Luân văn thạc sĩ hoàn thành chiến lược marketing cho ngân hàng BIDV chi nhánh yên bái

In today's business world, business strategies are particularly interested andconsidered the strategic construction as platform for the activities of enterprises in theUnited States if i

LUẬN VĂN CAO HỌC Hoàn thành chiến lược Marketing cho ngân hàng BIDV chi

nhánh Yên Bái

THESIS MBA TITLE ACCOMPLISHMENT OF MARKETING STRATEGY FOR THE

BANK FOR INVESTMENT AND DEVELOPMENT OF

VIETNAM - YENBAI BRANCH

TABLE OF CONTENTS

ACKNOWLEDGEMENT 2

TABLE OF CONTENTS 3

LIST OF FIGURES 7

LIST OF TABLES 7

INTRODUCTION 8

1 The imperativeness of the topic: 8 2 Purpose of research: 9 3 Subjects and scope of research: 9 4 Methods of research: 9 5 Contributions of the graduation paper: 10 6 Struture of graduation paper: 10 CHAPTER I: METHODOLOGY OF MARKETING STRATEGY OF THE COMPANY 11

1.1 BUSINESS STRATEGY OF THE COMPANY: 11 1.1.1 Concept and essence of business strategy: 11

1.1.2 The characteristics of business strategy: 12

1.1.3 The role of business strategy: 13

1.1.4 Business strategy system of enterprise: 14

1.1.4.1 Levels of strategy in enterprise: 14

1.1.4.2 Strategic types in enterprise: 15

1.2 BASIC CONTENTS OF MARKETING STRATEGY: 17 1.2.1 Definition and role of marketing strategy: 17

1.2.2 Steps of building marketing strategy: 18

1.2.2.1 Establishing marketing targets: 18

1.2.2.2 Choosing target market: 18

1.2.2.3 Building strategic orientation: 19

1.2.2.4 Forming marketing strategy: 19

1.2.2.5 Building marketing programs: 19

1.2.2.6 Control result of implementing Marketing strategy: 19

1.2.3 Marketing-Mix: 22

1.2.3.1 Definition of Marketing-Mix: 22

1.2.3.2 Content of Marketing-Mix: 23

1.3 BANK MARKETING STRATEGY 28 1.3.1 Characteristics of bank marketing strategy and its impact on marketing strategy 28

1.3.1.1 Characteristics of bank marketing: 28

1.3.1.2 Characteristics in bank business activities: 31

1.3.2 Mixed marketing strategy in banking: 32

1.3.2.1 Product strategy (P1): 32

1.3.2.2 Price strategy (P2): 35

1.2.2.3 Place strategy (P3): 36

1.2.2.3 Promotion strategy (P4): 37

1.4 MODELS USED IN ANALYSIS: 38 1.4.1 P.E.S.T analysis model: 38

1.4.2 Model of Michael Porter's five pressures: 39

1.4.3 S.W.O.T analysis model: 40

CHAPTER II: ANALYZING AND EVALUATING CONDITION OF CURRENT MARKETING STRATEGY OF THE BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM – YENBAI BRANCH 43

2.1 OVERVIEW ON BANK FOR INVESTMENT AND DEVELOPMENT OF

VIETNAM - YEN BAI BRANCH 43

2.1.1 Formation and development: 43

2.1.2 Functions and Responsibilities 45

2.1.3 Management organizational structure and operation of branch 46

2.1.4 Operation result of BIDV Yen Bai 49

2.2 ANALYZING FACTORS IMPACTING ON THE MARKETING STRATEGY OF THE BANK FOR INVESTMENT AND DEVELOPMENT – YENBAI BRANCH:52 2.2.1 Analyze P.E.S.T: 52

2.2.1.1 Law and political environment (P): 52

2.2.1.2 Economic environment (E): 53

2.2.1.3 Social culture environment (S): 55

2.2.1.4 Scientific and technological environment (T): 56

2.2.2 Analysis under Model of 5 pressures of Michael Porter: 56

2.2.2.1 Current competitors: 56

2.2.2.2 Potential Competitor: 59

2.2.2.3 Capacity of buyers (Capacity of customers) 60

2.2.2.4 Capacity of supplier 60

2.2.2.5 Replacing products 62

2.3 ANALYZING AND EVALUATING THE CURRENT MARKETING STRATEGY OF BIDV YEN BAI: 62 2.3.1 Market segment, target market selection, product and service position: 62

2.3.1.1 Analysis of market share and market: 62

2.3.1.2 Current customer group and market approach orientation: 65

2.3.1.3 Target market: 66

2.3.1.4 Positioning products and service: 67

2.3.2 Current marketing strategy of BIDV Yen Bai: 68

2.3.2.1 Product strategy (P1): 68

2.3.2.2 Price strategy (P2): 69

2.3.2.3 Place strategy (P3): 72

2.3.2.4 Promotion strategy (P4): 73

2.3.3 Evaluating current marketing strategy of Yen Bai BIDV: 74

2.3.3.1 Evaluating through S.W.O.T analysis: 74

2.3.3.2 Analyzing weak points of current marketing strategy and the reasons: 77

CHAPTER III: SOME MEASUREMENTS FOR PERFECTING MARKETING STRATEGY OF BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - YEN BAI BRANCH 81

3.1 BUSINESS STRATEGY OF YEN BAI BIDV IN THE PERIOD OF 2010-2015: 81 3.1.1 Target and mission of BIDV: 81 3.1.2 Targets, missions in business strategy of Yen Bai BIDV: 82

3.1.3 Specific strategy targets by 2015: 83

3.1.3.1 The period of 2010-2012: 83

3.1.3.2 The period of 2013-2015 84

3.1.4 Some group and functional strategies proposed: 84

3.2 SOLUTIONS TO PERFECTING MARKETING STRATEGY, CONTRIBUTING TO OVERALL BUSINESS STRATEGY OF YEN BAI BIDV: 87 3.2.1 General solutions: 87

