LUẬN văn THẠC sĩ a study solutions for developing brand of anbinh bank in the period 2005 2010 60 34 05

Background

In recent years, Vietnam‘s economy has been always at high growth rate, banking is one of the industries has influence on the economy with the highest growth rate in a long time Besides that, go together high growth is competitive pressure becoming increasingly among banks as well as foreign banks which has not only a strong power of finance but also experience in a long time Especially, when Vietnam become formal member of WTO since the 1 January 2007, after that there are many banks establish, and there are more foreign banks send file to State Bank of Vietnam to ask the Vietnam State Bank to permit them open branch or even establish a new foreign bank with 100% their capital What‘s more, with pressure from domestic competitors as well as foreign banks, domestic must have planning to compete in fierce competitive environment An Binh bank (ABBank) is not exception To compete with competitors from domestic to foreign, each bank must have good brand Below are some reasons, which make me to, decided chose this topic what makes ABbank to develop its brand in coming time

First, under competitive pressures from foreign banks, domestic banks more increasing, ABBank cannot develop without development planning of brand and a certain brand image in customers ‗mind Therefore, ABBank needs to have a plan to develop its brand in coming time, before cope with direct competition from foreign banks

Second, Vietnam participates into WTO (world trade organization), more and more foreign banks penetrate into Vietnam market, and this makes a large pressure for Vietnam‘s banks

Third, ABBank changed operation in commercial and investment banking in a short time and it is new one in Vietnam financial market Therefore, ABBank must do many things to build and develop a believable image in customers trust

Furthermore, ABBank has difficulties in finding solutions for developing brand as well as improve brand image in customers‘ mind Therefore, ABBank has to not only compete with domestic commercial banks but also prepare finance and human resource to guarantee existence and development in fiercely competitive environment as well as cope with foreign banks At this moment, ABBank has not yet an overall plan to develop its brand Therefore, it must have a plan to develop brand if it wants to exist and develop in fierce condition in today Moreover, there are sub-reasons what make me interest in studying brand in banking, that is brand in banking is new concept in Vietnam and the number of banks have strong brands is very little.

Objectives & aims

The purpose of this study is to show the issues of ABBank case and propose the solutions for developing brand of ABBank in the period 2007-2010 In the study, I will concentrate studying brand problem of ABBank and raise solutions to develop its brand in coming time Furthermore, the purpose is to provide an overall seeing about bank brands in Vietnam financial market as well as foundation for future research in the banking brand in Vietnam in the future In this thesis, the objectives and aims as following:

This study focus mainly on three objectives as following:

 Studying deeply and more detail how brand development is conducted in banking field

 Finding issues in process of building brand at ABBank as well as aspects, which relate to ABBank

 Propose some solutions and brand model for developing An Binh brand in coming time

 Applying successfully solutions in the process of developing ABBank brand

 Help ABbank become one of five leading commercial joint stock banks in Vietnam in 2010

 Make ABBank brand becomes one strong brand in Vietnam

Research question

As mentioned above, there are several important issues need to consider when developing a brand Local bank brands not only have to compete with each other but also to compete with international bank brands that have the advantage of capital and management skills to attract the consumer Because of new business in investment and commercial, ABBank actually has not an overall brand strategy for developing bank brand The question to ABBank now is to find the solution for developing Brand of ABBank in coming time As an intangible and risky purchase, the brand can reassure the customer and add functional as well as emotional value

Based on the discussion so far, the research problem is stated as:

Research question 1: What solutions can help ABBank develop its brand in the period from now to 2010?

However, to have solutions for developing brand of ABBank, the study needs consider the issues discussed in this paragraph, the research problem is further narrowed down as one following sub research question

Research question 2: What are difficulties and challenges facing AnBinh?

Scope of work

The study is conducted only in ABBank as a sample of Vietnam banking system However, the thesis only study in Hanoi branch of ABBank about 150 to

200 personal customers will be chosen in some transaction offices of ABBank in Hanoi to fulfill the objectives detailed above The period is chosen for the study is only in 5 years from 2005-2010 and in this thesis, the study focus on finding difficulties and challenges and then propose solutions for ABBank to build and develop its brand in the period 2005-2010.

Data & process

With the main objectives are to find solution for ABBank to develop its brand in the period from now to 2010 Study takes information from many sources as following:

Data source: Bank‘s information & findings, Internet, papers

The way to process data: The method to process data is mainly by excel

Data has been taken from some websites, which specialize on branding in the world and Vietnam such as Brand channel, Interbrand, Businessweek or vneconomy, saigontimes and so on Information from survey/interviews more than 100 customers in Hanoi as well as over 100 employees of ABBank in Hanoi branch.

Methods & approaches

The study uses case study to make clear the problem of brand in banking system in Vietnam Moreover, to have information for this study, this study concentrates on survey customers and employees by some ways such as questionnaires, interview and observation or in research method, we use case study method Especially, in the survey, we use three methods that includes questionnaires, interview, observation

This study will be an empirical research, which preliminarily adopts the following: Review of related literature/documentation, survey, in-depth interview, Review of related literature/documentation: this will examine the multidisciplinary theories of and empirical studies on brand in the literature In Surveys/interviews sessions: questionnaires will be developed and structured interviews are conducted.

Significance

With the objective mentioned above, the study contributes several meanings to banks in Vietnam On the theory, this study makes clear some aspects of the theory of banking brand in general and in ABBank in particular This study is also a good reference for banks in Vietnam when they have demand to build brand It is hoped that this study will contribute to the body of knowledge on brand and show how the brand concept could be deployed more effective in other parts of Vietnam

It will also help Vietnamese banks to understand fully about brand importance and come up with more suitable brand strategies and policies On the practice, this study gives an overall strategy for ABBank developing its brand in the future.

Limitations

Thesis has some limitations as following:

 The scope of work, which only in Hanoi branch of ABBank is narrow Not study in head office

 The time of the study from 2005-2010 is another limitation

 Customers in surveys are mainly personal not consist of enterprises

 Numbers of customers to interview and survey is not large.

Expected results

The study expects to show the following findings:

 Propose solutions for building and developing brand in ABBank

 Understanding more detail and deeply about brand in banking

 Finding the difficulties and challenges in the process of brand in ABBank

 Giving out the best solutions for developing brand in ABBank

Follow –up (potential)

Further study will be taken on building and developing ABBank brand after a period Other way of study will be analyzing the importance of brand to banks in ABBank particularly and all over banks in Vietnam in generally This study is an information channel and reference source for banks in Vietnam when they want to develop their brands Apply successfully in ABBank in the further future.

Short introductions

Introduction

This part presents the topic and the research question to the readers It seeks to build interest in the topic and help the readers understand the motivation for choosing the subject.

Theoretical Foundation

This chapter presents to the readers about basic theory of brand and brand in banking, consist of factors, criteria and process to build a successful brand in banking The chapter focuses on considering internal factors and criteria as well as others relate to building a strong brand in banking Beside that, this chapter also brings the theoretical foundation and different, more detail understanding of brand in general and banking brand in particular.

Research methodology

This chapter explains the theoretical, empirical and analytical approaches that were used for the study It also seeks to establish the validity and reliability of the paper Moreover, this chapter shows the research methodology in detail and all findings on the research based on reaching above objectives as well as mention model for developing in the case And present the overview of the case study

Solutions for Developing Brand of ABBank

This chapter bases on the results of the survey, interview, observation and study in relation to research questions and the theory presented in chapter one and two More importantly, this chapter indicates difficulties and challenges of ABBank and since then propose appreciate solutions, recommendations for bank in developing its brand in the coming time.

Conclusion

This part will summarize the findings of the study and give out conclusions about the study Furthermore, through comparison between theory and practical understanding this study gives out implications for further research of building and developing brand in Vietnamese banks.

