Research And Recommendations About Marketing Comunication Of Securities Companies In Vietnam.pdf

vietnam national university, HANOI school of business Nguyen Xuan Quynh RESEARCH AND RECOMMENDATIONS ABOUT MARKETING COMUNICATION OF SECURITIES COMPANIES IN VIET NAM master of business administration[.]

Nguyen Xuan Quynh

RESEARCH AND RECOMMENDATIONS ABOUT MARKETING COMUNICATION OF SECURITIES

COMPANIES IN VIET NAM

master of business administration thesis

Nguyen Xuan Quynh

RESEARCH AND RECOMMENDATIONS ABOUT MARKETING COMUNICATION OF SECURITIES

COMPANIES IN VIET NAM

Major: Business Administration

Master of business administration thesis

Supervisor: DR Chu Thanh

Hanoi - 2007

TABLE OF CONTENT

ACKNOWLEDGEMENTS i

ABSTRACT ii

TÓM TẮT iv

LIST OF FIGURES 8

INTRODUCTION 9

CHAPTER 1 THEORY FOUNDATION ABOUT MARKETING COMMUNICATIONS 11

1.1 General about Marketing Communications 11

1.2 Setting Marketing Communication Strategy for Service Firms 12

1.2.1 Define the Target Audience and Objectives 13

1.2.2 Divide the Communications Objectives and Target Audiences among the Channels 15

1.2.3 Define Communications Messages 16

1.2.4 Put the Communications Mix Together 18

1.3 Marketing Communication Tools 19

1.3.1 Advertising 19

1.3.2 Public Relations 27

1.3.3 Personal Selling 29

1.3.4 Sales Promotion 32

1.3.5 Direct Marketing 34

1.3.6 E-marketing 35

CHAPTER 2 RESEARCH ON MARKETING COMMUNICATIONS OF SECURITIES COMPANIES 39

2.1 Summary about Vietnam securities market and securities companies 39

2.2 Research on communication tools used by securities companies 42

2.1.1 Public relations 43

2.1.2 Advertising 48

2.1.3 Personal Selling 49

2.1.4 Sales Promotion 50

2.1.5 Direct Marketing 52

2.1.6 E-Marketing 52

2.3 Survey on efficiency of marketing communication from securities companies and customers behaviour 53

2.3.1 Aims of survey 53

2.3.2 Scope of survey and some limitations 53

2.2.3 Findings 54

CHAPTER 3 RECOMMENDATIONS 66

3.1 Define the target audience and objectives of communication 66

3.1.1 Define the target audience of communication strategy 66

3.1.2 Define the communication objectives 68

3.2 Divide the target audience and objectives of communication among the channels 69

3.3 Define communication messages 70

3.4 Put communication mix together 72

3.4.1 General recommendations 72

3.4.2 Recommendations for particular communication tool 73

CONCLUSION 78

REFERENCES 79

APPENDIX: Questionnaires for Thang Long Securities JSC 80

LIST OF FIGURES

Figure 1-1: The Communication Process 11

Figure 1-2: The tools of the marketing communication mix 12

Figure 1-3: Marketing Communication Strategy for Service Firms 12

Figure 2-1: Percentage of Accounts Opened at Securities Companies 40

Figure 2-2: One article about SSI when it first listed on HASTC 44

Figure 2-3: SSI with the event of being listed on HOSE 44

Figure 2-4: Announcement about the establishment of STB Securities 45

Figure 2-5: VNDirect launches new service 45

Figure 2-6: Bien Viet Securities with CBV-Index 45

Figure 2-7: SSI and its CEO Tran Duy Hung 46

Figure 2-8: CEO of Vndirect – Mrs Pham Minh Huong 46

Figure 2-9: „Chung khoan cuoi tuan” on VTV1 47

Figure 2-10: INFOTV 47

Figure 2-11: Viet Dragon Securities Corp holds training course for customers 48

Figure 2-12: Advertising of Ocean Securities on InfoTV 49

Figure 2-13: Advertising of Thang Long Securities on Investment Review 49

Figure 2-14: Image of brokers 50

Figure 2-15: Promotion of Viet Tin Securities Company 51

Figure 2-16: http://www.bsc.com.vn 52

INTRODUCTION

1 The Problem

Recently, after the booming from the end of 2006 and beginning of 2007, Vietnam stock market has had downward adjustment The investors don‟t rush to the trading floors like they did before Securities companies, especially new-born companies are facing a lot of trouble in attracting customers They really need effective marketing communication tools to communicate more with customers, understand and find the way to attract and maintain them Therefore, this research was conducted to give out recommendations about market communication for securities companies to help them communicate more effectively with customers

2 Objectives and aims

Objectives:

- Study about marketing communication

- Know how securities companies are communicating with customers and the effectiveness of these activities