3.2.2 Specific solutions in each period 90

3.2.2.1 Capital mobilization activity: 90

3.2.2.2 Credit activity: 92

3.2.2.3 Service activity: 93

3.2.3 Other solutions under mixed marketing strategy model: 94

3.2.3.1 Measurements in person (P5-Personal): 95

3.2.3.2 Solution on process (P6-Process): 97

3.2.3.3 Condition measure on material environment (P7-Physical Evidence): 98

CONCLUSION 99

REFERNCES: 104

LIST OF FIGURES Figure 1.1 Characteristics of business strategy 13

Figure 1.2- Levels of strategy in enterprise: 14

Figure 1.3- Capital sources from Bank cash……….………32

Figure 1.4- Model of Michael Porter's five pressures 40

Figure 1.5- SWOT-matrix model 41

Figure 2.1- Organizational Diagram of BIDV Yen Bai 47

Figure 2.2- Result of business activity from 2005 to 2009 of BIDV Yen Bai 51

Figure 2.3- Map of Bank network and Bank operation situation in Yen Bai Province in the period 2005-2009 57

Figure 2.3b- Competitive Image Matrix of banks in Yen Bai 59

Figure 2.4- Market Share of capital mobilization of the branch during 2005-2009: .63 Figure 2.5- Credit market share of the branch during 2005 and 2009 64

1 The imperativeness of the topic:

Vietnam is a developing country in the process of active and intensive integrationinto the regional and international economy

In order to meet demands of integration, domestic commercial banks are speeding

up its structural rearrangement, financial reinforcement, network development, andpreparing for equalization, strategic planning for an active integration, etc in order toenhancing completive capacity These are basic preparations because banking is one ofcrucial point in the economic integration

Together with equalization for extensive integration in order for a modern bankwhich operates according to normal banking practices with enough strength andcompetitive capacity for sustainable existence and development, and at the same time,states its position, brand and real image in the long term, Bank for Investment andDevelopment of Vietnam (BIDV) needs to renovate in thinking, business operation,management and makes through-breakings for its development In addition to mappingout business strategy of the unit, marketing activities play a very important role in thebank’s success

In the current market economy of fierce competition, it is difficult andcomplicated to map out a successful marketing strategy It is even more difficult to gainpre-eminence of products

With the purpose of putting theory into strategic management and marketing, thebank applies this into the situation of its subsidiary - Bank for Investment andDevelopment of Vietnam - Yen Bai Branch (BIDV Yen Bai ) Moreover, with the desire

to partially contribute to completing Marketing strategy of Yen Bai BIDV in order tofully meet all customers’ demands, carry out business given targets and strategies well,

we, the 10 group have chosen the subject of “Improvement of Marketing strategy for Yen Bai Branch - Bank for Investment and Development of Vietnam”

- Make clear and apply theory of strategic management and marketing in businessoperation of BIDV - Yen Bai

3 Subjects and scope of research:

Subjects of research: Current business and marketing strategy of BIDV - YenBai

Scope of research: to study and analyze business and marketing strategies ofbanking products and services currently carried out at BIDV - Yen Bai

4 Methods of research:

The used method is quantitative, specific as followed:

- Specialist method;

- Annalistic and comparative method;

- Statistic and economic analytic method;

To collect information from reports, media means, socio-economic developmentplans at local, sectoral and national scale The researching method of using annalisticmodels such as SWOT, marketing-mix, etc in marketing service, analysing internal andexternal environment, marketing segmenting as well as identifying targeted markets

Data: To use collective method through customer sastifaction questionares,synthetize opinions from Customer Association through reports of the current functional

sections (especially feedback opinions from customers, report on handling of functionalsections, ect )

Tools of handling: analysis, comparison and synthesis

5 Contributions of the graduation paper:

- To systematize fundamental issueses on theory of strategic manegement andbanking marketing

- To propose some solutions for accomplishing marketing strategy of commercialbanks in general and BIDV Yen Bai in particular

- To prove the effiencency of banking marketing theory in pratice

6 Struture of graduation paper:

Beside INTRONDUCTION and CONCLUSION parts, the report is devided

into 3 chapters, including:

Chapter I: Methodology of marketing strategy of the company.

Chapter 2: Analyze and assess current business and marketing strategy of BIDV Yen Bai.

Chapter 3: Some solutions to accomplishment of marketing strategy of BIDV Yen Bai.

CHAPTER I: METHODOLOGY OF MARKETING STRATEGY

OF THE COMPANY

1.1 BUSINESS STRATEGY OF THE COMPANY:

1.1.1 Concept and essence of business strategy:

Strategic concept was from ancient Greece, the term which derives from theprofound military To around 330 BC, that is ancient Greek times, the strategy refers tothe management skills to exploit these forces to crush the enemy and to develop asystem of overall administration In human history there are many theories of themilitary as Sun Tzu, Napoleon, Alexander mentioned and wrote about strategic onmany different points of view " Basic views of the strategy is a adversary party can crushopponent even it is more powerful opponent, if they can lead the battle and put opponent

on the battlefield advantage for the implementation of their abilities "

In today's business world, business strategies are particularly interested andconsidered the strategic construction as platform for the activities of enterprises (in theUnited States if in 1947 only 20% of enterprises had business strategy come to 1970 had100% enterprises build business strategy)There are many concepts of strategy as a model

of strategic objectives and scientific intentionally to achieve that goal (Benneth 1965), orthe strategy of red thread through the activities of the (An Ssofg, 1965) using thestrategic concept of Jonson, G Scholes, K (1999) whereby "Strategy is the direction andscope of the organization long-term to regain competitive advantage for organizationthrough the format of the resources of the organization in the changing environment tomeet market demand and meet expectations of stakeholders " -"Strategy is the directionand scope of the organization in the long term: to bring strategic advantages toorganizations through the optimum arrangement of resources in a competitive

environment to meet market demand and expectation of the capital contribution (*Source: Entrepreneur 3600, "The concept of business strategy", 2008).

