
Accommodation Establishments at Tourist Attraction (Hotels,Guesthouses,Resorts) in Thailand 2010
(January - March)
Accommodation
Establishments
Guest Arrivals at Accommodation
at Tourist Attraction in
Thailand
Thai Foreigners Total
2010 2009
(%)
2010 2009
(%)
2010 2009
(%)
Total 1,558,2
24
1,586,6
67
-
1.79
545,9
03
425,6
15
+
28.26
2,104,1
27
2,012,2
82
+
4.56
Kampaengphet30,118 50,544
-40.41
867 2,040 -57.50
30,985 52,584 -41.08
Chiangrai184,433 163,283
+12.95
56,098
44,029
+27.41
240,531
207,312
+16.02
Chiangmai290,026 411,212
-29.47
368,094
271,693
+35.48
658,120
682,905
-3.63
Tak131,880 190,227
-30.67
5,043 5,654 -10.81
136,923
195,881
-30.10
Ministry of Tourism and Sports,Thailand
Accommodation Establishments at Tourist Attraction (Hotels,Guesthouses,Resorts) in Thailand 2010
(April-June)Accommodation
Establishments
Guest Arrivals at Accommodation
at Tourist Attraction in
Thailand
Thai Foreigners Total
2010 2009
(%)
2010 2009
(%)
2010 2009
(%)
Total 1,299,6
55
1,366,1
90
-
4.87
254,2
43
311,3
76
-
18.35
1,553,8
98
1,677,5
66
-
7.37
Kampaengphet 29,909 23,109 +29.42
1,035 1,468 -29.48
30,944 24,577 +25.91
Chiangrai 134,755
142,289
-5.29
19,893
27,218
-26.91
154,648
169,507
-8.77
Chiangmai 283,200
298,544
-5.14
193,029
197,374
-2.20
476,229
495,918
-3.97
Tak 77,154 123,657
-37.61
1,937 5,677 -65.89
79,091 129,334
-38.85
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Ministry of Tourism and Sports,Thailand
Accommodation Establishments at Tourist Attraction (Hotels,Guesthouses,Resorts) in Thailand 2010
(July-September)
AccommodationEstablishments
Guest Arrivals at Accommodation
at Tourist Attraction in
Thailand
Thai Foreigners Total
2010 2009
(%)
2010 2009
(%
)
2010 2009
(%
)
Total 1,685,5
99
1,247,6
57
+
35.10
349,0
24
355,1
56
-
1.73
2,034,6
23
1,602,8
13
+
26.9
4
Kamphaengphet 30,220 19,037 +58.74
710 401 +77.0
6
30,930 19,438 +59.1
2
Chiangrai 167,683
170,823
-1.84
33,459
35,410
-5.51
201,142
206,233
-2.47
Chiangmai 620,885
223,279
+178.0
8
244,717
226,499
+8.04
865,602
449,778
+92.4
5
Tak 84,441 95,310 -11.40
2,719 4,692 -42.0
5
87,160 100,002
-12.8
4
Ministry of Tourism and Sports,Thailand
Accommodation Establishments at Tourist Attraction (Hotels,Guesthouses,Resorts) in Thailand 2010(October-December)
Accommodation
Establishments
Guest Arrivals at Accommodation
at Tourist
Attraction in
Thailand
Thai Foreigners Total
2010 2009
(%
)
2010 2009
(%)
2010 2009
(%
)
Total 1,736,062 1,685,905 +
2.98
479,9
85
462,9
67
+
3.68
2,216,0
47
2,148,8
72
+
3.13
Kampaengphet 30,620 27,818 +
10.07
1,702 1,230 +
38.37
32,322 29,048 +
11.27
Chiangrai 278,005 175,776 +58.1
6
50,048
40,943
+22.24
328,053
216,719
+51.3
7
Chiangmai 440,888 475,344 -7.25
324,899
291,010
+11.65
765,787
766,354
-0.07
Tak 140,814 127,306 +10.6
1
6,949 3,132 +121.8
7
147,763
130,438
+13.2
8
Table 3.1 Ministry of Tourism and Sports, Thailand
Source:http://tourism.go.th/2010/th/statistic/tourism.php
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The consumers separate to typically two types:
- Domestic customerSomeone will be shopping; they are not in need of anything, will see the item and
have to have it, were looking for an "accessory" that would match an outfit and happens
to come across the piece of jewelry and buy it. They will made decision under condition
thatthey satisfy and feel they receive the benefit from product and service. We are
divided into two groups. There are Local citizen and Thai tourism. Chiang Mai tourist is
299,591 and Thai tourist is 252,120.
