Appealing cultural factors for television advertising on fmcg in hanoi

Acknowledgment For the completion of this dissertation, I would like to express my special appreciation to my Supervisor, Professor Vu Minh Duc (P.H.D) who provided me valuable comments and guild me how to apply all theory into real business activities My sincerely thanks is also extended to my manager Ms Nguyen Huong Quynh as Associate Director of Nielsen Company Vietnam who offers me precious advices for my research paper as well as the research survey methods applied I would like to thank to all lecturers in CFVG for the past two years for knowledge, skills gained in MBA program Especially, my thanks are also given to my family, friends, my boss, co-workers and class members of 17 Intake who support me during the hard time of research study They are really strong motivation which has inspired me to fulfil my missions EXECUTIVE SUMMARY Vietnam has undergone major development over the past decade with significant increase in production and consumption It has become very lucrative markets especially for the retail industry in general and FMCG (Fast Moving Consumer Goods) in particular In order to compete in the potential market, it is required to make out a sound marketingư strategy to build a strong brand Television advertising has been chosen as the very effective mean to promote and strengthen product’s image in the customer’s mind The more economic is developed, the more sophisticated the demand of consumer is Vietnamese customers are considered as very potential ones but they have certain requirements for the advertising which are exposed to them every day With the booming of television advertising for the past decades, the customers have more choices for the products Under the data by TNS Gallup Media, everyday people are exposed to around 3,000 advertising messages on average With the overloaded advertisings, consumers are harder to please Advertising is not merely a mean of communication, a tool of marketing mix, but it is an art which requires the different elements, especially cultural element In the research paper, the author focuses on cultural factors which are considered the hard barrier to win the customers’ preference However, it is not easy for the advertiser, especially for the international firm to have successful advertising which takes into account of Vietnamese cultural elements As the research scope is limited within Hanoi, the author is ambitious to analize the appealing cultural factors for Hanoians in specific FMCG products With the research paper: “Appealing cultural factors for television advertising on FMCG in Hanoi”, the author expects it can analyze all the factors especially cultural ones to appeal customers in television In order to give insights on the importance of those factors as well as the effects on their consumer behaviors, the author conduct the survey for 150 questionnaires (92 out of those are valid) to understand what the audience/consumer think about the cultural factors appealing to them Futhermore, the author analyzes the cases of both successful and unsuccessful advertisings in Vietnam to bring the important findings for the report With the utmost objective of the research paper, the author shall provide recommendations for advertisers as well as the companies/enterprises to evaluate successful television advertising CHAPTER I: RESEARCH BACKGROUND 1.1 Research Problems Vietnam economy has experienced rapid development for the last two decade Especially, after being official member of WTO, Vietnam has been known as fast emerging economy in Asia Since then, Vietnam has made progressive integration into the global economy With the total population of around 86 million people ranking rd in ASIAN countries and 13rd in the world (General Population and housing survey, 2009), Vietnam has about 60.6 million consumers under TNS World-Panel This number is anticipated to increase up to 70 million by 2018 It is not exaggerating to affirm that Vietnam is a promising and lucrative retail investment market with huge number of consumers Even undergone hard time in economic crisis in 2009, Vietnam retail market is still an attractive destination not only for domestic enterprises but also international/global one Though being promising market, Vietnam is not easy market for international/global companies to dominate As our living conditions have been improved incredibly especially in Hanoi and Hochiminh city, the consumers are more and more sophisticated and demanding Amid this fierce competition, all enterprises acknowledge that if they not have wise marketing plan, they shall be leg behind in this potential market Many international/global companies in their “first landing” and “go native” stage believe that advertising shall be dangerous weapon in their marketing plan to win customers rapid developing markets such as Hanoi and Hochiminh city They have aggressively launched advertising programs in Vietnam with huge budget in order to lure more customers Obviously, annually those companies often spend huge amount on TV advertisements with an aim to attracting new triers and maintaining the loyalty of their customers, and strengthen their brand image in Vietnam However, whether those advertisings can meet the expected objectives set my marketers is questionable In order to save the cost, some international companies have launched regional advertising video Many of adverts have showed high effectiveness in some other countries in the region However, when launching the same advertising in Vietnam, it copes with barriers which are traditional Vietnamese customs and practices Mr Sam, director of Bates advertising company said: “Before I not understand clearly about Vietnamese culture When working in Vietnam, especially in this creative sector, I need to study thoroughly your country’s customs and practices to initiate ideas appropriate with Vietnamese culture” It does not mention only