Branding BIDV to individual customer segment for sustainable development

TRUONG DAI HOC MO TP HCM HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL MBMM5 HUYNH MY TRUC BRANDING BIDV TO INDIVIDUAL CUSTOMER SEGMENT FOR SUSTAINABLE DEVELOPMENT MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor’s Name: Dr Nguyen Minh Kieu Ho Chi Minh City (2011) i DECLARATION I declare that this study does not incorporate without acknowledgment any material previously submitted for a degree or diploma in any university; and that to the best of knowledge it does not contain any material previously published or written by another person except where due reference is made in the text Huynh My Truc Master of Business and Marketing Management – Intake ACKNOWLEDGEMENT ii This thesis was completed with great support and encouragement of the author’s instructors, family and colleges First of all, I wish to express deep appreciation to Dr Nguyen Minh Kieu for his thorough guidance and valuable feedback on the preparation and writing of this final project I would like to thank all Facilitators, Coordinators, Classmates and the numbers of the Postgraduate Office at Open University HCMC and Solvay Business School for their encouragement and assistance in completing this project I also send deep thanks to the Board, managers of BIDV who were always willing to provide me the related necessary documents Last, but not least, I would like to say thanks to all of my classmates, my family who have give me much encouragement and support during the time I perform this thesis All of these support and encouragement were acknowledged in this thesis as an indispensable part for its final result TUTOR’S COMMENTS iii ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ABBREVIATION BIDV : Bank for Investment and Development of Vietnam WTO : World Trade Organization APEC : Asia Pacific Economic Cooperation AFTA : Asean Free Trade Area iv ADB : Asian Development Bank NIB : Nordic Investment Bank JBIC : Japan Bank for Internation Cooperation SOCBs : State-owned Commercial Banks SOEs : State-owned Enterprises JSCBs : Joint Stock Commercial Banks SMEs : Small and Medium Enterprises SWOT : Strengths – Weaknesses – Opportunities – Threats SLEPT : Social – Legal – Economic – Political – Technology ACB : Asia Commercial Bank Vietinbank : Vietnam Bank for Industry and Trade ATM : Automated Teller Machine POS : Point of Sales Terminal IT : Information technology ISO : International Organization for Standardization PR : Public Relations CRM : Customer Relationship Management R&D : Research and Development GDP : Gross Domestic Product ROA : Return on Assets ROE : Return on Equity IPO : Initial Public Offering LIST OF TABLES/FIGURES/CHARTS Table1 The rate funding in GDP from 2004 - 2020 Table SWOT analysis Table BIDV’s sale objectives by type of customer at the end of 2013 v Table Estimated marketing budget 2009 – 2013 Table Marketing communication cost breakdown 2009 – 2013 Average deposit and average loan structure by customers of BIDV Table from 2005 – 2007 Table Numbers of bank from 1991 to 2011 Table Lending market share of banks from 2000 – 2007 Table Lending market share of banks from 2000 – 2007 Table 10 Comparison about market share of big SOCBs Figure The sources of brand equity Figure The Strategic brand management process Figure The brand value chain Figure The relation between factors of customer equities Figure The cooperation model in working process within BIDV Chart Percentage of individuals using banking services calculated on age and income Chart Type of banking services which individual customers want to use Chart Banks which banking individual users want to use Chart Prior elements in choosing bank CONTENTS DECLARATION i ACKNOWLEGEMENT ii TUTOR’S COMMENTS iii vi ABBREVIATON iv LIST OF TABLE/FIGURE/CHART v CONTENTS vi EXECUTIVE SUMMARY CHAPTER I : INTRODUCTION viii 1 Problem statement Objective Scope and limitation of research Structure of the project Research strategy and methodology Feasibility and practical of the research CHAPTER II : LITERATURE REVIEW Brand & Branding 5 1.1 What is a brand 1.2 Brand Equity 1.3 What is branding Branding process 2.1 Identifying and establishing brand positioning and values 2.2 Planning and implementing brand marketing programs 10 2.3 Measuring and interpreting performances 11 2.4Growing and sustaining brand equity 13 CHAPTER III: BRANDING BIDV TO DEVELOP INDIVIDUAL CUSTOMER SEGMENT 14 Introduction about BIDV 14 Market analysis 16 2.1 SLEPT analysis 16 2.2 Competitive analysis 18 2.3 Branding strategy of Vietnam banks analysis 19 BIDV brand analysis 20 3.1 Achievements 20 3.2 Drawbacks of BIDV brand 21 3.3 SWOT analysis 22 Branding strategy for individual segment 23 4.1 The brand objectives at the