Twelve Key Success Factors of Distribution Strategies for Distribution Community Enterprises Thailand

Abstract

Purpose: This study identifies how twelve key success factors of distribution strategies for community enterprises in Thailand achieve higher performances. Research design, data, and methodology: The samples in this study were 400 entrepreneurs throughout the country. The instrument for data elicitation was a questionnaire. The descriptive and inferential statistics for data analysis were percentage, mean, standard deviation, T-Test, F-Test, multiple regression, and multiple correlations. Results: The results revealed that, overall, the samples showed high opinions on online distribution strategies in all aspects. In detail, the three highest factors were as follows: 1) electronic satisfaction, 2) product characteristics and electronic trust, and 3) the quality and success in online distribution. In detail, the three highest aspects of online distribution success were customer loyalty, financial performance, and work management, respectively. The online distribution strategies influencing community enterprises' success were electronic trust, electronic loyalty, social information, electronic satisfaction, and online distribution tools, which had a statistical significance of 71. Conclusions: This research has made an essential contribution to community enterprise entrepreneurs should focus on and adopt these 8P+4ODS concepts to increase sales, maintain brand loyalty of existing customers, get new customers, develop learning, and improve the working potentials of community enterprise entrepreneurs.

1. Introduction

As the digital economy is the fusion of digital technology with the way of life of people in the community, there has been widespread use of digital technology even for people who have never used a computer or the Internet. Therefore, it has led to new business opportunities in almost every field. For example, community enterprises in Thailand are groups of people who work together to do business related to production, processing, resource, capital, and market management. They trade cooperatively, but their rules and regulations differ by focusing on sharing and helping each other rather than competition.

The Thai government has provided support and attached importance to community enterprises with the policies and management guidelines focusing on the care of the agricultural sector, the promotion of Thai tourism, and the use of domestic products, along with elevating the development of the digital economy as a driving force of Thailand’s economy. Digital technology has been incorporated into business models to increase efficiency, create added value to the country’s gross production, and emphasize new channels and in-depth investigation of online distribution, especially in the strategic context of adopting a new approach to reaching global customers. This paper, presents an online distribution study for community enterprises in Thailand. This study views online distribution as an essential alternative in the current era afflicted with a severe epidemic. It can proceed into the future regarding the rapid contactless delivery of products to consumers. Therefore, the researcher investigated twelve key success factors for community enterprises. To answer three research questions: 1) What are the online distribution strategies of community enterprises? 2) What is the online distribution success of community enterprises?; 3) What online distribution strategies influence the community enterprise success? They were then used to formulate a success concept for community enterprise entrepreneurs.

2. Literature Review

2.1. Community Enterprise (CE)

A community enterprise is a community business involving the production of goods, the provision of services, or other affairs operated by an engaged body of people who have a common way of life and join together to conduct such business, whether it is a juristic person in any form or not, to generate income and enhance self-reliance of the families, communities, and inter-communities. The objectives of community enterprise promotion or networks are to strengthen community enterprises and ensure their self- reliance. Therefore, the community enterprise promotion covers all aspects of product quality, management, funding, distribution, packaging, personnel management, accounting, capital management, evaluation research, raw material management, etc. It aims to develop community enterprises to strengthen the community economy and allow them to become entrepreneurs of small and medium enterprises and compete in trade under globalization. In addition, government agencies are encouraged to collaborate and support community enterprises unanimously by having a law supporting and certifying the status of community enterprises and their network. Government agencies can also be integrated to work together to develop community enterprises as a small, fundamental economic unit in society having knowledge, competence, and self-development, leading to a strong and sustainable community economy in the future.

So the community enterprise (SMCE or small and micro-community enterprise) is a community enterprise that deals with the production of OTOP products or services or is otherwise operated by a group of parties with a commitment. To have a common way of life and come together to operate such businesses, whether a juristic person in any form or not juristic person to generate income and for the self-reliance of the family community and between communities by using resources, products, knowledge, wisdom, culture, and their indigenous way of life attached to the basic economic structure for the community to be a contributor to strengthening the economy above because it has a strong foundation. Small and Medium Enterprises are business units larger than community enterprises for SMEs. It is essential in helping the country’s economic and social development because this small business will contribute to the income distribution from entrepreneurs to the population, which causes employment; which ministerial regulation that determines the size of small and medium enterprises is “Ministerial Regulation Determining the Employment and Value of Fixed Assets of Small and Medium Enterprises, B.E. 2545”, causing revenue to make the structure of the economy and society better.

