Wednesday, March 28, 2007

Miscellaneous Photos of Northern Thailand

Night Market in Chiang Mai…

Thai silk…


The bus from Chiang Mai to Chiang Rai. Five seats in a row, this bus was packed like sardine. For unknown reason, the fans were switched off midway in the journey, when the temperature was rising…

Tuk-tuk waiting for hire. Chiang Rai…

Buddhist zodiacs are similar to the Chinese ones, except that elephant replaces pig…

Inside a pizza restaurant…

Surprising! Chinese used in road sign. Chiang Rai…

Beauty and the beast. (This picture was taken by the owner of Shinsane Guesthouse in Mae Salong)

Another beauty of Mae Salong. (The beast is in the mirror.)

Monday, March 26, 2007

Management Lite & Ezy 30 – Pricing Strategies IV

Step 6: Selecting the Final Price

There are other factors which a company must consider before setting final price.

Impact of Other Marketing Activities

A product’s brand quality and advertising affects its price. Consumers are often willing to pay higher prices for known products than for unknown products.

Price is also not as important as quality and other benefits in the market offering. For example, a firm with better customer support is able to charge higher prices for its products.

Gain-and-risk Sharing Pricing

Products with longer warranty period and more extensive coverage can command higher prices.

Company Pricing Policies

Customers often get discounts for buying certain products in bulk. Clients get better pricing for signing long term contract with their service providers. Airlines charge penalties to those who change their reservations on discount tickets.

Impact of Price on Other Parties

How will competitors react? How will distributors and dealers feel about the price? Will they make enough profit? Will the government intervene and prevent the price from being charged?

These are the other factors a firm must take into consideration.

Reference: Kotler & Keller, “Marketing Management”, 12th edition

Friday, March 23, 2007

Wat Phra Singh

According to Thailand Handbook by Carl Parkes (Moon Publications), Wat Phra Singh, or Monastery of the Lion Lord, is the most famous wat in Chiang Mai. The complex is composed of several buildings of varying architectures. It is located near the Suan Dok Gate of Chiang Mai.

Buddha image in the main hall…

Bot (front) and chedi

Monastic library and the ubiquitous tuk-tuk

Devotees offering candles and flowers…

P/S now let’s get back to Carl Parkes’ statement that Wat Phra Singh is the most famous wat in Chiang Mai. I suppose he means Chiang Mai proper. In greater Chiang Mai, the most famous wat is, without doubt, Wat Prathat Doi Suthep. I first went to this monastery back in Nov 2003. In my Jan 2007 trip, I had to give it a pass because of time constraint. I recommend Wat Prathat Doi Suthep to first-time Chiang Mai visitors.

Wednesday, March 21, 2007

Language Barrier to Independent Travelers

Language is often an issue to independent travelers who travel to another country whose people speak other tongues. Unlike those in organized tours, independent travelers need to arrange for accommodation, transport and food on their own. They constantly come into contact with local people throughout their trips. How can they communicate in a foreign land?

Some people are so concerned with this problem that they prefer to join group tours and stick to rigid itineraries set by the tour operators. But experienced independent travelers will tell you that, with a little bit of patience, the barrier can be overcome.

For a start, English is widely spoken nowadays. Vietnamese spoke French during colonial era and learned Russian after Communists’ takeover. Today, English is the second language. In Beijing, taxi drivers learn English as a preparation for 2008 Olympiad. In Thailand, I came across a group of university students who struggled to explain their activity to me, but who cared! The important thing was, souvenir vendors and tuk-tuk drivers understood me.

Of course, we regularly encounter people who never learn English in school, or are too intimidated to speak to foreigners. The travelers, on their part, can learn to speak a few useful phrases in local tongues. Many travel guide books have a language section for this purpose.

Alternatively, we can also learn to speak a language from the people of our destination country. For example, in my recent trip to Northern Thailand, I asked a Chiang Mai resident how to say ‘beautiful’ and ‘bad luck’ in Thai. Both words are pronounced suay, but with different intonations – not easy to learn from book. This Chiang Mai resident, by the way, was an ethnic Chinese, and conversation between us was possible because we both spoke Mandarin.

Hand gesture, though clumsy, is universal. In Chiang Rai, I walked into a restaurant and pointed my finger at the noodle. In a few minutes, I was served a bowl of yummy noodle soup for just 20 baht. Restaurants which serve tourists have menus in English, often complete with illustrations.

When it is time to haggle, an electronic calculator usually does this trick. Souvenir vendors in the night markets of Chiang Mai and Chiang Rai show their offered prices in calculators. If you are not happy, enter your desired price. Note that some businesses accept multiple currencies. If a hotel receptionist in Ho Chi Minh City tells you that a room costs 20 per night, don't be over excited. The price is quoted in US dollar.