THEORETICAL FRAMEWORK

Understanding Brands

According to the American Marketing Association, a brand is defined as a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition In other words, where product features can be copied in constantly diminishing periods, brands offer companies the possibility of distinguishing themselves from their competitors Whereas products offer tangible benefits, such as different uses, and feature tangible attributes, such as price and quality and physical characteristics, brands are much more complex A brand is often loaded with symbolic meaning; it can bring up associations with seemingly unrelated subjects that have been linked with the brand, a perception of quality beyond physical attributes, or other positive/negative associations

A brand is ultimately built in the consumer‘s mind, where he or she gathers up all the knowledge regarding the bank, its products and services, the communication they have with the outside world, and the associations all those elements bring up Branding is ideally done in a manner that appeals to the needs and wants of the proposed target audience, and thus communicates to that audience issues that give them a positive impression Building profitable brands is a hard task, especially with the huge competition in today Only approximately 5% of new brands succeed, and even huge, well-known banks or companies often experience the need to downsize their brand portfolios However, the value of a strong brand can be immense, so a look into what researchers has deemed effective ways of building brands is in order

Mention brand we can know the short history of brand consists of three stages:

 Brand as a source of sustainable competitive advantage

Branding started to develop and come to the fore in the marketing process in the USA in the 19th and early 20 th centuries Many famous brands date back to this time, for instance, American Express and Coca-Cola With growing consumer sophistication branding became associated with a mix of values that gave specific set of values, which would lead them to reject an alternative unless their perceptions were altered or other factors

A brand in many ways is an external manifestation of an internal culture

The essential point of a brand is that it inspires customer loyalty and/or a method of distinguishing one product from similar rivals For the owner of a brand, two important characteristics should flow from the existence of the brand There are two types of brand

Manufacturer brands are created by producers and bear their chosen brand name The producer is responsible for marketing the brand The brand is owned by the producer By building their brand names, manufacturers can gain widespread distribution and build customer loyalty

Own-label brands are created and owned by businesses that operate in the distribution channel – often referred to as ―distributors‖ Own-label branding – if well carried out – can often offer the consumer excellent value for money and provide the distributor with additional bargaining power when it comes to negotiating prices and terms with manufacturer brands negotiating prices and terms with manufacturer brands

Brand is very important to all banks Especially in this stage, when competitive pressure is large and a lot of difficulties and challenge come to domestic banks Therefore, to understand about function of brand is the way help banks to use brand as a tool in the development process Below are some functions of brand and these expressing the importance of brand to a bank

 First, brand has recognizable and distinguishable function

 Third, Making feeling and confidence

Branding is determining the essence of your institution and communicating it Branding helps clearly communicate our heritage Branding also captures and communicates our distinct personality a Branding Context

Relate to brand name, there are many factor such as customers service, price quality, advertising, marketing sales, public relation, financial performance, facility appearances, competitors offerings, internet presence, employees behavior, employee appearance… b Service Branding

A holistic brand image integrates entities such as values, colors, name, symbols, words and slogans Many people argue that once an organization establishes a favorable brand image its main task is to ensure consistency They further argued that since service firms often follow a monolithic branding strategy, consumers mentally group all the corporation‘s portfolio together, expecting uniformity, thus management of brand consistency is even more important

Successful service brands also depend on good internal communication programmers enabling greater consistency delivering the service experience, regardless of the customer‘s point of contact Having well designed induction and training programmers creates greater commitment, which is an important component in services brands

Many services branding issues require a company-wide approach to their solution and implementation Such issues include closing service quality gaps; a focus on internal and external stakeholders, including staff; a need to monitor the whole service delivery process and the role of strong organizational values in motivating staff to deliver the services brand

1.1.5 Key Concepts in Building Brand

Brand is common term and in that term, there are quite many concepts related to it In this study, the research focuses mainly on finding difficulties and challenges as well as solution for develop bank brand This section will examine key concepts in this process Bank brands are different application of the brand concept; however, the theory presented applies to bank

Brand Personality is defined as ―the set of human characteristics associated with a brand (Aaker, 1996, p.347) The brand image building strategy implies the definition of a brand personality and a user personality The match between brand personality and consumer personality is also an underlying concept of the relationship marketing which is based on the self-image congruence notion Brand Personality is an important source of imagery, a soft attribute of image According to Aaker (1996), brand personality can create brand equity according to three models: self – expression model, relationship basis model and functional benefit representation model

Brand Identity includes brand names, logos, positioning, brand associations and brand personality A good brand name gives a good first impression and evokes positive associations with the brand

Brand Awareness is a status when people recognize your brand as yours

This does not necessarily mean they prefer your brand (brand preference), attach a high value to, or associate any superior attributes to your brand, it just means they recognize your brand and can identify it under different conditions Brand awareness consists of both brand recognition, which is the ability of consumers to confirm that they have previously been exposed to your brand, and brand recall, which reflects the ability of consumers to name your brand when given the product category, category need, or some other similar cue Aided awareness occurs when you show or read a list of brands and the person expresses familiarity with your brand only after they hear or see it

Brand Positioning: A positioning statement tells in one sentence, what business the company is in, what benefits it provides and why it is better than the competitors are The market position of a brand shows where a specific brand is located It also shows the relationship to competitive brands We can determine the market position of a brand based on the answers to the following four questions:

 Why (which benefits and advantages does the new brand bring to the consumer)

 When (determining the opportunities for which the brand is most suitable)

 For whom (it is about the determination of the consumer of a brand or target group)

 Against whom (determining the main competitive brands)

Branding strategy

As wee know, a brand is described as a name, term, sign, symbol or design, or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors We can further look at a brand to identify the maker or supplier of a product, while presenting specific features, benefits and services to consumers Moreover, a brand is a promise to the consumer of what the product, service, or company stands for, and of the kind of experience, they can get from it

A brand incorporates a personality based on cultural factors including film stars, sport heroes, or fictional characters Today‘s brands are viewed and understood from an emotional perspective Therefore, branding has to do with the way that customers perceive and buy things, not simply a characteristic of certain industries A brand equals a ‗relationship‘, ‗reputation‘, a ‗set of expectations‘ and a promise Moreover, they state that a brand is a combination of tangible and intangible attributes, symbolized in a trademark, which if properly managed, creates influence and generates value

Positioning is the process by which a company offers its brands to the consumer and positioning is an essential aspect of branding It is necessary that the message to be communicated by all the organizations activities because any of them may be the particular characteristic that the customers analyses and develops their perception Moreover, the objective of the positioning as the process makes the offer into a brand Positioning is not about what you do to a product, but what you do to the mind of the prospect This means products and services are positioned in the mind of prospects According to Aaker (1996), brand positioning refers to both the process and the result of building or rebuilding an image for a brand relative to a target market segment

―Brand equity‖ refers to the value of a brand Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations Brand equity also includes other ―intangible‖ assets such as patents, trademarks and channel relationships Brands differ in the amount of power and value they have in the market place due to different factors Powerful brands are known to have brand equity Brand equity is a set of brand assets and liabilities linked to a brand through its name and symbol, which adds or subtracts from the value provided by a product or service to a firm and/or to that firm‘s customers (Aaker, 1996) Nevertheless, the brand equity is based on the extent to which it has brand loyalty, name, awareness, perceived quality, strong brand associations, and other assets such as patents, trademarks and channel relationships

Furthermore, brands that have strong brand equity are seen as a valuable asset to the company and can be bought or sold for a price

Value is the trade-off between what a consumer gives and gets from a brand

Intangible values are the benefits that customers experience that are not functional or physical aspects of the brand, which can include the aspects of the brand personality These characteristics of the brand cannot be seen, tasted, felt, heard or smelled before they are bought For example, trust, freedom, power and excitement

However, tangible values are the benefits that the customer experiences that are the functional or physical aspects of the brand These characteristics of the brand can be seen, tasted felt, heard or smelled before they are bought Perceived value is the consumers overall evaluation of the benefits of a product, which is based on what they receive (ex: quality, satisfaction, or convenience) and what is given (ex: price, time, effort) Furthermore, perceived value is completely based on the individual

Perceived quality is the consumers perception about a products overall excellence or superiority in comparison to other products, and is based on the individual

Personality and the positioning of the brand make up the brands identity and image Brand is built by creating a strong brand personality, or set of brand values, and positioning the brand by creating a favorable perception in the mind of the target audience Brand images are the set of beliefs that a consumer holds about a particular brand Consumer‘s beliefs may differ based on their individual experience or perception of the brand Furthermore, the brand identity is the total proposition that a company makes to consumers, or the promise it makes and is everything the company wants to be seen It may consist of features, benefits as well as all other values that the brand possesses

Brand popularity can be defined as the extent to which a brand has been widely sought after and purchased by a significantly large population Furthermore, it is considered the accumulation of market acceptance and brand goodwill over a long period Brand popularity can occur from word-of-mouth, from prior users and is the result of the superior image of the brand, which is reflected in the brands marketing Brand popularity will positively influence the brand performance in the short run as well as in the long run, by creating a favorable brand image in the minds of consumers As a result, the brands popularity will have a positive contribution to the brand's loyalty, image, or market sales

A company uses product branding when they decide that the product should stand on its own, and should be left to succeed or fail without any support from the corporate brand or company name Usually fast moving consumer goods are associated with this level of branding Corporate brand is when the brand name gives all its identity to the products or service, and then the products receive strength and association through the companies brand values In extreme cases of corporate branding, the company‘s name is strongly associated with the product, while there is no mention of products and services at all

1.2.7 Yin and Yang Model to Branding

According to Asian culture, Yin and Yang are complementary sides to every individual, and it provides balance so that the individual is harmonized Like Yin and Yang, the human brain has two hemispheres; one on the left, another on the right The left side of the brain deals with logic and rationality, while the right side is concerned with emotions, dreams and creativity In branding the Yin represents the rational, while the Yang represents the emotional Both the left side and the right side of the brain are important for people to have because it creates balance

Based on this concept, bank either builds their brand personality to appeal to the rationality, or the emotions of consumers, while others use both This way of looking at consumers began with packaged consumer goods, but has adopted rapidly by practically every type of business in various industries, since it has shown to provide many benefits With specific products are services, therefore, the bank need to build a brand must based on combination of opposite factors That is philosophy make many successful brands in Asia, especially in Japan with famous brand in the world such as Toyota, Sony.