2.2. Diffusion of Innovation Theory (DIT)

DIT is a theory that emphasizes the belief that social and cultural change is caused by the diffusion of innovations from one society to another, including new knowledge, ideas, techniques, methods, and technologies. There are four essential variables (Rogers, 1995) as follows:

2.2.1 An Innovation

An innovation is something new that will be diffused to society. Innovations that will be diffused and accepted by people in that society generally consist of two important parts: idea and object;

2.2.2. Types of Communication

Types of communication are communications between the senders and the receivers through any medium. Innovations are diffused from their sources to the end-users or recipients, a process of human interaction. Therefore, communications are very important for the acceptance of innovations;

2.2.3. A Time or Rate of Adoption

A time or rate of adoption is required to let people in society learn of new innovations and ideas or to take advantage of what already exists in new ways to achieve economic benefits. The process of diffusing innovations takes time and sequence for individuals to adapt and accept innovations or ideas;

2.2.4. A Social System

A social system is the diffusion into members of society. It influences the distribution and acceptance of innovations. In modern society, the social system will be conducive to the adoption rate of innovations because of the norms and values of the society that support social and cultural changes.

2.3. Online Distribution Strategy (OMST)

A distribution strategy refers to distribution activities aimed at promoting the business to achieve its distribution objectives by determining the target distribution and the distribution position to give itself a clear competitive advantage. A digital distribution strategy refers to the presentation of products or services through the digital distribution channels to make reaching customers easier, creating satisfaction, maintaining a good relationship with customers, and a continuous distribution promotion and increasing sales for the business. According to the American Marketing Association, digital distribution refers to an organization’s activities related to the process of facilitation by using digital technology to create, communicate, and deliver value to its customers and stakeholders (Kotler, Armstrong, Saunders, & Wong, 1999). Online distribution strategies involve strategic planning to achieve distribution objectives by using the Internet as a medium for public relations in distribution to attract customers to visit the website, shop for products, and receive services, which can help reduce the cost of distribution to the business dramatically. One of the online distribution strategies that make a business successful, is widely used, and can better respond to online business in today's world. This is the 8P strategy (Kotler, 2003) as described below:

2.3.1. Product Characteristics (PC)

Product Characteristic (PC) refers to the information and property of a product in terms of its suitability and benefits. It is classified into different categories so that customers can easily find and select products in each category according to their needs, such as product type, product price, product variety, and product guarantee;

2.3.2. Online Distribution Quality (ODQ)

Online Distribution Quality (ODQ) refers to a perception or reflection making consumers see the excellence and effectiveness of electronic stores. It includes information on products and services, a collection of personal information, information service, security, and privacy, while system quality, data quality, and electronic service quality, such as security, privacy, usability, and website design, act as a driving force behind it;

2.3.3. Customer Values Perceived (CVP)

Customer Values Perceived (CVP) refers to an overall assessment or response of customers to the benefits, cost- effectiveness, and efficiency of a product or service, such as perceived usefulness, perceived convenience, perceives enjoyment, and perceived risk;

2.3.4. Information Social Influence (ISI)

Information Social Influence (ISI) refers to information about an individual or group of people expressing an online behavior, causing consumers to have behaviors in buying products via the website, such as reviews of customers, families, and celebrities;

2.3.5. Electronic Satisfaction (ES)

Electronic Satisfaction (ES) refers to a customer evaluation of feelings about using the website for electronic purchases. It is done before, during, and after purchasing products and services. Customers make a comparison between their expectations and perceptions. They evaluate based on their excellent shopping experience on the website and the seller's honesty. As a result, they have a positive attitude towards purchasing products on the website, such as purchase intention, attitude towards the website, and website experience;

2.3.6. Electronic Trust (ET)

Electronic Trust (ET) refers to a psychological state in which consumers trust the ability and integrity of website sellers. They believe that the sellers on the website fulfill their obligations in the transactions and have an attitude of expectation and confidence in the website situations or the risk of vulnerabilities not to be exploited by website sellers, such as information provided by website merchants, transactions, and commitments;

2.3.7. Electronic Loyalty (EL)

Electronic Loyalty (EL) refers to a positive customer attitude and an ongoing relationship between the consumers and the website merchants. It results in a positive attitude of customers towards electronic stores, leading to a repeated purchase behavior of customers and a referral to other consumers, such as repurchase intention, word of mouth, and membership system;

2.3.8. Online Distribution Tools (ODT)

Online Distribution Tool (ODT) refers to a distribution tool in online media, including social media, which is an online community where users communicate or post content such as, stories, experiences, articles, images, and videos they have created themselves or found in other media and shared them with others in their network via the website. Currently, online services are provided and communicated via the Internet and mobile phones, such as Line, Facebook, and Instagram. An electronic marketplace, or e- Marketplace, is a medium website for buying and selling products and collecting many products and shops, similar to a flea market or a department store. Still, it is in the form of an online flea market. Services are provided in the form of a website open to those interested in opening their shops and selling their products, such as Lazada and Shopee. An electronic taller, or e-Taller, refers to an electronic commerce channel for businesses with a storefront, such as JD Central.

