Improve the effectiveness of marketing activities in mobilizing capital at vietnam prosperity joint stock commercial bank head office

BANKING ACADEMY BANKING FACULTY GRADUATION THESIS TOPIC: IMPROVING THE EFFICIENCY OF MARKETING ACTIVITIES IN CAPITAL MOBILIZATION AT VIETNAM PROSPERITY JOINT STOCK COMMERCIAL BANK VPBA

THEORETICAL BASIS ON THE APPLICATION OF

Overview

With the trend of more and more new banks, financial institutions, and non-credit organizations so it can be said that the competition between banks and credit institutions is very fierce For that reason, banks are required to constantly innovate, grasp market trends, and apply advances in science and technology to their business activities to create a sense of excitement for customers In addition, banks also need to actively promote and affirm the bank's brand and create a beautiful image in the eyes of customers both in terms of product quality and product quality products and services provided and the quality of service provided by an elite and professional staff That is why the application of marketing in business activities at banks is increasingly popular

To understand more deeply and thoroughly the concept of bank marketing, we need to understand what the marketing concept is According to the UK Chartered Institute of Marketing, Marketing is the management process aimed at identifying, anticipating, and satisfying customer requirements efficiently and profitably; besides, according to Philip Kotler in Principle of Marketing, 2007, Marketing is the process by which individuals and organizations can satisfy needs and wants through the creation and exchange of products and values between parties In addition, in the Bank Marketing textbook of Assoc Dr Nguyen Thi Minh Hien, Banking Academy, Hanoi mentioned a number of different concepts of different researchers about banking marketing that the author collected as follows:

- The first concept is that bank marketing is an integrated management method based on awareness of the business environment; the bank's actions to best meet the needs of customers, in accordance with the fluctuations of the environment, on that basis to realize the objectives of the bank

Nguyen Ngoc Anh 6 Student ID: 21A4010682

- The second concept holds that bank marketing is the totality of the bank's efforts to satisfy customer needs and realize profit goals

- The third concept holds that bank marketing is the whole process of organization and management of a bank, from discovering the needs of different customer groups

Each of the different concepts of bank marketing outlined above, although built on different research angles, time, and research aspects, there is a consensus on some marketing contents The use of marketing in the banking sector must be based on the principles, contents, and motto of modern marketing Only then will the bank be able to effectively use marketing tools in its business activities and step by step closer to customers, attracting customers to use the products and services that are not available to banks currently supplying in the market

The bank marketing process shows a high degree of unity between the bankers' awareness and actions about the market, customer needs, and the bank's capacity Therefore, the bank needs to orient the activities of its departments and the entire bank staff in creating, maintaining, and developing close relationships with customers, because customers play a decisive role in determining the existence and development of banks in the market

The key task of bank marketing is to identify the needs and wants of customers and how to meet them more effectively than competitors in the market Because of the increasingly fierce competition among commercial banks today, it is important for a bank to determine the right direction, grasp the psychology and diverse needs of each customer group as well as meet the needs of customers That demand will best be an advantage for the bank in the competition From there, the bank can attract more customers to the bank, and the bank's business performance increases day by day

Bank marketing does not consider profit as the first and only goal but believes that profit is the ultimate goal and a measure of each bank's marketing level

Bank marketing is a type of intensive marketing formed based on applying the contents, motto, principles, techniques, and viewpoints of modern marketing to banking activities It has different characteristics from marketing in other fields: it is a type of financial services marketing, a type of inward marketing, and also a type of relationship marketing

1.1.2.1 Bank marketing is a type of financial service marketing

Services include many types of activities, so there are many different interpretations According to Philip Kotler: “A service is an activity or benefits offered for exchange, which is essentially intangible and does not result in ownership.” The performance of services may or may not be attached to physical products such as: renting rooms in motels, and hotels; sending money; borrowing money, and transferring money at banks; by plane, car, train

Financial services are services closely related to the movement and use of capital and money in the economy The products and services that banks provide in the market have the following characteristics, namely: intangibility, indivisible, volatile, non- storable, and difficult to determine quality

Intangibility, i.e cannot be seen, cannot be grasped, and cannot evaluate the quality of products and services before purchase, during purchase, and after purchase Therefore, most banks have tried their best to improve the art of using marketing tricks to promote the products and services currently offered in the market in the clearest way through icons, and images representing products, advertising activities, propaganda to help customers grasp the benefits that each type of product and service brings

In addition, banking marketing also provides customers with necessary information about the bank's operational efficiency, and the bank's technological and technical level, along with the bank staff

The inseparability of products and services provided by the bank is reflected in the process of providing products of the bank At banks, the process of providing products and services takes place at the same time as consuming them, so new products and services cannot be stored This requires each bank to have a system and fast service method at branches/transaction offices to be able to meet the increasing requirements of customers

The provision of banking products and services also has another feature closely related to banking marketing activities, which is the responsibility associated with the two-way information flow between the bank and the customer Two-way information flow requires banks and customers to provide each other with necessary, complete, and accurate information, especially responsible for the information provided This is the basis for establishing transactions and building long-term relationships between banks and customers

1.1.2.2 Bank marketing is a type of inward marketing

Banking marketing is considered inward because of the diversity and sensitivity of banking activities, especially the process of providing banking products and services with a combination of facilities, customers, and tellers Bank staff plays an important role in the supply and delivery of banking products and services as well as in deciding both the quantity and quality of products and services provided and the relationship with the bank bank customers This is because they are the ones who have direct contact with customers when transacting, who make the difference, attract customers to the bank and enhance the competitive position of the bank in the market school Measures to improve the performance of bank staff in order to better serve customers are called inward marketing