Can see that the concept of strategy covering all activities of the enterprise Theestablishment of enterprise’s strategy requires the understanding the external andinternal environment of the enterprise from which to determine an appropriate businessstrategy to help enterprises survive and develop even there are remarkable and differentactivities against competitors Enterprise’s strategy as ways by which the mission of theenterprise as well as long-term goals can be achieved, the strategy of enterprises has themain content: Restructure Strategy, Acquisition Strategy, Merger Strategy, MarketDevelopment Strategy and Product Diversification Strategy

Strategy is extremely important role in the operation of enterprise Strategiescontribute to make an organization to be more active in forecasting the changes of theenvironment from which can control their activities In the current market economy, thestrategy make to increase competitiveness of enterprise, ensure strong advantage of theenterprise

In Vietnam, since the move to market mechanisms, especially in the trend ofintegration, enterprises have polarized Some adapt to the new mechanism, built rightbusiness strategy and quickly boom Conversely, those companies also have becomeconfused not find the exit The construction of the business strategy will help enterprisesfind clear direction to their future, seeing clearly the opportunities and risks occur in thebusiness activities within integration economy to make enterprise give the decision todeal with each of the business environment to improve business efficiency

Therefore, business strategy construction is to become indispensable to theenterprises want to survive and grow

1.1.2 The characteristics of business strategy:

The characteristics of the business is derived from the historical mission (strategicvision) of the enterprise and building on the basis of analysis of external and internalenvironment is reflected in the diagram below:

Figure 1.1 Characteristics of business strategy

Source: “Strategic Management”, Le The Gioi, Le Thanh Liem, Tran Huu Hai (2009)

Business strategy has the following basic characteristics:

- Must determine the basic objectives, the business orientation of enterprises ineach period and is fully consistent in all activities of the enterprise

- Ensure maximum mobilization and combined maximum exploitation andutilization of enterprise resources in the present and future, to promote the advantagesand seize opportunities to gain advantage in the market

- Be reflected throughout the continuous process from building strategies,organizational implementation, testing and evaluating and controlling strategies

- Business strategy must have thought advancing winning victory Basiccharacteristics of the business strategy of globalization, integration of internationaleconomy is always in the dynamic environment, always use the attack strategy.Therefore, strategic management must be considered a special importance to predict andactively anticipate the changing business environment and to map out solutions to attack,

in order to take advantage of opportunities, risks are limited appear in the businessenvironment of enterprises

MISSION (Strategy purview)

ALTERNATIVE STRATEGY

1.1.3 The role of business strategy:

The business strategy construction is one of the most important activities of theenterprise management Some organizations do not have a strategy like the ship withoutrudder, most business failures are due to the lack of a proper strategy, or lack of properimplementation Building business strategy to make practical benefits for enterprises,they are:

- Clearly define objectives in each stage of the enterprise, helping enterprise findclear directions in the future to reach the objectives

- Help the enterprise’s leaders clearly see the opportunity and challenges fromoutside, the reality strengths weaknesses of enterprises themselves, predict the futurechanges to find the solutions to cope and adapt to environmental new business

- Help enterprises to exploit and use up their resources, develop at the bestenterprise’s power to grow to up

- Help to allocate resources in a reasonable way at each period, improvingoperational efficiency of enterprises

- Help increase the cohesion and consensus of leadership staff in implementingthe common objectives of the enterprise

- Help enterprise increase labor productivity, increase sales and increaseadministrative efficiency, avoid risks, increase preventative capability and preventdifficult problems happening to enterprise

1.1.4 Business strategy system of enterprise:

1.1.4.1 Levels of strategy in enterprise:

Figure 1.2- Levels of strategy in enterprise:

Bussiness-level strategy

doanh

Enterprise-level strategy

SBU3 SBU2

SBU1

P&R Production Marketing Personnel Finance Funtional level strategy

* Note: SBU (Strategic Business Unit) Source: “Competitive Strategy”, Porter, Michael (1996).

a, Enterprise-level strategy: The strategy to answer the question: What business

field will enterprise be located in? Position of enterprise on the environment? Role ofeach industry in the enterprise? The business-level strategy for any enterprise must bebuilt

b, Business-level strategy: Strategy determine that enterprise how should to rival

in each line of its possession

Thus, for small enterprises operating in a line of business and for big enterprises

to be specialized their business-level strategy like enterprise-level strategies

However, while enterprises operating in many different businesses fields, often,these enterprises will be classified into strategic business unit (SBU) Each SBUundertake one or several branches of business, self-making strategy for their ownenterprises, consistent with the strategy and the overall interests of the whole enterprise

c, Functional level strategy: Is the lower-level strategy than business-level

strategy, to be built for each functional part to implement the business-level strategy

1.1.4.2 Strategic types in enterprise:

a, Types of enterprise-level strategy:

a.1, Stable strategies: A strategy that is characterized by no significant changes.This strategy is applied appropriately when condition of the competitive environment isrelatively stable and enterprises satisfy with the results of their current activities

a.2, Growth strategy: is the strategy when enterprises want to seek growth in theiractivities This strategy often includes objectives: increase sales, increase market share

a.3, Narrowing strategy: is the strategy when the enterprises sought to cut the sizeand diversity of activities of enterprises Enterprises implement this strategy in thefollowing cases: The fierce environment of competition forced enterprises to cut the sizeand market share dominate; cutting off the scale of administrative machinery to innovateand ensure efficiency; State policies to narrow the enterprises’ ineffective activity …

a.4, Mixed strategy: Companies pursuing the same time on two or three strategies

b, Types of business-level strategy:

b.1, Adaptive strategies, including small strategies:

- "The defender” strategy is the strategy only pursuing stability by producingonly limited products directed at narrow piece of the overall potential market Thisstrategy is often achieved through activities to create products and services of highquality, prestige

- "Searcher" strategy is the strategy pursuing innovation by searching andexploiting new products, new opportunities in the market

- "The analysis” is the strategy sought to reduce risky minimum followed by therenovation of its competitors when the renewal was successful

- "The Response" strategy is the strategy which is typical of the type of makingdecision instability, lack of consistency, depend on the fluctuation of the market

b.2, Competitive strategy: Request to analyze simultaneously the competitiveadvantage of industry is a competitive advantage of the enterprise

- Analysis of industry, through analysis of factors: Barriers to join, the threat will

be replaced, the customer's prestige, prestige of suppliers and fierce competition betweencompetitors

- Select a competitive advantage:

+ Strategy leading prices: is a strategy which enterprises pursue when they want

to product with the lowest cost in the industry

+ Unique strategy: is a strategy which enterprises pursue when they wish tobecome unique in the industry about the scientific parameters are appreciated