OK, some of you are ready to learn a foreign language. What should you do? To begin, I suggest that we express gratitude in the language of the listeners, even if they understand English.

(‘Thank you’ is kawp khun karp in Thai, terima kasih in Indonesian, karm ern kuey kark in Vietnamese, xia xia in Mandarin, arigatou gozaimasu in Japanese, kamsah hamnida in Korean, gracias in Spanish, tack in Swedish and dank u in Dutch.)

Oh yeah, male travelers are encouraged to flatter the women by saying, in local tongue, “You are very beautiful.”

Sunday, March 18, 2007

Management Lite & Ezy 29 – Pricing Strategies III

Step 5: Selecting a Pricing Method

Firms use various methods to set their prices. We will examine a few of them here.

Markup Pricing

The most elementary method is to add a standard markup to the product’s cost. Reusing the example in Step 3 and suppose that the camera manufacturer expects to sell 100 units per day…

Average unit cost = $500

Now assume that the manufacturer wants to earn a 20 percent markup on sales. The markup price is:

Markup price = unit cost x 1.20 = $500 x 1.20 = $600

Because markup-pricing method does not take into account current demand, perceived value, and competition, it is unlikely to lead to the optimal price.

Target-Return Pricing

In target-return pricing, the firm determines the price that would yield its target return on investment (ROI).

Suppose the camera manufacturer has invested $20 million in the business and wants to earn a 20% ROI, i.e. $4 million, over a fixed period of time. The expected unit sales are 50,000 cameras during this period. The target-return price is given by the following formula:

Target-return price

= unit cost + (desired return x invested capital)/unit sales

= $500 + (0.2 x $20,000,000)/50,000

= $500 + $80

= $580

Going-Rate Pricing

In going-rate pricing, the firm bases its price largely on competitors’ prices. It may charge the same, slightly more or slightly less than major competitor(s). The smaller firms follow the leader, changing their prices when the market leader’s prices change.

In oligopoly industries that sell a commodity such as steel or paper, firms normally charge the same price.

Perceived-Value Pricing

In perceived-value pricing, the firm must deliver the values promised by their value proposition, and the customer must perceive these values. They rely on other marketing-mix elements such as advertising and sales force to communicate and enhance perceived value in buyers’ minds.

Perceived value is made up of several elements, such as the buyers’ image of the product, the channel deliverables, the warranty coverage, customer support, supplier’s reputation and trustworthiness. Furthermore, each potential customer places different weights on these different elements, with the result that some will be price buyers, others will be value buyers, and still others will be loyal buyers. For price buyers, firms need to offer stripped-down products and reduced services. For value buyers, firms must keep innovating and aggressively reaffirming their values. For loyal buyers, firms must invest in relationship building and customer intimacy.

Reference: Kotler & Keller, “Marketing Management”, 12th edition

Friday, March 16, 2007

Ratana’s Kitchen, Chiang Mai

Ratana’s Kitchen was my favorite restaurant in Chiang Mai. It served delicious Thai and Western food. Its Northern Thai dishes were especially worth trying. Prices were reasonable – relatively cheap compared to other restaurants which served farangs (Westerners).

Veggies and seafood over rice; spring rolls…

This is a Northern Thai dish but I no longer remember its name. Quite spicy. I should have told them “phet nit noi”…

Ratana’s Kitchen, 320-322 Thaphae Road (opposite Wat Mahawan) - highly recommended

Wednesday, March 14, 2007

Have backpack, will travel

On Jan 6, 2007, in the warmest hours of the day, I was walking in the city of Chiang Mai looking for accommodation. I carried two backpacks – a big one on my back and a small one in the front. (The small backbag essentially became a chest bag!) Despite in the middle of cool season, The Rose of the North was surprisingly warm. I later learned from locals that Chiang Mai was not as cool as in previous years. Al Gore’s inconvenient truth was real!

I eventually settled in a guest house off Tapae Road. I left the big backpack in the room, and headed for Wat Chedi Luang with the smaller one.

What were in my bags?

The big bag – 3 sets of clothes, towel, toiletries, first aid, alarm clock, charger for camera batteries, notebook etc.

The small bag – Thailand Handbook, jacket, photo gears, water bottle (actually outside)

There were plenty of stuffs, and the big bag got heavier as I added souvenirs to it.

