Improving the integrated marketing communication activities at vietinbank

To do this, VietinBank currently applied model 5 components ofmodern intergrated marketing communications including PR, Advertising,Direct Marketing, Direct Sales and Promotions.. - Why

TABLE OF CONTENT

LIST OF TABLE FIGURE, CHART

Table 1.1 Marketing mix components

Figure 1.2 Two parameters of communications

Figure 1.3 The Five Ms of Advertising

Table 1.4 Profiles of Major media types

Figure 1.5 Formular for measuring sales impact of advertising

Figure 1.6 AIDA model (Elias St Elmo Lewis, 1898)

Figure 1.7 Response Hierarchy Model (Philip Kotler, Marketing ManagementMillenium Edition, 2000)

Table 2.1 Business performance of VietinBank in 2008 – 2012

Chart 2.2 Cost of IMC

Chart 2.3 Structure of IMC Cost

Figure 2.4 Results of survey minds of customer to banks

Figure 2.5 Results of survey minds of customer to brand of VietinBank

Figure 2.6 Results of survey minds of customer to logo of VietinBank

Chart 2.7 Results of Ebanking activities

Chart 2.8 Results of Savings activities by customers

Chart 2.9 Results of Savings activities by currency

Chart 2.10 Results of Savings activities by maturity

Chart 2.11 Structure of advertising cost in 2012

Chart 2.12 Brand Evaluation Index (BEI) of VietinBank compared competitorsChart 2.13 Brand Evaluation Index (BEI) of VietinBank compared competitors

in Hanoi

Chart 2.14 Brand Evaluation Index (BEI) of VietinBank compared competitors

in Ho Chi Minh city

Figure 2.15 Analyzing the lelel of customer belief to VietinBank brand (AC

Nielsen 6 months of 2013)

In 2008, the Industrial and Commercial Bank of Vietnam to conductprivatization, conversion brand name from ICB to VietinBank It can be said isthe most important milestone for with VietinBank communication activities Forthe first time, the concept of Marketing Communication appear and be put intothe center of communication management proces Along with the addition ofpersonnel and process innovation, communication activities of VietinBank shiftfrom "one-way communication" to "interactive communication".

Follow “Customer is Center” communication strategy, VietinBankoptimizes the multi-channel communication system with the suitable coststructure To do this, VietinBank currently applied model 5 components ofmodern intergrated marketing communications including PR, Advertising,Direct Marketing, Direct Sales and Promotions From these improvements,marketing communication activities of VietinBank gained more successes inenhancing brand awareness (rate of customer’s awareness without support hasincreased from 8% in 2008 to 16% in 2011 - Report of Nielsen Vietnam 3/2012)

and business results (average profit growth of 20% per year from 2008 to 2011 VietinBank Annual Report)

-Despite of that, current communication activities of VietinBank are facedmany difficulties in the management, especially in four problems The first one

is that despite of significant investment for marketing communication activities,the level of brand identity, the number of new customers and businessperformance after marketing communication programs did not achieve theexpected results The second one is that there are no specific mechanisms andprocesses to manage marketing communications campaigns, leading to overlapcommunication channels and waste of marketing communication cost forproducts and services at the same time The third one is that some moderncommunication channels with low cost are not interested and invested properlymake customers’ access ability to shrink And the last one is that the marketingcommunications function separation is not clear in the organizational structure

as well as the uncontrolled level communication activities of the branch Thatmakes the cost communication increased and media messages are not consistent

as well as decreasing the effectiveness of every marketing communicationcampaign

Those are the basis for proposing the research “Improving the integratedmarketing communication activities at VietinBank”

1 Research objectives

- To assess and identify the current state of integrated marketingcommunication activities at VietinBank and level of their effects to thebrand identity and business performance

- To propose recommendations to improve the effectiveness ofcommunication activities at VietinBank

2 Research questions

- How is the integrated marketing communication activities at VietinBankbeing executed in fact? What are the advantages and disadvantages ofintegrated communication activities at VietinBank?

- How does the Advertising influence to the customers’ awareness toVietinBank brand and retailed banking products (private deposit, privatecredit and ebanking)?

- How do the Public Relations and Personal Selling influence to thecustomers’ interest and reliability to VietinBank brand?

- How do the Personal Selling, Direct marketing and Direct Sales influence

to the customers’ purchase behavior with VietinBank brand and retailedbanking products?

- Why do the integrated marketing communication activities at VietinBanknot to increase the brand identity and sales performance for VietinBankbrand and its services?

- What should be done to improve the integrated marketing communicationactivities at VietinBank?

3 Literature review

- Previous research:

 Al Ries, Laura Ries (2002) The Fall of Advertising & The Rise of PR,translated, printed, published by Saigon Times Group, Youth Publishing (2005).Study by Al Ries and Laura Ries focused on functions of advertising and

PR - two important components of marketing communication for the branding,which clearly states: PR build “brand” and Advertising protects “brand” Thestudy also confirms that Advertising is more and more expensive and unreliablewhile PR with cheaper cost provides much more reliable information tocustomers Since then, the study analyzes the effectiveness of each tool in theoverall communication activities of the enterprise and the trend ofcommunication activities in the future

Thus, the study clearly shows how to build the trust of customers from thecommunication activities However, appliying this theory in Vietnamparticularly (when “branding” definition is just taken seriously for a few years)and the developing countries in general, the study have not provided a solution

to build integrated marketing communications directed to build awareness andinterest of customer, and also not to mention of purchasing behavior of thecustomers This can make it difficult for developing communications programsfor products and services

 Luu The Long (2010), Research Marketing communications activities forthe Tiger beer brand in the North of Vietnam

In this study, the author analyzed the current status of the marketingcommunication activities in the enterprise (which emphasizes three majoractivities as advertising, sales promotion and public relations), which assess theeffects of these activities to improve the brand identifying level of Tiger beer inVietnam However, the study have not analyzed the relationship between thestructure of communication components (here is the ratio of the budget) and theeffectiveness of marketing communication activities (through market researchdata about the level of the awarenes, interest, desiration and action) At the sametime, the author's research focused on the FMCG (fast moving consuminggoods) sector, with high differentiate from the service sector, especially bankingand financial services

Chris Fill, Barbara Jamieson (2011) Marketing Communication,Edinburgh Business School

The study’s authors analyzed the relationship between each communicationactivity to the level of effectiveness of the communication process, whichapplies 4Cs framework and model the level of effectiveness of eachcommunication activities This help enterprise can evaluate the effectiveness ofcommunication activities However, the applied research is mainly in the FMCG

sector and do not have specific solutions in the field of banking and financialservices.