- Foreign customerCustomer, who wants to buy gifts or souvenir and sometime them only sightseeing
buys interest about product, a purchase occurs when the buyer is looking for a gift for
someone, sees the art and design of product piece, and then purchases it. In this case the
plan is to make a purchase, it is just not known what or where that purchase will be made.
Consumers can choose from many jewelry retailers if they are not satisfied with certain of
product or service. So, price differs and service is important e.g. information of product,
certification, lower prices for high quality jewelry, customer service, guarantee etc.
because refund, return or change the product could not be easy. So the trust and
creditworthiness is more concerning. Foreign Tourist is 1,316,355.
3.5Competitive Analysis
The jewelry industry, or even broader the art industry, is quite large and diverse.
There are countless different artisans making so many different pieces of work. There are
artists from every state that manufacture products. Some sell to large department stores, some
to galleries, some sell them only via a website, others will travel with the products and sell
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what they are carrying. Many entrepreneurs interested to open jewelry shop that gives full
service in Chiang Mai. After that the jewelry business becomes the business which is popular.
Then the affects of jewelry business is high competition about price of products and various
kind of dosing and creativity. Therefore the entrepreneurs of each store should be tries hardly
to create their own identities for their brands and doing the best for attracting customers
attentions to becomes successful business in finally.
3.6STP Analysis3.6.1 Market Segmentation
The market segmentation of Soul of Beauty divide customers segment into 3 groups
The first group is primary customer segment which can generating the most revenues for Soul
of Beauty include Thai tourist, and foreign tourist which can generate secondary revenues
and The last group is Chiang Mai local citizen. Chiang Mai local citizen divided into 5
groups of segment by age which age between 25-34 years old, 35-44 years old, 45-54 years
old, 55-64 years old and more than 65 years old. Because we can satisfy customer needs and
want and offer our product in different design, price, size and etc follow the customer
segment behavior. Then, it can penetrate markets in each target market. Statistics from
Tourism in Chiang Mai during the years 2007-2010, Soul of Beauty can be divided into
market segmentation by a pie chart to understand easily.
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3.6.3 Position Analysis
"Soul of Beauty" is a creative work art of jewelry and still maintain the quality and
value unique branded Soul of Beauty jewelry has created a new jewelry design up to date
fashionable and still keep quality, identity and valuable under the brand Soul of Beauty Our
image of product occurred in the mind of target group of customers is personal feeling.
Target groups is customer have perception and perceive of our identity, from Soul of Beauty
in a Thai contemporary because of this identity, we can continue to provide products that
relate to it. And include the skills of our employees or expertise that can provide advice or
consultation with clients for buying jewelry orders from their own design. We are also
concerned meet the needs of customers first. So our business is recognized and customers can
remember. The last, customers can tell to another by using word of mouth. It can gain more
customers.
3.7 Marketing Mix Strategy Analysis
3.7.1 Product strategy
BrandingBranding strategy, we set the brand in English language and symbol is SB. It
represents Soul of Beauty Brand. This word means the core of beauty that radiate from
diamond. The customer can remember easily and impressive when see our logo Soul of
Beauty.
Figure 3.11 Logo of Soul of Beauty
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ProductSoul of beauty has several products and categorize in 3 big groups that offer to
customer selection that different life style and preferred.