the different traits by countries, but it also exist different segmentations for localities within Vietnam Especially, there have been many differences between Hanoians and Hochiminh city and Hanoians are well-known to be the hard to please customers In fact, not all advertising campaigns work well as desired by marketers Lessons from international big guys so far show that not all their advertising campaigns work well and they even worsen their brand image In order to penetrate successfully into this lucrative market, it is required for international firms/enterprises to understand Vietnamese consumers’ traits and to adapt into its typical market’s features “Thinking globally, acting locally” is famous slogan by HSBC seems to be also appropriate for other foreign enterprises who want to be successful in Vietnam market So, how to utilize factors contributing to the success and effectiveness of a TV advertising campaigns has been great concern of marketers in international companies operating in Hanoi in particular and Vietnam in general This concerns by international/global companies has inspired me to pursue my research on “cultural factors in TV advertising campaigns on FMCG for Hanoians” for the final dissertation 1.2 Research Objectives As mentioned above, in order to solve the concerns by international marketers in Hanoi market in particular and Vietnam market in general, my dissertation shall analyze comprehensive factors contributing to the most effective advertising Due to limit time, the research paper cannot go thoroughly all aspects of this problem but focus more on cultural factors which are considered to be very important especially in Hanoi market My ambition does not constrain to understand which cultural factors to be taken into consideration for TV advertising campaigns but also to investigate Hanoian consumers’ attitude towards those and to develop best advertising campaign Therefore, the dissertation set out all objectives clarified as bellow:  WHAT? Clarify which cultural factors need to be taken into consideration for TV advertising on FMCGs It is very important to define cultural factors in advertising as they shall be the basis for strategy of international marketers for their decision making in Hanoi market  WHY? Assess the importance of these factors in the success of a TV advertising campaign Through insightful analysis, the author shall help evaluate their effectiveness of cultural factors  HOW? Give a guide on how to customize TV advertising effectively in Hanoi market The author shall provide recommendations on how to build a successful TV advertising campaign as the ultimate objective of the research for the advertising companies as well as the companies/enterprises I expect that by answering those three questions “WHAT”, “WHY”, and “HOW” by the end of the research, it somehow can help international/global companies acknowledge important issues to tailor TV advertising campaign in Hanoi in particular and in Vietnam in general 1.3 Research Methodology In the research paper, qualitative, quantitative and observation methods are applied  Qualitative methods: focus groups (10 peoples) - Target Interviewees: age ranging from to 60, include female and male, different job, and low, medium and high income …) - Objectives of focus group discussions: how and why cultural factors in those advertising shall affect to their perception, emotion, impression on the brand - Implementation of discussions The author will show at least different adverts for FMCG products from same company (Coca Cola, KFC, Nest Café,…) which one advertisement is shown in their home countries and one is in VN All these TV adverts shall be collected by authors During those discussions, we shall answer these following questions: Do they often watching TV Advertising?How often? (minute/day) Do they like those adverts? Which one they prefer, adverts in home countries or adverts in VN? (Please be noted that they are same company adverts) How they think about these adverts? Why they like/don’t like these advert? Shall their impression on TV adverts affect their shopping decision? buy or not buy? Do they think that International/global manufactures shall take into consideration of Vietnamese cultures in their adverts?  Quantitative method: Distributed to 150 respondents - Target interview: age ranging from 20 to 56, include female and male, different job, and low, medium and high income …) - Questionnaires shall be prepared basing on the ideas suggested from qualitative methods with aim to qualifying whether their comments/ideas represent for the majority or not The questionnaires shall include 13 questions to analyze which cultural factor are the most important in adverts The questionnaire are designed to capture all the thought/comments of the customer on the factors appealing to the advertising The survey was intended for 150 respondents, and the author received 92 valid answers out of 150 - Qualitative method shall be conducted firstly because it is necessary to define exactly their interviewee’s answers to these questions: “what factors”, “why?” and “how” The focus group including 6-8 people from backgrounds shall provide the author different points of views on TV advertising programs Exploring interviewees from diversified aspects would be important step to bring the author overall picture on what’s on their mind and to orient the research questionnaire survey  Observation method: around 70 television advertising in Vietnam and other countries - The author has selected around 70 TVC advertising in Vietnam and other countries in different channels During the observation, the author analyzes the elements which contribute to the success as well as failure of the advertising 1.4 Data sources In order to provide insightful analysis, I utilize two kinds of data resource including secondary and primary data Primary sources of information I collected from available information in reference books, reports