2.4. Online Distribution Success (ODS)

A community enterprise success refers to the cooperation of people in the community to drive forward according to the established goals by allocating and using available resources cost-effectively. In addition, modern technology is introduced to help in the operational process and create satisfaction for all parties. It can be measured by online distribution success, which is divided into four areas (Karabulut, 2015) as follows (sections 2.4.1.-2.4.4.):

2.4.1. Financial Performance (FP)

Financial Performance (FP) involves the performance of the business in the financial aspect regarding organization management, cost reduction, profitability, and investments, leading to good results for the organization, shareholders, and market shares;

2.4.2. Customer Loyalty (CL)

Customer Loyalty (CL) involves the ability to maintain an existing customer base and acquire a new customer base. There must be a quick offer of quality products or services, along with responding to the needs of customers in order to achieve their highest satisfaction;

2.4.3. Work Management (WM)

Work Management (WM) involves the performance of organization to improve it to be efficient in working quickly and with quality to meet customer satisfaction. It also involves Career Advancement (section 2.4.4.);

2.4.4. Career Advancement (CA)

Career Advancement (CA) involves a process to develop employee potential by focusing on skills, abilities, attitudes, and ethics and giving employees opportunities to show their abilities in order to be a motivator in their work.

3. Research Model and Materials

3.1. Research model

This research model was built up on Diffusion of Innovation Theory, and it combines key insights into distribution online.

Figure 1: shows this study's new framework (8P+4ODS), including Product Characteristics, Online Distribution Quality, Customer Values Perceived, Information Social Influence, Electronic Satisfaction, Electronic Trust, Electronic Loyalty, Online Distribution Tools, Financial Performance, Customer Loyalty, Work Management and Career Advancement.

Figure 1: Research Model

3.2. Methodology

3.2.1. Sampling Process

The sample group was community enterprise entrepreneurs in Thailand (400 out of 120,375 entrepreneurs). Using Taro Yamane's theory (Yamane, 1973) of computation, the tolerances were determined as 95% confidence intervals. These samples were selected by stratified random sampling.

3.2.2. Instruments and Data Collection

For data collection, a closed-ended questionnaire was developed. The questionnaire was separated into three sections:

Part 1: General information on entrepreneur

Part 2: Comments on Online Distribution Strategy. The section included 30 questions with eight systems (8P). The answers were obtained using a Likert scale with a scale ranging from 1 to 5, where 1 represents “Highly Disagree” and 5 illustrates “Highly Agree” (Albaum, 1997).

Part 3: Comments on online distribution success. The section included 19 questions with four sides (4ODS). The answers were obtained using a Likert scale with a scale ranging from 1 to 5, where 1 represents “Highly Disagree” and 5 illustrates “Highly Agree” (Albaum, 1997). The questionnaire was sent to the target population by post and by using an electronic tool; Google Forms. A sample of 400 (100%) was obtained. The researcher examined the quality of the instrument by looking for an IOC value of 0.50 or more from 5 experts. The researcher revised the questionnaire as suggested by experts and tested them with entrepreneurs were not included in the sample of 30 people. The reliability check of the questionnaire was tested by the Alpha Cronbach's Coefficient test. The value was 0.96, indicating very good value.

Table 1: Demographic data of the respondents

4. Results

4.1. Information of Entrepreneurs Community Enterprise

Four hundred completed and valid questionnaires were returned. The data collection period was two months (February to March 2021) from the total of 400 (100.00% completed). The majority (79.68%), of the respondents were female more than 40 years old (52.94%) who had received a bachelor’s degree (52.94%). They earned between 20,000 and 50,000 THB (46.79%), used Facebook (97.44%), sold processing and food products (35.29%), and sold online to achieve a cost savings (80.77%).