- The remaining questions and their interlocking logic:

 What theoretical background on communication activities at banking andfinance?

 How to manage the communication to pursuit marketing goals andbusines goal?

- Reprises the research questions in this context:

 How is the integrated marketing communication activities at VietinBankbeing excuted in fact? What are the advantages and disadvantages ofintegrated communication activities at VietinBank?

 How does the Advertising influence to the customers’ awareness toVietinBank brand and its services?

 How does the Public Relations influence to the customers’ interest andreliable to VietinBank brand and its services?

 How do the Sales promotion, Direct marketing and Personal sellinginfluence to the customers’ purchase behavior with VietinBank brand andits services?

 Why do the integrated marketing communication activities at VietinBanknot to increase the brand identity and sales performance for VietinBankbrand and its services?

 What should be done to improve the integrated marketing communicationactivities at VietinBank?

Theorical framework Theoretical background

Data, report of company

In-depth interview

Group Discussion

Requirement of integrated marketing communication activities

Current circumstances of integrated marketing communication at VietinBank

Effectiveness of integrated marketing communication at VietinBank to customers

data

4 Research methodology

4.1 Research Process

4.2 Data collection

The data is collected from 2 sources are secondary and primary data

- Secondary data is collected include:

 Monthly, yearly reports of VietinBank and Marketing Department

 Internal progress and marketing campaigns’s final reports

 Regulation, circular…from the State related to this research

- Primary data is collected include:

 In-depth interview:

Interviewee Objective Information to be collected

- Do you care about the integrated

marketing communication?

- How do you access about the role

of integrated marketing communication in your business/work?

- What should VietinBank do to

develop the integrated marketing communication in the future?

i What is the current integrated marketing communication now?

ii What are the causes make the shortcomings of integrated marketingcommunication?

iii What will you do after knowing the reasons?

iv In your personal point, how to improve the effectiveness ofcommunication activities at VietinBank?

 Data analyzed by Excel tool

 Questionaires Survey:

 Objective: Measure and assess the impact of integrated marketingcommunication activities to the level of awareness, favorite andreliability of the customers for VietinBank brand and its services

 Object: Customers of VietinBank, include 2 group:

i New customer (just open VietinBank account or usingVietinBank’s service at the first time)

ii Loyal customer (using VietinBank’s service at least 1 year)

 Sample size: 300 persons

 Sample structure:

i By group: New customer 150 persons, Loyal customer 150persons

ii By category: Retail Banking (70%), Corporate Banking (30%)

 Sample field: Hanoi

 Questionaire Designing:

i Questionaire structure: include 2 parts:

Part 1: General information and coding

Part 2: Detailed questions

ii Questionaire collection methods: include 2 methods:

Delivering questionaire randomly to customers at transactioncounter

Email questionaire to customers

iii Number of questions: at least 25 questions but not more than 40questions

+ Secondary data are within 5 years (2008-2012)

+ Primary data: from May to July, 2013

CHAPTER I: THEORETICAL BACKGROUND ON INTEGRATED

Many organization or enterprises now have a Chief Marketing Officer(CMO), to put marketing on a more equal role with other C-level executive such

as CFO or CIO However, making the right marketing decisions is not alwayseasy Marketers must decide what features to design into a new product orservice, what price to set, where to sell offerings, how much to spend onadvertising, sales, internet marketing or mobile marketing Good marketers arealways seeking new way to satisfy their customers and beat the competition.Marketing is meeting needs porifitability

Marketing is everything a company does to acquire customers and maintain a relationship with them (1)

Marketing are the activities of a company associated with buying and selling a product or service It includes advertising, selling and delivering products to people People who work in marketing departments of companies try to get the attention of target audiences by using slogans, packaging design, celebrity endorsements and general media exposure (2)

(1), (2): http://www.investopedia.com/terms/m/marketing.asp

According to a social definition, marketing is a societal process by whichindividuals and groups obtain what they need and want through creating,offering, and exchang-ing products and services of value freely with others.Peter Drucker, a leading management theorist defines that: “The aim ofmarketing is to make selling superfluous The aim of marketing is to know andunderstand the customer so well that the product or service fits him and sellsitself Ideally, marketing should result in a customer who is ready to buy.”

