Appealing cultural factors for television advertising on fmcg in hanoi

As the research scope is limited within Hanoi, the author is ambitious to analize the appealing cultural factors for Hanoians in specific FMCG products.. With the research paper: “Appeal

For the completion of this dissertation, I would like to express my special appreciation to my Supervisor, Professor Vu Minh Duc (P.H.D) who provided me valuable comments and guild me how to apply all theory into real business activities.

My sincerely thanks is also extended to my manager Ms Nguyen Huong Quynh as Associate Director of Nielsen Company Vietnam who offers me precious advices for my research paper as well as the research survey methods applied

I would like to thank to all lecturers in CFVG for the past two years for knowledge, skills gained in MBA program

Especially, my thanks are also given to my family, friends, my boss, co-workers and class members of 17 Intake who support me during the hard time of research study They are really strong motivation which has inspired me to fulfil my missions

EXECUTIVE SUMMARY

Vietnam has undergone major development over the past decade with significant increase inproduction and consumption It has become very lucrative markets especially for the retailindustry in general and FMCG (Fast Moving Consumer Goods) in particular

In order to compete in the potential market, it is required to make out a sound marketingưstrategy to build a strong brand Television advertising has been chosen as the very effectivemean to promote and strengthen product’s image in the customer’s mind The more economic

is developed, the more sophisticated the demand of consumer is Vietnamese customers areconsidered as very potential ones but they have certain requirements for the advertising whichare exposed to them every day

With the booming of television advertising for the past decades, the customers have morechoices for the products Under the data by TNS Gallup Media, everyday people are exposed

to around 3,000 advertising messages on average With the overloaded advertisings,consumers are harder to please Advertising is not merely a mean of communication, a tool ofmarketing mix, but it is an art which requires the different elements, especially culturalelement In the research paper, the author focuses on cultural factors which are considered thehard barrier to win the customers’ preference However, it is not easy for the advertiser,especially for the international firm to have successful advertising which takes into account ofVietnamese cultural elements

As the research scope is limited within Hanoi, the author is ambitious to analize the appealing

cultural factors for Hanoians in specific FMCG products With the research paper: “Appealing cultural factors for television advertising on FMCG in Hanoi”, the author expects it can

analyze all the factors especially cultural ones to appeal customers in television In order togive insights on the importance of those factors as well as the effects on their consumerbehaviors, the author conduct the survey for 150 questionnaires (92 out of those are valid) tounderstand what the audience/consumer think about the cultural factors appealing to them.Futhermore, the author analyzes the cases of both successful and unsuccessful advertisings inVietnam to bring the important findings for the report With the utmost objective of theresearch paper, the author shall provide recommendations for advertisers as well as thecompanies/enterprises to evaluate successful television advertising

CHAPTER I: RESEARCH BACKGROUND

1.1 Research Problems

Vietnam economy has experienced rapid development for the last two decade Especially,after being official member of WTO, Vietnam has been known as fast emerging economy inAsia Since then, Vietnam has made progressive integration into the global economy Withthe total population of around 86 million people ranking 3rd in ASIAN countries and 13rd in

the world (General Population and housing survey, 2009), Vietnam has about 60.6 million

consumers under TNS World-Panel This number is anticipated to increase up to 70 million

by 2018 It is not exaggerating to affirm that Vietnam is a promising and lucrative retailinvestment market with huge number of consumers Even undergone hard time in economiccrisis in 2009, Vietnam retail market is still an attractive destination not only for domesticenterprises but also international/global one

Though being promising market, Vietnam is not easy market for international/globalcompanies to dominate As our living conditions have been improved incredibly especially inHanoi and Hochiminh city, the consumers are more and more sophisticated and demanding.Amid this fierce competition, all enterprises acknowledge that if they do not have wisemarketing plan, they shall be leg behind in this potential market Many international/globalcompanies in their “first landing” and “go native” stage believe that advertising shall bedangerous weapon in their marketing plan to win customers rapid developing markets such asHanoi and Hochiminh city

They have aggressively launched advertising programs in Vietnam with huge budget in order

to lure more customers Obviously, annually those companies often spend huge amount on

TV advertisements with an aim to attracting new triers and maintaining the loyalty of theircustomers, and strengthen their brand image in Vietnam However, whether those advertisingscan meet the expected objectives set my marketers is questionable In order to save the cost,some international companies have launched regional advertising video Many of advertshave showed high effectiveness in some other countries in the region However, whenlaunching the same advertising in Vietnam, it copes with barriers which are traditionalVietnamese customs and practices Mr Sam, director of Bates advertising company said:

“Before I do not understand clearly about Vietnamese culture When working in Vietnam,especially in this creative sector, I need to study thoroughly your country’s customs andpractices to initiate ideas appropriate with Vietnamese culture”

It does not mention only the different traits by countries, but it also exist differentsegmentations for localities within Vietnam Especially, there have been many differencesbetween Hanoians and Hochiminh city and Hanoians are well-known to be the hard to pleasecustomers

In fact, not all advertising campaigns work well as desired by marketers Lessons frominternational big guys so far show that not all their advertising campaigns work well and theyeven worsen their brand image In order to penetrate successfully into this lucrative market, it

is required for international firms/enterprises to understand Vietnamese consumers’ traits and

to adapt into its typical market’s features “Thinking globally, acting locally” is famous slogan

by HSBC seems to be also appropriate for other foreign enterprises who want to be successful

in Vietnam market So, how to utilize factors contributing to the success and effectiveness of

a TV advertising campaigns has been great concern of marketers in international companiesoperating in Hanoi in particular and Vietnam in general This concerns by international/globalcompanies has inspired me to pursue my research on “cultural factors in TV advertisingcampaigns on FMCG for Hanoians” for the final dissertation