1. Modern style, we selected jewelry is a high quality materials form high skill
technician. A design of products is trend to modern style which up to date fashionable. This
category always change design depend on fashion trendy.
2. Hand craft style, this product category is high identity because we integrate the
Lanna style and jewelry together in design the product. Moreover Handicraft jewelry is
designed by Lanna artist in Vua-Lai Street that is salient Lanna art.
3. Made to order, the customer can design and create jewelry by themselves.
PackagingAlthough jewelry box is not show to customers on shop window, but we are
emphasizing on packaging because we think jewelry is valuable must be suitable with elegant
packaging. We choose luxury and modern package.
We have 4 types
4.Glass box5.Leather box6.Velvet box7.Wood box
ServicesWe are attention to every detail of services for both during sale and after sale services.
We select high skill salesperson and they can speak several languages to service foreign
tourists. We have clean jewelry service to customers, whether they buy from anywhere. We
are pleased to advice and fain for customers in any time. Our shop have credit card service,
this service is high security to offer confidence to our customers.
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3.7.2 Price strategy
We designed the price to be competitive to other jewelry shop. We use cost based
pricing strategy. The pricing is based on the cost of product, depend on the refinement of
hand craft, to each product has different components, the weight of product and type of
jewelry. Our product we set the price starts in the hundreds bath. In currency trading we use
the Thai Bath because easy to exchange for Thai customers. Because of our products is a
fashion jewelry and emphasis on luxury, we set the Skimming price strategy to show value of
the product. We set the price to promote our products, we use Special-event pricing for high
season and festivals such as New Year festival, Valentine festival and Birth day.
Detail of the products
Model silver
/gram
size main gems weight/
karat
color decorate price
Bath
Ring
R1341 99.99%/14.1 58 star gem 12.44 black swiss gems 10400
R1223 99.99%/9.30 52 ruby 2.39 pink square shape 4900
R1221 99.99%/9.30 52 ruby 2.39 white square shape 2900
R1453 92.50%/5.30 7-8 garnet 1.20 red white zesad 4500
R1567 99.99%/4.70 52 emerald 3.40 green swiss gems 6100
R1345 99.99%/6.60 53 ruby
amethyst
4.31 red
green
swiss gems 6500
R1315 99.99%/9.50 52 casedony 2.36 purple swiss gems 3900
R1464 99.99%/5.40 52 ruby 2.30 red sappier 4900
R1245 99.99%/6.70 53 quartz 3.2 green swiss gems 7500
R1334 99.99%/5.40 52 Shitrin 2.83 orange - 4900
R2315 99.99%/4.30 52 codolite 2.97 purple - 4500
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Model silver
/gram
size main gems weight/
karat
color decorate price
Bath
R2316 99.99%/4.30 52 prenite 7.03 green - 3500
R2331 92.25%/ 53 nine-gems 1.20 nine
colors
- 6900
R2332 99.99%/4.95 53 london
topaz
10.69 blue swiss gems 4900
R2533 95.00%/7.69 53 zircon 0.9 white square shape 4500
R2534 95.00%/3.65 53 zircon 5.6 white - 4700
R1783 95.00%/5.66 53 black star 3.2 black swiss gems 4500