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (3)

Marketing is the management process through which goods and services move from concept to the customer It includes the coordination of four elements called the 4 P's of marketing: identification, selection and development

of a product; determination of its price; selection of a distribution channel to reach the customer's place, and development and implementation of a promotional strategy (4 )

1.1.2 Concept of Marketing

1.1.2.1 Earlier approaches of Marketing

Production orientated Marketing: A firm focusing on a production

orientation specializes in producing as much as possible of a given product orservice Thus, this signifies a firm exploiting economies of scale until theminimum efficient scale is reached A production orientation may be deployedwhen a high demand for a product or service exists, coupled with a goodcertainty that consumer tastes will not rapidly alter (similar to the salesorientation)

Product oriented Marketing: A firm employing a product orientation is

chiefly concerned with the quality of its own product A firm would also assumethat as long as its product was of a high standard, people would buy andconsume the product

Selling oriented Marketing: A firm using a sales orientation focuses

primarily on the selling/promotion of a particular product, and not determiningnew consumer desires as such Consequently, this entails simply selling analready existing product, and using promotion techniques to attain the highestsales possible Such an orientation may suit scenarios in which a firm holdsdead stock, or otherwise sells a product that is in high demand, with littlelikelihood of changes in consumer tastes that would diminish demand

Modern Marketing: The 'marketing orientation' is the most common

orientation used in contemporary marketing It involves a firm essentially basingits marketing plans around the marketing concept, and thus supplying products

to suit new consumer tastes As an example, a firm would employ marketresearch to gauge consumer desires, use R&D (research and development) todevelop a product attuned to the revealed information, and then utilizepromotion techniques to ensure persons know the product exists

Holistic Maketing: The holistic marketing concept looks at marketing as a

complex activity and acknowledges that everything matters in marketing - andthat a broad and integrated perspective is necessary in developing, designing andimplementing marketing programs and activities The four components thatcharacterize holistic marketing are relationship marketing, internal marketing,integrated marketing, and socially responsive marketing

1.1.2.2 Contemporary approaches of Marketing

Relationship marketing: Emphasis is placed on the whole relationship

between suppliers and customers The aim is to provide the best possiblecustomer service and build customer loyalty

Business marketing: In this context, marketing takes place between

businesses or organizations The product focus lies on industrial goods or capitalgoods rather than consumer products or end products Different forms ofmarketing activities, such as promotion, advertising and communication to thecustomer are used

Societal marketing: Similar characteristics to marketing orientation but

with the added proviso that there will be a curtailment of any harmful activities

to society, in either product, production, or selling methods

Branding: In this context, "branding" refers to the main company

philosophy and marketing is considered to be an instrument of brandingphilosophy

1.2 Integrated marketing communications and the role in Marketing.

1.2.1 Integrated marketing communications (IMC)

1.2.1.1 Definition

The first definition for integrated marketing communication (IMC) camefrom the American Association of Advertising Agencies (4A’s) in 1989,

defining IMC as "an approach to achieving the objectives of a marketing

campaign through a well-coordinated use of different promotional methods that are intended to reinforce each other” The 4A's definition of IMC recognizes the

strategic roles of various communication disciplines (advertising, publicrelations, sales promotions, etc) to provide clarity, consistency, and increasedimpact when combined within a comprehensive communications plan.Basically, it is the application of consistent brand messaging across bothtraditional and non-traditional marketing channels

The Journal of Integrated Marketing Communication from the Medill

School of Journalism at Northwestern University refers to IMC as "a strategic

marketing process specifically designed to ensure that all messaging and communication strategies are unified across all channels and are centered around the customer." IMC is used practically to allow one medium's weakness

to be offset by another medium's strength, with elements synergized to supporteach other and create greater impact

A more contemporary definition states, "True IMC is the development ofmarketing strategies and creative campaigns that weave together multiplemarketing disciplines (paid advertising, public relations, promotion, owned

assets, and social media) that are selected and then executed to suit the particulargoals of the brand." Instead of simply utilizing various media to help tell abrand's overall story, with IMC the marketing leverages each communicationchannel's intrinsic strengths to achieve a greater impact together than eachchannel could achieve individually It requires the marketer to understand eachmedium's limitation, including the audience's ability/willingness to absorbmessaging from that medium This understanding is integrated into a campaign'sstrategic plan from the very beginning of planning - so that the brand no longersimply speaks with consistency, but speaks with planned efficacy This conceptinherently provides added benefits that include: a singular/synchronized brandvoice and experience, cost efficiencies generated through creativity andproduction, and opportunities for added value and bonus.

1.2.1.2 Process model of integrated marketing communication

Most of conventional communication “process models” derive fromSchramm’s original 1954 Linear Communication model The basic premise ofthese communication frameworks is that marketing messages are transmittedfrom a source to a receiver through some sort of media conduit

Source or sender can be an individual or organization responsible for

identifying a need as a market opportunity who wants to convey this message tothe target audtience Effectiveness of commnunication will be a result ofwhether we feel the source is: credible, attractive and power

Encoding is the representative element of the brand message or idea used to

convey meaning: words, colours, pictures, signs, symbols or music

Media refers to all the communication channels which carry the message

from sender to receiver and can effect the meaning of the brand to the targetaudience This maybe positive or negative

Decoding is the process of interpreting messages and relies on correct

encoding and the ability of the receiver to deconstruct transmitted meaning

Feedback is crucial since dialogues are two-way and depend on reaction to

intended communications This feeds back into the communication process andfuture messages may be changed and made more appropriate

1.2.2 The role of marketing communications in Marketing

Marketing communications are the means by which firms attempt toinform, persuade, and remind consumers – directly or indirectly - about theproducts and the brands they sell They present the voice of the company and itsbrand and help the firm establish a dialogue and build relationships withconsumers Marketing communications show consumers how and why a product

is used, by whom, where and when; let consumers know who makes the productand what the firm and brand stand for; and offer an incentive for trial or use Theallow companies to link their brands to other people, places, events, brands,experiences, feelings, and things They can contribute to brand equity – byestablishing the brand in memory and creating a brand image – as well asstrengthen customer loyalty, drive sales, and even effect share holder value

1.2.3 Activities of integrated marketing communications.

1.2.3.1 Definition of the communications mix.

According to Rowley (2001), the communication mix is “the combination

of different channels or tools that are used to communicate a massage” The

component parts of the communications mix form the structure of the rest of thissection and will therefore be discussed separately

