LV Thạc sỹ_Marketing mix for debit card service at Vietcombank

TABLE OF CONTENTS LIST OF ABBREVIATIONS LIST OF TABLES AND FIGURES EXECUTIVE SUMMARY .3 CHAPTER 1: INTRODUCTION 1.1 RATIONALE 1.2 RESEARCH OBJECTIVES 1.3 RESEARCH QUESTIONS 1.4 RESEARCH METHODOLOGY 1.4.1 Research process .7 1.4.2 Data collection 1.4.3 Data analysis 1.5 SCOPE OF THE THESIS 10 1.6 STRUCTURE OF THE THESIS 10 CHAPTER 2: THEORETICAL BACKGROUND ON DEBIT CARD SERVICE AND MARKETING MIX FOR DEBIT CARD SERVICE 11 2.1 COMMERCIAL BANKS AND DEBIT CARD SERVICE .11 2.1.1 Commercial banks 11 2.1.2 Debit card service .11 2.2 MARKETING MIX FOR DEBIT CARD SERVICE 15 2.2.1 Marketing and marketing mix 15 2.2.2 Marketing mix for debit card service 17 2.2.3 Factors impacting marketing mix 29 CHAPTER 3: CURRENT MARKETING MIX ACTIVITIES OF DEBIT CARD SERVICE AT VIETCOMBANK .32 3.1 OVERVIEW OF VIETCOMBANK .32 3.1.1 Establishment and development 32 3.1.2 Vietcombank’s performance results to date 34 3.2 DEBIT CARD SERVICE AT VIETCOMBANK 37 3.2.1 The establishment and development of debit card service 37 3.2.2 Debit card issuance 41 3.2.3 Debit card payment 43 3.2.4 Development of ATM and POS network 44 3.2.5 Revenue and investment in debit card 45 3.3 CURRENT MARKETING MIX ACTIVITIES OF DEBIT CARD SERVICE AT VIETCOMBANK 46 3.3.1 Target customers 46 3.3.2 Marketing mix analysis 47 3.3.3 Summary of problems and causes of problems .76 CHAPTER 4: SOLUTIONS TO IMPROVE MARKETING MIX FOR DEBIT CARD SERVICE AT VIETCOMBANK 80 4.1 ORIENTATION OF DEVELOPING DEBIT CARD SERVICE AT VIETCOMBANK TO 2020 .80 4.2 OPPORTUNITIES AND THREATS TO DEVELOP DEBIT CARD TO 2020 .81 4.2.1 Opportunities 81 4.2.2 Threats .84 4.3 RECOMMENDATIONS TO IMPROVE MARKETING MIX FOR DEBIT CARD AT VIETCOMBANK 85 4.3.1 Implementing systematic market research 85 4.3.2 Diversifying debit card product types 87 4.3.3 Collecting suitable fee to compensate the expenses 90 4.3.4 Exploiting the distribution channel more effectively 91 4.3.4 Establishing consistent promotional policies 95 4.3.5 Developing human resource capacity and competency 97 4.3.6 Improving service processes 98 4.3.7 Paying more attention on physical evidence maintenance 100 4.3.8 Other recommendations 101 CONCLUSION 103 LIST OF REFERENCES 104 APPENDICES .106 LIST OF ABBREVIATIONS ATM Auto Teller Machine ACB Asia Commercial Bank Agribank Bank for Agriculture and Rural Development BIDV Bank for Investment and Development EDC Electronic Data Capture EAB Eastern Aisan Bank MB Military Bank POS Point of Sale or point of service ROAE Return on average equity ROAA Return on average assets SEA Bank South East Asia Bank Vietcombank Bank for Foreign Trade of Vietnam Viettel Military Telecommunication Corporation Vietinbank Vietnam Industrial and Commercial Bank VNPT Vietnam Post and Telecommunications Corporation LIST OF TABLES AND FIGURES Table Page Table 3.1 :Financial highlights of Vietcombank 2005 – 2009 36 Table 3.2: Debit card issuance of Vietcombank 42 Table 3.3: Payment turnover of debit card issued by Vietcombank 44 Table 3.4: Development of ATM and POS network of Vietcombank 45 Table 3.5: Statement of revenue of Vietcombank’s debit card service 46 Table 3.6: Domestic debit card use limit of Vietcombank and others .49 Table 3.7: International debit card use limit of Vietcombank and others 51 Table 3.8: Debit card service of Vietcombank and others 52 Table 3.9: Fee table of Domestic debit card of Vietcombank and others 56 Table 3.10: Fee table of International debit card of Vietcombank and others 57 Table 3.11: The capacity of ATMs and POSs service providers 60 Table 3.12: Number of Websites accepted Connect24 for online payment .61 Figure Page