Currently, banks are focusing on training to improve knowledge, skills, and professional qualifications for all bank staff, especially focusing on knowledge of banking marketing, considering this as knowledge The mandatory minimum business knowledge that each employee needs to understand in order to achieve that goal is that

Nguyen Ngoc Anh 9 Student ID: 21A4010682 all employees in the bank must sell, and understand the characteristics of each different type of product and service Banks are currently providing on the market to be able to advise and support customers in the best way

1.1.2.3.Banking marketing is a type of relationship marketing

Forms of capital mobilization of banks

The bank's mobilized capital is the monetary value that the bank mobilizes from individuals and economic organizations in society through its business activities The

Nguyen Ngoc Anh 19 Student ID: 21A4010682 nature of mobilized capital is the property owned by the customer and the bank is responsible for repaying both principal and interest when due or when the customer needs to withdraw capital Mobilized capital often fluctuates, so the bank is often not allowed to use all that capital in business but must reserve at a reasonable rate to ensure solvency Mobilized capital is the main tool for the business activities of banks, it usually accounts for the largest proportion of the total capital of the bank

1.2.1.Mobilizing deposits from individuals and economic organizations

Demand deposit is a deposit of customers (including individual customers and corporate customers) at a bank for the purpose of making payments through the bank

This is a deposit that customers can withdraw and use at any time without having to notify the bank in advance There are 2 types: transactional deposits (payment deposits) and non-transactional deposits As follows:

- Transaction deposits (payment deposits): the purpose of customers sending money is to perform payment services through the bank by means of payment provided by the bank and the balance on the account is entitled to interest at interest demand deposit rate The characteristics of this type of deposit are high volatility and it is difficult for banks to predict the size of deposits that can be mobilized

- Non-transactional deposit: it is money deposited for the purpose of ensuring asset safety, not for a payment nature And customers can come to the bank to withdraw anytime they need Basically, this is not a stable source of capital for the bank, but it attracts a large and periodic deposit value If it is stable, it can still turn into a source of disposable capital and a much higher profit than other sources of capital Because the cost of raising capital is cheap and there is always a stable balance in it, the bank can aggregate those balances to form a source of credit for lending or investing

This is a deposit with an agreement between the customer and the bank on the deposit term When due, customers can go directly to the bank to settle the payment In case customers withdraw before maturity, they will enjoy the interest rate of demand deposit the corresponding to the actual deposit term Interest rates on demand deposits are of course lower than interest rates on term deposits

This type of deposit is usually more popular among corporate customers with a definite business cycle, stable payment period, and little volatility The important feature of this deposit is that it has high stability and safety, and banks have a basis for planning appropriate capital management strategies However, the drawback is the high cost of mobilization due to competition fierce competition among banks

Based on the term savings, people are divided into two types:

- Demand savings deposit: is the customer's deposit deposited at the bank and without agreement on the deposit term, whereby the customer can deposit more money into the account or withdraw money without prior notice to the bank row

- Term savings deposit is a customer's deposit at a bank for a certain period of time as agreed upon between the customer and the bank based on the principle that the main feature of this deposit product is its high stability, accompanied by high cost of capital mobilization due to fierce competition among banks in the market Customers who directly established and implemented transactions are Vietnamese citizens aged 15 years or older, have not lost or have limited civil act capacity, do not face difficulties in awareness and control of his/her behavior In case a customer cannot directly perform a transaction, it can be done through a guardian or legal representative

1.2.2 Raising capital through the issuance of asset value

Promissory notes, bills, certificates of deposit, and bonds (hereinafter referred to as valuable papers, abbreviated as the value of value) are proof of debt repayment

Nguyen Ngoc Anh 21 Student ID: 21A4010682 obligation between the issuing credit institution, foreign bank branch, and the issuing person purchase assets within a certain term, interest payment conditions, and other conditions

Currently, the mobilization of capital through the issuance of asset value by commercial banks is taking place popularly This type of capital has a higher interest rate than savings deposits and has many different terms, the longer the term, the higher the interest rate

This is a type of debt receipt issued by the bank in installments and is called a promissory note, which is issued in two forms: interest payment first and interest payment later

In the form of prepayment of interest: customers buying promissory notes will pay the purchase amount equal to the par value minus the interest, they are entitled to When the promissory note is due, the bank will refund the money to the customer exactly at the par value printed on the promissory note

With the following form of interest payment: customers can buy according to their ability, the bank writes the amount of money customers buy on the promissory note When the promissory note is due, the bank will return the principal and pay the corresponding interest to the buyer

This is a type of security that determines the repayment obligation of the issuing bank (borrower) to pay the bondholder (money lender) a specified amount (including principal and interest) in a given certain period of time in the future Through the issuance of bonds, banks can raise capital in a short time (compared to mobilizing capital from people through savings accounts) at a predetermined interest rate

This is a type of asset value issued by banks to mobilize capital from economic organizations and individuals in society In other words, it is a type of value deposit similar to a passbook issued by a bank to certify a customer's ownership of a term deposit at a bank The holder of this certificate will enjoy interest and receive the right to give, donate and transfer in accordance with the law and the issuer

There are three main types of Certificates of Deposit:

- Registered Certificate of Deposit: is a certificate of deposit issued in the form of a certificate or a book with the owner's name on it

- Anonymous certificate of deposit: Is a certificate of deposit issued in the form of a certificate without the owner's name The anonymous certificate of deposit is owned by the holder of the certificate of deposit

- Certificate of Deposit: A non-transferable certificate of deposit, sold at par value and paying interest on the maturity date

The basic content of marketing activities in mobilizing capital at banks

To be able to apply effective marketing in capital mobilization, banks often develop marketing strategies specifically for capital mobilization Common construction contents are as follows:

First, is to build a portfolio of products to raise capital

The portfolio of capital mobilization products is a collection of deposit products that a bank provides to customers for the main purpose of raising capital Including products for savings, products for payment via bank, and other purposes

Each bank will have different portfolios of capital mobilization products aimed at different customer groups The more diversified the portfolio of capital mobilization products is, the more it can meet the different needs of each customer group, and the more beneficial the bank's capital mobilization will be This is considered a key component in the marketing strategy to raise capital and is the basis for building and implementing other marketing strategies to raise capital

Second, is to build a competitive capital mobilization interest rate tool

Deposit interest rate is one of the effective competitive tools among banks in the capital mobilization market It is an economic blow that affects the efficiency of the bank's capital mobilization and is a factor attracting customers to deposit money in the bank Therefore, the Marketing department must regularly research the market, and collect information to help the bank build and operate a flexible and attractive deposit interest rate policy, thereby helping to improve the bank's competitive position in expanding deposits capital

Determining the capital mobilization interest rate is an important job in building the bank's capital mobilization marketing strategy, the Marketing department must be based on the following bases:

Firstly, the cost that banks have to spend to provide capital mobilization products to customers This is especially important for banks because the deposit interest rate applied by the bank must satisfy two conditions simultaneously: being competitive in the market and ensuring profitability for the bank

Secondly, the risk factor must be taken into account in the capital raising market segment For example, frequent changes in demand of depositing customers, fierce

Nguyen Ngoc Anh 26 Student ID: 21A4010682 competition on deposit interest rates between banks, economic and political changes , the above risks greatly affect the cost of deposits capital mobilization as well as efficiency in the capital mobilization of banks

Thirdly, must take into account the capital mobilization interest rate of competitors in the market This is a factor that directly affects the competitiveness of banks in the capital mobilization market segment because the deposit interest rate is one of the factors that customers consider first before deciding to deposit money in the bank The more preferential and competitive the banks apply, the more they attract customers to the bank and improve the bank's competitiveness in the market

Third, develop the bank's distribution channel system The bank's distribution channel system includes:

Traditional distribution channels are branches of banks in provinces and cities This is a safe, highly stable distribution channel and deals directly with customers

Modern distribution channel: This type of distribution channel was born on the basis of the application of scientific and technical advances, especially the application of information technology achievements in the banking sector including ATM automatic teller machines, online transactions via the Internet , has brought many conveniences to customers as well as banks Transactions take place quickly, safely, and conveniently

The more developed the bank's distribution channel system, the more positive impact it will have on the efficiency of the bank's capital mobilization, in particular, helping the bank to get closer to the customer's capital

Fourth, organize mixed promotion activities

The promotion mix is an important fundraising marketing tool used by banks to influence the funding market It includes a set of activities such as advertising activities; organizing promotions; trade promotion activities and direct communication with customers All activities are aimed at stimulating the use of current products and services that the bank is providing to the market as well as new products and services of the bank,

Nguyen Ngoc Anh 27 Student ID: 21A4010682 while increasing the loyalty of existing customers and attracting potential customers to come to the bank, expanding the scale of mobilized capital

Fifth, is about the implementation process

Currently, most banks are trying to apply advances in science and technology in the process of performing banking activities in order to streamline the steps in a process and reduce cumbersome and complicated procedures saving transaction time for customers and improving the operational efficiency of the bank The faster, safer, and more secure the implementation process, the more satisfied customers will be when dealing with the bank, attracting customers to deposit at the bank and thereby improving the efficiency of mobilization activities in raising bank capital

Normally, each bank will set its own rules that all employees must follow in the process of communicating with customers, mainly mastering the following points: Always keep a friendly attitude with customers, from actions and gestures show concern and are ready to share with customers ; Do not complain, criticize absent customers, especially when there are customers; Do not eat, smoke, chew gum, text, surf the web, play games during working hours; Do not exchange private stories, joke, call each other loudly when there are customers transacting and in case of need to exchange business, they must communicate at a moderate volume, avoiding disturbing customers around Because the attitude of bank staff when dealing directly with customers is very important, the good or bad image of the bank in the eyes of customers is also partly influenced by the attitude of the staff If the bank staff can create sympathy with customers, they will attract customers to the bank to transact more often, open deposit accounts, and save more at the bank, thereby contributing to creating favorable conditions for customers, improving the efficiency of the bank's capital mobilization, and expanding the scale of mobilized capital

Seventh is about related material manifestations

This is also one of the issues that banks care about Because the physical manifestations related to the bank will also affect the view of the bank in the eyes of customers For the transaction space inside the unit, the bank tries to ensure that the customer service space is serious, clean, and has enough facilities for customers to come and transact For the transaction space outside the unit, the bank ensures to maintain a beautiful brand and headquarters image in the eyes of customers: the unit's facade is clean, there are no damaged items; ATMs are well-functioning, clean, and free of garbage; The parking area is neatly arranged, clean, without standing water thereby contributing to creating a comfortable and pleasant feeling for customers when coming to the bank to transact with, stimulating customers to deposit money at the bank to improve the efficiency of capital mobilization, and expanding the scale of mobilized capital.