end 2013 23 vii 4.2 The sale objectives by types of customers at the end 2013 Branding process for BIDV to develop individual customer segment 23 23 5.1Identifying and establishing brand positioning and values 23 5.2 Planning and implementing brand marketing programs 27 5.3 Measuring and interpreting performances 29 5.4 Growing and sustaining brand equity 30 CHAPTER IV: RECOMMENDATIONS 31 Recommendation on organization structure 31 Recommendation on training brand awareness of staffs 31 2.1 The need for improvement 31 2.2 Recommendation on training program 32 Setting up a specialized department and improving the cooperation among brand department and other departments 3.1 Setting up a specialized department 3.2 Improving the cooperation among marketing and brand department among other departments Improving effectiveness of brand communication 33 33 33 34 4.1 Improving effectiveness of PR programs 34 4.2 Improving effectiveness of advertising campaign 35 CONCLUSION REFERENCES APPENDIXES 36 36 EXECUTIVE SUMMARY In 2011, key macro-economic indicators of the world and Vietnam such as inflation, interest rate, exchange rate, gold price, etc continued to fluctuate and had adverse influence on the bank’s operation viii As 2010 was the final year in the 2006-2010 business plans towards the Bank’s equitization, the whole system has strived to achieve outstanding results despite numerous challenges arising from the business environment BIDV with the long-term strategy is to become a strong group in the financial market dealing with difficult challenges according to the complicated situation of the economy in general also of the monetary market in specific With the IPO plan in December 2011, BIDV is concentrating to develop as a joint stock commercial bank – a retail bank To that, increasing individual customer segment is the key element to build up a sustainable development Branding has ever been a strategic calculation of managers Thus, building a brand which creates the awareness of customers to use banking services is a long-term strategy of BIDV to find the answer for the question “How BIDV can position its brand to gain individual customer segment in order to gain competitive advantages?” CHAPTER I INTRODUCTION PROBLEM STATEMENT: Following with the open-door economic policy, which started in 1986, the economy of Vietnam developed with a banking boom in terms of the number of banks and banking services However, the weaknesses in the banking system are lack of market thinking and banking skills such as identifying risks and risks management, asset and liabilities management, and especially marketing banking services and brand strategy Additionally, banking industry in Vietnam is facing with challenges than ever Pressure such as globalization, demanding customers, increased competitions, increased regulation, mergers and acquisition are urging all the banks to for their survival and development Like other three big state-owned banks (Vietcombank, Vietinbank and Agribank), BIDV has almost focused on state-owned enterprises (SOEs) as target customers to run business Previously as SOEs contributed the majority to GDP in characteristically subsidized economy, BIDV have gained certain successful achievements However, with the emergence of variety of business models along with the remarkably increasing profitability of SMEs and households to banking industry, long-term strategies should focus on retail banking market Fully aware this tendency, the domestic commercial banks and foreign banks have indeed started setting up plans, strategies to penetrate this potential market BIDV is one of the biggest banks in Vietnam, has missed this segment Up to now, all actions BIDV has done aim to make BIDV become a multi-functioned bank, and retail banking is one of that strategic plans With available strengths, the matter of this final project is how BIDV can position its brand for individual customer segment in order to maintain competitive advantages and sustainable development OBJECTIVE: This research is to explore problems existing in brand building process of BIDV, giving the suggestion for building a strong image of BIDV brand for individual customers based on a combination of other competitive advantages and market situation APPENDIX SURVEY ON INDIVIDUAL CUSTOMERS WHO ARE USERS AND NON USERS BANKING SERVICES Are you currently using any banking services?  Yes (Continue to questionnaire 1)  No (Continue to questionnaire 2) QUESTIONAIRE (For banking users) Which of the following banks are you using services?  BIDV  Vietcombank  Vietinbank  Agribank  ACB  Sacombank  Techcombank  Eximbank  HSBC  VP bank  Other (please specify) ……………… How often you go to the bank for transaction?  