by AC Nielsen as well as articles in newspaper and internet Besides, I use secondary sources collected from the questionnaire survey and hearing survey for the findings In additional, I have collected and observed hundred advertisements in different TV channels especially VTV3, VTV1, VTC and other cable channels This source of information is valuable and useful for me to give recommendations to build effective advertising campaign in Vietnam 1.5 Research scope and limitation The research scope for the survey is restrained in Hanoi where consumers are well- known to be very hard to please as they have stricter requirements than Saigonese Therefore, the survey result shall not present the ideas/opinions for the whole Vietnamese Thus, the remarks and insights shall be more suitable for the Hanoi context but not Vietnam nationwide Especially, the FMCG products are different from other products as they have short life cycle, so the recommendations shall be not cover all types of products Due to the limit of time and budget, I have not deeply covered all the cultural factors in advertising in Vietnam through the questionnaire survey, so there might have some missing points of analysis Futhermore, the sample of the survey deem not sufficient enough to present the overall information because I don’t have much time to collecting more questionnaires 1.6 Thesis’s Structure Chapter 1: Introduction This chapter shows the research problem research objectives and the research design with the explanation about the scope and limitation of the thesis Chapter 2: Theoretical background In this chapter, the author recalls relevant theories on advertising, its dimensions and basic objectives In addition, the author reviews the definition of culture and its cultural elements, and cross culture consumer behavior Through the theories on advertising and culture, the author studies the linkage between advertising and consumer behavior as well as the corelation between the culture and advertising Based on that, the author covers the basic and main points to answer the question how culture and advertising work to appeal the consumer’s behavior and trigger their purchasing Chapter 3: Research findings This part of the thesis presents the research findings including the cultural factors in Vietnamese advertising With comprehensive information collected from the questionnaire survey as secondary data as well as studies, report by research market companies such as Nielsen Company and TNS Media Vietnam, the author bring the overall picture on the television advertising development in Vietnam as well as the typical features of Hanoians customers This chapter also provides the important insights analyzed from over 25 advertisers broadcasted in Vietnam Through case analysis, the author summarizes what are the key points to be taken into consideration to develop a successful advertising of FMCG in Hanoi The research findings come to end with evaluation of those cultural factor appealing consumers Chapter 4: Recommendations Based on the research finding, the author proposed a set of recommendations to develop a successful advertising on FMCGs in Hanoi through objectives setting, budget planning and message generation which has been taken into consideration of Vietnamese culture CHAPTER II: THEORETICAL BACKGROUND 2.1 Advertising  Definition of advertising Every day, we as consumers are exposed to hundred of brands intentionally and unintentionally We can see them everywhere It may be in newspapers in the morning we are reading, in the bags we are carrying, in the websites we are surfing, in mobile phone messages we received, in coupons we are seeing in the shop, in the sign boards on streets we are going to office or back to home, or on bus driving on the roads, or on Television we are watching… All the forms we defined ourselves as means of advertising So, what’s the advertising? It is such a long time since advertising has appeared in our mind as familiar terms There have been many definitions on advertising from different point of views As for journalists, advertising can be interpreted as communication and persuasion process; but for manufactures advertising might be defined as a marketing process… A century ago, Albert Lasker, founder of Lord & Thomas understands “Advertising as salesmanship in print driven by reason why” However, this seems to no longer true thanks to rapid development of diversified and modern communication means Although advertising has been developed considerably for the past two decade in Vietnam and there also exist specific understanding about advertising Under the article 102, Vietnam trade law in 2005 defines advertising is trade promotion activity of the business to introduce to customers its products, services” However, this definition does not cover all aspects of advertising Advertising is not merely printed, but it comes to consumers by radio, internet and television… William F Arens in his Advertising book defines “Advertising as the structured and composed non-personal communication of information, usually paid for and usually persuasive in nature, about products (goods, services, and ideas) by identified sponsors through various media” In order to understand this definition, we would better to analyze all the elements embedded As advertising is type of communication, William F Aren perceived advertising as a definitely structured form conveying both verbal and nonverbal elements that are composed to fill in specific context at the specific time It is necessary to distinguish the meanings of “personal communication” versus with “non-personal communication” For example, what requires personal selling is the presence of the seller and the buyer together This interaction between the seller and the buyer shall be an opportunity for them to discus everything about the products The buyer can raise questions about products’ function, features, and also can examine them for the final purchasing