1.2 Research Objectives

As mentioned above, in order to solve the concerns by international marketers in Hanoimarket in particular and Vietnam market in general, my dissertation shall analyzecomprehensive factors contributing to the most effective advertising Due to limit time, theresearch paper cannot go thoroughly all aspects of this problem but focus more on culturalfactors which are considered to be very important especially in Hanoi market

My ambition does not constrain to understand which cultural factors to be taken intoconsideration for TV advertising campaigns but also to investigate Hanoian consumers’attitude towards those and to develop best advertising campaign Therefore, the dissertationset out all objectives clarified as bellow:

 WHAT? Clarify which cultural factors need to be taken into consideration for TVadvertising on FMCGs It is very important to define cultural factors in advertising asthey shall be the basis for strategy of international marketers for their decision making

in Hanoi market

 WHY? Assess the importance of these factors in the success of a TV advertisingcampaign Through insightful analysis, the author shall help evaluate theireffectiveness of cultural factors

 HOW? Give a guide on how to customize TV advertising effectively in Hanoi market.The author shall provide recommendations on how to build a successful TVadvertising campaign as the ultimate objective of the research for the advertisingcompanies as well as the companies/enterprises

I do expect that by answering those three questions “WHAT”, “WHY”, and “HOW” by theend of the research, it somehow can help international/global companies acknowledgeimportant issues to tailor TV advertising campaign in Hanoi in particular and in Vietnam ingeneral

1.3 Research Methodology

In the research paper, qualitative, quantitative and observation methods are applied

 Qualitative methods: 1 focus groups (10 peoples)

- Target Interviewees: age ranging from 6 to 60, include female and male, different job, and

low, medium and high income …)

- Objectives of focus group discussions: how and why cultural factors in those advertising

shall affect to their perception, emotion, impression on the brand

- Implementation of discussions

The author will show at least 2 different adverts for FMCG products from same company(Coca Cola, KFC, Nest Café,…) which one advertisement is shown in their home countriesand one is in VN All these TV adverts shall be collected by authors

During those discussions, we shall answer these following questions:

1 Do they often watching TV Advertising?How often? (minute/day)

2 Do they like those adverts? Which one they prefer, adverts in home countries or adverts in VN? (Please be noted that they are same company adverts)

3 How do they think about these adverts?

4 Why do they like/don’t like these advert?

5 Shall their impression on TV adverts affect their shopping decision? buy or not buy?

6 Do they think that International/global manufactures shall take into consideration of Vietnamese cultures in their adverts?

 Quantitative method: Distributed to 150 respondents

- Target interview: age ranging from 20 to 56, include female and male, different job, andlow, medium and high income …)

- Questionnaires shall be prepared basing on the ideas suggested from qualitative methodswith aim to qualifying whether their comments/ideas represent for the majority or not Thequestionnaires shall include 13 questions to analyze which cultural factor are the mostimportant in adverts The questionnaire are designed to capture all the thought/comments ofthe customer on the factors appealing to the advertising The survey was intended for 150respondents, and the author received 92 valid answers out of 150

- Qualitative method shall be conducted firstly because it is necessary to define exactly theirinterviewee’s answers to these questions: “what factors”, “why?” and “how” The focus groupincluding 6-8 people from backgrounds shall provide the author different points of views on

TV advertising programs Exploring interviewees from diversified aspects would be importantstep to bring the author overall picture on what’s on their mind and to orient the researchquestionnaire survey

 Observation method: around 70 television advertising in Vietnam and other

countries

- The author has selected around 70 TVC advertising in Vietnam and other countries in

different channels During the observation, the author analyzes the elements which contribute

to the success as well as failure of the advertising

1.4 Data sources

In order to provide insightful analysis, I utilize two kinds of data resource including secondaryand primary data Primary sources of information I collected from available information inreference books, reports by AC Nielsen as well as articles in newspaper and internet

Besides, I use secondary sources collected from the questionnaire survey and hearing surveyfor the findings In additional, I have collected and observed hundred advertisements indifferent TV channels especially VTV3, VTV1, VTC and other cable channels This source ofinformation is valuable and useful for me to give recommendations to build effectiveadvertising campaign in Vietnam

1.5 Research scope and limitation

The research scope for the survey is restrained in Hanoi where consumers are well- known to

be very hard to please as they have stricter requirements than Saigonese Therefore, thesurvey result shall not present the ideas/opinions for the whole Vietnamese Thus, the remarksand insights shall be more suitable for the Hanoi context but not Vietnam nationwide.Especially, the FMCG products are different from other products as they have short life cycle,

so the recommendations shall be not cover all types of products

Due to the limit of time and budget, I have not deeply covered all the cultural factors inadvertising in Vietnam through the questionnaire survey, so there might have some missingpoints of analysis Futhermore, the sample of the survey deem not sufficient enough to presentthe overall information because I don’t have much time to collecting more questionnaires

1.6 Thesis’s Structure

Chapter 1: Introduction

This chapter shows the research problem research objectives and the research design with theexplanation about the scope and limitation of the thesis

Chapter 2: Theoretical background

In this chapter, the author recalls relevant theories on advertising, its dimensions and basicobjectives In addition, the author reviews the definition of culture and its cultural elements,and cross culture consumer behavior Through the theories on advertising and culture, theauthor studies the linkage between advertising and consumer behavior as well as the co-relation between the culture and advertising Based on that, the author covers the basic andmain points to answer the question how culture and advertising work to appeal theconsumer’s behavior and trigger their purchasing

Chapter 3: Research findings

This part of the thesis presents the research findings including the cultural factors inVietnamese advertising With comprehensive information collected from the questionnairesurvey as secondary data as well as studies, report by research market companies such asNielsen Company and TNS Media Vietnam, the author bring the overall picture on thetelevision advertising development in Vietnam as well as the typical features of Hanoianscustomers This chapter also provides the important insights analyzed from over 25advertisers broadcasted in Vietnam Through case analysis, the author summarizes what arethe key points to be taken into consideration to develop a successful advertising of FMCG inHanoi The research findings come to end with evaluation of those cultural factor appealingconsumers

Chapter 4: Recommendations

Based on the research finding, the author proposed a set of recommendations to develop asuccessful advertising on FMCGs in Hanoi through objectives setting, budget planning andmessage generation which has been taken into consideration of Vietnamese culture

CHAPTER II: THEORETICAL BACKGROUND

2.1 Advertising

 Definition of advertising

Every day, we as consumers are exposed to hundred of brands intentionally andunintentionally We can see them everywhere It may be in newspapers in the morning we arereading, in the bags we are carrying, in the websites we are surfing, in mobile phone messages

we received, in coupons we are seeing in the shop, in the sign boards on streets we are going

to office or back to home, or on bus driving on the roads, or on Television we are watching…All the forms we defined ourselves as means of advertising So, what’s the advertising?