Page Error! No table of figures entries found Figure 1: Research process Figure 1: Survey result about product of Vietcombank’ debit card service 55 Figure 2: Distribution of Vietombank debit card service .61 Figure 3: The survey result about palce in Vietcombank’ debit card service 64 Figure 4: Card issuance process 71 Figure 5: Survey result about process of Vietcombank’ debit card service 74 EXECUTIVE SUMMARY Nowadays, bank card service plays more and more important role in the commercial banks’ business activities Developing bank card service not only create good image of the modern bank but also help the bank minimize the risk and increase income Recently, Vietnamese card market has strongly developed with participation of both foreign and domestic banks Vietcombank was the first and leading bank in bank card service but because of poor marketing mix its leading position is threatened under fierce competition The objective of the thesis “Marketing mix for debit card service at Vietcombank' is to evaluate the current Vietcombank’s marketing mix for debit card service and propose solutions to improve it Based on the theory on marketing mix theory together with primary data (survey 120 customers, interview managers and 10 staffs and observation) and secondary (publications, reports, articles, etc.), the author has analyzed the each element of marketing mix (Product, price, promotion, place, people, process and physical evidence) for Vietcombank’s debit card service and compare it with competitors and customers’ expectation Key findings are:  Product is poor in function and type  Follow low price strategy for all customers too long  Large distribution channel has not been exploited effectively  Unclear promotion strategy  Human recourse does not meet demand of growth rate  Process has not been introduced fully to customers  Backward and deterioration in Physical evidence Rely on opportunities and threats to develop debit bank card as well as the orientation of developing card service at Vietcombank, the author has propose recommendations for Vietcombank to improve marketing mix for debit card service such as:  Carrying out market research and analyze market target  Diversifying debit card service  Collecting some suitable fee to compensate the expenses  Exploiting the ATMs, POSs and Websites more effectively  Building a consistent promotion policies  Developing human resource  Improving and completing processes  Paying more attention on physical evidence maintenance The author hopes that these recommendations will help Vietcombank to keep its market share and increase profit from this service CHAPTER INTRODUCTION 1.1 RATIONALE Banking industry is playing an increasingly important role in the economy, especially in a developing country like Vietnam When Vietnam joins WTO, Vietnam’s banks have to innovate their operation, enhance their finance ability and speed up the application of advanced and modern technology as well as diversify product and service to meet multiform and plentiful demand of the economy One of the services that most of Vietnamese banks nowadays concern is card service Bank card is not only a safe means of payment without cash but also an effective mean of executing the State’s monetary policy It helps restrict the circulation of cash, attract the people’s unused deposit as well as other economic components in the economy to accelerate capital rotation speed in the economy Card business attracts the banks because this is both a modern, advanced, civilized tool of payment which is suitable with the age’s development trend and a main source of revenue of the banks Bank card has been popular long