Telephone Broadcast media Print media Computer-related

Point of Purchase Advertising

Shell talkers Goldola aisle markets Shopping cartads Queue TV

In-store radio and TV

Trade Promotion Trade deals and buying allowances POS display allowances

Contest and dealer incentives Trade shows

Contest and dealer incentives Trade shows

ADVERTISING

TV Radio Newspaper Magazines Online Viral Marketing

DIRECT MARKETING

TV Radio Newspaper Magazines Online Viral Marketing

PROMOTIONS

TV Radio Newspaper Magazines Online Viral Marketing

SALES

TV Radio Newspaper Magazines Online Viral Marketing

PUBLIC RELATIONS (PR)

TV Radio Newspaper Magazines Online Viral Marketing

Table 1.1 Marketing mix components (Micael Dahlén, Fredrik Lange, Terry Smith (2010) Marketing Communication, A Narrative Approach)

The communications mix includes two parameters of personal andimpersonal communications:

Non-personal communications: aimed at managing image and building thebrand These have been traditionally one way, asymmetrcial communications,

communications

Sales, service and customer contact management

Non-personal communications

Image management and brand building

Two-way communications with

dialogue aimed at segments

Immediate feedback

One-way communications without dialogue aimed at

segments Delayed feedback

boundary communication

Figure 1.2 Two parameters of communications (Micael Dahlén, Fredrik Lange, Terry Smith (2010) Marketing Communication, A Narrative

Approach)

1.2.3.2 Process of an Integrated marketing communication program

Modern marketing calls for more than developing a good product, pricing itattrac-tively, and making it accessible Companies must also communicate withpresent and potential stakeholders as well as the general public For mostcompanies, the ques-tion is not whether to communicate but rather what to say,

to whom, and how often The marketing communications mix consists ofadvertising, sales promotion, public relations and publicity, personal selling, anddirect marketing, although marketers know that communication goes beyondthese five methods The product’s styling and price, the package’s shape and

color, the salesperson’s manner and dress,the place’s decor—all communicatesomething to buyers In fact, every brand contact delivers an impression that canaffect a customer’s view of the company Therefore, the entire marketing mixmust be integrated to deliver a consistent message and strategic positioning.Today there is a new view of communications as an interactive dialoguebetween the company and its customers that takes place during the preselling,selling, consuming, and postconsuming stages Successful companies are askingnot only “How can we reach our customers?” but, in a break from the past, arealso asking “How can our customers reach us?” Increasingly, it is the newertechnologies, such as the Internet, that have encouraged more firms to movefrom mass communication to more targeted communication and one-to-onedialogue with customers and other stakeholders There are eight steps to follow

in developing an effective marketing communications program: (1) identify thetarget audience, (2) determine the communication objectives, (3) design themessage, (4) select the communication channels, (5) establish the totalcommunications budget, (6) decide on the communications mix, (7) measure thecommunications’ results, and (8) manage the integrated marketingcommunication process

Identifying the Target Audience

The first step is to identify a clear target audience: potential buyers of thecompany’s products, current users, deciders, or influencers; individuals, groups,particular publics, or the general public The target audience is a criticalinfluence on the com-municator’s decisions about what to say, how to say it,when to say it, where to say it, and to whom to say it

Determining the Communication Objectives

Knowing the target audience and its perceptions, the marketingcommunicator can now decide on the desired audience response, seeking acognitive, affective,orbehav-ioralresponse That is, the marketer might want toput something into the consumer’s mind, change an attitude, or get the consumer

to act All of these models assume that the buyer passes through a cognitive,affective, and behavioral stage, in that order This “learn-feel-do” sequence isappropriate when the audience has high involvement with a product categorythat is perceived to have high differentiation, as in purchasing an automobile Analternative sequence, “do-feel-learn,” is relevant when the audience has highinvolvement but perceives little or no dif-ferentiation within the productcategory, as in purchasing aluminum siding A third sequence, “learn-do-feel,”

is relevant when the audience has low involvement and per-ceives littledifferentiation within the product category, as in purchasing salt By choos-ingthe right sequence, the marketer can do a better job of planning communications

Designing the Message

Having defined the desired response, the communicator moves todeveloping an effective message Ideally, the message should gain attention,holdinterest, arousedesire, and elicit action In practice, few messages take thetarget audience all the way from awareness through purchase Formulating themessage will require solving four problems: what to say (message content), how

to say it logically (message structure), how to say it symbolically (messageformat), and who should say it (message source)

Message Content: In determining message content, management searchesfor an appeal, theme, idea, or unique selling proposition There are three types ofappeals: Rational appeals, Emotional appeals and moral appeals Multinationalcompanies wrestle with a number of challenges in developing message contentfor global campaigns First, they must decide whether the product is appropriatefor a country Second, they must make sure the targeted market segment is bothlegal and customary Third, they must decide if the style of the ad is acceptable

or customary in all of the countries And fourth, they must decide whether adsshould be created at headquarters or locally

Message Structure: Message effectiveness depends on structure as well as

content For example, a communicator may think that one-sided presentations

that praise a product would be more effective than two-sided arguments that alsomention shortcomings Yet two-sided messages may be more appropriate,especially when some negative association must be overcome The order inwhich arguments are presented is also an important part of mes-sage structure.