More than times/month  – times/month  time/month  time/3 months  time/6 months Please score 10 criteria when you choose a bank (Please circle your choice) No Criteria Scale of priority (5 represents highest priority) High deposit interest; low loan interest; low service fees Attractive promotions Bank staff are professional Safety on deposits/assets 5 Quick and simple process Diversified services Strategic partners are big and famous foreign banks 10 Large scale of bank Bank’s prestige and seniority Brand name 1 2 3 4 5 What time you prefer going to the bank?  Office hours  Non-office hours  Weekend Who makes final decisions on borrowing/lending money from the banks?  Parents  Your husband/your wife  Both  Yourself Which of the following banks you want to use? (You can choice more than 1)  BIDV  Vietcombank  Vietinbank  Agribank  ACB  Sacombank  Techcombank  Eximbank  HSBC  VP bank  Other (please specify) ……………… What kind of bank you think BIDV is?  Joint stock commercial bank  Joint venture bank  Foreign bank  State-owned commercial bank  Indefinite Each bank has advantages in certain fields Which of the following areas you think BIDV is strong at/specialized in?  Export - Import  Agriculture  Industry  Construction  Trading  All of the above  Don’t know Which of the following services you think it available at BIDV? (you can choose more than answer)  ATM  Payment  Savings  Personal loans  Business loans  Credit card  International money transfer  Promissory note  Guarantee  Financial consultancy  Foreign exchange  Documentary discounting  Don’t know any services of BIDV (Skip question No 13) 10 You are aware of BIDV’s banking services from (you can choose more than answer)  Advertising on TV/radio  Advertising in newspapers/magazines  Internet  Sponsored events  Introduced by relatives, friends  Others (please specific) ……………………………………………… 11 Is BIDV’s current distribution network convenient to you?  Very convenient  Fairly convenient  Not really convenient  Very inconvenient  No comment 12 What would you comment on BIDV’s logo?  Stylish  Friendly  Meaningless  Ugly  Don’t know/Don’t remember this logo 13 What would you comment on BIDV’s slogan?  Meaningful  Witty, subtle  Meaningless  Long and hard to understand  Similar to other bank’s slogan  Don’t know/Don’t remember this slogan Please state your personal details: 14 Gender:  Male  Female 15 Age:  Under 21 years old  21-30 years old  31-35 years old  36-40 years old  Above 40 years old 16 Please state you average monthly income:  Less than VND million  From VND million – less than VND million  From VND million – less than VND 10 million  From VND 10 million – less than VND 20 million  More than VND 20 million 17 Please state your job:  Pupil/student  Workers  Officers  Housewife  Managers  Retired  Business owner  Other (please specific) ……………………………… QUESTIONAIRE 2: (For banking non-users) Please state the reasons why you currently don’t use any banking services Disadvantages:  Deposit interest at banks is too low  Service fees and loan interest rate are too high  Do not savings  Risky Time and location convenience  No banks are available at non-office hours  Banks are not located conveniently Barriers  Would not feel welcomed or treated with respect  Don’t trust bank  Family friends will lend in need  Bank would not provide services because of personal reasons (bad credit situation)  Complicated banking services and confused procedure of transactions Please state your personal details: Gender:  Male  Female Age:  Under 21 years old  21-30 years old  31-35 years old  36-40 years old  Above 40 years old Please state you average monthly income:  Less than VND million  From VND million – less than VND million  From VND million – less than VND 10 million  From VND 10 million – less than VND 20 million  More than VND 20 million Please state your job:  Pupil/student  Workers  Officers  Housewife  Managers  Retired  Business owner  Other (please specific) ……………………………… APPENDIX RESULTS FROM THE SURVEY The survey concentrated questionaires for the sample 60 individuals from selected areas: Ward 1, 2, Binh Thanh District and Dist 1) There are 50 people using banking services and 10 people not using banking services The result is analyzed as follows: Chart 1: Percentage of individuals using banking services calculated on age and income: 8 40 6 5 3 3 2 1 1 0 2-5 VND mil 5-10 VND mil 21 - 30 31 - 35 10 - 20 VND mil 36 - 40 >20 VND mil Above 40 Chart 2: Type of banking services which individual customers want to use: ATM 45 Savings 21 26 21 - 35 yrs old 36 - 40 yrs old Bill payment 10 Personal loan 30 16 10 21 20 < 21 yrs old 30 40 50 60 Chart 3: Banks which banking individual users want to use: Comparison about favorite bank ACB TCB 10 EXIM ICB VCB BIDV AGRI Others 11 10 ANZ 1 Chart 4: Prior elements in choosing