4.2. The concept on community enterprise entrepreneurs’ compliance with online distribution strategies, as shown in Table 2

Table 2: shows overall mean scores standard deviation and the entrepreneurs’ compliance with online distribution X strategies. The overall mean scores were high ( \(\overline X\) = 4.13). In details, the five highest mean scores are electronic satisfaction ( \(\overline X\) =4.24), product characteristics ( \(\overline X\) = 4.23), electronic trust ( = 4.23) online distribution quality ( \(\overline X\) = X 4.17) and social information (\(\overline X\) = 4.16), respectively.

Table 2: Mean scores and standard deviation of community enterprise entrepreneurs’ compliance with online distribution strategies (8P).

4.3. The concept on online distribution Strategies Success for community enterprise entrepreneurs, as shown in Table 3.

Table 3: Mean scores and standard deviation of online distribution success (4ODS). Online distribution X Level of

Table 3: shows the online Xdistribution success. The overall mean scores were high (\(\overline X\) = 4.04). In detail, three X highest mean scores were customer loyalty (\(\overline X\) = 4.19), financial performance (\(\overline X\) = 4.09), and work management (\(\overline X\) = 4.01).

4.4. The analysis on multiple correlation, multiple linear regression by regulation of stepwise and creation of the forecasting equation for raw score and standard score of online distribution strategies influence toward the community enterprises success.

4.4.1. The checking of relation of independent variable of online distribution strategies for the community enterprises by multiple correlation analysis, as shown in Table 4.

Table 4: shows the independent variables of 8 aspects of online distribution as follows: The strategy of Products Characteristic (PC), Online distribution Qualification (ODQ), Customers Value Perceived (CVP), Information Social Influence (ISI), Electronic Satisfaction (ES), Electronic Trust (ET), Electronic Loyalty (EL) and Online distribution Tools (ODT) were on friendly relationship and were on statistical significance at 0.01 level with the correlation coefficient (r) from 0.161 – 0.750. Which were less than 0.90 (Hair, Black, Babin, Anderson, & Tatham, 2010).

Table 4: Correlations between PC, ODQ, CVP, ISI, ES, ET, EL, ODT with operator business efficiency.

* Correlation is significant at the 0.05 level.

** Correlation is significant at the 0.01 level.

4.4.2. The analysis of online distribution strategies influences the community enterprise’s success by using the multiple regression analysis by stepwise regulation in Table 5-7.

Table 5: shows the Multiple Correlation (R) has valued 0.714 and Coefficient of Multiple Determination (R2) has valued 0.714. Shows that, the forecast variable; Electronic Trust (ET), Electronic Loyalty (EL), Information Social Influence (ISI), Electronic Satisfaction (ES) and Online Distribution Tools (ODT) was able to forecast influence of community enterprises success for the percentage of 71.40 and Std. Error of Estimate (S.E.est) 0.183.

Table 5: Model Summary

e. Predictors: (Constant), ET, EL, ISI, ES, ODT

Table 6: shows the analysis of variance for testing the significance of multiple correlation coefficients were statistically significant at the 0.05 level. The table show that the influence between the criterion variable and forecast variable; Electronic Trust (ET), Electronic Loyalty (EL), Information Social Influence (ISI), Electronic Satisfaction (ES), and Online Distribution Tools (ODT) influenced community enterprises success on linear correlation and have been on further creation for the equation.

Table 6: Model with ANOVA regression analysis

** P<0.01

Table 7: shows that the model of five online distribution strategies of community enterprises consisting of Electronic Trust (ET), Electronic Loyalty (EL), Information Social Influence (ISI), Electronic Satisfaction (ES), and Online distribution Tool (ODT) was able to forecast the community enterprise success with statistical significance at the 0.01 level up to 71.00 percent. A forecast equation in the form of raw and standard scores can be constructed as follows:

Table 7: The values of statistics for online distribution strategies that's influence the community enterprises success (Coefficients)

** P<0.01, R= 0.845, R2 = 0.714, Adj. R2= 0.710

Raw score of predicting equation

Ŷ = 1.628 + 0.159ET + 0.198EL + 0.187ISI + 0.108ES + 0.077ODT

Standardized score of predicting coefficient

\(\hat Z = 0.233 ET + 0.221 EL + 0.176 ISI + 0.176 ES + 0.0930 DT\)

5. Discussion

From the results of This study, supported the results of scholar, such as, Robertson (1967); Vaccaro (2009); Chang (2010); Raynard (2017) that support the diffusion innovation theory to understand online distribution for community enterprise entrepreneurs. This study was consistent with Micu, Micu, Geru, and Lixandroiu (2017); Adam (2002); Schwarzl and Grabowska (2015); Harris and Rae (2010); Valos, Ewing, and Powell (2013); Polo-Peña, Frías-Jamilena, Rodríguez-Molina, and Rey-Pino (2016) supporting the view that online distribution strategies are beneficial for entrepreneurs and support the growth of distribution in Thailand and around the world.