In the case of a one-sided message, presenting the strongest argument first hasthe advantage of establishing attention and interest This is important in news-papers and other media where the audience often does not attend to the wholemes-sage With a captive audience, however, a climactic presentation might bemore effec-tive In the case of a two-sided message, if the audience is initiallyopposed, the communicator might start with the other side’s argument andconclude with the strongest argument

Message Format: The communicator must develop a strong message

format In a print ad, the commu-nicator has to decide on headline, copy,illustration, and color For radio, the commu-nicator has to choose words, voicequalities, and vocalizations If the message is to be carried on television or inperson, all of these elements plus body language (nonverbal clues) have to beplanned If the message is carried by the product or its packaging, thecommunicator has to pay attention to color, texture, scent, size, and shape Web-based messages have the flexibility to combine aspects of print, radio, andtelevision messages with a variety of special effects and interactive features toattract, retain, and reinforce audience interest

Message Source: Messages delivered by attractive or popular sources

achieve higher attention and recall, which is why advertisers often usecelebrities as spokespeople In particular, messages delivered by highly crediblesources are more persuasive Three factors that underly source credibility areexpertise, trustworthiness, and likability

Selecting Communication Channels

Now that the message has been designed, the communicator must selectefficient com-munication channels to carry it For example, pharmaceuticalsalespeople can rarely wrest more than 10 minutes’ time from a busy physician.Because personal selling is expensive, the industry has added multiple channels:ads in medical journals, direct mail (including audio and videotapes), sampling,telemarketing, Web sites, confer-ences and teleconferences, and more All ofthese channels are used in the hope of building physician preference forparticular branded drug products In general, firms can use two types ofcommunication channels: personal and nonpersonal

Personal Communication Channels: Personal communication channels

involve two or more persons communicating directly with each other face toface, person to audience, over the telephone, or through e-mail These channelsderive their effectiveness through the opportunities for individualizing thepresentation and feedback

Companies can take several steps to stimulate personal influence channels

to work on their behalf:

- Identify influential individuals and companies and devote extra effort

- Use influential or believable people in testimonial advertising

- Develop advertising that has high “conversation value”

- Develop word-of-mouth referral channels to build business

- Establish an electronic forum

Nonpersonal Communication Channels: Nonpersonal channels include

media, atmospheres, and events Mediaconsist of print media (newspapers,

magazines, direct mail), broadcast media (radio, television), elec-tronic media(audiotape, videotape, CD-ROM, DVD, Web page), and display media(billboards, signs, posters) Most nonpersonal messages come through paidmedia.

Atmospheres are “packaged environments” that create or reinforce thebuyer’s leanings toward product purchase Events are occurrences designed tocommunicate particular messages to target audiences Although personalcommunication is often more effective, nonpersonal chan-nels affect personalattitudes and behavior through a two-step flow-of-communication process Ideasoften flow from radio, television, print, and Internet sources to opinion leadersand from these to the less media-involved population groups This two-step flowhas several implications First, the influence of nonpersonal channels on publicopinion is mediated by opinion leaders, people whose opinions are sought orwho carry their opinions to others Second, the two-step flow shows that peopleinteract primar-ily within their own social group and acquire ideas from opinionleaders in their group Third, two-step communication suggests that marketersusing nonpersonal channels should direct messages specifically to opinionleaders and let them carry themessage to others

Establishing the Marketing Communications Budget

Industries and companies vary considerably in how much they spend onpromotion; expenditures might amount to 30–50 percent of sales in thecosmetics industry but only 5–10 percent in the industrial-equipment industry,with variations from company to company There are four common methods toestablish the marketing communication budget:

- Affordable method: Many companies set the promotion budget atwhat managementthinks the firm can afford However, this methodignores the role of promotion as an investment and the immediateimpact of promotion on sales volume; it also leads to an uncertainannual budget, making long-range planning difficult

- Percentage-of-sales method.Many firms set promotion expenditures at

a specified percentage of sales (either current or anticipated) or of thesales price Supporters say this method links promotion expenditures

to the movement of corporate sales over the business cycle;encourages management to consider the interrelationship of promotioncost, selling price, and unit profit; and encourages stability whencompeting firms spend approximately the same percentage On theother hand, this method views sales as the determiner of promotionrather than as the result, and it provides no logical basis for choosingthe specific percentage

- Competitive-parity method.Some companies set their promotionbudget to achieve share-of-voice parity with competitors Althoughproponents say that competitors’ expenditures represent the collectivewisdom of the industry and that maintainingcompetitive parityprevents promotion wars, neither argument is valid There are nogrounds for believing that competitors know better what should bespent on promotion Company reputations, resources, opportunities,and objectives differ so much that promotion budgets are hardly aguide Furthermore, there is no evidence that competitive paritydiscourages promotional wars

- Objective-and-task method.Here, marketers develop promotionbudgets by definine specific objectives, determining the tasks thatmust be performed to achieve these objectives, and estimating thecosts of performing these tasks The sum of these costs is the proposedpromotion budget This method has the advantage of requiringmanagement to spell out assumptions about the relationship amongdollars spent, exposure levels, trial rates, and regular usage

Developing and Managing the Marketing Communications Mix

Having established a communications budget, companies must decide how

to allocate it over the five promotional tools Companies differ considerably intheir allocations, even within the same industry Still, because companies arealways searching for more efficiency by substituting one promotional tool foranother, they must be careful to coordinate all of their marketing functions

Measuring Results

After implementing the promotional plan, the communicator must measureits impact Members of the target audience are asked whether they recognize orrecall the message, how many times they saw it, what points they recall, howthey felt about the message, and their previous and current attitudes toward theproduct and company The communicator should also collect behavioralmeasures of audi-ence response, such as how many people bought the product,liked it, and talked to others about it

Managing the Integrated Marketing Communications Process

Given the fragmenting of mass markets into minimarkets, the proliferation

of new types of media, and the growing sophistication of consumers, companiesneed to use a wider range of communication tools, messages, and audiences To

do this most effec-tively, companies must embrace integrated marketingcommunications As defined by the American Association of AdvertisingAgencies, integrated marketing communications(IMC) is a concept of marketingcommunications planning that recognizes the added value of a comprehensiveplan that evaluates the strategic roles of a variety of communications disciplines

- for example, general advertising, direct response, sales promotion and publicrelations and combines these disciplines to provide clarity, consis-tency, andmaximum communications’ impact through the seamless integration of discretemessages