time ago in the world In Vietnam, bank card was first known in 1996 and has just used widely over the last five years Recently, with participation of foreign banks that are masters in retail banking service and domestic banks that have invested a lot in card service, Vietnamese card market has strongly developed and but under a fierce competition Vietcombank was the first bank in Vietnam to provide card service and it was the leading bank in this service in the number of card issuing, the number of ATM machine and merchant turnover for many years However, under competition, card market share of Vietcombank decreased continuously for the past few years, particular debit card service According to latest statistics announced by Vietnam card association, in 2009 Vietcombank ranges the third in debit card issuing and the second in the number of ATM machine The merchant turnover of Vietcombank is still the biggest but it has fallen from more than 50% in 2005 to 30,7 % in 2009 of total market On the other hand, the quality of growth is not good Although Vietcombank has determined a large target market, it cannot take advantage and exploit the market fully There are many reasons for above situations but the main reasons being defined is that Vietcombank haven’t paid enough attention on marketing mix activities Meanwhile, other banks spend a lot of money on marketing mix for debit card service and get expected results Therefore, this dissertation’s aim is to give some solutions for improving Marketing mix of Vietcombank debit card service, to improve quality of growth and keep its market share The author hopes that the result of this study will also can help Vietcombank exploit large Vietnamese potential card market and increase profit from this service 1.2 RESEARCH OBJECTIVES This research aims to achieve the following objectives - To systematize fundamental theories related to bank debit card and marketing mix - To evaluate the current Vietcombank’s marketing mix for debit card service; - To propose solutions to improve Vietcombank’s marketing mix for debit card service 1.3 RESEARCH QUESTIONS This research is designed to answer the following questions: What is the marketing mix and it's characteristic in debit card service? What is the current situation of debit card service business and marketing mix in debit card service at Vietcombank? How to improve Vietcombank’s marketing mix in debit card service? 101 unsuccessful if the customers feel annoyed in the service process no matter how good our services are - Sign the commitment contracts with other banks in the alliance and outside the alliance; together solve the claim of customers in the most rapid way according to the claim settlement process built by parties Avoid the circumstances of late information or insufficient information by the banks which makes the another bank fail to settle the claim for customer promptly - In addition, Vietcombank should rapidly construct a system collecting feedback from customers as well as answer the inquiries of customers on services By that way, we can learn the customers’ demand and give out suitable solution to raise the service quality From this, the service process shall be perfect 4.3.7 Paying more attention on physical evidence maintenance Card service is playing a very important role in activity of Vietcombank in particular as well as commercial banks of Vietnam in general Thus, the investment in developing the card service is strongly implemented in the past few years Vietcombank is not beyond that trend According to the mentioned figure, the investment in equipments for card service in Vietcombank is rapidly developing