Factors affecting the effectiveness of marketing activities in mobilizing

In the current fierce competition between commercial banks, banks that pay more attention and focus on investing in technology improvement and process modernization will have more competitive advantages For a bank equipped with more advanced and modern technology, the quality of customer service will be better, thereby attracting more customers to the bank and contributing to improving the efficiency of marketing activities in mobilizing capital at the bank

Bank staff plays a particularly important role in the effectiveness of marketing activities in the bank's capital mobilization because this is the source of direct contact

Nguyen Ngoc Anh 29 Student ID: 21A4010682 with customers when customers have a need to come to the bank to transact A bank equipped with a team of staff with high professional qualifications, good professional knowledge, especially with good moral qualities, dynamism, enthusiasm that is the foundation of the bank's success

Reputation and brand of the bank

A bank's reputation and brand are especially important to the choice of customers, showing specifically its financial capacity, business performance, and quality of products and services provided A high reputation and building a good image in the eyes of customers will attract more customers So each bank needs to build a high reputation, good image, and good brand in the eyes of customers through quality, quantity of products and services provided, social activities, communication activities, and a number of other activities to maintain and strengthen relationships with old customers and attract potential customers to the bank, thereby contributing to improve the efficiency of marketing activities in the capital mobilization of banks

People's life and income are factors that directly determine the need to use banking products and services The higher the people's income, the greater the demand for banking products and services Besides, psychology and consumption habits also affect the demand for using banking products and services Currently, most people have the notion that they prefer to hoard cash, rather than deposit it in a bank Therefore, the rapid development of non-cash payment forms is of great significance in the development of banking products and services

There is also the inflation factor This is an economic factor that greatly affects the capital mobilization of banks Because people deposit money in banks in the hope of earning a certain amount of interest, however, high inflation causes the currency to depreciate At this time, customers have the mentality that they want to withdraw their

Nguyen Ngoc Anh 30 Student ID: 21A4010682 deposits at the bank and invest in other areas with higher stability and profits, thereby negatively affecting the effectiveness of marketing activities in mobilizing activities bank capital

Building a healthy and open legal environment is an important factor contributing to enhancing the efficiency of the bank's capital mobilization activities Because then, customers will feel more secure when depositing money in the bank

Currently, the number of commercial banks is increasing, leading to increasingly fierce competition among banks, many of which provide more diverse and quality services as well as good management qualifications and capacity higher market share and larger scale of mobilized capital compared to other banks Therefore, the bank's products and services that are better, have more reasonable prices, and have better service quality will be prioritized by customers, thereby contributing to improving the bank's competitive position in the market and its impact positively affect the effectiveness of marketing activities in the capital mobilization of banks.

Criteria to evaluate the effectiveness of marketing activities in the capital

Level of customer satisfaction: This indicator is highly subjective to customers, so it is extremely difficult for banks to determine There are 5 basic aspects for banks to evaluate the effectiveness of marketing in mobilizing capital through the perceived level of customers:

Level of trust: the level of trust of customers in the bank's capital mobilization activities is shown when depositors face financial difficulties, does the bank care to solve

Nguyen Ngoc Anh 31 Student ID: 21A4010682 that problem? Or does the bank provide capital mobilization products that bring maximum benefits to customers?

Level of assurance: reflected in the knowledge and behavior of service providers, as well as their ability to create trust and credibility Some questions are asked to survey the level of assurance when a bank provides services such as: Do bank staff have enough professional knowledge to advise customers? Do customers feel safe when dealing with the bank…

Tangible elements: shown in the physical conditions, supporting equipment, and appearance of the service provider Some questions arise, which are: Do bank staff wear appropriate attire when dealing with customers? Is the transaction space properly arranged…

Understanding: showing the bank's interest in customer needs Customers depositing money sometimes for many reasons need to supplement their financial capacity, so the bank is interested in helping customers

Responsiveness: showing the spirit of being ready to serve customers, consulting as well as answering customers' questions about the products and services that the bank provides , as long as customers have needs

The customer satisfaction index is collected on the basis of an investigation of customers who have used products and services provided by the bank It provides detailed information about the quality components that create customer satisfaction with the products and services provided by the bank in general and capital mobilization products in particular

1.5.2 Quantitative criteria a) Growth rate of mobilized capital

If the ratio is positive, it shows that the deposit capital of this period is more than that of the previous period, it shows that the bank has expanded the deposit scale The

Nguyen Ngoc Anh 32 Student ID: 21A4010682 growth rate of the scale shows a good trend, that is, the capital source grows steadily when there is always a steady growth rate over the years b) An increase in the number of customers

The increase in the number of customers using the bank's capital mobilization products shows the expansion of the bank's scale and reputation in general and the expansion of capital mobilization activities in particular In addition, the number of customers coming to deposit money also reflects the effectiveness of marketing activities in mobilizing the capital of the bank c) Structure of mobilized capital

This is an indicator of the bank's advantages, reflecting the ratio between different types of mobilized capital on the total working capital of the bank, and the rationality in the process of mobilizing different types of capital Thereby, it shows which sources the bank is mainly raising capital from and from which sources the bank can expand or narrow the mobilization scale The capital structure needs to be diversified, ensuring a reasonable ratio between short-term capital mobilization with medium and long-term capital, between the domestic currency and foreign currency d) Ability to meet capital needs

The ability to meet capital needs is reflected in three main aspects: size, the balance of the term, and the balance of the money

This indicator compares the lending capacity with the ability to mobilize capital and indicates the ability to meet capital needs, thereby evaluating the efficiency of the bank's capital use

Chapter 1 of this thesis has completed some of the following main contents, which are:

- Clarifying the theoretical basis of banking marketing

- Presenting forms of capital mobilization of commercial banks

- Content of marketing activities in the capital mobilization of the bank

- Factors affecting the effectiveness of marketing activities in the capital mobilization of banks

Therefore, affirms that capital mobilization marketing is a modern business tool, a bridge connecting the bank's internal activities with the external market, which is meaningful and important to the efficiency of the bank's capital mobilization activities This is the theoretical basis for the author to objectively evaluate the reality of using marketing in capital mobilization at Vietnam Prosperity Commercial Joint Stock Bank - Head Office in the next Chapter 2