decision Via personal communication, all five senses such as smell, touch, taste, sound and sight can be experienced by the potential buyer Meanwhile, non-personal selling delivers very quick message via different means of communication and there is no way to examine the customer’s response to the message delivery In addition, by non-personal communication, the customer can use only two senses: sight and sound for their products’ examination To some extends such as information delivery, interaction between the seller and the buyer, personal communication shall be preferred However, when it comes to cost matter, nonpersonal communication shall be effective solution Through advertising, the manufacture also tries to send the message to their potential customers with information such as its feature, shapes, color, functions, ect As purpose of advertising is to introduce, indentify and differentiate the product from others with an aim to persuading customers to buy the products That is to say, it might cause inducement to their customer through perceptible difference; namely, shape, colors, or imperceptible differences which is not obvious features or function For example; Coca Cola shall try to persuade Vietnamese customers through their advertising campaign by differentiate their product features by color, shape, taste, emotion from Pepsi or other brands All advertising shall be conducted by identified sponsors, i.e who launch the advertising to prevent the audience from misleading their ideas and contents If the sponsor for the advertising is not identified, the audience might understand it as the news about the products but not an attempt to induce their purchasing Advertising shall be shown in varies means such as newspaper, radio, televising, billboards, posters or anything which help communicate through non-personal ways from one/groups of people to the others According to Philip Kotler, managers need to make M decisions in developing an advertising program: Mission, Money, Message, Media and Measurement Figure 2.1: “5-Ms” model in advertising Source: Marketing Management, Eleventh Edition by Philip Kotler 2003 Firstly, in setting the objective of advertising program, manager needs to base on the prior decision on target market, market positioning and marketing mix Secondly, manager should know how much to spend on advertising tool by considering: stage in the product life cycle, market share and consumer base, competition and clutter, advertising frequency and product substitutability and market characteristic Thirdly, they must choose the advertising message, determining how the message will be generated, evaluating alternative message for desirability, exclusiveness and believability and executing the message in appropriate style And next, they must make decision on the media they will use There are a number of vehicles to deliver reach, frequency and impact Each have its own advantage and limitation as showed the below table Table 2.1: Profile of major media types Source: Marketing Management Millennium Edition, Tenth Edition by Philip Kotler 2002 This decision is made based on several factors such as: target audience media habit, product, message and cost Finally, marketers need to evaluate the effectiveness of advertising on sales and communication goal Though the fundamental research on ad effectiveness is small, it’s necessary to know potential effect on awareness, knowledge and preference as well as the ad’s sales effect In the consumer survey, the Nielsen Company evaluates the degree of trust for different types of advertising globally Accordingly, advertising from recommendation from people known is the most trustful sources for consumers In fact worth-of-mouth communication is the most effective way because people tend to put their trust in friends’ or neighbors’ recommendations In addition, other sources such as consumer opinions posted online or brand website also reliable for consumers with 70% and 69% respectively Television as one of the most popular means of advertising, win the 62% of consumers’ trust However, upon the different kind of products, the source of trustful advertising is different Therefore, manufacture/company is required to consider appropriate means of advertising to promote their products Figure 2.2: Degree of trust in Advertising (Source: The Nielsen Company)  Dimension of Advertising However, to grasp the full meaning of advertising, it is important to analyze its dimensions William F Aren in his “Advertising” book mentions four dimensions of advertising including communication dimension, marketing dimension, economic dimension and social and ethical dimension Firstly, communication is the foremost dimension of advertising As shown in the graph below for advertising flow: Figure 2.3: Communication process Source Encoding Message Channel Decoding Receiver (William F Aren, Advertising) As can be seen in the flow, the communication process begins when the source generate ideas in the first step, then they are encoded through message The message shall be transfer via channels The receiver shall decode the message as the final step of the communication Similarly, advertising process is also trigged by source as sponsor to generate ideas After ideas are encoded through message, it will be delivered by channels which might be radio, 10 ... ambitious to analize the appealing cultural factors for Hanoians in specific FMCG products With the research paper: ? ?Appealing cultural factors for television advertising on FMCG in Hanoi? ??, the author... to consider all its functions: awareness building and information provision, persuading, and reminding  Awareness building and information provision is the foremost functions of advertising Advertising... which cultural factors need to be taken into consideration for TV advertising on FMCGs It is very important to define cultural factors in advertising as they shall be the basis for strategy of international