annually, indicated by the increasing number of ATMs, number of EDC machines at POSs and other modern equipments Although the investment is strongly implemented, the maintenance and restore of old equipments have not gone along with This is the most attractive issues in the proposal of Physical evidence As for this matter, Vietcombank needs consideration to distribute reasonably capital between new investments and restore and maintain the old infrastructures The restore, renew of old infrastructure, maintain the old equipments of card service is as important as the investment expansion This help Vietcombank avoid the waste in investment and keeps the image of the most modern bank of Vietnam 102 4.3.8 Other recommendations + To the Leader of the bank All a above marketing mix solutions can only be perfomed when they got strong support from the Executive Board of Vietcombank These supports include: - Establishing the budget for markeing mix Vietcombank need money for market research as well as carry out activities raleted to each elements of marketing mix - Giving Card Center more power and flexible in marketing mix decision, so Card Center can easily implement markeitng mix policies to respond to quick changes of market and competitors - Creating favorable conditions for Card center, Card department in recruitment and training staffs and in using salary policies to encourage and keep talented people - Directing and supervise other departments in cooperattion with Card center to carry out marketing mix policies + To the Gorverment agency Card payment bring a lot of benefits to the entire society such us cutting down circulation cost, contributing to effectively enforce the national moneytaty policy, limiting bad economic activities Therefore, Gorvement agency must have policies to help banks improve debit card serivice and change the habit of card using in Vietnam: - Investing more in technology infrastructure to increase effectiveness in card payment This require large investment that beyond the finance ability of commercial banks - Having preferential treament for commercial banks on import tax and VAT tax The banks can import morden equipments with low cost and they can provide customers a better debit card service with low price 103 - Promulgate the policy of tighten cash use in order for the people to change into others forms of payment, preferential policy for payment service through bank card Enforcing a strict implementation of the Decision No 291/2006/DQ-TTg approving “ the scheme on non-cash payment in Vietnam in the 2006-2010 period and orientaions to 2020” - Allow banks to collect reasonable fee to conpensate expences and reinvest 104 CONCLUSION With the development of information technology, card service becomes more and more popular in Vietnam This service has offer customers modern payment methods without using, which is safer and more convenient As the first bank in Vietnam providing debit card service, Vietcombank gained many achievements and a dominant position in card market As the several competitors have started to joint in this market, Vietcombank is losing its market share It is high time for Vietcombank to revise marketing mix strategy and use it effectively Base on the marketing mix and data collection, the thesis analyzed and appraised about the weaknesses and strengths of marketing mix for debit card service at Vietcombank From that, the thesis recommends solutions for marketing mix to help Vietcombank keep its market share and increase profit The author has tries the best to the thesis but it can not avoid the shortcomings because limitation in knowledge as well as time Thus, I hope to be received