- Know how customers get communication messages from securities companies

- Know media tools and other communication tools which are being used

by customers to search information about stock market

- Give recommendations about marketing communication for securities companies

Aims: Help securities companies build up comprehensive marketing strategies

3 Research Questions

- Which communication tools are use by securities companies in Vietnam

- How effective are these tools?

- How do customers aware of the communication of securities companies

- By which way do customers find information about stock market?

- Which media platform do customers prefer and use most?

4 Scope of work

– Research on the communication with individual customers only, not including institutional investors

– Security market in Vietnam in 2005 – 2007

– Survey mainly in Hanoi

5 Data source & Processing

– Primary data: questionnaires

– Secondary data: newspapers, websites

– Processing: to use MS Excel

6 Methods

– Empirical

– Survey using questionnaires

7 Significance

– Theory: understand about marketing communication

– Practice: recommendation for securities companies to communicate more effectively with customers

8 Limitation:

- Time 2005 – 2007

- Survey mainly in Hanoi

- Survey only with individual investors

CHAPTER 1 THEORY FOUNDATION ABOUT

MARKETING COMMUNICATIONS

1.1 General about Marketing Communications

Communications is the process of conveying a message to others and require six

elements: a source, a message, a channel of communication, a receiver and the processes of encoding and decoding The source may be a company or person who has information to convey The information sent by a source, such as a description

of a new service, forms the message The message is conveyed by means of a channel of communication such as a sales person, advertising media, or public relations tools Clients who read, hear, or see the message are the receivers

Figure 1-1: The Communication Process

Source: Managing Service Marketing, John E.G Baterson, K.Douglas Hoffman

Marketing communications are all the communications between the organization

and all other parties, especially with customers Part of the wider academic research area of marketing, it encompasses all the traditional forms of promotion including advertising, sales promotion, personal selling, publicity, public relations, direct marketing and e-marketing But it aims to be broader than this It includes all points

of contact between the organization and other parties

The Marketing Communications Mix is the specific mix of advertising, personal

selling, sales promotion, public relations, and direct marketing a company uses to pursue its marketing objectives

Figure 1-2: The tools of the marketing communication mix

1.2 Setting Marketing Communication Strategy for Service Firms

The setting of a communications strategy follows a common pattern in irresponsive

of whether the firm is producing a goods or services The first is to define a target audience and clear objectives for the complete communication mix The main elements of the communication mix include advertising, public relations, personal selling, sales promotion and direct marketing Only personal selling is normally a two-way process The remainders are one-way communication, from the marketer

to the customer only With services, however, the service providers at the point of communication can also have an important two-way communication role

Figure 1-3: Marketing Communication Strategy for Service Firms

Marketing Communication Mix

Public Relations

Advertising

Marketing

E-Sales Promotion

Direct Marketing

Personal Selling

Source: Managing Service Marketing, John E.G Baterson, K.Douglas Hoffman

1.2.1 Define the Target Audience and Objectives

Defining the target audience

Consumer Behavior

Marketing Strategy

The target audience should flow from the overall marketing plan and from a sound understanding of consumer behavior The target audience for the service needs to

be decided early in the process of the whole services formula may become malformed Define the target customer for the service is thus the foundation of the service formula Unlike goods, however, the target audience has to be much more precisely targeted