Building banking brands

To have a good and prestigious brand such as HSBC or Citibank, Vietnamese banks must spend much time and expenditures in a long time to prove their ability, management ability as well as finance power before have customers‘ absolute confidence To do this, banks must understand the importance of brand and other factors, which have influence on process of developing brand of bank Next step we will consider elements relate to brand and role of brand in banking

1.3.1 Introduction about brand in banking a The importance of brand to bank in business

If brands are a strategic asset, then how do they affect business? A strong brand provides a point of differentiation for the member and customer by leaving an impression in the mind of the members or customers It builds a long-term relationship for long-term gain through loyalty and trustworthiness The goal of branding is to create perceptions that drive choice of customers

Figure 1.1: Importance of brand to banks

[Source: Steffen Leditschke, Successful branding in the Financial

There are two things, which affect people‘s perceptions and preference communications about an offering and experience with the offering

Communications and experience both affect brand image More importantly, what you communicate and the experience you deliver must be closely aligned to build a positive brand image Finance in general and banking in particular is, as it were, the stomach of the country, from which all the other organs take their tone Brands have until recently been a relatively minor part of the marketing message of retail financial services companies and bankers in particular

With changes over in 20 years, since economic reform began in 1986 have changed the pattern of banking Some of these have been driven by changes in regulation, but more significant have been the changes in consumer behavior

Today, demand of customers has changed much Customers are now more aware of safety of their asset and comfortable with new technologies Customers are more willing to purchase banking services such as home banking, internet banking…

They have embraced change, regulatory changes have made many financial products more transparent, and thus more easily compared b Why should banks try to build their brands?

Until now, there are 37 commercial banks and representatives in Vietnam

Under strong competitive pressure from all sides, domestic banks must build strong their brand in order to attract customers as well as to cope with competitors If they don‘t build brand for themselves that means they will make them in trouble in the process of competition To avoid being merged and acquisitioned by foreign large banks, banks must have strong enough brand to cope with them as well as to attract customers There are many advantages to businesses when they build successful brands for them These include higher prices, higher profit margins, better distribution, and customer loyalty Businesses that operate successful brands are also much more likely to enjoy higher profits A brand is created by augmenting a core product with distinctive values that distinguish it from the competition This is the process of creating brand value c Brand value in banking sector

A good brand name is invaluable asset in banking industry Banks rely trust the bank company with large sums of money Branding is particularly important to the financial sector in the current economy, since investors and other big spenders are being cautious about making large financial transactions

Finance Brand is a London company that tracks the value of bank brands The company tracks 150 global brands across all industries The top financial services brand, holding the number 13 spot on Finance Brand‘s worldwide list, is Citibank

(According to Interbrand, the world's top brand name is Coca-Cola with brand value is over $ 70 billion)

Scandals are not the only factor affecting brand value in the banking sector

Banks and financial service firms have sought to trim their budgets over the last few years Like other industries, the banking sector has had to react to the recent economic downturn by becoming leaner and more efficient Seeing losses in investment units, banks are looking to their consumer divisions to find a profit As a result, instead of being rewarded for bringing banks their business, customers are often seeing higher fees and decreasing personalized customer service Some banks have even adjusted their fee structure to encourage customers to use ATM machines instead dealing with bank tellers These cost-cutting measures lead to a depersonalized banking experience in which customers have little emotional connection to the bank's brand The lack of human contact is increased by modern technology While many basic banking transactions can now be handled either at an ATM or at a bank's Web site, neither outlet is capable of perceiving, let alone addressing, a customer's fears or frustrations Unfortunately, as banks rely more and more on technological outlets for service, there is often fewer helpful and knowledgeable staff in the bank lobby when the customer shows up in person

Maintaining the value of a single bank brand is difficult Corporation in the industry bring new branding challenges The function of a brand is to make the bank and its services recognizable and memorable In corporation, however, corporate politics often become involved The fate of the acquired bank's name can be perceived as a symbol for what is happening to the bank itself Employees are afraid for their careers often fight to preserve what they believe are the core identity of their company d Signals to recognize a strong brand in market

It is not easy to recognize the mistakes of bankers in their investment of brand building Experience from crisis in 1997 in Asian countries gave us important lessons about right investment decision in branding A large brand without difference or specific characteristic or image, it could not get profit The same to the case a large brand and famous service without profit also lead to failure in the near future

Moreover, to have a strong brand as well as to know that we need to know necessary signals to a brand in market What are signals to know a brand is strong in the financial market? There are many signals to recognize a strong brand, but in banking industry, we only need to know six signals below Those are Difference, Image, Service Quality, Price, Profits and Distribution channel

You can know and make a plan for building and developing a strong brand in the future Therefore, how to measure our brand whether it is strong or not You cannot describe how your brand difference to competitors in one word With product are invisible, it is very difficult for banks when make customers see the difference between your service to competitors If do not that, your brand is not strong Why did you succeed? What would you have in that case? The answer is certainly profit However, how could we to cope with financial difficulty or crisis if we would have not a strong brand to base If not, certainly you go to bankruptcy

If you cannot summarize your mission, task, vision, and brand value in a word That mean your customers also cannot feel Therefore, you have to answer clearly the question: ―what your brand‘s mission is? How does it develop and where is your brand‘s Customers only remember your brand‗s symbol when it is clearly different and salient to others If you have intention to imitate to others, you will fail

Company value is visible assets This is right However, if your bank has been fired all assets disappear, how much is your bank value? At that time, only brand is factor can help your company to restore

Experience in building and developing banking brands

1.4.1 Failures and Success in building brand

Talking about experience in building and developing brand, we can take many examples in the world and in every field from service to production To any banks or financial organization, experience in building and developing brand is very important, with experience from in the past that will help bank avoid unnecessary damages Although, banking is a specific industry, but each failure or success is a lesson to bank in the process of building and developing its brand Below are some examples about failure and success in banking

First, talk about typically successful examples in building brand HSBC is a typical example in building brand HSBC success is not only in a country but also in the world With motto is a global bank but understand local, HSBC actually make an impression to customers Moreover, this is a meaningful strategy in today‘s competitive pressure Beside the HSBC case, we can see some cases succeed in building brand such as Citibank in America or Guaranty Truth Bank in Nigeria or ACB and Sacombank, Techcombank in Vietnam, these are banks quite successful in building brand image in customer‘s mind

Next is failure, there are many cases of bank‗s failures, fore example:

Cr´edit Lyonnais Bank, this was a French bank, however the thing I want to mention in here is, the failure of Cr´edit Lyonnais came from a an article written by Joseph Fitchett, (International Herald Tribune, Thursday, 3 October 1996, page

13) Back to Vietnam market, in 2003 Southern bank failed in improving brand image when the bank did not control information well Through this event of southern bank, we can see that ability of Vietnamese banks in dealing with crisis is not good Due to a rumor, ACB were in trouble when thousand people went to bank and draw money, but in Southern bank, due to a news of credit was leaked out, many people wanted to draw money and this bank were nearly to went bankruptcy without the SBV intervention

Recently, Northern Rock, the fifth largest bank in England, has been in crisis by leaking internal information about credit status of bank, this lead to financial crisis in banking system not only in England but also in Europe Furthermore, we can take a typical example is Barings bank in Singapore Failure of this bank stemmed from the poor management at a branch We can consider the more detail of this case on the website businessweeks.com This is typical case about managing brand This is a lesson to many banks in Vietnam, because of management in banking in Vietnam is still bad

To build a successful brand is very difficult, especially in banking sector

There are many bitter lessons for us who are beginners in branding field In this study I mentioned five lessons about improve brand All these come from famous companies in the world such as Procter & Gamble (P&G), Starbucks or Barings Bank in UK All manage brand differently to the ways in the past a Innovation

In Banking, number of services has much more than number of products To make impression to customers, banks must often have innovation in products and services by many forms Back to Vietnam banking market, Vietcombank is a bank has largest number of products and services than others Due to extend products and services, VCB is always a bank have much credit to customers It is always a safe and believable space to customers b Fast or failures