It is such a long time since advertising has appeared in our mind as familiar terms There havebeen many definitions on advertising from different point of views As for journalists,advertising can be interpreted as communication and persuasion process; but for manufacturesadvertising might be defined as a marketing process…

A century ago, Albert Lasker, founder of Lord & Thomas understands “Advertising assalesmanship in print driven by reason why” However, this seems to no longer true thanks torapid development of diversified and modern communication means Although advertisinghas been developed considerably for the past two decade in Vietnam and there also existspecific understanding about advertising Under the article 102, Vietnam trade law in 2005defines advertising is trade promotion activity of the business to introduce to customers itsproducts, services” However, this definition does not cover all aspects of advertising

Advertising is not merely printed, but it comes to consumers by radio, internet and

television… William F Arens in his Advertising book defines “Advertising as the structured and composed non-personal communication of information, usually paid for and usually persuasive in nature, about products (goods, services, and ideas) by identified sponsors through various media”.

In order to understand this definition, we would better to analyze all the elements embedded

As advertising is type of communication, William F Aren perceived advertising as adefinitely structured form conveying both verbal and nonverbal elements that are composed tofill in specific context at the specific time It is necessary to distinguish the meanings of

“personal communication” versus with “non-personal communication” For example, whatrequires personal selling is the presence of the seller and the buyer together This interactionbetween the seller and the buyer shall be an opportunity for them to discus everything aboutthe products The buyer can raise questions about products’ function, features, and also canexamine them for the final purchasing decision Via personal communication, all five sensessuch as smell, touch, taste, sound and sight can be experienced by the potential buyer

Meanwhile, non-personal selling delivers very quick message via different means ofcommunication and there is no way to examine the customer’s response to the messagedelivery In addition, by non-personal communication, the customer can use only two senses:sight and sound for their products’ examination

To some extends such as information delivery, interaction between the seller and the buyer,personal communication shall be preferred However, when it comes to cost matter, non-personal communication shall be effective solution Through advertising, the manufacture

also tries to send the message to their potential customers with information such as its feature,shapes, color, functions, ect

As purpose of advertising is to introduce, indentify and differentiate the product from otherswith an aim to persuading customers to buy the products That is to say, it might causeinducement to their customer through perceptible difference; namely, shape, colors, orimperceptible differences which is not obvious features or function For example; Coca Colashall try to persuade Vietnamese customers through their advertising campaign bydifferentiate their product features by color, shape, taste, emotion from Pepsi or other brands All advertising shall be conducted by identified sponsors, i.e who launch the advertising toprevent the audience from misleading their ideas and contents If the sponsor for theadvertising is not identified, the audience might understand it as the news about the productsbut not an attempt to induce their purchasing Advertising shall be shown in varies meanssuch as newspaper, radio, televising, billboards, posters or anything which help communicatethrough non-personal ways from one/groups of people to the others

According to Philip Kotler, managers need to make 5 M decisions in developing anadvertising program: Mission, Money, Message, Media and Measurement

Figure 2.1: “5-Ms” model in advertising

Source: Marketing Management, Eleventh Edition by Philip Kotler 2003

Firstly, in setting the objective of advertising program, manager needs to base on the priordecision on target market, market positioning and marketing mix Secondly, manager shouldknow how much to spend on advertising tool by considering: stage in the product life cycle,market share and consumer base, competition and clutter, advertising frequency and productsubstitutability and market characteristic Thirdly, they must choose the advertising message,determining how the message will be generated, evaluating alternative message fordesirability, exclusiveness and believability and executing the message in appropriate style.And next, they must make decision on the media they will use

There are a number of vehicles to deliver reach, frequency and impact Each have its ownadvantage and limitation as showed the below table

Table 2.1: Profile of major media types

Source: Marketing Management Millennium Edition, Tenth Edition by Philip Kotler 2002

This decision is made based on several factors such as: target audience media habit, product,message and cost

Finally, marketers need to evaluate the effectiveness of advertising on sales andcommunication goal Though the fundamental research on ad effectiveness is small, it’snecessary to know potential effect on awareness, knowledge and preference as well as thead’s sales effect

In the consumer survey, the Nielsen Company evaluates the degree of trust for different types

of advertising globally Accordingly, advertising from recommendation from people known isthe most trustful sources for consumers In fact worth-of-mouth communication is the mosteffective way because people tend to put their trust in friends’ or neighbors’recommendations In addition, other sources such as consumer opinions posted online orbrand website also reliable for consumers with 70% and 69% respectively Television as one

of the most popular means of advertising, win the 62% of consumers’ trust However, uponthe different kind of products, the source of trustful advertising is different Therefore,

manufacture/company is required to consider appropriate means of advertising to promotetheir products

Figure 2.2: Degree of trust in Advertising

(Source: The Nielsen Company)

 Dimension of Advertising

However, to grasp the full meaning of advertising, it is important to analyze its dimensions.William F Aren in his “Advertising” book mentions four dimensions of advertising includingcommunication dimension, marketing dimension, economic dimension and social and ethicaldimension