R1704 92.25%/4.25 53 emerald 7.6 green swiss gems 11250
R1572 92.25%/4.50 53 spechatie 2.5 orange swiss gems 5200
R1890 92.25%/4.25 52 topaz 3.6 blue CZndimond 2500
R1439 90.00%/9.8 53 CZ 4 white - 3000
R1237 90.00%/6.5 53 garnet 3.2 red swiss gems 5460
R1907 99.99%/4.90 52 amities 3.5 purple swiss gems 9400
R1569 99.99%/5.0 52 amities 3 blue swiss gems 4900
R1267 99.99%/5.60 52 quartz 5.6 green swiss gems 10800
R1097 99.99%/5.60 52 casedony 4 gray - 3800
R1094 99.99%/4.70 51 ruby 1.5 pink myanmar 3400
R1790 99.99%/5.60 53 topaz 0.87 white swiss gems 5900
R1556 99.99%/5.00 53 topaz 1.2 white swiss gems 6500
R1667 99.99%/6.60 53 ruby 1.2 pink myanmar 3100
R1668 99.99%/4.30 54 ruby 2.2 pink myanmar 3600
R1578 92.50%/4.30 53 ruby 1.2 pink myanmar 2700
R1390 92.50%/4.50 52 ruby 2 pink myanmar 3400
Earring
E2343 95.00%/11 - fancy 14 fancy 7600
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Model silver
/gram
size main gems weight/
karat
color decorate price
Bath
E2112 95.00%/12 - sapphire 5.18 orange circle 5600
E2123 95.00%/11 - sapphire 4 orange circle 4500
Bracelet
B4543 95.00%/27 - fancy 19 fancy circle 11200
B4332 95.00%/34 - sapphire 21.30 orange circle 14000
B4556 95.00%/29 - shitrin 7.8 yellow circle 13000
B4565 95.00%/27 - fancy 18 yellow circle 9400
B4563 92.50%/40.1 - ruby 10.85 pink circle 19000
B4336 92.50%/40.1 - jade 23.35 green circle 14000
B4786 92.50%/40.0 - amities 10.85 purple synthesis 3600
B4778 92.50%/48.4 - jade 2.95 yellow circle 1300
B4906 92.50%/30.0 - fancy 13.5 fancy circle 12200
B4560 99.99%/32.0 - fancy 46.00 fancy circle 21600
B4314 99.99%/34.4 - rubellite 10.85 purple circle 19000
B4326 99.99%/28.7 - topaz 10.0 blue synthesis 3500
B4366 99.99%/40.2 - jade 15.40 green circle 13900
B4667 99.99%/32.0 - fancy 30.0 fancy circle 14600
B4668 99.99%/25.0 - fancy 26.0 fancy circle 13000
B4669 99.99%/21.0 - fancy 27.0 fancy circle 12400
Brooch
BH656 99.99%/3.80 - fancy 9.30 fancy flower 4600
BH675 90.00%/7.50 - garnet 6.00 red white goal 11490
BH687 99.99%/4.20 - casedony 3 purple swiss gems 4200
BH690 99.99%/8.00 - amities 25.53 purple swiss gems 10200
BH642 90.00%/5.90 - silver - - Wua-Lai art 3600
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Model silver
/gram
size main gems weight/
karat
color decorate price
Bath
BH691 99.99%/5.00 - prenite 13.42 green - 2900
BH665 99.99%/3.50 - garnet 5.0 purple - 4500
BH683 90.00%/6.00 - shitrin 15.95 yellow - 9456
BH644 99.99%/4.50 - ruby 4.7 pink - 7400
BH621 99.99%/4.50 - jade 3.5 green swiss gems 6300
BH689 99.99%/4.60 - ruby 3.5 pink gold sand 5800
BH694 99.99%/4.50 - garnet 9.1 black swiss gems 6200
BH677 99.99%/4.50 - sapphire 5.0 black swiss gems 2300
BH678 99.99%/5.20 - fancy 4.3 fancy swiss gems 5300
BH679 99.99%/4.30 - casedony 4.00 white swiss gems 4600
BH645 99.99%/4.70 - garnet 3.7 purple swiss gems 5000
BH670 99.99%/7.60 - jade 31.9 green swiss gems 11100
BH611 99.99%/6.90 - ruby 6.0 pink swiss gems 6500
BH613 99.99%/5.70 - fancy 7.30 pink swiss gems 4800
BH631 99.99%/14.1 - fancy 14.09 fancy swiss gems 11900
BH641 99.99%/4.70 - casedony 3.9 white swiss gems 4400
BH615 99.99%/5.90 - garnet 2 white - 1900