To day, customers often have trend to ask innovation in products as well as brand must operate Banks must have innovative each year and each month or quarter New product or service often encourage customer‘s curiosity to know and then to buy or use c Take advantage of all information channels

There is no any information can attract customers fully, therefore banks must introduce their name and services on many channels We only success when we know to take advantages all information to advertise out service as well as polish our brand to customers Not only advertise on TV, internet, outdoor etc Banks can establish forums about subjects, which are service or products of bank on internet

To do that, banks can know point of view from customers as well as propagandize banks‘ image and brand to them d Extending thinking

Not only focus in one or some main services, we should think to others service which relate to our service and bring benefits to customer For example, Apple Computer Company or Starbucks when they know to combine supplying products with other operation, which make customers, feel comfortable when using their service or products e Competitors

All strong brands have competitor A strong brand is built based on their characteristic, which shows who their competitors are and what competitors focus on Then build a brand with characteristic are opposite to competitors For example, Mercedes cars are big and convenient; therefore, BMW has made other types with smaller, thinner, and faster cars, and many examples In banking service, we can realize that through some banks and their services For example, ABBank often has attractive interest rate more than other banks Below are some short-term mistakes in building brand

The first symptom is having no detail and clear plan All meetings are only statement or common operations Even when have plan, but there are not many departments and some body to do or do not carry out seriously Therefore, after a short time all things have been sunk in forgetting

 Skipping from one to another

This is a phenomenon happen in many companies, this express working without a detail plan In addition, this also expresses the banks or companies have many campaigns to advertise or promote Therefore, it could not control the effectiveness of plan or campaign of advertising or promotion Mistake in here is lacking of overall, common and long-term brand strategy

Many managers even CEO of bank often-think brand go together with revenue Therefore, they have adjustment about advertising budget when revenue down or up This is serious mistake When revenue down, we need to consider carefully and then have a plan to deal with The best way to build and develop brand is that company need to educate employees about their role in building and developing brand, that relate to their lives and bank need have a sustainable plan of brand development

Each bank has its own strategy in business; we cannot take competitors‘ revenue as our objective, competitors easily obsess bank There are many banks imitated each other about advertising or promotion campaign over past time

 Do not understand bank’s image clearly

RESEARCH METHODOLOGY & EMPIRICAL FINDINGS

Research Approach

The aim of this study is to evaluate the factors have influence on process of building brand and find the solutions for developing brand of the bank The descriptive approach was chosen for the study, as it is appropriate when the focus of the study is to describe and explain elements relate to bank brand As customary, the descriptive study is of an inductive nature The variables that should be examined are hard to establish through theory Therefore, they come rather from practical experience rather than theory.

Research Method

In the early stages of this study, it became clear that the study would be of a qualitative nature This was due to the complexity of the subject and the difficulty by which element is quantified Therefore, it would be extremely important to understand the concept of brand before trying to quantify it and its underlying factors Brand is part of asset system in bank and it would be difficult to gain an understanding of it through a quantitative study before the elements are examined

The main difference between the quantitative and qualitative method is that the quantitative method is more formalized and structured The possibility to statistically analyze the results is the foundation of quantitative research, which however distances the researcher from the research object When studying an issue like brand, it is important to have a close connection to the respondents in order to gain their understanding and behavior as well as make them to reveal their true feelings The closeness to the research object that the qualitative research method offers also leaves the researcher with more space for interpretation and understanding.

Data collection method

Data can be collected through two types of sources, primary and secondary

Primary data is gathered with the particular study in interview and observation, and thus gathered for the first time Secondary sources do not have this connection to the study, and the data is collected before the study often by others Since the research problem focuses on the concept of brand building, it is natural that the study takes a qualitative approach, which further allows one to analyze the unique and diverting responses, as oppose to the minimum of what statistics offers in quantitative methods It is clear that the qualitative case study in this case can give more information that is useful Furthermore, a qualitative study has the advantage of possibly bringing out elements and ways of thinking that the researcher was not aware of This could be things such as recognition, status and motivation When using multiple sources of evidence is good for conducting case studies The most important advantage of using multiple sources is the development of converging lines of inquiry In other words, a finding that is based on several sources is stronger than one based on a single source The main data collection method used in this study is the Interview, survey and from key channels

This study will start with looking at secondary sources, primarily books and articles Databases such as reports, general business files, have been important means to find interesting articles A comprehensive and systematic literary review is the backbone of this study and its primary purpose was to establish a base on what has been done previously on the subject, and to identify factors that are important for the building of brand that may have high implications

Primary sources will be utilized in order to gain a deeper understanding of these factors and their impact on building brand In depth, direct interview and surveys were conducted for this purpose Theses are the best way to collect evidence that can not be observed Direct interview is one of the most important sources for case study The interviews are based on open-ended questions where the respondents can be asked about their opinions to services of the bank as well as behavior of employees

Direct interview is a channel to collect much information from customers who are using services of bank The manual is however not a standardized questionnaire that should be followed but rather an aid to secure that the areas of interest are covered It is important that the respondents are allowed to freely give their views and experiences and the use of the manual makes it possible to discuss certain areas deeper than a questionnaire would since the manual is open-ended

It is extremely hard and mentally exhaustive to conduct qualitative interviews The researcher has to be a good listener as well as being able to ask good questions In addition, flexibility, an unbiased mind and a firm grasp of the issues discussed are desired skills As much as possible has been done to conduct the data collection in a satisfactory way Among other things, exhaustive research on the subject was made prior to the primary collections in order to get the most out of the interviews Admittedly, the interviews were not flawless but conducted to the best of my ability and therefore, the result must be considered satisfactory Through these interviews, we have precise looking about service quality of bank.

Overview of the case ABBank

An Binh Commercial Joint-Stock Bank (ABBank) founded in 1993 and now is one of the leading joint-stock banks in Vietnam and also is one of the ten banks with the largest registered capital of Vietnam After 13 years of growth and development since establishment in 1993, ABBank has made great advances in its business performances and results in the last 3 years marked by significant milestones such as: Electricity of Vietnam Group (EVN) became a strategic shareholder of ABBank with 30% of shareholdings in 2006; ABBank and An Binh Securities (ABS) has successfully issued VND 2000 billion bond for EVN in 2006;

EVN bond issued by ABBank has been selected by Asia Money 1.2007 as the best local currency bond of Asia in 2006

Currently ABBank has a network of 40 branches and transactional offices in nine provinces of Vietnam, serving 5,000 business clients and 50,000 individual customers Target business clients of ABBank consist of companies and enterprises belonged to EVN and EVN Telecom, small and medium enterprises (SME) in export and import industries For the individual customers, ABBank focuses on EVN and EVN Telecom employees, electricity consumers, and other customers who have needs for debit and credit card products, account salary payments, installment loans for car, house and consumption

To attract and maintain customers, ABBank commits to create its unique service differentiation comparing to other banks by delivering best service quality to its target customers by frequently listening to customer opinions and feedbacks, applying most up-to-date IT infrastructure and solutions, professionally recruiting and training our staffs and developing joint marketing programs and products with our strategic partners In 2007, ABBank business objectives include increasing the number of our branches and transactional offices to 50 by the end of the year, achieving growth of 250-300% in fund mobilization, loan provision and total revenue with a strong increase from fee-based services

2.4.2 History and development process of ABBank a) History of ABBank

ABBank was established in May 1993 with registered capital of VND 1 billion at 138 Hung Vuong, An Lac, Binh Chanh district, Ho Chi Minh City In a long time, ABBank focused on agricultural sector In addition, in the first time it was a rural bank Now, the Head Office of the Bank is located at 47 Dien Bien Phu, District 1, Ho Chi Minh City, Vietnam

To meet the increasing demands of customers for modern banking products and services, at this stage ABBank implemented fundamental reforms in organizational structure and top management to focus on two business areas: commercial and investment banking

On 6 December 2006, ABBank signed agreement with Temenos to implement the core banking solution and opened International Banking Centre in Hanoi ABBank inaugurated seven new transactional offices in Hanoi; consist of

ABBank Dinh Tien Hoang, ABBank Tran Khat Chan, Nguyen Van Cu, Tran Dang Ninh, Ton Duc Thang, Le Trong Tan, and Quan Thanh ABBank has issued successfully VND 1000 billion 10 year and fixed rate bond for EVN with the technical assistance of Deustche Bank and VinaCapital Registered capital was increased from VND 165billion at the beginning of the year to VND 1131 billion by the end of 2006

In January 2007, Asia Money selected EVN bond underwritten by ABBANK as the best Asia local currency bond 2006 In April 2007 ABBank was selected to receive the "Best Banker Award" in the category of the bank has success quick development of high service and product b) Development process of the Bank