Firstly, communication is the foremost dimension of advertising As shown in the graph

below for advertising flow:

Figure 2.3: Communication process

(William F Aren, Advertising)

As can be seen in the flow, the communication process begins when the source generate ideas

in the first step, then they are encoded through message The message shall be transfer viachannels The receiver shall decode the message as the final step of the communication.Similarly, advertising process is also trigged by source as sponsor to generate ideas Afterideas are encoded through message, it will be delivered by channels which might be radio,

printed means, internet or television…The message shall be decoded by potential customers

as the receivers The Stern model of advertising communication is illustrated in the chart 2.2

Figure 2.4: The Stern model of the advertising communication process

Source Message Receivers

Within the text of advertisement

(Source: Contemporary advertising, p.11)

As can be shown in the diagram, the source comes from the sponsor who takes the legalresponsible for the consumers They shall bear all the costs and fund all activities for theadvertising The sponsor authorizes the author who can be advertising agency to generate theadvertising message

To the consumer, this person who represents the sponsor is the source for the text message.They are invisible to the audience but plays important role in composing the text and conveythe message The message can be delivered by different forms such as autobiography,narrative or drama In autobiographical messages, the main character shall tell story abouthis/her own experiences Meanwhile, narrative massage shall be sent by third person to tellstory about others Different from those two kinds message, drama message leads thecharacter acting out of event in front of imagined audience The key point of theadvertisement is how the author of message uses the persona or literary forms consideringemotion, culture, attitudes, and motives to aims at the target audience

As mentioned in the diagram, the ultimate destination of message is the receiver As forWilliam F Aren, the receiver is also multi-dimensional and the implied consumers are the oneaddressed by ad’s persona They are imagined by ad’s author to be the idea consumers.According to William, there always presume audience for all texts or advertisings When weremove text out of the ad, the first audience is sponsor of company who give the firstideas/evaluation on the advertising content In other words, sponsorial consumers are the one

to decide whether launch the adverting or not Since the advertising is approved by thesponsor, it shall be launched to the actual customers They are actual and final receiver andthey possibly do not share the same thoughts with implied consumer or sponsor consumers.Therefore, it is very important to study how actual consumers decode and interpret themessage delivered In order to understand the actual consumers, it is necessary to analyze allaspects considering all related factors

Implied consumers

Sponsorial consumers Actual consumers

In additional to communication, as for the manufactures/companies, advertising also carries

marketing dimension For a long time, advertising is considered as component in the

marketing process Marketing always take the main role to generate revenue for business As

defined by William in his Advertising book, marketing is the process of planning and executing the conception, pricing, distribution, and promotion of ideas, goods and services to create exchanges that satisfy the perceive needs, wants, objectives of individuals and organization.

The role of advertising is to inform, persuade and remind groups of customers about valueworth of product/service and the ultimate goal of advertising also aims at revenue generating

In order to launch advertising program, the author is required to fully understand the wholemarketing process to propose their advertising in line with company’s marketing process If inmarketing, we need to answer the questions: “what”, “who”, “when”, “where”, and “how”,and we also have to answer to the similar questions for advertising Each company can usedifferent type of advertising depending on the marketing strategy it is now pursuing Asquoted by William the marketing strategy will determine who the target of advertising should

be, where the advertising should run, what media should be used and what purpose ofadvertising should be accomplish Depending on the product type, the author shall madedecision on which type of advertising shall be used For example, for fast moving consumergoods, advertising shall make full use of its aesthetic features such as package for theirprogram Meanwhile, for electronics or equipment, author shall focus more on its high techadvertising…

In order to understand how marketing elements influence advertising type, it is necessary tothoroughly study marketing mix with 4 Ps including product, place, promotion, price Pricing

is also marketing element which affecting the advertising style In order to compete with therivals on pricing, author shall try all means to bring strong impression on the audience on thepricing For example, such kind of information as “buy one get two” or “plus volume with thesame price”, ect…in the advertising can trigger the audience for their purchasing decision

In addition to product and pricing elements, placing element also affect advertising type Ifthe firm determines their target market as international market such as Coca Cola, Sonny,Nokia…, they shall choose international advertising In case that their target market isdomestic one, they need to apply national advertising By each market, there exists distinctivefeatures for the consumers; therefore, it is required to take into consideration of placingelement to decide advertising type

The last but not least marketing element is promotion or communication As analyzed in thefirst part of the dissertation, advertising indeed is kind of powerful means of communication

It is especially true for the marketing as advertising is effective tool for manufacture to access

to their customers For each purpose of the sponsor, the author shall identify the exact type ofadvertising can be used Depending on the communication strategy, the author can chooseproduct advertising, non-product advertising, awareness advertising, ect…As analyzed byWilliam, advertising enable marketers to reach more prospects at lower cost than asalesperson could ever do Actually, the creativity inherent in advertising allows the marketer

to convey an image or personality full of symbolic meanings and benefits for the companybrand

The third dimension which play very important role not for only advertising but also others is

economic dimension No one can deny the fact that economics is the motivation for adverting

growth Since the earliest beginning of advertising, the sponsor acknowledges the economicbenefits brought by advertising Economic evolution has been followed by the advertisingdevelopment In the ancient time, when people cannot read or write, they do not have demandfor advertising and the marketer use symbol or signs to advertise their products Theeconomic development marked by the population broom, technology development,advertising has been on the gold age thanks to different means of media such as printed, TV,Internet…In conclusion, advertising can play an important role in the process of an economicsystem In such a system, advertising can be a useful tool for sustaining honest and ethicallyresponsible competition that contributes to economic growth in the service of authentichuman development.