Setting communication objectives for services

The preconsumption choice phase

The objectives must to be ensuring that company‟s service is the one perceived to

be the least risky alternative Communications could be used to try to influence the choice process in the following ways:

 To ensure that the firm‟s service offering is in the evoked set

 To alter the weights attached to different attributes by consumers to favor those on which the company is strong

 To alter the score on a given attribute for the company, particularly if there

is gap between performance and consumers‟ perceptions

 To alter the score on a given attribute given to a competitor, again particularly if there is a gap between performance and consumers‟ perceptions

 If the company is not in the evoked set, to build enough awareness of the offering to arouse inclusion

The consumption phase

During this phase, the services consumer is a more or less active participant in the production process It is important that consumers perform that production role successfully From the firm‟s point of view, successful performance will improve the efficiency of the operation and the satisfaction of other customers From the consumers‟ point of view, successful performance will ensure a high level of

perceived control and, in all probability, a high level of satisfaction in the postconsumption phase

Therefore, communication in this phase can be used to ensure successful performance by giving the consumer a clear script The nature of this script depends on the nature of the service operation

The postconsumption evaluation phase

Consumer expectations come from a number of sources, some within the control of the services firm and some outside its control Expectations arise either from previous experience with the firm and/or its competitors or from some form of communication The objective for this phase is to attempt to match customers‟ expectation to the performance characteristics of the servuction system

1.2.2 Divide the Communications Objectives and Target Audiences among the Channels

Once the overall objectives and target audiences for the whole communication mix are set, it is necessary to divide the tasks among advertising, selling, public relations, and point-of-sales messages This is a process of matching the tasks to the capabilities of the different communications channels and to the ways consumers uses those channels and the different objectives

One way of assigning tasks across the array of communication channels is to consider the degree to which the message can be targeted at specific audiences Media advertising itself varies along this dimension TV advertising can reach very board audiences but it is not very selective except in the variation in audience across channels by time of day Nation print media such as newspapers and magazines offer more selective focus, as they themselves tend to be targeted at more specific segments of consumers

Trade magazines are even more specific in their readership Direct mail offers the most focused of the impersonal media The choice among these media must be able

to make based on the cost per thousand members of the target audience and the risk and cost of reaching the wrong segment

1.2.3 Define Communications Messages

Key differences in information usage between goods and services

In order to create communications messages for a service, it‟s necessary to understand key differences in information usage between goods and services These differences are crucial to understanding how divide the communications objectives, target audiences, and budget between the different channels

Consumers of services are less likely to purchase without information than those buying goods This relates to the increased perceived risk associated with services and the need for consumer to reduce that risk by collecting information before purchasing

Consumer of services will prefer personal over impersonal sources of information Because services are experimental, it is extremely difficult to describe or specify the “product” before purchase It might be possible to use TV advertising to convey the experience, but it is clear that consumers prefer to obtain their information from individuals who have experienced the services directly or indirectly

Even among personal services, the high level of risk inherent in the process mean that customers will give greater credibility to independent sources of information rather than those perceived to be controlled by the firm All this implies that mass advertising communication from comparable individuals is far more likely than mass advertising to be used by consumers as a source of information

However, it is possible to use advertising and other forms of promotion to leverage word-of-mouth communication Such as an approach might imply using advertising and promotional tools to persuade satisfied customers to tell other consumers Word-of-mouth communication can be used directly in media advertising, in the form of testimonials from satisfied customers

Consumer information sources can be classified broadly into internal and external sources Both types can be used to help consumers cope with perceived risk Internal sources are fundamentally linked to memory scan