IMC produces stronger message consistency and greater sales impact; italso gives someone responsibility to unify the company’s various brand images

Sales goals

Advertising

objectives

MISSION Factors to consider:

Market share and customer base Competition and clutter Advertising frequency Product

MONEY

Message generation Message selection Social – responability review

MESSAGE

Reach, frequency Major media types Specific media vehicles Media timing

Geographic allocation

MEDIA

Commnunication impact

Sales impact

MEASUREMEN

T

and messages Properly implemented, IMC will improve the company’s ability

to reach the right customers with the right messages at the right time and in theright place

1.2.3.3 Activities of integrated marketing communications.

1.2.3.3.1 Advertising

Advertising is any paid form of nonpersonal presentation and promotion ofideas, goods, or services by an identified sponsor Advertisers include not onlybusiness firms but also museums, charitable organizations, and governmentagencies that direct messages to target publics Ads are a cost-effective way todisseminate messages, whether to build brand preference or educate people

In developing an advertising program, successful firms start by identifyingthe target market and buyer motives Then they can make five critical decisions,known as the five Ms, including:

- Mission: What are the advertising objectives?

- Money: How much can be spent?

- Message: What message should be sent?

- Media: What media should be used?

- Measurement: How should the results be evaluated? These decisions aresummarized in

Figure 1.3 The Five Ms of Advertising (Philip Kotler (2000) Marketing

Management Millenium Edition, Prentice-Hall, Inc.)

Setting the Advertising Objectives: Advertising objectives can be classified

according to whether their aim is to inform, persuade, or remind:

- Informative advertisingfigures heavily in the pioneering stage of aproduct category, where the objective is to build primary demand

- Persuasive advertisingbecomes important in the competitive stage,where the objective is to build selective demand for a particular brand.Some persuasive advertising is comparative advertising, which explicitlycompares two or more brands

- Reminder advertisingis important with mature products A relatedform of advertising is reinforcement advertising,which seeks to assurecurrent purchasers that they have made the right choice

Deciding on the Advertising Budget: Management should consider these

five factors when setting the advertising budget:

- Product life cycle stage: New products typically receive large budgets

to build awareness and to gain consumer trial Established brandsusually are supported with lower bud-gets as a ratio to sales

- Market share and consumer base: High-market-share brands usuallyrequire less advertising expenditure as a percentage of sales tomaintain their share To build share by increas-ing market sizerequires larger advertising expenditures On a cost-per-impressionbasis, it is less expensive to reach consumers of a widely used brandthan to reach consumers of low-share brands

- Competition and clutter:In a market with a large number ofcompetitors and high advertising spending, a brand must advertisemore heavily to be heard Even simple clutter from advertisementsthat are not directly competitive to the brand creates a need for heavieradvertising

- Advertising frequency:The number of repetitions needed to put acrossthe brand’s message to consumers has an important impact on theadvertising budget

- Product substitutability:Brands in a commodity class (cigarettes, beer,soft drinks) require heavy advertising to establish a differential image.Advertising is also impor-tant when a brand offers unique benefits orfeatures.

Media selection: Media selection involves finding the most cost-effective

media to deliver the desired num-ber of exposures to the target audience What

do we mean by the desired number of expo-sures? Presumably, the advertiser isseeking a certain response from the target audience, for example, a certain level

of product trial The rate of product trial will depend, among other things, on thelevel of audience brand awareness The effect of exposures on audi-enceawareness depends on the exposures’ reach, frequency, and impact:

Reach (R): The number of different persons or households that are exposed

to a particular media schedule at least once during a specified time period

Frequency (F):The number of times within the specified time period that anaverage person or household is exposed to the message

Impact (I): The qualitative value of an exposure through a given medium.Although audience awareness will be greater with higher reach, frequency,and impact, there are important trade-offs among these elements It is the mediaplanner’s job to figure out, within a given budget, the most cost-effectivecombination of reach, frequency, and impact Reach is most important whenlaunching new products, flanker brands, extensions of well-known brands, orinfrequently purchased brands, or when going after an undefined target market.Frequency is most important where there are strong competitors, a complexstory to tell, high consumer resistance, or a frequent-purchase cycle Manyadvertisers believe that a target audience needs a large number of expo-sures forthe advertising to work Too few repetitions can be a waste because they willhardly be noticed Others doubt the value of high ad frequency They believethat after people see the same ad a few times, they either act on it, get irritated

by it, or stop noticing it Another factor arguing for repetition is that offorgetting The higher the forgetting rate associated with a brand, productcategory, or message, the higher the warranted level of repetition But repetition

is not enough Ads wear out and viewers tune out, so advertisers need freshexecutions of the messages

Selecting Media and Vehicles: The media planner has to know the capacity

of the major media types to deliver reach, frequency, and impact

Media planners choose among these media categories by considering thefollowing variables:

- Target-audience media habits: For example, radio, television, and theInternet are effective media for reaching teenagers

- Product: Media types have different potentials for demonstration,visualization, explanation, believability, and color

- Message: A message announcing a major sale tomorrow will requireradio, TV, or newspaper A message containing a great deal oftechnical data might require specialized magazines or mailings

- Cost: Television is very expensive, whereas newspaper advertising isrelatively inexpensive What counts is the cost-per-thousandexposures

Table 1.4 Profiles of Major media types ( Philip Kotler (2000) Marketing

Management Millenium Edition, Prentice-Hall, Inc.)