Furthermore, from the aspect of consumers/ users, advertising also carry social and ethical dimension Advertising, by one or other ways informs audience about the availability of the

products and service It can be very useful reference for their purchasing behavior Moreover,advertising contributes to improve living standard of people That is to say, people can havemore options to choose and they are total free for their decisions By sponsor different mediameans such as newspaper, magazines, books, TV, internet…, adverting seems to be the keyrevenue which helps maintain the operation of those media This really facilitates the freedom

of press and information to the audience Advertising does this, among other ways, byinforming people about the availability of rationally desirable new products and services andimprovements in existing ones, helping them to make informed, prudent consumer decisions,contributing to efficienicy and the lowering of prices, and stimulating economic progressthrough the expansion of business and trade All of this can contribute to the creation of newjobs, higher incomes and a more decent and humane way of life for all It also helps pay forpublications, programming and productions —that bring information, entertainment andinspiration to people around the world

 Awareness building and information provision is the foremost functions of

advertising Advertising can help to create awareness to the audience on the brand and theproducts That is to say it is the most effective tool to launch the new product into themarket For sales representative, they can only communicate with a group number ofcustomers; meanwhile, just with 30s advertising, half million of people can know thepresence of the product This function can be listed specifically as below:

To provide information of the new products in the market

To inform the functions/advantages of the product

To announce pricing changes

To explain the working/operation/usage principles of products

To notice current services

To adjust/correct wrong impression For example, Coca Cola used their ads tochange consumer’s perception on product terminated with Dioxin chemicals

To reduce concerns on products before purchasing For example, consumers arwworried that front door washing machine often has problem compared to othertypes Therefore, the consumers shall decide to look for the suplementary feature

to make it perfect or to switch to new brands

To build company image

 Persuading : Advertising not only provides information but it also has power to

persuade customers For example, Sunsilk shall use advertising on new variant ofshampoo for hair smooth feature to persuade customers to buy it if they want to havesmooth hair In fact, this function is considered to be the toughest requirement for theadvertisers In fact, it is not easy to persuade somebody to switch or try to use the newbrand because we need to have rational evidence to trigger the customer’s purchasingdecision It is big step from thinking to the action In order to understand how advertisingcan persuade customers, it can be referred to the following points:

To persuade the new triers

To persuade customer’s purchasing

To encourage customer to switch to the company’s brand

To create brand preference

To change buyers’ awareness on products’ specifications/feature

 Efficient Reminding : Customer can be aware of presence of product but time after

time, they might forget it Knowing about the product is not enough to motivate customers

to buy it Therefore, advertising plays important role to remind the prospects who are notready to buy it for the product and it would be more economical than other means

To remind the shoppers that products shall be needed in coming time

To remind the product selling places

To remind price promotion

To remind the products’ position in the shoppers’ mind For example: consumersshall notice in some advertising: “Glad to see you again!”, “Introduced inVietnam since ”, or “Together discover one more time”

2.2 Fast moving consumption goods (FMCG)

MCGs include food and non-food categories which are consumed everyday Basically, thoseproducts are purchased by the decision of individual consumers Therefore, those FMCGs arestrongly supported through advertising, promotion activities by the manufacturers Thoseproducts are the necessity things in daily life and have shorter consumption cycle than otherproducts There are some criteria to classify the FMCG as follows:

 High possibility of good repurchasing

 Low margin on good sold

 Manufactor buy raw materials from the suppliers and produce in a large scale

 Short using time

 Low price

 The manufactures do not communicate directly with the end-users FMCGs shall be available for the end users through distribution network

For example, there are some typical FMCGs manufactures in the world and in Vietnam, respectively:

1 The biggest FMCG manufactures in the world

2.3 Culture and cultural elements

As mentioned above, we can have comprehensive understanding on the definition as well asall aspects of advertising In order understand how important cultural factors in advertising, itwould go through the brief definition of culture and its key elements

“Culture” has been defined by many scholars and conveys different meanings Ralph Linton(1945.P.21_Marketing across Culture) defines “culture as the configuration of learnedbehavior and results of behavior whose component elements are shared and transmitted by themembers in a particular society” For this, Linton emphasizes that there exists the speciallinkage between the individual and the society As Child and Kieser’ understanding, culture is

simply a pattern of thought manners which are widely shared Meanwhile, Gooenough

believes that culture is a set of belief or standards shared by a group of people which help theindividual decide what is, what can be, how to feel, what to do and how to go about doing for

By this understanding, the individual can follow different cultures with different groups In aparticular situation, the individual might switch to the suitable culture which is suitable forthem

According to Philip Kotler (2003), culture, subculture, and social class are particularlyimportant influences on consumer buying behavior Culture is the fundamental determinant of

a person's wants and behavior The growing child acquires a set of values, perceptions,preferences, and behaviors through his or her family and other key institutions

Each culture consists of smaller subcultures that provide more specific identification andsocialization for their members Subcultures include nationalities, religions, racial groups, andgeographic regions When subcultures grow large and affluent enough, companies oftendesign specialized marketing programs to serve them (chapter 7, p.183)

Multicultural marketing grew out of careful marketing research, revealing that different ethnicand demographic niches do not always respond favorably to mass-market advertising Recent

study done by Nielsen Vietnam in June 2009 on consumer behaviors in both cities of Ho ChiMinh City and Hanoi Capital, shows a number of behavior differences between consumers ineach location That helps marketers to apply different campaigns in advertising, promotion or

so on in each location to gain the customer satisfaction

However, regarding to the culture, it much more than a process but it is collection of elementsincluding which are set to form culture As for Jean-Claude Usunier and Julie Anne Lee, thereare four important elements of culture: language, institutions, material productions, symbolicproductions Language is considered as mean of humankind communication and especially ithas prominent role for culture Language conveys more than the words itself but it impliesmeaning, feelings, attitude, and also culture As language was born together with thecommunity and it closely connect individual in the community Obviously, language isindispensable element to form a community where we are born, raised up and share worldview as well as our social behavior

In addition to language element, institution is also very crucial in cultural process Institutioncan be a family, a group of people who are sharing same value and comply with same rules