CURRENT SITUATION OF MARKETING ACTIVITIES IN

Overview of Vietnam Prosperity Joint Stock Commercial Bank - Head

Vietnam Prosperity Joint Stock Commercial Bank (VPBank for short), formerly known as Joint Stock Commercial Bank for Non-State Enterprises, was established on August 12, 1993, is one of the earliest banks established in Vietnam VPBank was set up beneath the License No 0042/NH-GP issued by the Governor of the State Bank of Vietnam and formally worked on September 4, 1993, under the License No 1535/QD-

UB allowed by Hanoi People's Committee with the introductory constitution capital of

20 billion VND The bank's English name is Vietnam Prosperity Joint Stock Commercial Bank, whose head office is located at 89 Lang Ha, Dong Da During its nearly 30 years of establishment and development, VPBank has made remarkable achievements as well as positive changes in the banking system to gradually deserve the slogan "For a prosperous Vietnam" As of June 30, 2021, VPBank has developed its organization to

233 branches/transaction workplaces with a staff of about 25,000 workers

Based on the Certificate of Business Registration No 0100233583 first issued by Hanoi Department of Planning and Investment on September 8, 1993, registered for the 38th change on July 10, 2017, industry VPBank's business lines are as follows: VPBank's main activities include performing banking transactions including mobilizing and receiving short-term, medium-term, and long-term deposits from individuals and organizations; short-term, medium-term, and long-term loans to individuals and organizations; performing foreign currency transactions, international trade finance services, discounting commercial papers, bonds and other valuable papers; investing in securities and bonds; providing payment, guarantee and e-wallet services; investing in government bond futures contracts; property management services; providing credit in the form of rediscounting negotiable instruments and other valuable papers; money

Nguyen Ngoc Anh 35 Student ID: 21A4010682 transfer service at home and abroad in many forms, especially Western Union fast money transfer; and other banking services permitted by the State Bank Initially, VPBank focused on the wholesale banking segment Then, together with other private banks, VPBank shifted to exploiting the retail banking segment after nearly two decades of operation without many special features Since 2010, VPBank has strongly restructured its parent bank's loan portfolio (VPBP) as well as established FE Credit consumer finance company (FEC), which accounts for approximately half of the market share of the financial market main consumption in Vietnam in mid-2019

As one of the earliest joint-stock commercial banks built up in Vietnam, VPBank has made relentless advances all through the bank's history VPBank has set key objectives for the period 56-2022 with the aspiration of getting to be the foremost consumer-friendly bank much appreciated to innovation applications and entering the top 3 most valuable banks in Vietnam

VPBank's brand with the motto "Action for dreams", is built from the following factors: Professionalism, Dedication, Differentiation, and Simplicity

2.1.1.1 The process of establishment and development of VPBank

Joint Stock Commercial Bank for Non-State Enterprises of Vietnam was built up beneath Operation Permit No 0042/NH-GP issued by the Representative of the State Bank of Vietnam and authoritatively worked on 04 September 1993 beneath Foundation Permit No 1535/QD-UB issued by Hanoi People's Committee with beginning constitution capital of 20 billion VND

Was the period when VPBank effectively extended its network and generated items to capture market share and boost the number of clients transacting Numerous branches and transaction offices of VPBank were opened at this time

January 2005: VPBank opens level I branches in Hanoi, Hue, and Saigon

January 12, 2005: VPBank was recognized by the Union Bank of California to have come to global benchmarks for the precision of cash exchanges in universal installments by accomplishing an elevated STP (Straight-Through Process proportion) VPBank is one of the banks with the most heightened STP proportion in Vietnam and is one of the few banks within the area to meet this standard

In the same year, VPBank declared changing its symbol and brand character framework with two fundamental colors: dark green and bright red VPBank has also steadily expanded its scale and extended its organization by expanding its constitution capital to VND 310 billion and opening 12 transaction points all throughout the country

March 2006: VPBank was authoritatively chosen as a strategic shareholder as a foreign financial institution - OCBC Bank of Singapore

April 24, 2006: VPBank marked a contract to buy T24 core banking software from Temenos – Switzerland This framework will be the innovation establishment for VPBank to create products and services with tall innovation substance within the close future VPBank will open two deputies, VPBank Asset Management Company (VPBank AMC) and VPBank Securities Company (VPBS) with constitution capital come to 750 billion VND and 18 branches/transaction workplaces were opened

VPBank launched two product lines of cards VPBank Mastercard Platinum and VPBank MasterCard MC applying chip card technology according to EMV standard - this is the most advanced card technology in the world In Vietnam, VPBank is a pioneer in applying this technology This is the year that VPBank expanded its network strongly with the opening of 51 branches/transaction offices throughout the country VPBank's charter capital reached 2,000 billion VND

VPBank opened 32 more branches/transaction offices, bringing the total number of VPBank's network to 135 transaction points

The State Bank of Vietnam approved VPBank to sell an additional 5% stake to OCBC VPBank launched the VPBank MasterCard E-card card product - this is a testament to the diversification of products and services for customers

VPBank signed a cooperation agreement with Prudential Vietnam and became the official agent in distributing insurance product packages through Bancassurance bank to consumers VPBank deployed internet banking services

VPBank was approved by the State Bank of Vietnam to change its name to Vietnam Prosperity Commercial Joint Stock Bank Along with the name change, VPBank also officially put into use the new logo and brand identity system

Established Consumer Credit division under the brand name FE Credit

VPBank expanded its constitution capital to VND 4,000 billion with a transaction network of 150 points VPBank contracted the world's leading consulting firm, McKinsey, to evaluate and analyze banking operations and construct and execute a comprehensive change program to a cutting-edge retail managing an account model