In addition, the results of this study found that online distribution strategies applied to community enterprise entrepreneurs Thailand were 1) Electronic Satisfaction, 2) Electronic Trust and Product Characteristic, 3) Online Distribution Quality, 4) Information Social Influence, 5) Customer Value Perceived, 6) Electronic Loyalty, and 7) Online Distribution Tool, respectively, resulting in tremendous success in selling products and services, and helped build a responsive branding to consumer product search. Since community enterprise entrepreneurs had a good attitude and experience in selling their products online, there was electronic satisfaction. For product appearance, products were classified, easy to find and priced, making it possible to evaluate different products and easy to make a buying decision, including a warranty after the products were delivered to the consumers. For an electronic trust, the information presented on the online stores was accurate, truthful, and reliable. In contrast, online store transactions were ethically and systematically conducted, including activities to maintain customer relationships. And selling points for customers to remember. Finally, for online market quality, it was safe to buy and pay for products, including privacy, ease of use, attractive appearance, clear product information, and visual and audio response. As a result, the community enterprise entrepreneurs were successful according to their goals (Gatautis & Vitkauskaite, 2014; Kaplan & Haenlein, 2010; Sharma, Alavi, & Ahuja, 2017; Mangold & Faulds, 2009; Khan, 2017; De-Vries, Gensler, & Leeflang, 2012). The success was considered based on Customer Loyalty, Financial Performance, and Work Management. Customers were satisfied with buying products in online stores, including their loyalty by returning to buy again, retaining existing customers, and acquiring new customers. For financial management, more sales, profits, and revenues were obtained from existing and new customers, while financial management was effectively done. Finally, for working process in a good organization, there was a reliable and secure payment system and good customer management, including the quality of products that meets the requirements, clear and continuous promotions for customers, channels for customers to contact easily and quickly at all times, and aftersales services (Gibson-Graham & Cameron, 2007). Online distribution strategies of Electronic Trust, Electronic Loyalty, Information Social Influence, Electronic Satisfaction, and Online distribution Tool Influenced the Community Enterprise Success. In contrast, product characteristics, online distribution quality, and customer value Perceived did not influence the community enterprise's success. At present, community enterprise entrepreneurs who sell products on online distribution are required to present accurate, true, and reliable information. Doing business on an online store must be ethically done and a system to work for various activities to succeed. In addition, community enterprise entrepreneurs had activities and services to maintain customer relationships and a selling point for customers to remember them as a keeper of contracts and agreements. They were also confident that customers were satisfied with their products or services and returned to use the services again. In addition, acquaintances were recommended to buy products, while discounts or points were given to members. Information from customers who leave positive and negative feedback was collected for improvement. Family members were also consulted to sell products or services online. Moreover, they were interested in using famous people to recommend their products through online media for credibility. They had an attitude towards selling products and a good experience in selling products in online distribution. Therefore, community enterprise entrepreneurs believed that product information on social media (Line, Facebook, and Instagram) and E marketplaces (Lazada, Shopee, and JD Central) affected the purchase of products (Chung & Shin, 2010; Dharmesti & Nugroho, 2013; Godey, Manthiou, Pederzoli, Rokka, Aiello, Donvito, & Singh, 2016; Jones & Kim, 2010; Kumar & Ayodeji, 2021; Topaloglu, 2012).

6. Conclusions

This research has made an essential contribution to community enterprise entrepreneurs should focus on and adopt. These 8P+4ODS concepts, including Product Characteristics, Online Distribution Quality, Customer Values Perceived, Information Social Influence, Electronic Satisfaction, Electronic Trust, Electronic Loyalty, and Online Distribution Tools, combined with Financial Performance, Customer Loyalty, Work Management, Career Advancement to increase sales, maintain brand loyalty of existing customers, get new customers, develop learning and improve the working potentials of community enterprise entrepreneurs.

6.1. Limitations and Future Research

Community enterprise entrepreneurs in Thailand do not have complete knowledge and understanding of 8P+4ODS. Therefore, there are problems and obstacles in conducting business online. In future research, community enterprise entrepreneurs should know their strengths, weaknesses, obstacles, and areas that need to be developed as a guideline for sustainable improvement.