ABBank is a Vietnamese joint-stock commercial bank established in Vietnam in accordance with the Business License No.0031/NH-GP dated 15 April

1993 issued by State Bank of Vietnam, which has become effective from 18 September 1997 for a period of 20 years The Bank was initially registered as a rural joint stock bank According to Decision No.1333 dated 07 September 2005 issued by the State Bank of Vietnam, the Bank was approved to transform to a commercial bank The Bank can carry out full banking activities which include mobilizing and receiving short term, medium term and long- term capital from various organizations and individuals lending short term, medium term and long term capital to various organizations and individuals up to the nature and ability of the Bank's capital resources; conducting foreign currency transactions; international commercial service, discounting of commercial notes, bonds and valued documents; providing transaction services between customers; and other banking services as approved by the State Bank of Vietnam

In 2006, ABBank has expanded quickly the network to serve new customers locations including ABBank Le Van Sy in Ho Chi Minh City, Can Tho, Vung Tau, Binh Duong,Da nang city, increasing total number of ABBank offices by year end to 14 As at 31 August 2007, the Bank has one (1) Head Office, six (6) main branches and twenty six (26) transaction offices in Ho Chi Minh City, Hanoi, Da Nang, Can Tho and Ba Ria – Vung Tau The goal of ABBank in network development in 2007 is to increase the number of branches and offices to 60 by the end of the year in nationwide Next, we consider some information about result of operation of ABBAnk from 2004 to 2006

2.4.3 Mission, Vision and Objectives of ABBank

The net profit for the year ended 31 December 2006, after taxation, was VNDm 58,147 (2005: VNDm 8,230) In the year, the Bank has paid a dividend of VNDm 6,608 (2005: VNDm 1,366) and announced the dividend for the year ended

31 December 2006 to be 70.82% of profit after tax

[Source: An Binh bank, Annual report, 2006, p5]

Figure 2.2: Performance Results in the period 2004-2006

[Source: An Binh bank, Annual report, 2006, p5]

Since 2005, ABBANK‘s deposits have increased more than three times year on year In 2006, ABBANK has adjusted the interest rates timely along with the rise of USD interest rates in international markets and the increases of VND interest in local market At the year-end of 2006, total of deposit grew 288% from VND 485.541 to VND 1,888.002 billion Deposit from businesses and individuals increased by 649% from VND 209.317 billion to VND 1,567.350 billion, making up 83.01% of total deposit Deposit from financial institutions rose 23% from VND 241.224billion to VND 297.686billion, accounting for 15.76% of total deposit

Deposit mobilization from businesses registered the highest growth compared with other sources of deposits in 2006

Based on the closed business relationship with strategic shareholders (EVN, PVFC, GELEXIMCO) and their subsidiary members, who have strong demand and saving deposit, ABBANK‘s deposit from businesses have increased 851% from VND 141.678 billion to VND 1,369.356 billion, composing 72.52% of total bank‘s deposit Deposits from individuals increased 382% from VND 41.106 billion to

VND 197.994 billion, consisting 10.47% of the bank‘s total deposit This positive result is due to the expansion of network with eight more new transactional offices over the year, the timely adjustment of interest rates to market changes and the increase of marketing, PR and promotional activities

ABBank is one of leading commercial and joint stock banks in providing diversified services, packing service and have high competition and high quality in technology by international standards for all customers who are individuals, investors and enterprises

Empirical findings

Objectives of this study are to find solutions for developing brand of ABBank in the period from now to 2010 That mean we have to research the question 1 However, to answer the research question 1, we have to research the question 2 in advanced This mean this study must identify the difficulties and challenges are facing AnBinh and consider what elements AnBinh need to focus in the process of developing its brand

Research question 1: What solutions can help ABBank develop its brand in the period from now to 2010?

Research question 2: What are difficulties and challenges facing AnBinh?

In this part, the empirical data of the ABBank case, general statistics and result of survey will be presented generally We study more detail about ABBank case with information from interviews and surveys In chapter 3, we will study more detail the following parts:

 Difficulties and challenges of ABBank

 Solutions for ABBank to develop its brand in the period from now to 2010 Below is some summary of the research process Through that identify the difficulties and challenges of the bank To have enough information for the study we need display the process of collecting information from people who relate to the study To do that, the study will bring a good result for the thesis Below are some requirements to a questionnaire: Questionnaire, from 10 to 20 questions, at least 100 respondents Selected interviews must have an interview guide Samples of competitive print ads, Evaluation of key advertising messages

This part will analyze the results of the interviews in relation with the study questions and the literature The findings of the study will be presented in manner that suits the purpose of the thesis As stated earlier, the aim of this study is to find out difficulties and challenges of ABBank in developing its brand in the period 2005-2010 to become one of five the strongest commercial banks in 2010 There has been little academic work done in the areas of linking the data to propositions and interpreting the findings of case study However, the analysis will include a descriptive account as well as establishing themes that are found through pattern matching where pieces from the case are matched with theoretical propositions By using multiple sources, it is possible to triangulate the data to obtain valid results

The qualitative approach of this study will allow speculation about the linkages between what is presently known about the theory and what has been discovered in the study

While it was not always possible to follow this design exactly, it was adhered to as closely as was possible Data analysis was performed following the recommendations of leading writers in grounded theory Incidents within the data were compared with other incidents, and to more abstract theoretical points, which arose from both the literature and the authors‘ experience This allowed the identification of similarities and differences and ultimately the categorization of the data General speaking, in this part, the study only focus on presenting the result of the survey and study in general In chapter 3, we will mention clearly about the problems, difficulties, challenge, and opportunity of ABBank through the result of data analysis, the survey, interviews and observation

In this study to employees and mangers at ABBank, we focus on internal factors relate to brand developing process of the bank as following:

 Evaluate understanding of employees about brand

 Evaluate feeling of employees about corporate culture at ABBank

 Evaluate perceptions of employees about recruitment policy, difference between ABBAnk and others

 Collect opinion from everyone in developing brand

 Considering difficulties of employees in working at the bank as well as making a good working environment

In other word, this study wants to indicate factors have relation to brand development of ABBank and then show difficulties and challenge of ABBank in the process of developing brand Next is time and venue of the study This survey took place from in the end of June to 10 August 2007 It was simultaneous with survey on customers The steps are as follows:

 Step one (From June 2 to June 11, 2007): design survey questionnaire

 Step two test trials some customers and employees(consist of 11 customers and 15 employees)

 Step three revise and supplement the questionnaire for both of customers and employees through the result of test trial

 Step four (From 24 June to 25 August 2007): Surveying, analyze and process the questionnaire and information from survey and interviews

 Venue: Hanoi branch of ABBank, No 101 Lang Ha street;

 ABBank Card centre No 101 Lang Ha street;

 Dinh Tien Hoang transaction office No 69 Dinh Tien Hoang street

 Tran Khat Chan transaction office No 288 Tran Khat Chan street

 Tran Dang Ninh transaction office No 109 Tran Dang Ninh street

 Quan Thanh transaction office No 188 Quan Thanh street

 Ton DucThang transaction office No 141 Ton DucThang street

 Nguyen Van Cu transaction office No 453 Nguyen Van Cu street

 Outcomes of the Survey (for managers and employees in ABBank)

First, evaluate the understanding of employees and managers about brand

This group from question 1 to question 12, the objective in these is to evaluate the understanding of them since then has measures to recover in training Manager is awareness of brand name and the importance of brand name According to the survey‘ results, there are many staff think of that brand as a ―marketing tool‖ and trade mark A little people consider brand as trademark and good origin indications

Most of people make sure that trademark is a brand That means 10 % ABBank manager have not been full aware of what brand name is Then, 100% of them think that brand; brand identity and brand strategies are in full importance in enterprises‘ activities Therefore, we can see that ABBank‘s managers are all aware of the importance of brand name and affirm the importance of investing in strategies of communication and upgrade image Evaluate the way of building brand name via detailed directions

Moreover, to decide a strategy of promoting brand name, we have to get deeply knowledge of the meanings and characters composing a brand name That is the why, I raise many questions assessing the abilities and effort of each ABBank‘s staff in proposes their way to improve ABBank‘s brand name in the market When being asked what functions and characters of brand name are and to give the meaning of brand equity, there are not many staff has correct answers The question of brand name – brand identity also catches a little percent correct answer from ABBank‘s staff

According to these results, we can define that simple questions with yes-no answers about the meaning of brand, brand vision, and brand strategy, most of people have correct answers Nevertheless, for deeply knowledge of characters, functions of brand, there are few correct answers That means ABBank‘s managers are aware of a piece of cake of building and promoting strong brand in the market

They also have no idea or very embarrassed, ambiguous answer on detailed directions The essential elements for their jobs have not been aware clearly