the recommendations of teachers and specialists in this field for my thesis better 105 LIST OF REFERENCES I For Vietnamese references For books: - GS.TS Trần Minh Đạo (2009), Giáo trình marketing bản, NXB Đại học kinh tế quốc dân - Peter S.Rose (2001), Quản trị Ngân hàng thương mại, NXB Tài chính, Hà Nội For legal documents: - Decision No 291/2006/QD-TTg dated december 29, 2006 of Prime Minister approving the scheme on non-cash payment in Vietnam in the 2006 – 2010 period and orientations to 2020 - Directive No.20/2007/CT-TTg dated August 24, 2007 of Prime Minister on paying salary via bank accounts for cadres, workers, and officials who get paid from the government budget - Regulation of issuing, using and paying card following the Decisions No 20/2007/QD-NHNN dated of July 15 th 2007 of State Bank of Viet Nam - Regualtion in issuing, using and paying card of Vietcombank For reports and websites: - Annual report of Vietcombank from year 2005 to 2009 - Reports on card service of Vietcombank in 2007, 2008, 2009 - http://www.vcb.com.vn/Personal/Card/ - http://www.vietinbank.vn/web/home/vn/product/card/index.html - http://www.bidv.com.vn/atm.asp 106 - http://www.acb.com.vn/khcn/cn_the_365styles.jsp - http://www.eab.com.vn/service/2,35,146.html - http://www.agribank.com.vn/61/1003/khach-hang-ca-nhan/dich-vuthe/the-ghi-no-noi-dia-success.aspx I For references in English For books: - Philip Kotler (2000) Marketing Management Millenium edition Prentice Hall - Philip Kotler and Kevin Lane Keller( 2008) A Framework For Marketing Management Prentice Hall Websites - http://en.wikipedia.org/wiki/Visa_Debit - http://en.wikipedia.org/wiki/MasterCard - http://en.wikipedia.org/wiki/Debit_card 107 APPENDICES Appendix 1: The questionnaire Câu hỏi vấn dành cho khách hàng dùng thẻ ghi nợ Vietcombank 1.Anh/chị sử dụng thể ghị nợ Vietcombank : o < năm o – năm o > năm 2.Anh /chị biết dịch vụ thẻ ghi nợ Vietcombank từ đâu ? o Từ người thân, bạn bè o Từ báo chí, tạp chí o Từ tivi o Từ radio o Từ internet o Từ poster, quảng cáo trời Vietcombank o Từ tời rơi, quảng cáo giới thiệu Vietcombank o Từ nhân viên Vietcombank o Từ hội thảo thẻ kiện khác Ngân hàng Vietcombank tổ chức o Từ quan giới thiệu o Khác ( xin ghi rõ) : Lý anh/chị chọn thẻ ghi nợ Vietcombank mà không sử dụng dịch vụ ngân hàng khác : o Thủ tục đăng ký thẻ Vietcombank đơn giản 108 o Sản phẩm thể Vietcombank an tồn, thuận tiện nhiều tính o Máy ATM điểm toán thẻ Vietcombank nhiều o Dùng thẻ Vietcombank hay ưu đãi, khuyến phát hành toán o Nhân viên Vietcombank niềm nở nhiệt tình với khách hàng o Do nhân viên Vietcombank giới thiệu làm o Phí sử dụng dịch vụ thẻ ghi nợ Vietcombank rẻ o VCB có chi nhánh gần nhà, thuận tiện o Do bạn bè giới thiệu tin tưởng vào uy tín Vietcombank o Đã sử dụng nhiều dịch vụ khác Vietcombank o Lý khác ( xin ghi rõ) Chức sau thẻ ghi nợ Vietcombank mà anh/chị hay dùng nhất? o Rút tiền mặt o Chuyển tiền sang tài khoản khác o Trả tiền hàng, siêu thị, nhà hàng, khách sạn o Trả tiền hoá đơn điện, nước, điện thoại o Trả tiền Internet, bảo hiểm dịch vụ khác 109 o Dùng để nạp tiền vào tài khoản điện thoại di động trả trước o Dùng để xem kê số dư tài khoản o Khác ( xin ghi rõ) 110 5.Xin anh/chị đánh giá dịch vụ thẻ Vietcombank cách đánh dấu (X) vào ô tương ứng theo mức độ : = Khơng đồng ý; = Bình thường ; = Đồng ý ; = Hoàn toàn đồng ý STT Nội dung đánh giá Về sản phẩm Mẫu mã thẻ ghi nợ Vietcombank đẹp sành điệu Sản phẩm thẻ ghi nợ phong phú đa dạng nhiều chức Thẻ thuận tiện để toán hàng hoá dịch vụ Thẻ an tồn khó bị làm giả ăn cắp thông tin cá nhân Hạn mức rút tiền mặt, chuyển khoản linh hoạt hợp lý Về phí dịch vụ Các khoản phí dịch vụ thẻ mà Vietcombank thu hợp