VPBank changed the appearance of transaction points with a design and service orientation with the motto "All for customers", VPBank increased its chartercapital to

VND 5,050 billion with a transaction network of 199 points VPBank's pre-tax profit exceeded 1,000 billion dong for the first time

August 2012: VPBank declared its improvement technique for the period 2012 to

2017 in arrange to realize its vision of getting to be one of the beat five joint-stock commercial banks in Vietnam and one of the best three retail commercial banks in Vietnam by 2017-2018

Evaluating the effectiveness of marketing activities in raising capital

VPBank Head Office has achieved the following proud results in capital mobilization in particular:

Variety of capital mobilization products, integrated with many utilities for customers

The bank not only designs normal savings product packages but also adds savings product packages suitable for each audience such as children children, active young people, or old people with idle funds Each package of capital mobilization products is meticulously designed and tailored to the needs of each customer that the bank is targeting For example, for the Bank's Easy Savings package, customers can be flexible in depositing the principal increase into a savings account with a very favorable interest rate

Promotion and advertising activities are gradually being paid more attention at branches and affiliated transaction offices

In recent years, banks have paid a lot of attention to marketing activities, and VPBank is no exception to that trend Marketing is one of the ways for the Bank to convey information to its customers, if the policy is not creative enough, or not informative enough, customers will find it difficult to understand and do not want to use the bank's products again The bank's marketing policies are focused on and issued by the Head Office to each branch and each branch is responsible for following and communicating to customers in its own ways based on those agreed policies

A team of young, qualified, and capable staff that can take on many different positions, which means that they can come up with plenty of creative marketing ideas to increase the capital, and also help to change the way customers approach the information about those products As a result, the scale of mobilized capital increased steadily over the years, and the capital mobilization situation of the whole bank improved significantly

The process of serving customers takes place quickly, safely, effectively and in accordance with the correct transaction execution process

In fact, not a few customers have complained about the poor service quality at the branches Therefore, in order to overcome that situation, the bank has sent documents to

Nguyen Ngoc Anh 60 Student ID: 21A4010682 each branch, sending officials to randomly check branches in order to accurately evaluate and have conditions to reward branches for compliance strictly comply with or reprimand branches that do not comply with the service time and working process of the Bank as prescribed Therefore, after a period of inspection, branches have also made significant progress, and have improved customer service attitudes, complying with the process prescribed by the HQ

Besides the positive results achieved by the HQ, there are still some limitations as follows:

First, is the limitation in market segmentation

Currently, in the market segmentation of the Branch, there are still some problems, the most prominent is that the HQ does not have detailed and specific classification criteria for the deposit market segment, so it cannot propose marketing policies as well as a suitable product portfolio to meet the diverse needs of each segment of the capital raising market Therefore, the effectiveness of marketing activities in raising capital has not yet been as expected

Secondly, there are many limitations in communication and promotion of capital raising products at the branch

Communication and promotion of the Branch's capital raising products are not impressive enough to customers Most of the staff when dealing with customers sometimes introduce and promote the products that the Main Office currently provides but are still not really specialized, only introduced through speakers, so customers do not understand the benefits that products and services bring, so they do not pay any attention to those products and services of the Bank These factors combined make the effectiveness of marketing activities in capital mobilization showing any significant leap in recent years

Through actual research at the Head Office, one of the reasons for the limitations in the use of marketing in raising capital can be listed as follows:

Firstly, awareness of the meaning and role of Marketing in the bank's business activities, specifically in capital mobilization, is still limited

This is one of the reasons why marketing activities at the branch have not shown remarkable results, especially in capital mobilization Most of the bank staff, even though they have been trained and fostered knowledge about banking marketing but still do not know how to apply it in practice, or appreciate it Indeed, marketing activities have not been effective at the branch, customers ignore the products of the bank, and show their interest in other banks' services

Secondly, due to the limited psychology and habits of customers in using banking products and services

Most customers have the mentality of holding and spending in cash and are not aware of the benefits of using banking products and services It is mainly because the education level is still low and the income level is not high The money they make is mainly used for spending, but there is no need for savings

In chapter 2, the thesis has introduced an overview of the operations of Vietnam Prosperity Joint Stock Commercial Bank since its inception until now as well as a brief overview of VPBank the Headquarters and especially focusing on research the current status of marketing activities in capital mobilization at the Branch, analyzing the achieved results and remaining limitations, as a basis for proposing solutions and recommendations to improve the effectiveness of marketing activities in capital mobilization at the Branch in the next chapter 3

SOLUTIONS AND RECOMMENDATIONS FOR IMPROVING

Orientation to improve efficiency in capital mobilization at Vietnam

The general orientation of VPBank the HQ in capital mobilization is to maintain the capital mobilization market share in the area; maintain and develop current capital mobilization products and services as well as continue to improve customer service quality in order to bring a sense of satisfaction to customers when using products and services provided by the Branch

Not only that, the Branch will strengthen communication activities, advertise VPBank's branded products and services widely in many different forms such as through newspapers, media, leaflets, incentives applied when customers choose to use the Bank's products and services, in addition through the bank's staff and customers who have been using the Bank's products and services

In addition, the Branch will focus more on developing the retail banking services segment, maintaining the card market share in order to increase the proportion of profit from fees and services at the Branch, mainly focusing on developing payment services such as paying tuition fees for schools for students, paying electricity and water bills, service bills in order to maximize the needs of all customers, while also ensuring safety, convenience, and saving delivery time Transactions with reasonable fees and interest rates for the ultimate purpose of gaining customer satisfaction and trust in VPBank in general and the Main Office, in particular, is a payment to improve the efficiency of capital mobilization activities at the branch