+ Focus strategy: a strategy when enterprise directed at the cost advantage (costfocus) or the unique advantages (unique focus) in a narrow piece of the market

+ Strategy stuck in the middle: Enterprise is not selected on all three strategies

- Maintain competitive advantage: the enterprise must know to maintain theircompetitive advantage This is not simple, because technology and customer’spreferences are changing, while the competition never stands still

c, Types of functional level:

c.1, Financial strategy: Building funds and set up an appropriate financialstructure, assisting enterprises to achieve the their objectives It was decided to considerthe enterprise’s strategy in the financial perspective and choose the optimal strategy

c.2, Human Resource Development Strategy: Managing the implementation ofthe objectives through people Human resource development strategy is the decisivesignificance to the success or failure of your enterprise The objective of human resourcedevelopment strategy is to have the human resources and do everything possible forworkers to reach the best thing they can reach

c.3, Marketing strategy: marketing strategy can strongly affect to efficiency andcost structure of an enterprise Through strategic marketing, enterprise won the position

by the activities coordinator pricing, promotion, advertising, product design anddistribution It can play a key role to increase the efficiency of enterprise

1.2 BASIC CONTENTS OF MARKETING STRATEGY:

1.2.1 Definition and role of marketing strategy:

Marketing strategy is a functional strategy in the overall business strategy of acompany Marketing strategy is the way where the company intends to go to reach the

desired goals in the market such as increasing competitive strength, increasing productquantity or market share.

Marketing strategy plays an important part in general strategy of the company byproviding specified information about the current position of the company in the marketand its chances in the future Moreover, strategies of products, customers, distributionchannels… in marketing strategy will be combined at many levels to form the officialstrategy of the company According to independent marketing strategy, the companywill define sales personnel, develop products and other functional activities

Marketing strategy has to be developed from the overall strategy of the companyand it relates to the contents such as location for products, strategies for product brand,choosing target markets, methods for market entry, use of Marketing-Mix license plates

in implementing strategy and other contents

1.2.2 Steps of building marketing strategy:

1.2.2.1 Establishing marketing targets:

Targets of marketing strategy are usually oriented from targets of the company, incase the company orients marketing completely, these two groups of target coincide.Marketing targets are often provided as activity standards or a job needed to be achieved

at a certain time These targets provide framework for implementation of marketingstrategy Marketing target is established from analysis of capacity of market andevaluation of marketing capacity of the company This analysis is based on related dataabout the products, competitive market, marketing environment, and from that helps tolearn about potentialities of the market that needs to be exploited and chooses suitabletarget ideas with marketing capacity of the company

1.2.2.2 Choosing target market:

Researching, choosing exactly target market for the company requires to beimplemented based on careful analysis of data about market and customers This is thework of identifying customers’ demand and choosing potential groups or sections of

customers who the company will serve with each of its product The company canchoose, decide to penetrate one or more specified market segments These marketsegments can be classified according to different criteria in which factors of macroenvironment have much influence on the division of market into smaller marketsegments Thus, to choose target market for the company, it is required to research,analyze carefully factors of macro and micro environment of the company These factorsare the base to evaluate and segment different market segments, the company will have

to decide how much to serve and which market segments

1.2.2.3 Building strategic orientation:

Before establishing marketing strategy for products in target market, the companyhas to put forward strategic orientations for the products, which need to achieve in targetmarket These orientations provide specific ways for marketing strategy

1.2.2.4 Forming marketing strategy:

The company needs to base on the first analysis about marketing environment,market, customers and strategic targets to establish a division of the most suitablevariables in order to satisfy the target market and achieve targets of the company

1.2.2.5 Building marketing programs:

Marketing strategy must be implemented in form of new marketing programs andstrategies to represent main features of marketing in order to achieve targets Therefore,the company has to build action programs to implement marketing strategies, that is theconcretization of marketing strategy by marketing variables that is planned in detail intarget market

Thus, to establish a thoughtful, effective marketing strategy that is suitable withtarget market of the company, that company has to clarify market factors, businessstrategies, real situation of the company, competition, customers Those are the bases to

build targets, choose target market, build strategic and defined orientations, design aneffective marketing strategy for products in target market with specific action programs.

1.2.2.6 Control result of implementing Marketing strategy:

Research activity environment of the company and planning Marketing strategy isonly the first step to direct Marketing administration The company also has to carry outnecessary activities to implement Marketing strategy and organize testing regularly,evaluate activities and result in order to ensure certainly target of Marketing strategy isimplemented

* The purpose of checking marketing: Measure and evaluate specifically the

process to implement defined marketing target On this base, ensure to provide accurateinformation about level and result of each section, individual as well as their existence inimplementing Marketing program Therefore, only by checking, Marketing departmentcan find out errors from different sections, in order to offer actively suitable adjustmentmethods

Checking process have to base on sources of information In order to gain this,building effective information system is very essential in each company

Combine checking techniques and methods: Direct check - indirect check, regularcheck – extraordinary check

+ When checking have to specify gained results and achievements fully,accurately as well as weaknesses and their causes

+ After checking, have to recommendations and solutions

+ Checking staffs have to understand banking Marketing field

* Content of checking Marketing:

Checking of implementing targets: Checking Marketing is the method use

techniques to evaluate missions , targets of company on base of analysis, compare inorder to specify implemented targets, implementing targets and unimplemented targets

as well as main causes On this base, company find out punctual solutions in order incarry out all objects.