Share of

expenditure

Share ofvoice

Share ofmind and heart

Share ofmarket

Evaluating Advertising Effectiveness: Good planning and control of

advertising depend on measures of advertising effec-tiveness Yet the amount offundamental research on advertising effectiveness is appallingly small.Advertisers should try to measure the communication effect of an ad, that is, itspotential effect on awareness, knowledge, or preference as well as theadvertising’s sales effect:

- Communication-effect research seeks to determine whether an ad iscommunicating effectively Called copy testing,it can be done before

an ad is placed (pretesting) and after it is placed (posttesting).Advertisers also need to posttest the overall impact of a completedcampaign

- Sales-effect researches complex because sales are influenced by manyfactors beyond advertising, such as product features, price, andavailability, as well as competitors’ actions The sales impact is easiest

to measure in direct-marketing situations and hardest to measure inbrand or corporate-image-building advertising Peckham studied therelationship between share of voice and share of market for several

consumer products over a number of years and found a 1-to-1 ratio for

established products and a 1.5–2.0 to 1.0 ratio for new products

Figure 1.5 Formular for measuring sales impact of advertising (Philip Kotler (2000) Marketing Management Millenium Edition, Prentice-Hall, Inc.)

1.2.3.3.2.Sales Promotion

Sales promotion,a key ingredient in many marketing campaigns, consists of

a diverse collection of incentive tools, mostly short term, designed to stimulatetrial, or quicker or greater purchase, of particular products or services by

consumers or the trade Whereas advertising offers a reason to buy, salespromotion offers an incentive to buy.

Sales promotion includes tools for consumer promotion(samples, coupons,cash refund offers, prices off, premiums, prizes, patronage rewards, free trials,warranties, tie-in promotions, cross-promotions, point-of-purchase displays, anddemonstrations); trade promotion(prices off, advertising and display allowances,and free goods), and business-and sales force promotion(trade shows andconventions, contests for sales reps, and spe-cialty advertising)

In years past, the advertising-to-sales-promotion ratio was about 60:40.Today, in many consumer-packaged-goods companies, sales promotionaccounts for 65–75% of the overall promotional budget Several factors havecontributed to this trend, particularly in in consumer markets

Internal factors include the following: Promotion is now more accepted bytop management as an effective sales tool, more product managers are qualified

to use sales-promotion tools, and product managers are under greater pressure toincrease current sales External factors include: The number of brands hasincreased, competitors use promotions frequently, many brands are seen asbeing similar, consumers are more price-oriented, the trade demands more dealsfrom manufacturers, and advertising efficiency has declined because of risingcosts, media clutter, and legal restraints

In general, sales promotion seems most effective when used together withadver-tising In one study, a price promotion alone produced only a 15%increase in sales volume When combined with feature advertising, sales volumeincreased 19%; when combined with feature advertising and a point-of-purchasedisplay, sales volume increased 24%

Purpose of Sales Promotion

Sales-promotion tools can be used to achieve a variety of objectives.Sellers use incentive-type promotions to attract new triers, to reward loyalcustomers, and to increase the repurchase rates of occasional users New triers

are of three types users of another brand in the same category, users in othercategories, and frequent brand switchers Sales promotions often attract thebrand switchers, because users of other brands and categories do not alwaysnotice or act on a promotion Brand switchers are primarily looking for lowprice, good value, or premiums, so sales pro-motions are unlikely to turn theminto loyal users Sales promotions used in markets of high brand similarityproduce a high sales response in the short run but little per-manent gain inmarket share In markets of high brand dissimilarity, however, sales promotionscan alter market shares permanently.

Major Decisions in Sales Promotion

In using sales promotion, a company must establish its objectives, selectthe tools, develop the program, pretest the program, implement and control it,and evaluate the results:

Establishing objectives: Sales-promotion objectives are derived frombroader promotion objectives, which are derived from more basic marketingobjectives that are developed for the product The specific objectives for salespromotion vary with the target market For consumers, objectives includeencouraging purchase of larger-size units, building trial among nonusers, andattracting switchers away from competitors’ brands For retailers, objectivesinclude persuading retailers to carry new items and higher levels of inventory,encouraging off-season buying, offsetting competitive promotions, buildingbrand loyalty, and gaining entry into new retail outlets For the sales force,objectives include encouraging support of a new product or model, encouragingmore prospecting, and stimulating off-season sales

Selecting consumer-promotion tools: We can distinguish betweenmanufacturer promotions and retailer promotions The former imparts a sellingmessage along with the deal, as in the case of coupons that include a sellingmessage Sales-promotion tools that are not consumer-franchise building include

price-off packs, premiums that are unrelated to a product, contests andsweepstakes, consumer refund offers, and trade allowances.

Selecting trade promotion tools: Manufacturers can use a number of promotion tools, to persuade an intermediary to carry the product, persuade anintermediary to carry more units, induce retailers to promote the brand byfeaturing, display, and price reduction, and stimulate retailers and theirsalespeople to push the product The growing power of large retailers hasincreased their ability to demand trade promotion at the expense of consumerpromotion and advertising, so manufacturers often spend more on tradepromotion than they would like

trade-Selecting sales promotion tools: Companies spend money on business andsales force promotion tools to gather business leads, impress and rewardcustomers, and motivate the sales force to greater effort Companies typicallydevelop budgets for each business-promotion tool that remain fairly constantfrom year to year

Developing the program: In deciding to use a particular incentive,marketers have to consider: the size of the incentive (a certain minimum isnecessary if the promotion is to succeed; a higher level will produce more salesresponse but at a diminishing rate); the conditionsfor participation (whether tooffer the incentive to everyone or to select groups); the duration (if the period istoo short, many prospects will not be able to take advantage of it - but if it runstoo long, it loses some of its “act now” force); the distribution vehicle (eachdistribution method involves a different level of reach, cost, and impact); thetiming (annually, one-time, or some other dates - which must be communicatedand coordinated with other departments); and the total sales-promotion budget(including administrative costs and incentive costs)

Pretesting the program: Although most sales-promotion programs aredesigned on the basis of experience, savvy marketers use pretests to determine ifthe tools are appropriate, the incentive size is optimal, and the presentation

method is efficient Strang maintains that promotions usually can be testedquickly and inexpensively and that large companies should test alternativestrategies in selected market areas with each national promotion.