Solutions to improve the efficiency of marketing activities in capital

Based on the analysis of existing limitations at VPBank The Head Office in the implementation and application of marketing strategies in capital mobilization developed by Vietnam Prosperity Joint Stock Commercial Bank and applied in the entire VPBank banking system as well as a number of reasons If these limitations are caused, there are a number of solutions as follows to improve the efficiency of marketing activities in capital mobilization at the branch

Headquarters, as well as branches, need to be sensitive in identifying customers' wishes and changing needs of depositing money in the bank, thereby supporting and advising customers on issues related to the banking sector: finance - currency - banking, more importantly, helps customers get investment portfolios, and choose the types of services that the bank provides, thereby helping the bank strengthen the relationship between the bank and the customer

Secondly, the Bank needs to focus on customer classification and select the target customer segment of the capital mobilization market segment Headquarters and branches use one or a combination of different criteria to group customers The criteria are not fixed but change from time to time to suit the types of products, business goals of the bank, or the mobilization programs from time to time as oriented by the Head Office For corporate customers, Branches usually group customers according to a combination of two criteria, nature of operation and size, while for individual customers, banks often group customers according to deposit balance, gender or maturity, and year- old

Thirdly, study competitors' capital mobilization policies Banks in addition to understanding their own banking system need to understand their competitors in the same industry, grasp their strategies, and analyze strengths and weaknesses in

Nguyen Ngoc Anh 65 Student ID: 21A4010682 competitors' policies to serve as a basis for further development of marketing activities in raising capital from their banks

"LIGHT UP VIETNAM" campaign is VPBank's large-scale repositioning campaign in 2022 with music and physical activities This campaign acts as a lever, creating an image of VPBank's capital mobilization products and brand in the minds of customers in the target market, choosing the position of VPBank's capital mobilization products in the world target market, creating a difference for the Bank's products and brand, in order to attract a large number of potential customers to use savings product packages at the bank

3.2.3 Have a reasonable interest rate policy

In each different period, the interest rate offered by the bank is different, but it must ensure the factor of attracting customers, retaining traditional customers, and looking for more new customers Many small-scale banks that lack capital often offer high-interest rates to compete with large banks However, the interest rate race often causes many risks for banks, so the interest rate tool in the future will no longer be effective (on the one hand, it also stems from the requirements of the competition and the provisions of the law), instead of needing to improve service quality, banking services provided, or competitive medium-term interest rates

- Products: VPBank needs to develop policies and strategies suitable to customers' needs, and marketing activities need to highlight the presence of products through icons, and forms of advertising advertising, creating impressive images, increasing the usefulness of services, and making services and messages more tangible Includes the following steps: Determining product categories and attributes of each product or service to raise capital; Perfecting capital mobilization products and services; New deposit product development

- Price: The price of banking products is determined on the principle that they must cover costs and be profitable Determining the price also depends on which customers VPBank is targeting, the needs and interests of customers, the market, costs, objective factors such as inflation, and regulations of the Bank Government However, VPBank also needs to consider the fees in its fee schedule, because compared to the common ground, the price is not highly competitive compared to other banks in the same industry

- Distribution: A direct strategy to bring banking products to customers expressed through human factors, the network of branches/transaction offices, and technical facilities In the face of the current "severe" competition between commercial banks, it is very necessary to improve the quality of customer service for each bank, not only to help the bank "retain" old customers but also to "attract" potential customers, creating favorable conditions for the capital mobilization of each bank Increased mobilized capital will create favorable conditions for banks to invest and thrive The staff in the Branch must show a positive attitude, and a professional working style and be ready to support and answer questions from customers related to the Bank's products and services Each employee needs to be aware of the importance of customers for the development of the Bank and try to serve customers in the best way, bringing satisfaction to customers when coming to the Branch

- Mixed strategy: This is the policy that the bank will focus on developing the image and brand through communication activities, advertising, public relations, direct marketing, and social activities to help customers know and recognize the image of the bank The bank has also built up marketing strategies such as hanging banners, and posters to promote new products at branches, or through re-branding campaigns to promote the bank's image and at the same time attract attention from potential customers The Branch leadership needs to pay special attention to the communication and promotion of the Bank's products and services, and must thoroughly understand and require the staff to advise and introduce different types of products in the exact procedure that the Headquarters established, and the various fundraising services that the Branch

Nguyen Ngoc Anh 67 Student ID: 21A4010682 currently offers, along with the benefits they bring to customers, helping customers better understand those products and services

- HR strategy: The goal of the HR strategy is to comprehensively improve the staff, especially the transaction staff because they themselves are a tangible part of the product or service Banks need to develop specific training programs and determine the standards, quantity, and style required in bank employees For the training program, the Bank should also pay more attention to behavior training as well as clearly disseminate the working process and general rules of the bank to each new employee to minimize risks to customers banks as well as

- Tangible strategy: Tangible means are shown through appearance, service staff's clothing, and service equipment Like logos and slogans, bank uniforms are said to be one of the important identification features as well as proof of the professionalism, prestige, and pervasiveness of the brand For the space outside the unit, the branch must ensure that the unit's facade is clean, there are no damaged items and the parking area is neatly arranged, clean, and free of standing water ATMs must be in good working order, clean, and free of garbage This helps the Branch to maintain a beautiful image of VPBank's brand and headquarters in the eyes of customers For the space inside the unit, the Branch must ensure that the amenities for customers in the transaction area are fully arranged sufficiently, undamaged, and convenient for customers Other areas in the transaction space must be clean, the working atmosphere is serious This helps bring satisfaction to customers when they come to do transactions at the Branch.