Define Communication Messages

These guidelines have developed based on the key differences in information usage between goods and services and features of services including: intangibility, inseparability, heterogeneity, and perishability inherent in services products

Promise what is possible

In its most basic form, customer satisfaction is developed by customers‟ comparing their expectations to their perception of the actual service delivery process In times

of increasing competitive pressures, firms may be tempted to overpromise Making promises the firm cannot keep initially increases customer expectations and then subsequently lowers customer satisfaction as those promises are not met Two problems are associated with overpromissing First, customers have disappointed and a significant loss of trust then occurs between the firm and its customers The second problem directly affects the service firm‟s employees

Tangibilize the Intangible

In tangibilizing the intangible, the scale of market entities, which reflects the degree

of tangibility among products, should be turned on its ends The advertising of tangible-dominant products tends to make them more abstract to differentiate them from one another In contrast, the advertising of intangible-dominant products

should concentrate on making them more concrete through the use of physical cues and tangible evidence

Feature the working relationship between customer and provider

Service delivery is an interactive process between provider and customer, and it is therefore appropriate that the firm‟s advertising should feature, for example, a customer and a company representative working together to achieve a desired outcome The advertising of services, in particular, must concentrate not only on encouraging customers to buy but also on encouraging employees to perform

Reduce consumer fears about variations in performance

The firm‟s advertising can also minimize the pitfalls of heterogeneity in the customer‟s mind To enhance the perception of consistent quality, the firm‟s advertising should provide some sorts of documentation that reassures the customers

Determine and focus on relevant service quality dimensions

The reasons customers choose among competing services are often closely related

to the five dimensions of service quality: reliability, responsiveness, assurance, empathy and the quality of the tangibles associated with the services However, some features are commonly are more important to customers than others; therefore the company should more focus on them

1.2.4 Put the Communications Mix Together

If the objective is to reach nonusers of the service at the preconsumption phase, then the choice of communication channels is limited Media advertising can be used either directly or as way to harness or create word-of-mouth communication in the market place If the number of target customers is limited, it might be possible

to use other means such as personal sales force or direct marketing The decision would depend on the cost-effectiveness of the different channels and the complexity of the message to be conveyed

By the time consumers reach the consumption and postconsumption phases, they are already part of the servuction process On a cost/audience member basis, it would seem more logical to use the point-of-sale environment or the service provider to handle the communication

1.3 Marketing Communication Tools

1.3.1 Advertising

1.3.1.1 Concept of Adverting

Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor The paid aspect of this definition is important because the space for the advertising message normally must be bought Advertising involves mass media (such as TV, radio, and magazines), which are nonpersonal and do not have an immediate feedback loop as does personal selling

There are several advantages to a firm using advertising in its communication mix

It can be attention-getting and also communicate specific product/service benefits

to prospective buyers By paying for the advertising space, a company can control what it wants to say and, to some extend, to whom the message is sent Advertising also allows the company to decide when to send its message The nonpersonal aspect of advertising also has its advantages Once the message is created, the same message is sent to all receivers in a market segment If the message is properly pretested, the company can trust that that the same message will be decoded by all receives in the market segment

Advertising has some disadvantages, the costs to produce and place a message are

significant, and the lack of direct feedback makes it difficult to know how well the message was received

1.3.1.2 Types of advertisements

a) Product advertisements

Focus on selling a good or service, product advertisements take three forms: (1) pioneering (or informational), (2) competitive (or persuasive) and (3) reminder

Used the introductory stage of the life cycle, pioneering advertisements tell people

what a product is, what it can do, and where it can be found The key objective of a pioneering ad is to inform the target market Informative ads have been found to be interesting convincing, and effective

Advertising that promotes a specific brands‟ features and benefits is competitive The objective of this message is to persuade the target market to select the firm‟s brand rather than that of competitors An increasingly common form of competitive advertising is comparative advertising, which shows one brand‟s strengths relative

to those of competitors Firms that use comparative advertising need market research and test results to provide legal support for their claims