Implementing and evaluating the program: Implementation planning mustcover lead time (the time needed to prepare the program before the launch) andsell-in time (which begins with the launch and ends when approximately 95percent of the deal merchandise is in the hands of consumers) Afterimplementation, manufacturers can measure sales-promotion effectiveness usingsales data, consumer surveys, and experiments

Marketing Public Relations

Many companies are turning to marketing public relations (MPR) todirectly support cor-porate or product promotion and image making Thus MPR,like financial PR and community PR, serves a special constituency, namely themarketing department MPR plays an important role in:

- Assisting in the launch of new products

- Assisting in repositioning a mature product

- Building interest in a product category

- Influencing specific target groups

- Defending products that have encountered public problems

- Building the corporate image in a way reflects favorably

Major Decisions in Marketing PR

In considering when and how to use MPR, management must follow thesame process as it does for advertising and sales promotion: Establish themarketing objectives, choose the messages and vehicles, implement the plancarefully, and evaluate the results

- Establishing the marketing objectives These may include: Buildawareness of a product, service, person, organization, or an idea; addcredibility by communicating a message in an editorial context; boostsales force and dealer enthusiasm; and hold down promotion costswhile gaining share of mind Management needs to set specificobjectives for each MPR campaign so the results can be evaluated

- Choosing messages and vehicles.The MPR expert must identify ordevelop interesting stories to tell about the product If there are fewstories, the expert should propose newsworthy events to sponsor as away of stimulating media coverage

- Implementing and evaluating the plan PR implementation must behandled with care A great story is easy to place, but other storiesmight not get past busy editors One of the chief assets of publicists istheir personal relationship with media editors MPR’s contribution tothe bottom line is difficult to measure because it is used along withother promotional tools The easiest measure is the number ofexposuresobtained in the media, including the audience size and thecost of that space and time if purchased at advertising rates Othermeasures include changes in product awareness,comprehension,orattituderesulting from the MPR campaign (afterallowing for the effect of other promotional tools) The most

1.2.4 Framework to assess the IMC activity

Within the scope of research, thesis based on 2 main framework for

evaluating IMC activities, including: AIDA Model of Elias St Elmo Liwis and

Response Hierarchy Model of Philip Kotler

Figure 1.6 AIDA model (Elias St Elmo Lewis, 1898)

Figure 1.7 Response Hierarchy Model (Philip Kotler, Marketing

Management Millenium Edition, 2000)

In conclusion of chapter 1, theoretical analysis of IMC shows that IMC isnot only a specific issue, but also a strategic issue Applying IMC activitíes aredifferent from objectives to objectives or from industry to industry Clearly,based on the characteristics of enterprises and the feature of banking field, IMCactivities needs to concern as the most important activities in every enterprise.The implementation of IMC activities is very necessary in the hard competitions

in Vietnam, especially in banking field

CHAPTER II: ANALYZING INTEGRATED MARKETING

COMMUNICATION ACTIVITIES AT VIETINBANK

2.1 Overview about VietinBank.

2.1.2 Introduction

VietinBank was established in 1988 after being separated from State Bank

of Vietnam Being one of the four largest State-owned commercial banks ofVietnam, VietinBank’s total assets account for over 20 percent of the marketshare of the whole Vietnamese banking system VietinBank’s capital resourceskeep on increasing over the years and have been substantially rising since 1996with the annual average growth of 20 percent, especially up 35 percent a yearagainst that of last year VietinBank has developed an operations networkcomprising of 01 Transaction Centers, 150 branches, over 1000 transactionoffices/ savings offices Has established correspondent relationship with 900banks, financial institutions of 90 countries and territories all over the world Being diversified with 07 independent accounting subsidiaries: VietinBankLeasing Company, VietinBank Securities Company, VietinBank AssetManagement Company, VietinBank Insurance Company, VietinBank FundManagement Company, VietinBank Gold and Jewellery Company, VietinBankGlobal Money Transfer Company and 03 non-profit making units: VietinBankInformation Technology Center, VietinBank Card Center and VietinBankTraining Center

 Being the founder of the following Financial Credit Institutions:

- Saigon Bank for Commerce and Industry

- Indovina Bank (the first joint-venture bank in Vietnam)

- Vietnam International Leasing Company – VILC (the first financialleasing company in Vietnam)

- Vietinbank Insurance Company Ltd

 Being the official member of :

- Vietnam’s Banker Association

- Asian Banker’s Association

- Society for Worldwide Interbank Financial Telecommunications(SWIFT)

- Visa International Services Association

 Being the first bank in Vietnam to apply modern technology and

e-commerce in its banking operations.

Mission: To become the leading fnancial and banking corporation in

Vietnam that operates in diverse areas, as well as provides products andservices that conform to international standards, aiming to improve thevalues of life

Vision: To become one of the most modern and efective fnancial and

banking group in and outside the country

Core Values: Customer-oriented operations; Dynamic, innovative,

professional, devoted, transparent, modern; Workers have the right to make

their best efort and contribution – they have the right to receive rightfulcompensation – they have the right to pay homage to outstandingindividuals and workers

Business Philosophy:

- Safe, efective, sustainable, and in compliance with internationalstandards;

- United, ready to cooperate, share, and be socially responsible;

- Your prosperity is our success

- Slogan: Improving the values of life

For two consecutive years, 2012 and 2013, VietinBank is the onlyVietnamese enterprise in the top 2000 largest one in the world (based on theranking of Forbes Magazine, United States of America,www.forbes.com/global2000) Throughout 25 years of construction and