bank Prior elements in choosing bank Bank's prestige and seniority 39% High deposit interest, low loan interest, low fees 37% Quick and simple process 9% Bank staff are proffesional 2% Strategic partners are big and famouse 1% Prior elements in choosing bank Attractive promotions 6% Safety on deposits/assets 5% Large scale of bank 1% 0% 10% 20% 30% 40% 50% RESULTS OF QUESTIONAIRE 1 Types of banks of which services respondent s are using: Items SOCBs No of respondents 23 Percentage (%) 46 25 50 50 100 JSCBs Foreign banks Total Priority in choosing bank: Scale of priority Items Percentage of respondents giving highest priority (%) Bank’s prestige and seniority High deposit interest, low loan interest, low fees Quick and simple process Bank staff are professional Strategic partners are big and famous foreign bank Attractive promotions 6 Safety on deposits/assets Large scale of bank Diversified services Brand name 10 39 37 Frequency of bank visiting: Items - times/month time/month time/3 month time/6 month Total No of respondents Percentage (%) 20 26 2 50 40 52 4 100 Preferred time for using banking services: No of Item respondents Non-office hours 35 Office hours Weekends 13 Percentage (%) 70 26 Who decided on using banking services: No of Items respondents Yourself 36 Both of spouses 11 Wife or husband Parents Percentage (%) 72 22 Respondents want to use banking services: No of Item respondents ATM 50 Savings account 47 Bill payments 40 Personal loans 37 Percentage (%) 100 94 80 74 Respondents are aware of banking services from: No of Item respondents Respondents' need 24 From relatives Newspapers TV/radio Internet 11 Others Percentage (%) 48 14 22 Awareness of BIDV type: Item SOCBs JSCBs Foreign bank Joint venture bank Other No of respondents 20 27 Percentage (%) 40 54 Awareness of major products and services of BIDV: No of Percentage Item respondents (%) All of mentioned 20 40 Construction 18 36 Export/import 10 20 Industry Commerce Agriculture 0 10 Awareness of BIDV services: Item Business loans Personal loans ATM Savings Payment No of respondents 40 11 50 38 25 Percentage (%) 80 22 100 76 50 Credit card International money transfer Promissory note Guarantee Foreign exchange Financial consultancy Documentary discounting Don't any services at BIDV 21 27 31 22 42 54 10 12 62 44 11 Awareness sources: Item From relatives, friends Internet TV/radio Magazines/newspapers Sponsored events No of respondents 32 39 17 15 Percentage (%) 64 78 34 30 14 No of respondents 31 12 0 Percentage (%) 62 24 14 0 12 Location convenience: Item Fairly convenient Very convenient Not really convenient Very inconvenient No comment 13 Logo: No of respondents 21 23 Item Stylish Friendly Meaningless Ugly No comment Percentage (%) 42 46 10 14 Slogan: Item Meaningful Witty, subtle Meaningless Similar to other's slogan No comment No of respondents 39 0 Percentage (%) 78 16 0 15 Gender: Item Female Male No of respondents 27 23 Percentage (%) 54 46 16 Age: Item 21 - 30 years old 31 - 35 years old 36 - 40 years old Under 21 years old Above 40 No of Percentage respondents (%) 11 22 16 32 17 34 0 12 17 Income: No of respondents Item Less than VND million From - VND million From - 10 VND million From 10 - 20 VND million Above 20 VND million 15 21 12 Percentage (%) 30 42 24 18 Job: Item No of respondents Students/Pupils Workers Officers Managers Retired Housewife Business owners 30 Percentage (%) 18 60 10 RESULTS OF QUESTIONAIRE Disadvantages: Item No of respondents Services fees and loan interest rate are high Deposit interest rate is too low Not savings Risky 0 Percentage (%) 70 30 0 Hours and location of banks: Item Not having convenient hours Banks are not located conveniently No of respondents Percentage (%) 80 20 Barriers: No of respondents Item Don't trust banking system Family will lend if in need Do not feel welcomed Personal reason Complicated and confused procedure of transactions 1 3 Percentage (%) 10 10 20 30 30 Gender: Item No of respondents Female Male Percentage (%) 70 30 Age: Item No of respondents 21 - 30 years old 31 - 35 years old 36 - 40 years old Under 21 years old Above 40 Percentage (%) 10 60 20 10 6 Income: Item No of respondents Less than VND million From - VND million From - 10 VND million From 10 - 20 VND million Above 20 VND million 4 Percentage (%) 10 40 40 10 Job: Item Students/Pupils Workers Officers Managers Retired Housewife Business owners No of respondents 1 Percentage (%) 10 20 50 10 10 APPENDIX ACTION PLANS OF MARKETING COMMUNICATION Types of advertising Note Time 1.TV channels Show advertising spots 5’’ in break time Show at prime time to (Good morning program 6:45 am on get high rating HTV7 channel; the news daily at 7:00 pm VTV1 channel) All year round Show advertising spots 3’’ on TV Continuously have