lý Vietcombank nên thu thêm phí để nâng cao chất lượng dịch vụ Về hoạt động xúc tiến Các quảng cáo dịch vụ thẻ Vietcombank quấn hút dễ hiểu Dùng thẻ Vietcombank hay ưu đãi, khuyến 10 Vietcombank quảng cáo rộng rãi dịch vụ thẻ 11 đến cơng chúng Về kênh phân phối Địa điểm đặt máy ATM hợp lý thuận tiện 12 cho khách hàng Số lượng máy ATM điểm chấp nhận thẻ Vietcombank đáp ứng nhu cầu giao dịch chủ 13 14 thẻ tốt ngân hàng khác Máy ATM hoạt động ổn định không bị lỗi Vietcombank kết nối ATM với liên minh khác tạo nhiều thuận lợi cho khách hàng 111 15 Các Websites có thẻ sử dụng thẻ ghi nợ toán 16 17 online ngân hàng cập nhật thương xuyên Về quy trình Thủ tục đăng ký sử dụng thẻ đơn giản dễ hiểu Các bước thực giao dịch máy ATM 18 điểm chấp nhận thẻ rõ ràng Thời gian giải đáp thắc mắc xử lý cố 19 nhanh chóng Khi bắt đầu sử dụng dịch vụ thẻ khách hàng giới thiệu đầy đủ, chi tiết quy trình giao dịch 20 21 22 23 quy trình khiếu nại gặp cố Về người Nhân viên thẻ ngân hàng giỏi chuyên môn thành thạo nghiệp vụ Nhân viên ngân hàng niềm nở, nhiệt tình Về sở vật chất Trang thiết bị Vietcombank đại Các địa điểm giao dịch Vietcombank khang trang, 6.Nếu anh/chị có thêm ý kiến đóng góp để giúp Vietcombank nâng cao chất lượng dịch vụ thẻ, xin anh/chị viết vào ? Xin cảm ơn anh/chị dành thời gian để trả lời câu hỏi ! 112 Appendix 2: The questionaire Câu hỏi vấn dành cho khách hàng dùng thẻ ghi nợ ngân hàng khác 1.Anh/chị sử dụng thể ghị nợ Vietcombank : o < năm o – năm o > năm 2.Anh /chị biết dịch vụ thẻ ghi nợ mà sử dụng từ đâu ? o Từ người thân, bạn bè 113 o Từ báo chí, tạp chí o Từ tivi o Từ radio o Từ internet o Từ poster, quảng cáo trời ngân hàng o Từ tời rơi, quảng cáo giới thiệu ngân hàng o Từ nhân viên ngân hàng o Từ hội thảo thẻ kiện khác Ngân hàng tổ chức o Từ quan o Khác ( xin ghi rõ) : Chức sau thẻ ghi nợ mà anh/chị hay dùng nhất? o Rút tiền mặt o Chuyển tiền sang tài khoản khác o Trả tiền hàng, siêu thị, nhà hàng, khách sạn o Trả tiền hoá đơn điện, nước, điện thoại o Trả tiền Internet, bảo hiểm dịch vụ khác o Dùng để nạp tiền vào tài khoản điện thoại di động trả trước o Dùng để xem kê số dư tài khoản o Khác ( xin ghi rõ) 4.Anh/chị có biết dịch vụ thẻ ghi nợ Vietcombank khơng ? o Biết o Có nghe nói o Khơng biết 114 5.Nếu biết, xin vui lịng nêu lý không chọn dịch vụ thẻ ghi nợ Vietcombank ? o Sản phẩm thể Vietcombank chưa phong phú đa dạng o Phí phát hành sử dụng thẻ Vietcombank cao o Số lượng máy ATM điểm chấp nhận thẻ Vietcombank chưa nhiều không bố trí hợp lý o Máy ATM Vietcombank xử lý giao dịch chậm hay bị lỗi o Sử dụng thẻ Vietcombank không thường xuyên ưu đãi, khuyến o Thủ tục phát hành giải khiếu nại Vietcombank rườm rà, phức tạp o Nhân viên Vietcombank khơng nhiệt tình, trình độ nghiệp vụ o Trang thiết bị máy móc Vietcombank tồi tàn lạc hậu o Do hoạt động quảng cáo tiếp xúc giới thiệu ngân hàng mà Anh/chị sử dụng thẻ o Do quan yêu cầu làm o Lý khác ( xin ghi rõ) 6.Nếu anh/chị có thêm ý kiến đóng góp để giúp Vietcombank nâng cao chất lượng dịch vụ thẻ, xin anh/chị viết vào ? Xin cảm ơn anh/chị dành thời gian để trả lời câu hỏi ! 115 Appendix ... on debit card service and Marketing mix for debit card service Chapter 3: Current marketing mix for debit card service at Vietcombank Chapter 4: Solutions to improve marketing mix for debit card. .. MARKETING MIX FOR DEBIT CARD SERVICE AT VIETCOMBANK 80 4.1 ORIENTATION OF DEVELOPING DEBIT CARD SERVICE AT VIETCOMBANK TO 2020 .80 4.2 OPPORTUNITIES AND THREATS TO DEVELOP DEBIT CARD. .. related to bank debit card and marketing mix - To evaluate the current Vietcombank? ??s marketing mix for debit card service; - To propose solutions to improve Vietcombank? ??s marketing mix for debit