Information and document system mainly serve marketing check process ofcompany include: financial reports, detail report about revenue in each section, eachentity, each market section and report of customer research

Checking method is mainly used is to compare between posed object and realcapacity Result can occur some situations: Gained objects lower than proposed levels ,Gained objects as much as proposed levels, Gained objects higher than proposed levels

In each situation, checker must find out causes and offer actively solutions andthe way to solve

Check adequate capacity of marketing activity:

When checking of implementing mentioned above targets, the person who carryout bank Marketing aware adequate capacity of Marketing activity before changing ofmarket for bank production On other hand, level of implementing targets specifiesadequate capacity of Marketing activity and reserve

To implement to check adequate capacity of Marketing activity, have to find outfollowing information: Information about competitors, Research customer according tocontent; Information from media; Report of research result of each section; opinion ofcompany staffs

In order to evaluate adequate capacity of Marketing activity, companies usuallybase on criteria as follows:

- Customers’ satisfaction level to bank service products in the aspects: usefulness,price, communication,…

- Customers’ reaction to new bank service products

- Effectiveness achieved after deploying Marketing programs

- Reasonability level of steps in Marketing process, as well as structure of eachpart in Marketing strategy…

Comprehensive check of Marketing strategy of bank:

Marketing strategy is an important functional one in Business strategy system ofbank Therefore, Marketing strategy of company has to be checked, assessedcomprehensively to be able to develop its effectiveness to business activity of bank.Process of checking Marketing strategy of bank often focuses on the following maincontents:

- Proposed system of targets, includes short-term target, long-term target

- System of policies (products, price, distribution, expansion – communication) toimplement the target of strategy through each different stages

- Comprehensive effectiveness of Marketing strategy

Comprehensive check of Marketing strategy is conducted frequently in everytime, however, its content and features are different through each operation stage ofcompany

Checking is the last stage of Marketing activity to ensure that tasks, programs ofMarketing strategy are suitable with requirements and changes of business environment

of company in both present and future Thus, good checking requires to build clearrequests; have specific program, comprehensive content When finishing checking, thecompany will find out potentiality of Marketing that needs to be developed, at the sametime specify existing problems, make petition and proposals about plan in the short termand long term in order to complete, develop to improve comprehensive effectiveness ofMarketing in business activity of company

1.2.3 Marketing-Mix:

The most popular marketing strategy now that companies are building and using

is Marketing-Mix

1.2.3.1 Definition of Marketing-Mix:

“Marketing-Mix is a set of variables that the company can control and manage and it is used to try to cause desired reaction from target market” (Source: Marketing-

Statistics Publishing House-2000-Page 166)

In Marketing-Mix, there are many different tools, each tool is a variable that can

be controlled and classified according to 4 main factors called 4P: Product, Price, Placeand Promotion

- Decision about types and list of products

- Decision about product quality

- Decision about product brand and packing

- Decision about customer service

a1 Decision about types and list of products:

- Decision about types of products: Each company often has a different way to

choose types of products The choices depend on the aim that the company pursuits

The company pursuits the target of providing a full type of product or trying tooccupy the majority of market or expand the market then it will have wide range ofproduct types To do so, the company has to set up a problem that is by what way toexpand and maintain the width of product type? To solve this problem, the company has

2 ways to choose:

One way is developing product type on the basis of the following ways: Develop

down, up and in both ways

The second way is supplementing product types It means the company tries to

add new products to available product types

- Decision about list of product: Product list of a company will have width, length

and depth, certain plenty and harmony depend on the aim the company pursuits Thewidth of product list shows how many different groups of product types provided by thecompany The length of product list is the total number of products in the list The depth

of product list shows the total number of specific products offered in each individual line

of product type group Harmony of product list reflects close relationship amongproducts of different groups of product type according to the final level and aim ofusage, requirements of manufacture organization, distribution channels or somecriterion

The above specific parameters of product list opens strategies for the company toexpand product list:

+ Expanding product list by adding new products

+ Extending each type of product and increasing the length of product list

+ Supplement product programs for each kind of product and increase the depth

of product list

+ Increase or decrease product density depend on enterprise would like toincrease strong reputation for one field or many fields

a2, Decide product quality:

Product quality is total functions and features of one product or service that bring

to it the ability to satisfy said or implicit requirements

Between product quality and service, customers’ satisfactoriness and capacitybring benefit of enterprise have close relationship The higher quality is, the higher level

of customers’ satisfactoriness is and lead to price is counted higher

Product quality is the first and the most important feature that customers noticewhen they choose their product provider Product quality of enterprise is expressed

though parameters: product resistance, safety coefficient, technical design ensuring andconformable capacity.

Therefore, to ensure high product quality, enterprise has to pay attention to bothtechnical design and quality of product manufacture process Manufacturing high qualityproducts will ensure that enterprise attract many customers, increase its capacity on themarket

a3, Decide package and label:

When planning marketing strategy for each kind of product, enterprise has todecide a number of issues relating to product label

Basically, label is a promise of seller to ensure to provide to buyer a given list offeatures, benefits and services Decisions relating to label are usually:

+ Stick label for its product or not?

+ Who is owner of product label?

+ Correlative with selected label, which feature does product quality have?

+ How to choose the name for label?

+ Should expand usage limitation of label name or not?

+ Use one or many labels for products that have different features of an item?Decisions about label are important decisions in product strategy because label isconsidered as long term and important asset of an enterprise Managing label is alsoconsidered as a primary marketing mean in product strategy

a4, After sales service:

This is an important mean to increase competition advantage of enterprise Aftersales service is carried out well will help to increase customers’ benefit and raise theirsatisfactoriness This is efficient mean to create difference for products

b Price fixing strategy:

Price is direct factor in Marketing-Mix strategy to create income and is one of themost flexible factor of Marketing- Mix, it can change quickly, unlike features of product

and commitments of channel, also price fixing and price competition are highlight issuesfor marketing staff.

Price fixing strategy depend on marketing target of enterprise When define theprice for product, enterprise need to examine steps of price fixing process as follows:

Firstly, Enterprise select marketing target though price fixing, they are: fee,

benefit, increase maximum immediate income, increase sales level or gain leadingposition for quality of product

Secondly, Enterprise define, estimate market demand scale and elasticity in order

to define suitable price

Thirdly, Enterprise estimate price and this is floor price of product.