During promotion channels of province where BIDV advertising spots in the campaigns or branches located week during the time events BIDV launch promotion campaigns or events Show advertising spot 5’’ in the break of the live football match involving the Vietnam national team during the SEAGAMES on TV Each SEAGAMES football match attracts 70% of Vietnamese watching their national team playing During the SEAGAMES 2.Newspapers, Magazines Buy a whole page of the most popular and high-sales newspapers such as Tuoitrenews, Thanhniennews daily Have BIDV’s advertisement features about marketing products, services, announcing new interest rate, launching new branches, increasing bank’s capital equity All year round Have advertisements on Tuoitrenews, Thanhniennews newspapers upon products or promotion launching During the launch Have logo advertised on specific pages in Logo rotates to appear on newspapers and magazines such as each of these newspapers Nguoilaodong, Tuoitre, Saigon times, and magazines per week Security investment review Have advertisements on spedial press edition on the Tet Lunar New Year All year round At the end of year 3.Internet Have logo and links of BIDV big events Continuously have shown on the leading websites in Vietnam advertising during two such as www.vneconomy.vn, months per website www.vnexpress.net, www.tintuconline.com.vn Have advertisements of promotion programs on www.tuoitre.com.vn, www.thanhnien.com.vn Per events Per promotion campaigns 4.Other advertising Place panels, logo at well-known and One-meter in width crowded restaurants, cafeterias, cinemas BIDV’s logo at the entrance of each place March 2012 Work with karaoke CDs producers for showing BIDV’s logo at the end of each song March 2012 Print brochures for all products and Assure enough brochures services are provided in need Biannually Hang advertising banners about launching big events at lamppost in crowded streets Per launching event Place panels at transaction offices, Place neon light above branches, all eye-catching buildings the panels 2012 Put BIDV’s logo and panels at Coop mart, Put in front of buildings Big C supermarket system, Vincom, Parkson, Saigon Trade center 2012 Public Relation Note Time Have articles about BIDV’s performance and activities advertised on newspapers and magazines such as Tuoitre weekly, Thanhnien weekly, Saigon times weekly, Doanhnhan Saigion Full page articles Quarterly Build up close relationship with at least 10 journalists of different press agencies to ensure all positive BIDV’s information will be timely updated All year round Build up confidential relationships between BIDV’s board and Board of Editor of Press Agencies All year round Build up good relationships with politic groups: The Government, the State bank of Vietnam, People’s committee and authority departments of every province or city All year round Invite movie and sport stars of Vietnam or world to join advertising films or events of BIDV To create the image of young, active people who are using BIDV’s banking services Biannually Event Organize customer conference Note Timer For better understanding customers’ need and want Yearly Organize the International Children’s Day, the Middle Autumn Festival for the children of VIP customers Organize the establishment anniversary Sponsorship of Per event bank’s To show gratitude to the customers Note 26 April of yearly Time Sponsor Banking and finance program on Have BIDV’s logo and HTV9, VTV1, Info TV advertisements shown at the bottom of screen of running programs As schedule Sponsor and co-sponsor music cum charity Choose high rating programs raise fund for the poor programs at any cities or provinces per year Three times per year Sponsor the Study encouragement Grant scholarships to scholarship for universities, colleagues high achieving students of Vietnam universities; sponsor student contests such as Robocon, Dynamic Per event Sponsor game shows, talk shows on TV Have advertising shown such as Ai la trieu phu in the break and have BIDV’s logo shown at the back of the studio Per selected show Sponsor The Miss Vietnam Per selected show Have advertising shown in the break ... awareness of customers to use banking services is a long-term strategy of BIDV to find the answer for the question “How BIDV can position its brand to gain individual customer segment in order to gain... 2011, BIDV is concentrating to develop as a joint stock commercial bank – a retail bank To that, increasing individual customer segment is the key element to build up a sustainable development Branding. .. helps to find out what are the attitudes, awareness of the targeted segment for BIDV brand Finally, it proposes appropriate recommendations for BIDV branding to develop sustainably individual customers