Let’s see what Carl Parkes, author of Thailand Handbook, says about packing…

Overpacking is perhaps the most serious mistake made by first-time travelers. Experienced vagabonders know that heavy, bulky luggage absolutely guarantees a hellish vacation. Travel light and you’ll be free to choose your style of travel. With a single carry-on pack weighing less than 10 kg you can board the plane assured your bags won’t be pilfered, damaged, or lost by baggage handlers. You’re first off the place and cheerfully skip the long wait at the baggage carousel. You grab the first bus and get the best room at hotel.

(Carl Parkes, Thailand Handbook, Moon Publications)

“Single carry-on pack? Is this possible?” I was in disbelief when I first read the book. But Parkes was totally right. In Oct 2005, shortly after second terrorists’ assault, I traveled to Bali. In the airport, I saw one guy with just a small, carry-on bag. (He did check in one huge surf board.) In my 2007 Northern Thailand trip, I also met two Americans, each with a medium-sized backpack. I believe they only brought 2 sets of clothes. Wash one, wear one - this is what Carl Parkes suggests in his book.

One of the biggest headaches in my trip was laundry. Ideally, I should drop my clothes in the laundry and collect them back before moving on to another destination. Unfortunately, I often spent just one day in a place – not long enough to have my clothes washed. For my Northern Thailand trip, I decided to bring enough clothes so that I didn’t have to send them to laundry. Worse still, as a shutter bug, I brought a big camera plus an external flash. That explains why I needed a big backpack that could not meet the dimensional limits of carry-on baggage.

The trip lasted eight days. Every shirt was worn for two days. Fortunately, I was traveling alone. Had I traveled with relatives/friends, the other people would have to bear with me wearing dusty clothes and stinking socks .

So, the “wash one, wear one” concept didn’t work for me. But my vacation was definitely not hellish. I had not been very healthy prior to my Northern Thailand trip, and saw backpacking as a form of physical exercise. It turned out that the added load of my bags wasn’t a bane .

Monday, March 12, 2007

Management Lite & Ezy 28 – Pricing Strategies II

In Management Lite & Ezy 27, I mentioned that pricing strategies involve 6 steps. Step 1 is selecting the pricing objective. Step 2 is determining demand.

Step 3: Estimating Costs

Some terminologies:

  • Fixed costs – costs that do not vary with production or sales revenue; also known as overhead.
  • Variable costs – costs that vary directly with the level of production
  • Total costs – sum of the fixed and variable costs
  • Average cost – cost per unit at certain level of production; it is equal to total costs divided by production

Economies of scale is an important concept in lowering the total costs.


Assuming that a camera factory has an optimum capacity for producing 100 units per day. Fixed costs are $10,000. Variable costs are $400 per units.

If the factory is running on its optimum capacity…

Total costs

= fixed costs + variable costs

= $10,000 + $400 x 100

= $10,000 + $40,000

= $50,000

Average cost

= $50,000/100

= $500

If the factory only produces 50 cameras per day…

Total costs

= $10,000 + $400 x 50

= $10,000 + $20,000

= $ 30,000

Average cost

= $30,000/50

= $600

As we can see, average cost drops when the production level goes up. However, average cost increases after the optimum level of 100 units, because the plant becomes inefficient: workers have to line up for machines, machines break down more often, and workers get in each others’ way.

Step 4: Analyzing Competitors’ Costs, Prices, and Offers

Within the range of possible prices determined by market demand and company costs, a firm must take competitors’ costs, prices, and possible price reactions into account. If the firm’s offer contains features not offered by the nearest competitor, their worth to the customers should be evaluated and added to the competitor’s price. If the competitor’s offer contains some features not offered by the firm, their worth to the customers should be evaluated and subtracted from the firm’s price. Now the firm can decide whether it can charge more, the same, of less than the competitor. Do note that competitors can change their prices in reaction to the price set by the firm.

Reference: Kotler & Keller, “Marketing Management”, 12th edition

Friday, March 09, 2007

Ladyboys Show, Chiang Rai Night Market

Some travel guide authors don’t give high scores to Chiang Rai. Chiang Rai, long eclipsed by Chiang Mai, has fewer attractions. Its wats are not as magnificent as those in Chiang Mai, and its night market is smaller.

I liked Chiang Rai because of its compactness – I could walk across the town. (Backpackers like to walk, which is why we carry backpacks rather than shoulder bags in the first place.) I also enjoyed the stage performance in the night market. On Jan 8, 2007, I watched traditional Northern Thai dancing in the night market. On Jan 11, the night market invited a couple of ladyboys, or transvestites, to perform there.

There were two stages in the night market. The ladyboys shuttled between them, and I followed them like a paparazzi

By the way, performance of the ladyboys was fantastic

Wednesday, March 07, 2007

Why I Travel Alone?