As can be seen easily, family is institution where members are integrated by blood connection

or marriage commitment based on reproduction principles Furthermore, territoriality is alsoprinciple to form institution That is to say cooperation among people coming from the samevillage, same region, or same territory shall be stronger than others The principle ofinstitution also based on sex, physical traits, age and it functions to help connect people Forexample, there exists women union for the same sex, youth union for same age… Moreover,institution also can be defined by spontaneous tendency, occupational and professionalactivities… Especially in modern society, people tend to have more demands to join indifferent institutions

Material production also is the third element of culture Production is diverse and it includesmachine, factories, paper, instruments, media of communications, food, ect, As quoted bythe writer of “Marketing across Culture”, there exists many different cultural attitudes to thematerial world and people shall give preference or priority to production and materialachievement This can be seen from the difference between India and China as referring toKumar Indian deems to respect their inner spiritual world based on Brahmanism They shallemphasize the spiritual value over the wealth or acquisition Meanwhile, Chinese world-view

is based on Confucian to achieve harmonious social order That is to say it appreciates themeritocracy and hard working and action in the material world rather than spiritual world The final element to form the culture is symbolic production Symbols, like artifacts, arethings which act as triggers to remind people in the culture of its rules, beliefs, etc They act

as a shorthand way to keep people aligned

Symbols can also be used to indicate status within a culture This includes clothing, officedecor and so on Status symbols signal to others to help them use the correct behavior withothers in the hierarchy They also lock in the users of the symbols into prescribed behaviorsthat are appropriate for their status and position There may be many symbols around anorganization, from pictures of products on the walls to the words and handshakes used ingreeting cultural members from around the world

2 4 Cross culture consumer behavior

As by Jean-Claude Usunier and Julie Anne Lee, the influence of culture on selected aspect of

consumer behavior has been shown as the table below:

Table 2.2: Possible impacts of cultural differences on selected aspects of consumer behavior Aspect of consumer

behavior Impact of cultural differences: Value involved/issues to be addressed

Perception Perception of shapes, colors and space varies across cultures

Motivation Motivation to own, to buy, to spend, to consume, to show, to share,

to give

memory Literacy levels, memory as it is shaped by educationFamiliarity with product classes shaped by education

Age Do people know their exact age? Value of younger and older

people in the society

Influence processes across age groupsHow is purchasing power distributed across generations?

Self concept

Group influence Individual/collectivism

To what extent are individual influenced in their attitude andbuying behavior by their group?

How does consumer behavior reflect the need to self-actualizeindividual identity or to manifest group belonging?

Social class Are social classes locally important?

Is social class belonging demonstrated through consumption?

What type of products or services do social-status-mindedconsumers buy? Are there exclusive shops?

Sex role The sexual division of labor; who makes the decisions? Shopping

behavior Who shops; he or she, both of them?

Attitude changes Resistance to change in consumer behavior (possibly related to

high level of uncertainty avoidance, past orientation, fatalism)especially when change could clash with local value and behavior(e.g resistance to fast-food restaurants in France)

Decision making Family models (nuclear versus extended family) involvement

Compulsive buying Purchase Loyalty Environment factors, especially legal Influence of

salespersons on clientsPost purchase Perception of product quality

Consumer complaining behavior Dissatisfaction/Consumerism

(Source: Marketing Across Culture)

Based on the table above, it is important to acknowledge the co-relation between the cultureand consumer behavior Depending on each feature of consumer such as age, sex role, socialclass, attitude changes, decision making, perception and so on, there exist specific impact onthe relevant cultural differences

2 5 Advertising and consumer behavior

As mentioned above, there are not only co-relation between cultural differences andconsumer behavior, but also the linkage between advertising and consumer behavior Thefact shows if the consumers feel the advertising as expected by the advertising, theadvertising achieve the success For example, after watching the ads, what remains in theconsumers’ mind is their reliability of product, or advance technology or the trendy fashion

The advertising is considered as irreversible effect Meanwhile, if the feelings of the consumers are opposite to the objectives of the advertiser, the advertising causes reverse effect

It can be said that the process to make the consumer accept their product through theadvertising is long and complicated one The advertising is not only restrained to theinformation provision but it is expected to trigger the consumer for the demand andpurchasing As referred from the diagram below, the advertising input via the messagecontent and media repetition comes to filters through motivation and affect to the consumers.There are three stages for the purchasing process of the consumers: the 1st stage: cognition,the 2nd stage: affect/feeling and the 3rd stage: experience After the advertising helpsformulate the consumer’s experience, it shall reach to the final consumer behavior

Figure 2.5: Advertising impacts on consumer behaviors

(Source: D.Vakratsas & T.Ambler, How Advertising Works, Journal of Marketing,

consumers tend to more rely on information found in their reference group, often by word ofmouth communication rather than information discussed in media mass Secondly, Asianconsumers tend to follow the group consensus until there is evidence that new product isbetter In a sample of eleven western European countries, it found that consumerinnovativeness was higher than people from more individualist culture, from more masculineculture from cultures with less uncertainty avoidance They found that uncertainty avoidanceand collectivism were both positively related to loyalty, suggesting that companies enteringmarkets with these characteristics will face more obstacles Where consumers are more loyal,

it may be necessary to build a loyal consumer base from scratch Where consumers are lessloyal, it may be more effective to persuade consumers switch from established brands to newbrands

 Consumer involvement

The involvement of the consumer in products purchase or consumption varies across culture.Yang (1989) depicts the Chinese consumers as being in a low-involvement situation whenproducts are used for private consumption In this case, Chinese consumers are likely toadopt a simple cognition, favoring the physical function of the product and more concernedwith the price and quality Conversely, there is high level of purchase involvement whenChinese consumers buy products for social symbolic value These consumers greatly valuesocial harmony and the smoothness of relationship within the extended family Therefore, thesocial significance of a product is very important because it may express status, gratitudeapproval or disapproval According to study of Kim et al (2002), it examined the relationshipbetween need and loyalty for women in their clothing purchase and it will have higherinvolvement In line with his research, Chinese female consumers brought the same brands tosatisfy experiential need and social needs, and only to a much lesser extent for functionalneeds