Forth, Find out about price of competitor in order to define itself position of

price

Fifth, Select the method for price fixing, including: Fix price by additional price,

fix price by target benefit, fix price by sensitive value of customer, fix price by value, fixprice by current price and fix price by bidding

Sixth, Enterprise select their final price, combine with other factors of

marketing-mix strategy

Because of competition and changes of market, lead to enterprise has to change,adjust suitable, adjustment strategy can be as follows: Fix price by geographicalprinciple, sales discount, promotion price, fix distinguish price and fix price for productlist

When implementing price change and adjustment, enterprise has to studycarefully responses of market, customers and competitors

c, Contribution strategy:

Contribution is key tool in marketing-mix strategy, including different activitiesthat enterprise carries out in order to bring products towards where target customer canapproach and buy them

Important decisions in contribution strategy are decisions about contributionchannel Contribution channel is created as a system flow that specified by levels ofchannels including manufacturer, intermediates and consumer Contribution channelcarry out the transfer products from manufacturers to consumers, overcome distance oftime, space and ownership right between commodity and service with people use them.Basic decisions about channel including:

+ Decision about design channel and

+ Decision about managing channel

d, Mix promotion strategy:

This is one of four key strategies of marketing-mix and it become more and moreeffective and important that enterprise can use to affect to target market The nature ofpromotion activities is to notice product and enterprise to customer in order to persuadethem to buy product

Mix promotion strategy including 5 key tools:

- Advertisement: Including any method is introduced indirectly and express ideas,products and services is carried out according demand of advertisement entity and theentity must pay for fee and charge

- Direct marketing: Use letter, telephone and other indirect tools to informavailable customers and expectation customers or require them to have their responses

- Sales promotion: Is award method in short time to encourage trial or buy aproduct or service

- Public relation and propaganda: Are different programs that designed toheighten or protect enterprise’s image or their products

- Direct sales: Is direct introduce by mouth about product and service ofenterprise though dialogue with one or many potential customer on purpose for sales

Each mix promotion has its own features and its charge Therefore, whenselecting tools and combine tools in mix promotion strategy, marketing person has to

find out own feature of each tool when select as well as have to factor that affect mixpromotion structure such as: Kind of product market, push and pull strategy, readyperiod of buyer, period in lifetime of product.

Carry out content of methods above, enterprise need to pay attention to followingissues:

+ Define who is customer of enterprise

+ Which method is the most suitable one

+ Which feature of product does content need to emphasis

+ Time and frequency of using this method

1.3 BANK MARKETING STRATEGY

1.3.1 Characteristics of bank marketing strategy and its impact on

marketing strategy

1.3.1.1 Characteristics of bank marketing:

In fact, the bank marketing is manipulate the principles and techniques ofcommercial marketing in the business of banking But itself has unique features comparedwith other areas of marketing, expressed by the following characteristics:

* Bank marketing is type of the service marketing:

Bank itself is a form of enterprise trade in currency services, making the job ofmonetary intermediaries, customer charges, it is ranked belong to the service sector Thestudy of the characteristics of the service as a basis for well-organized process ofmarketing the bank Banking products and services have different characteristics, which

is its invisible, no separate calculation of products and services, without storage and

hard to define quality These features affect the work of organizing bank marketing

activities:

- The invisible characteristic: is the main characteristic to distinguish products

with the bank's product material and other manufacturing industries, the bank'scustomers often have difficulty making decisions using product selection Customers can

determine the product quality during and after use So banks have to make up amarketing image, the reputation of banks and strengthen trust with customers byimproving service quality, increase the utility of the product

- Impossible-separated characteristic: The process of supply and consumption of

products occur simultaneously and with the participation of customers The supply ofbanking products and services usually follow a certain process, not product progress,reserve storage This feature requires banks to have marketing coordination amongdepartments in the supply of products, identifying customer needs

- Unstable and difficult to determine: Banking service Product are made up by

several factors: staff qualifications, technology, time, customer these factors oftenfluctuate, so difficult to determine a precision

* Bank marketing depend mainly on human factors:

This feature is also completely true to the general principles, because man is thedecisive factor in all economic - social activities

Bank marketing is based on many factors: the level of technology banking,education level, quality and stability of the products or services; the level ofmanagement; in which human factors are important added This feature requires banks

to create marketing skills for all staff management and professional staff, the staff evensecurity guard, receptionist, clerical, telephone

* Banks marketing tightly associated with the operation of the units in the organizational structure of the apparatus of the bank:

Popularity of the organizational structure of commercial banks is an opportunityoffice, together with the subsidiaries and affiliated units Therefore, most of themarketing work for the commercial banking system there But there are some specifictask implementing by a branch in a certain locality, or a unit attached to a productdeployment services that do the specialized business units, it also requires specificmarketing for branch or unit

At the main office and at each branch or attached units of commercial banks havethe room, board, different parts Other parts departments have relationships directly witheach other and must be oriented general marketing, image promotion, brands, productsand services of the bank, attract customers

* Bank marketing depend mainly on relationships with customers:

Bank marketing strategy, often need to classify different customer groups, indifferent times to carry out specific marketing activities, especially in evaluatingprofitability of each customer group Or evaluating the potential development of eachcustomer group

* Marketing banks have to deal with harmonization of two elements: Medium improve competitive performance while improving the effective cooperation in the banking.

Nature and objectives of marketing activities is to improve efficiency, enhancecompetitiveness, attract customers, dominate market share Therefore, the intermediategoal of marketing is to promote the image bank going into the subconscious of thecustomers, making customers more and more crowded the banks know, know the newproducts and services, quality have superior computer market Song itself due to thenature of banking operations, the nature of banking requires mutual cooperation toattract customers to implement effectively a service or a professional Therefore, thebank marketing must reflect this specific requirements

* Bank marketing is strongly dominated by legal environment:

Marketing activities must comply with the law profession, often competitionlaws, or advertisement laws, consumer protection laws, Accordingly, the generalprinciples of image promotion, advertising and introduce products and services, specificmarketing activities, to be honest is not misleading consumers, harm the reputation,honor, defamatory distort the truth about other bank, your competitors

Bank marketing activities must strictly comply with laws on banking, monetaryactivities Accordingly, must respect the law and the direction of consumers, guidingcustomers to comply with the provisions of general law on currency bank, observing theprocedures prescribed by law

Marketing activities must also comply with international law relevant

1.3.1.2 Characteristics in bank business activities:

Characteristics of Product:

Banking is a organization trade in money, a special commodity The bank's mainproduct is services related to money that banks provide to customers to meet their needs.Therefore, the bank's products carry the full nature of the products and services have thefollowing characteristics:

• Products with non-physical morphology;

• The production and consumption occur simultaneously services;

• Products of the bank is difficult to distinguish, recognize the benefitsimmediately, their use;

• The level of uniformity of the product is high;

• Products of the bank have been increasingly diversified, a series of servicesduring the year

* Characteristics of clients:

Bank customers are diverse and abundant, including class population, theeconomic organization, politics and especially the bank's customers are becoming Today the bank is conducting diversify its services should the number of customers ofbanks increasing quickly But customers of the bank as a whole is quite complex andcontains many different criteria segments Besides the demand of customers for bankingservices is not uniform and many changes

* Characteristics of competition:

Along with the general trend of the economy, business banking is taking place in

an environment of extremely fierce, with the intensity of competitive and contain no lessrisky Today, the trend of competition from banks expressed in three forms:

- Competition on automatically;

- Competitive Marketing activities;

- Competitive scale (merger, consolidation, linked to increased competitiveness)

1.3.2 Mixed marketing strategy in banking:

1.3.2.1 Product strategy (P1):

In fact, bank’s products are services that bank provide customers, including:

* Deposit service: Deposit is the most resource in monetary capital , therefore,

bank focus on mainly about marketing into this capital source, resource by money ofbank including types as follows:

Table 1.3-Capital sources from Bank cash

Source: “Commercial Bank Management.”, Nguyen Thi Mui

* Credit services: Making capital loans is the most significant activity of the bank

and the main service that earns the bank on basis of disproportion of interest rate andfunding ratio of the bank There are many ways to classify loan services according tocriteria as follows: sources of capital loans, terms of loans, assurance characteristics,ways of loan supply, ways of debt settlement, nature of interest rate, methods of interestdisposition, types of loan currency, quantity of capital loan sources

* Investment services:

Beside loan services, in order to make use of unused capital effectively, the bankcan operate investments into valuable sheets - which are defined by investment bank astwo main groups: the 1st reserve and the 2nd reserve

Valuable sheets of the 1st reserve are used to gain earnings for the bank, mostlylong-term valuable sheets and enable to highly profitable Valuable sheets of the 2ndreserve are used to improve its settlement capacity more than income

* Other services:

The bank operates these services in order to ensure subsistence income and limitrisks for the bank These consist of a number of services including non-bank services:cash settlement, foreign currency service, other post services, value preservationservices, consultancy services, information services, auditing services, technical-economic verification services, guardian services, insurance services, and other services

Each type of services above also consists of detail classification form according to manycriteria, such as customers’ needs, origin of services, nature of services, etc.

A proper service classification helps the bank to build a proper organizationframework, enables the bank to concentrate its potentials on which service’sdevelopment, based on the balance of ability between itself and the market

- Strategies to develop bank products

To make strategies of service development, personnel in bank marketing firstlymust work out analysis on bank service products and base on that, make the best onstructures of bank services provided in general, and design a new product developmentstrategy

+ Product analysis:

All products must be regularly analyzed to identify which process of life cycledoes the type of product exist That would be done by research on criteria of eachservice’s consumption, costs and benefits of each type of products

Mostly bank services has a relatively long life-cycle, therefore analysis on periods

of bank product’s life cycle will help the bank re-design the product or change into aproper sales policy, select the best structure for bank products The structure of productsmust also be balance between profitability and diversification of services to avoidaccidentally sharp changes of the market or customers’ needs

+ Presenting new products:

Presenting new products to a bank is a significant factor of Marketing Researchand design of new products depend on financial capacity (capital) and experience of thebank staffs Thus, the process of researching and deploying new products could be donewith the lowest cost and the most suitable time

Presenting new products must process step by step, so as to avoid “overload” tothe bank’s management and personnel system as well as market saturation with quantity

of new products, avoid the case that new products representing with no effect resultsimpact on reputation and prestige of the bank.

In building product development strategies, the bank should concentrate on:

Firstly, mostly the services provided by banks are similar to each other.

Secondly, once a customer satisfies with one service of a bank, he is supposed to

use another or other services of the same bank as well

Therefore, in range of bank services provided, the bank should concentrate onOne Trademark for one service superior than other banks, so that this service willremind on public about the bank Based on that, the bank will make it own prestige - thebank trademark to attract customers to other services of the bank

There are two general strategies usually applied in banks The first strategy isskimming, putting a very high price for new products The second is penetration, putting

a lower cost than competitive products However, each strategy has its own advantages

One of the advantages to apply skimming strategy is that there are alwayscustomers who do not care of the price of whatever new products or services Thisstrategy will help the firm achieve the highest benefit on each service/ product unit, andthen quickly withdraw the expenditure made for research and development of theproduct itself When its rivals join in the market, the bank still can offer price reduction

to get competitive advantage The second advantage but not less important is the high

primary price means good image of the firm Higher price is supposed to present highquality as well Particularly in banking, the service products seem invisible to customers,therefore the price (visible factor) is supposed to be a quality indicator In banking, there

is one special reason for encouraging “skimming” strategy appliance Every serviceneeds human and procedures As usual, demand increases will cause procedure’s re-design; the higher price will help limit the rapid growth speed of demand Disadvantage

of this strategy appears when the bank expects enough number of customers to gaindefinite effect, as well as encourage other rivals join in the competitive market

Advantage of penetration strategy is to prevent new competitors enter into themarket, and motivate the demands One of the problems if choosing this strategy is thatthe bank must have a thorough grasp of the cost and price for a product unit The firmhas to make sure price on sale including both cost price and target benefits

In fact, bank activities in the world have accumulate much experience in strategydesign to formulate price To put an appropriate price for each customer group, ensurebenefits of customers as well as profits of the bank, and comply with price offered by itsrivals, the whole procedure of price strategy for banking business activities designed byBank marketing staffs is used widely the most

1.2.2.3 Place strategy (P3):

Requirements of Marketing activities include not only producing high qualityproducts to meet customers’ demands, not only verifying the right price for products, but

also distributing products to all customers Therefore, the bank needs a system of

distribution channels to distribute products appropriately to customers, time and placeproviding bank services as well as serving quality

Currently, banks combine to use two main groups of distribution channel:

+ Traditional distribution channel: Traditional distribution channels exist during

the same time as banks Characteristics of these based on direct labor of the bank,

allocate network of branches and transaction offices to complete wholly or partially bankservices or by bank agents.