“Why do you travel alone?” “Don’t you find it boring?” These are the questions I have been asked many times. I live in Malaysia, not the United States of America. Americans are individualists. Malaysians, and especially ethnic Chinese, are group-oriented. I am considered a ‘freak’ in my society for traveling solo.

Imagine this: what I would do if I didn’t travel? I might watch soap operas or “re-read” The Da Vinci Code. Aren’t those more boring! Some may think I should have traveled with a few companions. Well, apparently, I can’t point a gun at someone – preferably a woman – and say, “Let’s go to Bali.”

So you get the answer.

Many people can’t live without friends. They would cancel their recreation activities, such as shopping, if not joined by their ‘gang members’. To me, not having company is no excuse for not going to the destination I yearn for.

I have backpacked to Thailand and Bali. In my business trips to Vietnam, I also took time off to tour around Ho Chi Minh City and Mekong Delta. In these places, I have met many people who, like me, traveled without any companion. I came to this realization:

I may be a lone traveler, but I am not alone!

(Confused? Chew on the words.)

To be sure, there are some benefits of traveling alone. During my Northern Thailand trip in January 2007, I had chance to talked to four other solo tourists – one British woman, one Italian man and two Japanese retirees. I also chat with a Thai woman who traveled with her farang boyfriend as well as hosts/hostesses of several guesthouses. Had I traveled with my friends, I would be less inclined to interact with other people. One thing which surprised me was, I saw many Japanese who either travel alone or in pairs. We often view Japan as a group-oriented society. If Japanese can break from their groups, there is no reason I can’t.

As a lone traveler, I have maximum freedom. I hardly book accommodation in advance, and usually search for it only after I arrive at my destination. I also have the convenience to change my plan. In one instance, I decided to extend my stay in Thailand, and simply e-mailed my boss to apply for additional leave. In contrast, a large group of tourists need a well-defined itinerary prior to departure. Since some people are impatient, accommodation and transport are also best arranged in advance. A group of more than 10 tourists may even need to charter a bus rather than relying on public transport. (So, no chance for riding tuk-tuk in Thailand.)

That said, I have to admit that I do sometimes feel lonely, especially at night. I also have to bear with higher transportation costs – e.g. tuk-tuk fare – since I cannot share them with partners.

None of these drawbacks, of course, will deter me from traveling. After several memorable solo trips, I am starting to be proud as a lone traveler.

Monday, March 05, 2007

Management Lite & Ezy 27 – Pricing Strategies I

Setting the price of a product or service involves, generally 6 steps. We will examine each of these 6 steps.

Step 1: Selecting the Pricing Objective

Survival In order to survive, a firm sets the prices as long as they cover the cost.

Maximum Current Profit Demand of a product or service is affected by its price. Many firms choose the price that produces maximum current profit.

Maximum Market Share Higher sales volume will lead to lower unit costs and may discourage competition.

Maximum Market Skimming Firms unveiling a new technology favor setting high prices to maximize market skimming. The prices start high and slowly lowered over time.

Quality Leadership Many brands strive to be “affordable luxuries” – products or services characterized by high levels of perceived quality, taste, and status with a price just high enough not to be out of consumers’ reach.

Step 2: Determining Demand

Each price will lead to different level of demand and therefore have a different impact on a firm’s marketing objectives. The relation between alternative prices and the resulting demand is captured in a demand curve. In general, the higher the price, the lower the demand. In the case of prestige goods, however, higher price may leads to higher demand!

If demand changes considerably with a small change in price, we say the demand is inelastic. If demand changes considerably, it is elastic. The diagrams below show the curves for inelastic and elastic demands.

Demand is likely to be less elastic under the following conditions:

  • There are few or no substitutes or competitors.
  • Buyers do not readily notice the higher price.
  • Buyers are slow to change their buying habits.
  • Buyers think the higher prices are justified.

One classical example of goods with inelastic demand is cigarette.

Reference: Kotler & Keller, “Marketing Management”, 12th edition

Friday, March 02, 2007

Wat Chedi Luang, Chiang Mai

Wat Chedi Luang is named after its massive but ruined chedi within the temple complex. The famous monument was erected in 1401 by King Sam Feng Ken and raised to 90 meters by his son, King Tilokaraja. An earthquake in 1546 partially destroyed the chedi and reduced its size to 42 meters.

The ruin…

Closer look of the chedi…

This monastery invites foreign visitors to chat with the monks. Through “monk chat”, visitors learn more about Buddhism, a monk’s life and Thai culture. Monks, on the other hand, take this opportunity to practice their English…

Here is “monk chat” in action. This young monk is talking to the farang and me (not in the picture since I was holding camera). Topic of discussion: meditation.