Request

Firstly, to build a legal framework in line with international standards applicable to the banking industry

This is a very important job and needs to be implemented immediately The Government needs to continue to improve the legal framework, and continue to review and amend the shortcomings in the Law on the State Bank of Vietnam 2010, the Law on Credit Institutions 2010, and its guiding documents, in addition, it is necessary to apply the best practices and standards international standards in order to create a "healthy competitive" operating environment for commercial banks in Vietnam

Second, maintaining a stable macroeconomic environment

The macroeconomic environment is a factor affecting the operation of all enterprises in the economy, including the operation of the entire Vietnamese banking system To stabilize the macroeconomic environment, the Government needs to:

- Inflation control: fluctuations in the inflation rate will lead commercial banks to face more risks High inflation caused the most difficulty for capital mobilization, potentially causing instability to the banking system Therefore, the Government must continue to direct the State Bank to operate monetary policy flexibly through monetary policy tools

- Operating interest rates in line with macroeconomic developments: the aim is to control inflation and support economic growth

- Manage exchange rates according to market signals

Third, create a stable social environment

This action is aimed at creating a reliable image for the people in banking activities To influence people's psychology and habits, the Government must implement solutions to create a safe investment environment and create people's trust in the law In addition, it is also necessary to ensure a sustainable economic growth rate, control inflation, and build a strong financial system

Fourth, encourage people to increase payments through banks

Through a number of popular activities such as propaganda, promotion, and education, to clearly show the benefits of electronic payment in daily life, for example: saving time; high level of security, and safety; It is more convenient and important, can be done whenever there is a need without having to go directly to the bank

3.3.2 For Vietnam Prosperity Joint Stock Commercial Bank

Currently, the marketing strategies in capital mobilization implemented throughout the VPBank banking system are developed and decided by the Head Office of Vietnam Prosperity Joint Stock Commercial Bank Therefore, the effectiveness of marketing activities in capital mobilization at the Head Office Branch in particular and other branches in the VPBank banking system, in general, depends partly on the marketing strategies developed by the Head Office Therefore, in order to improve the efficiency of marketing activities in capital mobilization at VPBank the HQ, there are some recommendations as follows:

Firstly, perfecting the Bank's product and service development strategy based on research on the operating environment, development trends as well as development strategies of a few other banks In particular, it must be based on the characteristics of the needs of each place, to make the most of the competitive strengths of the bank and to correspond with the development of the current economy

The second suggestion is to develop the Bank's distribution channel system With the traditional distribution channels being affiliated with transaction offices, the Bank needs to evaluate the effectiveness of capital mobilization activities at each transaction office during the past time, thereby proposing appropriate solutions in order to promote and promote operational efficiency at each transaction office The Bank should also encourage competition among transaction offices because only when there is competition can it stimulate and promote the development between transaction offices, on that basis, the Bank should also have appropriate forms of reward and discipline for

Nguyen Ngoc Anh 70 Student ID: 21A4010682 individuals and collectives who achieve success good achievements as well as individuals and groups who have not reached the set targets With modern distribution channels such as ATM automatic teller machine systems, the Bank must ensure that ATM cash machines are maintained and operated continuously, limiting the case where customers come to withdraw money but cannot withdraw In some cases, customers are still confused when using it for the first time or do not know how to use it, so the Bank should add an instruction sheet next to the ATM to serve customers when using it

Thirdly, improving the effectiveness of mixed promotion at the Bank through the following measures:

- Actively propagate and promote products and services that the Bank provides to customers by means of popular media such as: Facebook, radio, word of mouth, handing out leaflets and a number of other channels to attract customers to use them products and services of the Bank

- Regularly organize Customer Conference programs along with other special programs in special events of the bank such as the anniversary of the bank's establishment or during holidays, year-end summary; offer many incentives to customers when visiting the bank started using the Bank's products and services as well as sending greetings and gifts to customers on their birthdays to express their gratitude to customers

- Participate in social activities and charity programs to build and promote the Bank's image, leave good impressions in the eyes of customers, and importantly, contribute to the socio-economic development of the country

The fourth tactic is persisting to improve the process of providing banking products and services The simpler and more streamlined the process and procedure, the more accurate, legal and safe for both parties, which not only saves transaction time for customers but also makes a difference compared to other banks in the market thereby enhancing the competitive position of the Bank

The fifth plan is to raise awareness and marketing skills for bank staff This is an issue that the Bank needs to pay more attention to because employees are the ones who deal directly with customers and play an important role in the long-term and sustainable development of the Bank The training and building of staff, in addition to focusing on quality, capacity and professional qualifications, also need to pay special attention to the necessary soft skills such as: communication and negotiation skills; negotiation skills; sales skills and some other skills In addition, the Bank also needs to regularly inspect and supervise training courses to improve knowledge and marketing skills for all employees and organize periodic inspections and evaluations of training results to achieve the best results

The sixth strategy is to build an interest rate policy based on the market supply- demand relationship, in accordance with the fluctuations of the economy in each period strictly complying with the regulations of the State Bank on compulsory reserves, guarantee deposits, etc., to ensure the safety of the bank's operations, besides creating a source of revenue for the Bank and ensuring the benefits for customers

Tiêu đề	Improving the Effectiveness of Marketing Activities in Capital Mobilization at Vietnam Prosperity Joint Stock Commercial Bank (VPBank) Head Office
Tác giả	Nguyễn Ngọc Anh
Người hướng dẫn	Ph.D. Do Thi Thu Ha
Trường học	Banking Academy
Chuyên ngành	Banking
Thể loại	Graduation Thesis
Năm xuất bản	2022
Thành phố	Hanoi

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