Figure 2.3: Employees’ Understanding about brand

From the survey‘s results, there is 70.43% of staff being aware of brand as a

―marketing tool‖ and trademark Most of people make sure that trademark is a brand There is only 13.04% people answer correctly question one That mean 13.04

% people understand precisely the nature of brand

When ask about importance of band to bank, there are 99% people think that brand is very important to bank It is expressed that employees are aware of brand importance to bank

When ask about functions of brand, 74,78% people have wrong answer, although they are aware of importance of brand but they really don‘t know the functions of brand is thing the board of bank need to notice when have HR policy to employees

From the result of survey, there are 86.96% people answer incorrectly the question ―what is brand?‖ even there are 65.35% people misunderstand the brand vision while brand vision is very important to one organization or in question four there is 81.74% answer incorrectly to the brand characteristics

For the yes-no questions of the meanings of brand strategy, there are 95.65% of asked persons having incorrect answers Meanwhile, there are 98.26% people were asked have correct answer about brand building

Figure 2.4: Understanding of employees about aspects of brand

From the figure 2.4, we have overall seeing about understanding brand of employees in ABBank Through that, we see the status of brand development at ABBank over past time

Table 2.1: Employees’ understanding about brand

Table 2.2: Difficulties of employees in working

From the table 2-2 we see that, there are 70.43% ideas said that they have difficulties in skill and experience in work and these affect their ability to persuade customers and success of the bank Nevertheless, for deeply knowledge of characters, functions of brand, brand strategy and so on there are many people have incorrect answers That means ABBank‘s managers are aware of a piece of cake of building and promoting strong brand in the market They also have no idea or very embarrassed, ambiguous answer on detailed directions The essential elements for their jobs have not been aware clearly Similarly, to the question brand asset and brand vision, there are 60.87% people misunderstanding the brand vision and 64.35% people misunderstand the brand asset concept

Status of brand development in ABBank

Although founded since 1993, but in a long time ABBank only focus on customers in agricultural area Since 2003, it transform in urban commercial joint stock bank from rural joint stock bank In a short time, therefore it had not enough time to build and develop a brand image in customers‘ mind And this is cause of its brand building is lack of many things as well as not have a strategy in developing brand in this time In coming time, the bank will have a detail strategy to attract customers and reinforce its brand name and brand image in customer‘s mind Over the past years, the banks had to mobilize capital, open branches, building human resource That is why, until now the bank has not a real brand strategy yet ABBank still has not an overall brand strategy, so in coming time it need have a brand strategy to make sure ABBank brand become one of strongest bank brand in 2010

Activities in developing brand of ABBank

Through the some activities such as study, survey employees and customers as well as interview managers at ABBank, there are some problems as following:

 Service performance and development: To develop its brand, ABBank has some marketing and activities to develop as well as promote brand image to customers With competitive pressure as well as aspiration to develop, the bank always cares for the way to diversify types of services and product So far, ABBank has total 30 services and product in its category Besides the traditional products and services providing to customers, An Binh has breakthroughs in products and services in order to attract customers such as credit loan to 200 million VND without mortgage This is really a breakthrough in Banking in Vietnam On the other hand, car loan, house loan with much support, out only in 8 hours since customers submit profile to bank This is record in Vietnam banking system This makes difference between

 Network: In banking business, location is an important factor when making competitive advantage to competitors Most of branches and transaction offices of ABBank have convenient venue Why? Because convenient venue is considered bys some factors such as: a space for customer to put their means when go into trading, easy to get traffic or security aspect when customers want to put money in bank or draw money and so on

 Press releases: It is important to have press conference in advance to take one branch or transaction office into effect The bank often holds a press conference with the appearance of Investment economic review, Vietnam Economic times, banking Review or labor newspaper and some media Therefore, the bank is easily to attract much attention from customers

 Corporate events: ABBank has taken part in local activities in some provinces and Hold programs for employees on holidays, traditional days…

 Promotions: On the occasion of USD mobilization campaign the bank has hold a program to draw award to customers: “send USD, have big award with YOU card of ABBANK” ABBank hold promotional program for customers had saving in US dollar On 27 and 28 December 2006 ABBank sponsored for ―Hòa Nhạc Chào Năm Mới 2007‖ program

 Relationship program: The bank also takes part in the campaign of supporting flood victims, which subscribe one-day salary of staff The money gives to Vietnam fatherland fund and then to victims for overcoming their difficulties Government authorities appraise this noble behavior

 Social Activities: To fulfill its corporate responsibilities, and carry our CSR campaign, ABBANK has taken part in many social and charitable events to help support people suffering from natural disasters

The bank has contribute VND 150 million to the program ―Benevolent arms‖ of the Health Ministry, an activity to raise funds for building healthcare infrastructure for the poor people

 Advertising: Advertising is necessary condition and PR is sufficient condition Although ABBank transform to urban commercial joint stock bank in a short time, but there has been a few advertising programs on

 Brochures: The bank has printed many brochures about new services of bank such as YOUhouse, YOUcard, YOUspend, YOUHOUSE, YOUcar…All customers when come to transacting with the bank are sent brochures in order to introduce new services and products of bank to them as well as take advantage of customers to introduce these services to their friends or relatives The bank asks employees to deliver leaflets introducing sales promotions and new services to inhabitants

This activity makes attention in potential customers‘ mind.

Why are Vietnamese banking brands not great?

2.7.1 Overview of banking brand in Vietnam

General speaking, brand is relatively new concept to most banks in Vietnam, only some banks have launched some campaigns to expand their brands such as VCB and Techcombank, DongA or Sacombank in recent years By advertising on

TV and in other tools such as outdoor or media, these banks have made a good impression to customers about banking services However, there is no bank has a professional strategy to make a famous brand in financial market in Vietnam Most of them only to make a campaign in order to attract customers for one program such as mobilizing capital or US dollar and so on That means they only do for short- term objectives not long- term objectives In addition, this is thing happen to at most the banks in Vietnam now

A review of banking services: Through the process of studying, there are some outstanding problems in banking service in Vietnam as follow:

 Services in banking industry in Vietnam are actually not attractive to customers

 Types of service are poor and lack of innovation in supply services to customers

 Compare to foreign banks, technology application in domestic banks is low

 Numbers of services are poor and qualities of them are not high

 Service quality of banking industry is a problem

Now, there are some banks apply strongly ecommerce in business, that is:

VCB, Techcombank, Sacombank, ACB and Dong A And this application of e- commerce brings much benefits for them in economic as well as in improve their brand image in customers All expressed through growth ratio and profits in each bank on years

2.7.2 Actual existences of bank branding in Vietnam

Through recent studies and reports from sate bank and financial organizations in Vietnam and in the world, we can recognize some problems and challenges to Next are some challenges to commercial banks system in Vietnam as following:

 The largest challenge to Vietnamese commercial banks is factor inside banks that are capital size, limited human resource and technology progress Most of them are lower than countries‘ in the area

 Product and services in banks are mainly traditional and even poor when compare to other banks in the Asia Service quality is not high, not follow up to customers‘ demand Most banks mobilize capital from savings with the amount of capital account for 94% in total mobilization capital Capital mobilization and credit operations are main activities in banks and they account for more than 80% total income

 New products and services of bank seemly are modified from old those without innovation As we see, almost Vietnamese commercial banks have no diversification in products and services, so they have to compete with each other by interest rate tool in order to attract customers However, this tool also has advantage at a limit level

 There is no product and service has breakthrough in technology or convenience Customers have not many choices in using services at bank In developed countries, banks have many kinds of business outside of banking service such as investment in funds, corporate bonds…

 Procedures of banks relatively complicated and often take much time of customers For example, to one service, in foreign banks, it take only from 3 to 5 minutes but in domestic banks with the same service it often takes from 8 to 10 minutes even 15 minutes This make much inconvenience for customers and many customers feel unsatisfied when they have to go bank to deal

 Risk management in Vietnamese banks is not good Danger from risk management is likely to happen to banks This is many international financial organization warned But, there is few banks are interested in that

 Application in information technology is lower than countries in the area This is expressed in number and quality of products and services in banking system

 Service system in banking is relatively poor and monotonous, connectivity among services in bank are low

 Payment system in banking has not reached standard yet

 Online banking system has not reached standard and cached up the market demand a Four general difficulties to banks

 Regulation from state bank (express through regulation to commercial bank about, recently the state bank required all commercial banks increase compelled reserve rate from 7 % to 15% or lending rate to stock market not beyond 3% This make difficult to banks when many customers come to bank and then come back without any support because from the state bank regulation

 Financial capacity of banks is limit and actually weak to foreign banks Although in two year back now, most commercial banks increased chartered capital though several forms such as : selling strategic shares for foreign partners , issued more shares to shareholders…this capital, however, is smaller than foreign banks in many times Therefore, commercial and joint stock banks in Vietnam need to improve risk management skills while develop capital in many aspects and from many sources