Reminder advertising is used to reinforce previous knowledge of a product Reminder advertising is good for products that have achieved a well-recognized position and are in the mature phase of their product life cycle Another type of reminder ad, reinforcement, is used to assure current users they made the right choice

b) Institutional advertisements

The objective of institutional advertisements is to build goodwill or an image for an organization, rather than promote a specific good or service Often this form of

advertising is used to support the public relations plan or counter adverse publicity Four alternative forms of institutional advertisements are often used:

 Advocacy advertisement states the position of a company on an issue

 Pioneering institutional advertisements, like the pioneering ads for products

discussed earlier, are used for announcement about what a company is, what

it can do, or where it is located

 Competitive institutional advertisements promote the advantages of one

product class over another and are used in the market where different product classes compete for the same buyers

 Reminder institutional advertisements, like the product form, simply bring

the company‟s name to the attention of the target market again

1.3.1.3 Develop the advertising program

Because media costs are high, advertising decisions must be made carefully, using

a systematic approach The advertising decision process is divided into (1) developing, (2) executing, and (3) evaluating the advertising program

Development of the advertising program focuses on the four Ws:

 Who is the target audience?

 What are (1) the advertising objectives, (2) the amounts of money that can

be budgeted for the advertising program, and (3) the kinds of copy to use?

 Where the advertisements should be run?

 When should the advertisements be run?

a) Identifying the Target Audience

The first decision in developing the advertising program is identifying the target audience, the group of prospective buyers toward which an advertising program is

directed To the extent that time and money permit, the target audience for the advertising program is the target market for the firm‟s product, which is identified from marketing research and market segmentation studies The more a firm knows about its target audience‟s profile – including their lifestyles, attitudes, and values – the easier it is to develop an advertising program

b) Specific Advertising Objectives

After the target audience is identified, a decision must be reached on what that advertising should accomplish Consumers can be said to respond in terms of a hierarchy effects, which is the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action

Awareness: the consumer‟s ability to recognize and remember the product or brand

name

Increase: an increase in the consumer‟s desire to learn about some of the features

of the product or brand

Evaluation: the consumer‟s appraisal of the product or brand on important

attributes

Trial: the consumer‟s actual first purchase and use of the product or brand

Adoption: through a favorable experience on the first trial, the consumer‟s repeated

purchase and use of the product or brand

For a totally new product the sequence applies to the entire product category, but for a new brand competing in an established product category it applies to the brand itself These steps can serve as guidelines for developing advertising objectives

c) Setting the Advertising Budget

After setting the advertising, a company must decide on how much to spend Determining the ideal amount for the budget is difficult because there is no precise way to measure the exact results of advertising

d) Designing the Advertisements

The central element of an advertising program is the ad itself Advertising messages consists of advertising copy and the artwork that the target audience is intended to see (as in magazines, newspaper and TV) or hear (as on radio, TV) The message usually focuses on the key benefits of the product that are important to a prospective buyer in making trial and adoption decisions

Message content

Most advertising messages are made up of both informational and persuasional elements These two elements, in fact, are so intertwined that it is sometimes difficult to tell them apart For example, basic information contained in many advertisements such as the product name, benefits, features, and price are presented

in the way that tries to attract attention and encourage purchase On the other hand, even the most persuasive advertisements have to contain at least some basic information to be successful

Create the actual message

The creative people in an advertising agency have responsibility to turn appeals and features such as quality, style, dependability, economy, and service into attention

getting, believable advertisements

e) Selecting the Right Media

Every advertiser must decide where to place its advertisements The alternatives are the advertising media, the means by which the message is communicated to the audience Newspapers, magazines, radio, and TV are examples of advertising media This media selection decision is related to the target audience, type of product, nature of the message, campaign objectives, available budget, and the costs of the alternative media