2 6 The link between culture and TV advertising

In this dissertation, the author would like to focus mainly on the correlation between TVadvertising and culture Among other type of advertising, TV is the most popular mean andhas many advantages In TV advertising, the audience can see, hear, and feel the productthanks to the combination of sound, music, and color through impressive messages to theaudience

As can be referred to the advertising dimensions and culture elements, there always existcultural factors in advertising Culture is indispensable factor in communication process and itpresents in all aspects of our daily life and advertising is no exception That is to say culture is

embedded in the language, the color, the image, the sound and also the feeling Whenadvertising is on, the audience immediately has negative or positive feelings They do not likethe ads because they hate the sound in the TV ads, or because they don’t like the contents ofthe ad or they just don’t like because of the actors/actress in the Ad clips Meanwhile otherscan have positive feeling because of the exact reasons analyzed above We take the example

of one TV advertising program on Moon Cake by Kinh Do, the audience can hear the sound(the language), institutions (the family), material productions, symbolic productions (thefamily tradition)

Jonna L Holland, University of Nebraska-Omaha studied on the “impact of cultural symbols

on advertising effectiveness” and he has proposed the theory of intercultural accommodation.Jonna and his partners in the study find the answer of marketers “How can marketers enhancecommunication by using the target group’s language, symbols, and cultural markers” As theworld becomes more diverse and intercultural interactions expand, marketers are increasinglyaware of the need to improve communication with groups from varying culturalbackgrounds.? The Theory of Intercultural Accommodation help us to answer the question:

“How does the presence of cultural symbols in an ad impact its effectiveness? What happenswhen customers react negatively to accommodation attempts, and what happenhis zs whenthey react favorably?”

As for Jonna, in the context of intercultural communication, companies attempt toaccommodate their targeted audience by adapting their messages to the receivers’ culture.They often go beyond merely matching their target’s speech or language styles, however, anduse many aspects of cultural symbols to become more similar to and gain the approval of theiraudience In the study research, The author concludes the following points:

 People who identify strongly with their ethnic group will have stronger affectiveresponses to the use of cultural symbols in advertisements

This states that respondents with stronger ethnic identification will have stronger affectiveresponses tothe use of cultural symbols in ads as compared to weaker ethnic identifiers Theconsumer’s feelings about the ad are often the primary determination of their attitude towardthe advertisement

 Ad evaluations will be significantly correlated with affect

The second hypothesis states that attitude toward the Ad will be significantly correlated withaffective response across all treatment conditions Affect and Attitude toward the Brand.Brown and Stayman’s (1992) provided support for a strong direct, as well as an indirect,influence of Ad Attitude on Brand Attitude Given the strong correlation between affect andAttitude toward the Ad, it is fairly safe to predict a relationship between affective response to

an ad and Attitude toward the Brand In the context of ethnically targeted advertising, in fact,this correlation was found Pitts et al (1989) studied the relationship between actor’s race andviewer’s responses to an advertisement in the context of positive portrayals The authorsreported a positive correspondence between brand evaluations and affect when the actor was

of the same race as the viewer For positive affect resulting from the use of cultural symbols

in the ad, similar results are expected in this study

 When consumers experience a positive affective response to the use of cultural symbols in

an advertisement, the direct correlation between Affect and Attitude toward the Brand will

be stronger than for those who have a negative affective response or those who seeadvertisements with no cultural symbols

This predicts that Affect and Attitude toward the Brand will be more highly correlated in thepositive affect condition than in the control or negative affect condition.

 Negative affect resulting from the use of cultural symbols in advertisements will impede the effectiveness of advertisements as measured by feature recall

 Positive affect resulting from the use of cultural symbols in advertisements will enhance the effectiveness of ads as measured by feature recall

CHAPTER III: RESEARCH FINDINGS

In this part, the author would summarize all the findings which are resulted from both primaryand secondary information As the survey is conducted in Hanoi and the interview samplesare peoples living in Hanoi, thus the results do not represent for the general Vietnamese forthose samples

3.1 Television Adverting in Vietnam

Television service providers in Vietnam

As mentioned above, we do have thoroughly understanding on the linkage betweenadvertising and culture In this part, the author will analyze current TV advertising which isdominant media in Vietnam

In Vietnam, there are around 60 central and local television broadcast firms VietnamTelevision (VTV) and Vietnam Multimedia Corporation (VTC) are the biggest national firmsfollowed by the strong development of local television firms such as Hanoi Television, HoChi Minh Television, and other local televisions With the long development history, VietnamTelevision offers free channels such as VTV1, VTV2, VTV3, VTV4, VTV5, VTV6, andVTV9 nationwide 1995 is marked by the new launch of VTV3 with many advertisingprograms which have sponsored for the television operation It cannot be denied that the birth

of VTV3 has triggered the strong development of immature advertising industry Current,thanks to booming of TV services with many channels including HBO, CNN, DisneyChannel, Cinamax, VCTV1, VCTV2, etc., advertising industry has more “land” for thedevelopment TV shopping is the persuasive evidence for this as it is channel for onlyadvertising

According to the report by TSN for three year 2006, 2007, and 2008, there has beenincreasing of the rate of TV owning in household in Vietnam As for 2008, nearly 99%peoples interviewed own TV and this number is expected to increase in the coming future.This fact indicates that Television is the best communication means which can reach to almostthe population

This claim has been confirmed by the data survey by TNS Vietnam conducted in January andFebruary 2010 On average, each urban household in the North has two TV sets, those incenter is only 1.7 and in their South, 1.8 The rates for the rural areas are 1.4, 1.2, and 1.3respectively VTV1 and VTV3 are most favoured by viewers while HBO, Star Movies andCinemax are the leading foreign pay channels

