Homenet North (part of Homenet Thailand) conceptualized an action plan for starting a Small Business Association (SBA).

The target groups for this market development project are the homeworkers from the six provinces in Thailand - Chiang Mai, Lamphune, Lampang, Phrae, Nan, Phayao and 19 leaders who will be in charge of production development processes.

The objectives of the project are: 1) to increase the capacity of homebased workers on production and marketing development; and 2) to develop the business idea and organization of the Northern Home Based Workers’ Network that will eventually improve production towards economic stability.

Expected results are: 1) an operations manual that describes the business engagement of the Northern Home Based Workers’ Network; 2) a business plan (including production and marketing information); and 3) knowledgeable and skilled homebased workers (HBWs) in clustering and product profiling.

Activity 1 - Cluster Production

The first activity, Cluster Production, was implemented in three phases: 1) gathering of information in the pilot group/network through focused group and in-depth interviews; 2) training of leaders at the provincial level on the concept of clustering; and 3) application of production and marketing development and unit formation.

A working team composed of a Marketing Specialist, Project Coordinator and representative from the Sustainable Alternative Development Association (SADA) used the collected information from the six provinces in setting up the production and marketing groups. Two product lines (textiles and basketry) were chosen for development by the cluster group. In accordance with the Cluster and Supply Chain Concept, a model was set up for implementation at the provincial level (a weaving group would specialize in the process of cotton row dying, spinning, design, weaving) and at the regional level (a handicraft entrepreneur’s group and designer group of the Lanna Fashion Project will transfer to network members skills in product design and marketing).

During the training phase, a designer-consultant and an entrepreneur introduced a new mode of clustering and supply chain approach that guided the group on product development utilizing neo-marketing strategy. The designer and entrepreneur made recommendations regarding colors, shade, size and thickness of fabric, and period of time needed to finish the product . They worked with a group from Chiang Mai and Lamphun who now belong to the chain as cotton row producers. The group also linked raw material production (cotton row) to another group through the marketing unit and production development coordinator.

Marketing Organization for HBWs’ Network

A Tri-Partnership was formed composed of the private sector (who will run the marketing and design); HBWs (for production and raw material development, product transformation in accordance with their potentials); and Homenet North (to support the Network’s production processes). It was proposed that initial market niching must be geared towards the Japanese market, and subsequent expansion to the European market upon mastery of neo-product management with emphasis on natural fiber production.

Target for year 2006 was the Japanese market, whose requirements are consistent with the potentials and training of the production group.

Activity 2 - Setting up the Marketing Unit

The Marketing Unit is composed of the Private Sector (Marketing and Design section); Networking Groups (12 groups at the beginning and one Network Coordinator); Cotton and Silk Project; and SADA. For the Cotton and Silk Project and SADA, a Production Coordinator has been chosen to manage the program. The role of the Marketing Unit is to conceptualize a business plan; conduct regular meetings; monitor progress, follow up and make suggestions in accordance with what is deemed important; and seek cooperation with other organizations who can support product development and marketing channel promotion.

The Marketing Unit Committee meets every three months to plan and evaluate the progress of work. It is composed of a Marketing Coordinator, Production Coordinator, Network Coordinator, and the President of the Northern HBWs Network. Membership fees (100 Baht / group / year) will be collected. Members who invest in the Marketing Unit will receive benefits after two years. Profit distribution will be divided into four parts: 35 percent for management expense; 30 percent for investment support; 10 percent for the Network Development Fund; and 25 percent for the Marketing Unit.

The Network’s marketing fund, directly managed by the Marketing Unit’s management arm, will be utilized basically for product development and ordering. Advance debt payment during and after production processes through the Marketing Unit will be practiced. Transactions will only take place between Producers (Sellers) and the Marketing Section (Buyer), with 30 percent deposit payment. Inspection during the production process with 20 percent payment will be allowed if stipulated in the agreement; and inspection during the final process will be allowed for transactions with 50 percent payment.

A group who receives orders from the Marketing Unit could borrow money or loan (from the Marketing Unit Fund) at 30 percent value of order (equal to Deposit Value). Said payment will be deducted from 50 percent of final value of products after the group has delivered the products to the Marketing Unit.

Coordinators will receive allowances — marketing coordinators at 6,000 baht/month from products sold each month; production coordinators, allowance on per job basis (follow-up the progress of production; give advise to the groups); project coordinators, with wages in accordance with the Network’s orders.

Cooperation Point and Customer Contacts take place at the Network Learning Center .

Progress of the Marketing Organization

	Thai homeworkers doing wickerwork and product transformation

Contact and initial dealings with the Japanese market began two years ago. This was followed by two more business transactions (order by design or through a catalogue) made possible through the cooperation of the Marketing Unit team. Transactions were undertaken through electronic mail and limitations were addressed by the SADA Team.

Payment methods usually go through LC and Banking Channels. Since the Marketing Unit team is not a registered company, the buyer had to pay in cash during the first order just so products will be received on time, with SADA serving as guarantor.