+ Modern distribution channel: Modern distribution channels formed on basis of

progress of information technology Characteristics of these are based on making use ofachievements of information technology Modern distribution network consists ofautomatic branches and e-banks

Selecting the appropriate supply system as well as the right place for branchescarry out on basis of analysis: aims of the bank, capacity of bank in service providing,competitive level, and characteristics of customers Though the general trend graduallyincreases modern distribution channels, banks still should concern about where to buildoffice and branches, because place can take the view of public or customers about theimage and prestige of the bank

1.2.2.3 Promotion strategy (P4):

In business operation environment, banks have a system of complicatedrelationship: to customers, to many different financial institutions, to public, etc Due tothose relationships have different directions and interleaving, the bank has to deal withresponsibilities for formulating and maintaining images of products as well as oforganizations in eyes of society and potential customers If so, the bank has to operatemiscellaneous promotion activities As many other material and service producing fields,the miscellaneous promotion system in bank includes 4 factors as follows:

* Individual sale:

Individual sale means providing bank products by individual meeting between thebank representative and the customer Through the meeting, the bank knows more aboutcustomers and satisfies their needs the best if possible In the highly risky and severelycompetitive environment, this method gradually gets concern of banks However,expenditure for the meeting remains high so it is applied only to serve large customers

* Activating consumption:

Including apply multiple tools to promote the target public’s feedback withdifferent methods in scale of marketing strategy and information strategy of customers.Activating consumption cannot execute regularly to bank products and attract newcustomers for long-term relationship However, the effects it brings relatively morequickly than other activating methods Currently, banks usually apply consumptionactivating tools in three main directions:

- Activating customers: with some methods such as competitive examination,exhibition, reward, model propagation, etc

- Activating business fields: apply when bank services provided indirectlythrough the third party Activate tools include: special sale-off, general exhibition, free-of-charge goods supply, commission for agents, souvenirs or other gifts, etc

- Activating bank staffs: to improve quality of serving customers and developprofessional skills with some tools such as rewards, competition, gifts, etc

* Advertisement:

Banks use advertisements for public presentation to introduce products andpromote demand of the bank’s products in the target market A rising problem is that thebank’s products mostly are invisible (not in material form), so it is quite difficult forcustomers to realize Therefore, using advertisement is necessary for customers toclearly identify the bank’s products and the benefits they will receive if they useproducts provided by the bank

* Propagation:

This is the most important working component for social relationship, theorganized activity of the bank aiming at forming good images of banks in the eye ofpublic by providing significant and reliable information of its activities on mass media.Propagating campaigns are usually organized by banks to deal with marketing missionssuch as forming, improving or repairing the bank image; propagating bank’s products toensure support from different groups of customers

1.4 MODELS USED IN ANALYSIS:

1.4.1 P.E.S.T analysis model:

PEST analysis plays an important role in the environmental assessment beforestarting the macro conduct marketing activities in general and banks in particularmarketing Macro environment has strongly influenced the development of the bank.Macro factors (PEST), including politics, economy, culture, society and science andtechnology (* Source from: The concept of business strategy of Business Forum New,November 26, 2005)

Political factors: Politics has tremendous influence policies to the economic

development of the sector Institutional problems of political stability like? Governmentpolicies affecting the sector policy and adjust your behavior in society, includingincreased tax reduction issues

Socio-cultural factors: socio-cultural factor of the local effects difference between

domain areas across the country They include: Habits mainstream of the local people'sattitudes to the exotic factor, consumption habits, level of position,

Economic factors: Marketing banks need to consider state's economy short,

medium and long term Factors such as: rates, inflation levels, national economic income

Technology factors:

Science and technology are important factors in winning competitive advantageand is the driving force behind the integration process in the national and internationaleconomy

Applying science and technology permit bank supply products and services withcheaper price, better service quality Science and technology to help consumers andenterprises make more than material wealth through innovative creativity Science andtechnology to help banks get information channels to customers

1.4.2 Model of Michael Porter's five pressures:

Michael Porter is the famous strategic administrator of Harvard University in his

book "Competitive Strategy: Techniques Analyzing Industries and Competitors" has

made the comment about the competitive pressure in every industry and business Likeother business industries, banks must determine the competitiveness, attract customersand develop their markets

Although the market competition often related to customers, but banks alsocompete with each other to attract qualified human resources In general, competitionbetween banks can exist under many different aspects or on the basis of differentcompetition: Towards customer, human resources, toward the works of promoting andadvertising the brand, image

(* Source: Michael Porter's theory of "competitive advantage" 1985)

Figure 1.4- Model of Michael Porter's five pressures

Potential new competitors

Customer Customer Competitors in the industry

The competition between existing banks

Group of financial products instead

Competitors

Risk of new

Ability to price pressure

Ability to price pressure

Risk by

& services insteadProducts

1.4.3 S.W.O.T analysis model:

SWOT is the abbreviation of the collection of the first letter of the English words:Strengths (Strengths) Weaknesses (Weaknesses), Opportunities (Opportunity) andThreats (Risks) This is extremely useful tool to help us understand the problem ordecision in the organization and management as well as in business It is said in otherway, a SWOT framework is based on the theory that we can review the strategic reviewand determination of position and direction to the organization, a company, analyzed theproposed business or any ideas regarding the interests of the business In fact, theapplication of SWOT build a business plan, strategic planning, evaluating competition,market surveys, product development and in research reports are increasingly selected

by many enterprises

Based on the analysis of external and internal environment to assess the factorsdetermining the position of the enterprise as well as environmental businessdevelopment of enterprise we use SWOT analysis model In the synthesis of elementsinside and outside (as above mentioned) is shown in the SWOT analysis This is animportant tool to help businesses develop strategies may be viable options

Figure 1.5 SWOT-matrix model.

MATRIX SWOT

Strengths (S)1………

2………

3………

Weaknesses (W)1………

WO StrategyOvercome weaknesses inorder to take advantage ofthe opportunity