BH661 95.00%/5.40 - ruby 1.5 pink - 2900
BH622 99.99%/5.90 - fancy 7.30 fancy - 4800
BH634 99.99%/5.70 - fancy 12 fancy - 7600
BH684 99.99%/6.30 - fancy 7.00 fancy - 7600
BH673 99.99%/7.20 - casedony 4.3 white 4200
BH663 99.99%/3.50 - ruby 2.1 pink myanmar 2600
BH666 99.99%/4.70 - fancy 4.3 fancy swiss gems 5300
BH669 99.99%/9.50 - fancy 10.1 fancy swiss gems 12000
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3.8 Sales Forecast/Profit Estimation
Figure 3.12 Total of Tourism in Chiang Mai statistic
(Source: http://tourism.go.th/2010/th/statistic/tourism.php)
According to the total number of tourism in chiang mai statistic between in 2006 to
2010 we assume the number of tourism in chiang mai in 2010 .There are 4,194,752 tourism
to forecast sales of our shop as following
Number of tourism in 2010 = 4,194,752 tourism
Number of tourism/month = 4,194,752/12 ~ 349,563 tourism
There are 15 main competitors = 349,563/15 ~ 23,304 tourism
Soul of Beauty divided the customer segment into three types which are Chiang mai
citizen,Thai tourism and foreign tourism.
The primary customer segment which can generate the most revenues for Soul of
Beauty is Thai tourism.
Total of Thai tourism = 58.76%* 4,194,752 = 2,464,836 tourism
0
1000000
2000000
3000000
4000000
5000000
6000000
Y2006 Y2007 Y2008 Y2009 Y2010
TotalNumberofTourisminChianmaibetween2006to2010
NumberofTourisminChianmai/years
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-Female = 51.9%*2,464,836 = 1,279,249 peoples
-Male = 48.1%*2,464,836 = 1,185,586 peoples
-Number of Thai tourism that buy Jewelry is 10% of Thai tourism, Female is 9 % of Thai
Female tourism and Male is 1% of Thai Male tourism.
-Number of Thai Female tourism who buy jewelry = 1,279,249 *9% = 115,132 peoples
-Number of Thai male tourism who buy jewelry = 1,185,586 *1% = 11,855 peoples
So Tourism who buys jewelry is 115,132+11,855/12 = 10,582 / months
The secondary customer segment which cans generate the most revenues for Soul of
Beauty is foreign tourism.
Total of Foreign tourism = 41.42%* 4,194,752 = 1,729,915 tourism
-Female = 35.2%*1,729,915 = 562,222 peoples
-Male = 64.8%*1,729,915 = 1,167,693 peoples
(Source: http://tourism.go.th/2010/upload/filecenter/file/stat_File_pdf52/north/cheanmai.pdf)
-Number of Foreign tourism that buy Jewelry is 10% of foreign tourism, Female is 9 % of
foreign Female tourism and Male is 1% of foreign Male tourism.
-Number of foreign Female tourism who buy jewelry = 562,222 *9% = 50,600peoples
-Number of foreign male tourism who buy jewelry =1,167,693 *1% = 11,676 peoples
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So Tourism who buys jewelry is 50,600+11,676/12 = 5,170 / months
There are 15 main competitor in Chiang mai = 10,582+5,170/15 = 1,050 / months
Jewelry shop in Chiang mai was sold 1,050 for each shop
Soul of Beauty can get about 30% of segment for first year
We assume that percentage of customer increase 10 % of total sale for 1-4 year and
15% in year 5
Year Total SalesY 1 1,631,425
Y 2 1,879,825 (increase 15% from sale of Y1)
Y 3 2,817,250(increase 20% from sale of Y2)
Y 4 3,383,500 (increase 20% from sale of Y3)
Y 5 3,891,325(increase 15% from sale of Y