Figure 3.1: Report on owing of electronic devices in Vietnam

(Source: TNS Media Habit Survey 2006-2008)

Based on result of the TNS Media Habit Survey for the base of male and female age 15+across four major cities (Ho Chi Minh, Hanoi, Da Nang and Can Tho), although there havebeen more choices for other means of communication, TV is the best choice for theVietnamese to spend time

Accordingly, the time spending on TV in 2006, 2007 and 2008 is 295, 253, 233 minutes/dayrespectively A recent study by TNS also indicated that in 2009 Vietnam spend an average 4.3hours per day sitting before their TV sets, slightly more in the north with 4.6 hours, while thefigure is 4.2 hours in the south Generally, viewers prefer news and Vietnamese films Moreaudiences in the centre prefer game shows, while more southern viewers prefer Vietnamese

TV series and reality TV programmes

Figure 3.2: Minutes spending on TV, Newspaper, magazine, Radio and Internet

(Source: TSN- Habit Survey 2006-2008)

The author’s survey also indicates that 44.57% of respondents spend from one to 3 hours perdays and the majority of the above respondents are women aged from 26 to 33 years old Thiscan be easily understood as women in that age are almost married and they have to care take

of their family after working Because this questionnaire survey is mainly conducted in Hanoiwhere the life pace especially is faster than other cities, they can enjoy many kinds ofentertainments Therefore, the average hours spending on television in big cities are less thanother cities

25% of the respondents answer that they watch television for more than 4 hours What shall

be noted from the survey below is that the objectives that spend more than 4 hours per daysare mainly male As shared, the male respondents who have more 4 hours for TV mainlysports programs such as football, tennis

Figure 3.3: Spending time on television

(Source: Author’s survey in 2010)

Advertising in Vietnam

Although TV advertising is very favorable in Vietnam, not all the firms can afford the hugecost on television As estimated in order to have 30s spot for one TVC (television clip) intelevision, the company might spend 30,000 USD for the video clip, 2,000 USD/30s

According to the report in 2008 by James Chadwick as leader of business planning in AsiaPacific, developed and big countries like Japan and China spent much money on advertising.Under the report, Vietnam spent around 584 million USD in 2008 and 71.9% expenditure ofadvertising is for TV That is to say, Vietnam marketers prefer TV advertising than othermeans as it can create mass effect to Vietnamese consumers

Figure 3.4: Advertising expenditure of Asia Pacific countries in 2008

Source: GroupM, TYNY December 2008, Estimated Net Expenditure (million USD) including agency commission

Although global economy in general and Vietnamese economy in particular has experiencehard time in crisis, enterprises have been more active in marketing and they are generous totheir budget for advertising

Figure 3.5: Advertising growth in the first nine months

As for TNS, a market research company, the top 10 companies which spend the most foradvertising activities are listed in the table below:

Table 3.1: Top 10 companies spending expenditure on advertising for the first 6 months in 2010

Ranking position Company name

1 Unilever Vietnam

2 P&G Vietnam

3 Vinamilk

4 VMS-Mobile phone

5 Dutch Lady Vietnam

6 Tan Hiep Phat Group

As can be referred from the recent report by Nielsen Vietnam, the advertising industry haspositive signals when 50% of business leaders plan to increase their advertising across TCV(29%) In brief, advertising have been acknowledged as the “dangerous weapon” of thebusiness and it shall be very promising industry in the future where “big guys” includingglobal and domestic companies do not hesitate to spend money on that

Advertising on Hanoi consumer behaviors

In order to understand the attitude of Hanoian consumer toward advertising, the authorindentify how long they spend on watching the advertising a day and what they think aboutthe TCV advertising

Figure 3.6: Time spending on advertising watch

(Source: The author’s survey in July 2010)

From the survey’s result by the author, nearly 49% of respondents in Hanoi spend less than 15minutes a day on advertising and nearly 30% out of them watch TVC from 15 minutes to 30minutes The survey also indicates the majority of the group spending from 15 minutes to 30minutes is female

Obviously, in a typical Vietnamese family in general and in Hanoi in particular, women arethe shopper and decision makers or the influencer for their husband’s decisions They aremore patient then men and want more information of the products in detail before theirpurchasing decision In the focus group discussion, Mrs Phuong, 32 year old with 3 year old

daughter shared: “I like to watch TVC advertising especially when my daughter has meal The sound, image of the advertising attract her and she can eat more In addition, I can know about new products as well its information for more options My husband does not care much about it”

Mrs Phuong’s ideas seem to share the common points with other female shoppers In fact,man are less attractive for the TVC advertising then women as they are not patient enough towatch the advertising except the products are their current interest As shared by maleinterviewees, they often switch to other channels when the advertising is broadcasted Notablyduring our discussion with Mrs Tuyen, 59 year old who has retired for four years, weacknowledge that middle aged or old women seems to be more strict for the TV advertisingand they tend to not trust in advertising until they physically see the product The result fromthe qualitative methods has been verified by the author’s survey result in Hanoi as the belowgraph:

Figure 3.7: TVC Ads impacts on purchasing behavior

(Source: Author’s Survey in July 2010)

Based on the result, 45.56% and 8.7% out of 92 respondents have moderate and high impact

by TVC advertising for their purchasing behavior and almost answers are female Meanwhile,men tend to not have advertising impact on their decisions

We have interview with Mr Hung whose wife, Huong, 28 year old working for a foreigncompany who is always obsessed by her dry and damaged hair She spends much money on

shampoo and hair conditioner Her husband complained that “If you see the shampoos in our house, you will be sock As whenever she heard in TV adverting on new hair treatment products, she goes to supermarket to buy”

Another case can be referred from Ms Anh who is now raising 1 year son Although sheconsulted from her doctor for the milk suitable for her kid, her mother in law till insists her touse different product Her mother in law is much influenced by the milk advertised in TVbelieving those products shall be good for her grandson