 Banking technology: this is obstacle to domestic banks when compete with foreign We can easily recognize this problem when contact with domestic banks Many services can be done by technology but in Vietnam technology infrastructure is not strong enough to do

 The last difficulty is human resource: with trend setting up bank in recently in Vietnam, labor force to bank is a serious problem to many banks, not only domestic banks but also to foreign banks In a short time , there many banks are established, this situation leads to a problem human in baking increasing suddenly while people have experience in bank are not enough to meet banks demand Therefore, competition among banks becomes fierce than ever b Some challenges to banks

 Competitive ability of Vietnamese banks are limited

As we know, foreign banks have strong finance resource, and advanced technology, diversified services during domestic banks actually bad at many aspects from capital to service quality to technology as well as management skills are not good and experience is not much

SOLUTIONS FOR DEVELOPING BRAND OF ABBANK

Orientations develop banking industry in coming time

3.1.1 Objective and strategy in developing Vietnam’s banks in coming time a Objectives develop Vietnam’s banks in coming time

Over past years, Vietnam banking industry has reached some prominent results in process of enhancing competitive and management ability However, with outside pressure, domestic banks cannot exist without innovation and restructure system before too late therefore, on may 24 th 2006 the Vietnam prime minister signed decision No 112/2006/QĐ-TTg in order to approved project:‖ development on banking industry to 2010 and 2020 vision forward by restructuring completely the organizational model and operations of banking systems In order to guarantee all banks have enough ability to compete with oversea banks, the government has some objectives and strategies to get those

 Reform strongly and develop commercial and joint stock banks system forward to multifunctional, modern, and diversified about ownership and kind of organization To guarantee the baking system will has large scope and running by market principles with main objective is profit Apply international normal practices and criteria in banking businesses

 Restructure commercial banking system, disparate credit policy and business credit and so on though some following activities:

 Develop banking service system in diversification and multi-convenient and is oriented by demand of the economy base on basic continue to enhance quality and effectiveness of traditional services of banks and access rapidly new services with high technology level

 Observe by prescription of bilateral agreements and regulations of WTO about opening market in banking services for foreign banks

 Improve and develop Vietnam commercial Joint stock banks system forward increase financial power and management ability Merger, acquisition, dissolves, or resells commercial Joint stock banks have bad operations in business in a long time

 Guarantee business rights for foreign banks and financial organization by international commitments have been signed by Government , encourage foreign banks have 100% capital operate in Vietnam

 Combine banking reform with state own enterprise reforms

 Helping and make conditions for domestic funds and credit organizations have much chances to do business as well as enhance management ability and professional degree to have enough ability to compete with oversea credit organizations

 Restructure commercial banks system in order to make an effective result in banking system

 Permit establishing new credit funds and capital management funds

 Develop credit funds in order to keep stability in financial market avoid crisis in banking

 Develop banking services system in order to make sure have enough ability to compete with foreign banks

In banking field, Vietnam government will regulate and promulgate policies, which are suitable to bilateral and multilateral arrangements about approaching market and national behaviors, such as permit foreign banks doing business in Vietnam with many different types For example joint-venture bank, foreign bank branch, 100% foreign capital bank Furthermore, permitting banks expand scopes and types of banking services in Vietnam b Orient strategy to merge international economics in banking field

 Enhance the role and influence of Vietnam banking system to financial market in area and in the world

 Permit commercial banks issue and list shares of them in both domestic and foreign stock market and international financial market

 Participate in international arrangements, clubs, area forums and international forums about banking and money

 Apply strongly international standards and requirements in banking performances as well as regulations about relationship among banks in providing capital or international payments …

 Reduce gradually barriers and restrictions to foreign banks in numbers and business forms such as capital ratio in a joint venture, mobilization level in VND or types of services and products, which banks can provide to customers

 Building a legal system, in which all banks have chance to compete with others in comfortable conditions

3.1.2 Government orientation in developing banking services

In recent years, with reinforce strongly modernization of banking technology, application of information technology in banking operations and expanding networks of banks have made chance to develop new and modern banking services Appearance of modern and multi facilities banking services such as: ATM, Internet Banking, Home Banking, PC Banking, Mobile Banking…has made a new era in develop banking service market in Vietnam Retail banking services are concerned bay commercial banks and focus on exploiting, payment instruments and payment services are based on modern technology has made new appearance for payment services of Vietnam banking industry Development of banking service in people is one important part of strategy in develop banking service in Vietnam from 2010 to 2020 of Vietnam government

Objects are approached and used banking services in the economy are more expanded, beside customers are state own enterprises, more and more customers are private enterprises, un-stated companies, small and medium size enterprises and business householders Technology infrastructure in general and information technology in particular, national telecom system is weak and non-synchronous and has much limit Therefore, it cannot support to process of development and enhancement banking service quality, although has considerable improvements but development speed and information technology application in banks are low

Technical infrastructures are weak; speed is low, expensive costs, unstable service quality and did not meet requirements of innovations in banking system as well as did not meet requirements in integrations into area and international

Automatization level of banking transactions are low, many professional competence processes of banks are built based on hand process or low technology level and not suit to modern technology At present, national payment system and payment system among commercial banks has still defects and not modernized comprehensively It is difficult to connect networks among banks each other in order to make convenience for customers when using banking services

Management information System still has not met requirement of business management and strategic planning From this status, the government has orientations in develop banks as following: a) Orientations develop mobilization services

First, banking system need consider the important and strategic objectives of itself In so doing, Vietnam banking system must make sure capital source for economic development process in Vietnam in coming years Each bank must prepare building development strategy of long-term capital source, so long that strategy is suitable to demand and ability of the bank Especially, the bank must focus on exploiting the mobilization in the people, because, this is potential market

Some orientations in developing mobilization services in the people as following:

 Diversify capital mobilization forms in order to maximize the mobilization of leisure money sources in the people, which are accumulated in gold, foreign currencies To do that, the banks have enough ability to meet credit demand of the economy as well as increasing the ratio of VND in total capital source

 Continuing give new types of capital mobilization products, which have high technology content/ratio and bring many conveniences for customers such as: accumulated saving products, insurance savings, Autobank deposit (now VIETCOMBANK has applied in reality), ladder savings, award saving, in which focus on reducing mobilization cost, reform banking transaction procedures in order to have fast and neat services but make sure safe and effective

 Increase to expanding branches and transaction offices network Opening contact centers between customers and banks in order to serve the customers at the best level

Difficulties and challenges in developing brand of ABBank

Although has 13 years experience in banking, but ABBank actually has 4 years in commercial and investment field Therefore, it is not surprised when ABBank has many difficulties and challenges in the process of developing its brand Due to a new commercial joint stock bank in urban area, ABBank also has four general difficulties as banking system in Vietnam

 Regulation from state bank (express through regulation to commercial banks, recently the state bank required all commercial banks increase required reserve rate from 7 % to 15% or lending rate to stock market not beyond 3% This makes banks difficult in deal with customers and others activities

 Financial capacity of ABBank is small and limit when compare to others

 Banking technology: this is obstacle to the bank when compete with both domestic and foreign banks

 The last difficulty is Human resource: with trend setting up bank in recently in Vietnam, labor force to bank is a serious problem to many banks, not only domestic banks but also to foreign banks

Not only have four difficulties mentioned above, but also ABBank has some own difficulties by itself These are identified through the process of interview some managers and survey employees as well as observation process

 AnBinh is a relatively new bank in financial service market

 Number of transaction offices is limited even very few to others

 Employees are young and they have not enough experience in banking

 Competitive pressures from old banks and new banks are getting more

 Infrastructure is relatively poor, many transaction offices are small and this makes customers feel that ABBank is a small bank

 Understanding of employees and managers about brand are relatively poor

 Corporate culture have not much difference to attract and keep employees to like working as well as encourage them to innovate in working and make new ideas about products and services to serve customers

 Employee‘s performance is to take long time for customers in international banks one transaction often take 3 to 5 minutes to customers therefore customers must not wait in long time for their transaction and this make comfortable for them But, in Vietnamese banks one transaction often prolong from 10 to 15 minutes and this make inconveniences for customers

 Although employees to serve customers are quite quick, but in my point of view it is a bit slow, because of in the observations I see the employees have activities which take long times For example, when customers have transaction employees must go to the managers take seal, these activities often prolong the time to serve

 General speaking, technology infrastructure in bank is quite weak to ABBank, this make difficult to ABBank when has to directly compete with strong banks such as ACB, Dong A, Sacombank

 Working environment is not salient in order to attract and keep people to work for long

 Promotional campaigns is both less than others banks and attraction level is not high to customers

 Recruitment policy is not attractive to employees, through direct interview employees; they said that HR policy in ABBank is normal and there is no impression to them

 Media activities: From the situation of the bank, ABBank‘s media activities are poor and not make impression to customers and public, media activities in ABBank is not actual make salience in customers‘ choices

In the next page, there is comparison between ABBank and other CJS banks

Through that, we have overall seeing about branding development of some leading banks in Vietnam In the table 3-1, we can see the disadvantages of An Binh to others by the number of branches to number of employees or areas of appearance of ABBank are less than the rest This is difficult task for ABBAnk when compete with large competitors in expanding market share and attract customers Above are table in which there are some parameters to reflect the coverage of a bank brand in the market

Table 3-1: Comparison between ABBank and other CJS banks

Number of branches & transaction offices

If compare to four main competitors, we can see that ABBank is less than banks in all aspects from branches, capital to labor force Therefore, ABBank must try to do best to catches up them before get the objective is to become one of five the strongest joint-stock banks in 2010 In the process of survey and interview customers, the study has found some difficulties and challenges to ABBank as following:

 With limited services number as now, services in the bank are not diversified and have no much choice for customers

 Space for customers to put their motorbike is a problem to ABBAnk branch in Hanoi and some transaction offices such as Dinh Tien Hoang transaction office There are many customers complained about this problem when I interview them

 From the survey and interview customers, there are not many people know ABBank brand, many people told that they never heard the name

An Binh even in media Because they have not ever heard the name of AnBinh, so they did not risk when putting money in the bank

The bank does not only cope with difficulties, but also does cope with challenges in the process of developing its brand, below challenges are main challenges of ABBank in the present period

 There are many banks in Vietnam market both domestic and foreign banks in coming years

 Technology in banking industry is always updated

 There are many choices for customers, it is difficult for ABBank when attract customers come to it

 Pressure from itself when it has to strive for objectives is become one of three strongest commercial joint-stock banks in 2010

 Branch network is limited, transaction offices are not much and this make difficult for bank in process of competing to competitors in retail services and mobilization of capital Of course, it is difficult to get more market share in a short time

 More and more domestic banks sell strategic shares for foreign banks

To do that, they increase their chartered capital and open their operation

 Most banks, now, concentrate on the largest market, that is retail banking Because in Vietnam now there is only 6 – 7% population have account in bank, therefore, we can see that this is very large potential market for banks Besides advantage is wholesale banking, foreign banks are increasing operations in retail banking for personal customers and medium and small size enterprises

 With permission of SBV, the number of financial and credit organizations, funds are increasing more in Vietnam market in coming time These are direct and potential competitors of commercial banks in the race of attracting larger customers.

Solutions for developing ABBank brand

With objective to expand transaction offices to 50 in 2007 and 200 in 2010, the bank must have overall strategy about business operation as well as building brand in coming years So here, the study has some suggestion for bank in the process of managing and motivate bank branches have good performance

Growth is the top priority for most banks today With this in mind, many bank managers are turning their brands as important elements to jumpstart growth and profitability As we know, when brand is stronger, it is rewarded with higher degree of customer loyalty and higher price premiums and that the ability to leverage strong brand is a key success factor enabling the bank to launch a new business or a series of products or services

3.3.1 Overall solutions for developing ABBank brand

Stemming from difficulties and challenges mentioned above, as well as competitive pressure from both domestic and foreign banks, ABBank needs an enough strong brand strategy to deal with competitors as well as develop in the future In other words, to deal with difficulties and challenges above the banks need to focus on below solution groups as following: a) Portfolio of products and services

The Bank‘s marketing and organization strategy need to be grounded in a mix of customer and service line segments, which are the Bank‘s profit centers

The bank can segment customers into small groups:

 Retail individuals, high wealth individuals, owner-operated small businesses The bank has launched a sub brand, focus on customer group

 Commercial medium-sized companies, normally Vietnamese based

 Institutional larger-sized companies and local offices of foreign multi- nationals

 Public Sector governments (national, regional and local)

In addition to the main customer-based profit centers, the bank operates a Payments/Investments bank and a settlements business unit, which are product/service-based rather than customer-based

 Relationship managers provide the link between these clients and all the Bank‘s services and operations The relationship managers are highly qualified, innovative, motivated and autonomous; they make the difference for clients and are a major reason why the Bank is so highly regarded by commercial and institutional clients

 ABBank needs show customers that its service is better than competitors are, because it is more interested in its customers‘ businesses than others are Besides that, ABBank try to understand the customer‘s business inside- out in order to position itself in the more lucrative parts of business

 The bank must guarantee service delivery is good or better than competitors are

 The bank has always refused to deal with clients and or transactions that failed to meet the ethical standard required of the Bank An Binh must be clear about the profile of the customer that we wanted to do business with – and if that customer did not meet that profile, we refused to work with them b) Network

Until now, ABBank only have 39 branches and transaction offices in 14 currently whereas the top four Vietnamese joint stock banks have networks numbering between 100 and 120 branches and transactions offices in 20 to 40 provinces Personal contact and physical branches are essential to doing business, particularly as customers are not fully confident of the infrastructure that supports remote banking The Bank, whilst adding new branches at a sustainable space still finds itself well behind the level of distribution achieved by its larger competitors

ABBank need open many branches in nationwide in order to attract customers, because in many provinces, where many banks have still no branches (see in table 3-1) Through interview customers, many people believe in partner of ABBank, which is EVN, so ABBank needs to expand network and promote its brand, brand image base on EVN network Since then develop its network, make a strong advantage in compete with competitors Through relationship with EVN, ABBank soon polish its image through EVN customers This is base makes confidence in customers In considering partners, such institutions realize that their own reputations and customer relationships are affected by their choice of partners and they will value ABBank‘s reputation and service standards c) Reputation

There is reputation; we have all, AB Bank‘s reputation must be built since it opened the doors of its first branch Reputation goes together new business venture and big capital Instead of relying upon the traditional route of political and moneyed connections, ABBank needs approach a short list of prominent Vietnamese who they feel share their vision of a high quality, ethical bank The list included business people, leading academics and professionals

 In the early years, ethics will be very clear to bank as the way forward

If we are ethical, other people will easily see this and, for us, ethics delves significantly into morality and our relationship with our customer At all times we need to be fair: charges a fair price for what we do and what we say to them must be clear so therefore no argument and no misunderstanding…

 The leaders of ABBank need create a list of values to guide employees towards delivering that vision: professionalism, ethics, integrity, customer service and innovation

 To ensure the Bank deliver the highest levels of customer service and professionalism, the founders recruited and personally trained all management level people for the first five years of the Bank‘s operations

 Each new manager must be provided with extensive training in both areas of professional competence and the Bank‘s vision and values In this way, the founders embedded their revolutionary zeal into all managers and created a true sense of community and purpose

 Management meetings must be held with a degree of openness and discourse unheard of in the traditional, formal culture of Vietnamese business Offices will be eschewed in favor of open plan design with glass partitions between cubicles This transparency, openness and high level of ambition created a unique culture and meritocracy

 Hiring the right staff to perform revenue-generating tasks lets business owners focus on building a business identity that has equity and salable value

 Training employees in order to remind them that, they must have good ethics before want to work in a standard and professional working environment

 Translating the internally generated vision and values into a banking brand that customers would choose required putting fine words into real practice

 Vision and values for the bank must be certainly inspiring and newsworthy; these words alone do not create a compelling customer preference and set of business processes that generate success

 Building a specific corporate culture in bank and make people feel comfortable and interesting with that culture

 Names are important The ABBank name sounds safe and this makes customers feel confident in trading with bank

 Publish Write articles, write a book, and create a website Having published information available to the public enhances brand identity and increases the business‘ equity

 Saturate the marketplace Research shows it takes the average consumer up to five strong exposures to a brand to even recognize and remember the name of the person or product

 Advertising on traffic means such as cars, buses, supermarket …to help people know more about ABBank‘s appearance d) Performance

Serve customers in a short time (if any) make the impact upon people

 Branches must be beautiful, make a comfortable environment when they goes to transact This tells customers that ABBank trust them, the bank respect the customers‘ time is important to us Customers will be greeted at the door The beauty is that the timings [measures of timeliness of service delivery in the branches] are from the customer themselves When they arrive at the banking hall, the door attendant gives them a card so the customer can record the time they came in and leave The customer also ticks the type of service they came in for The card is then dropped in a box.‖

 A head office function, Systems and Control, reports directly to the Managing Director and oversees a continuous customer service and delivery quality audit of each branch Monthly reports of branch performance are prepared on the quality (timeliness and accuracy) of nine key services, such as account opening, cash withdrawal and cheque deposits