G1_00162 ACCOMPLISHMENT OF MARKETING STRATEGY FOR THE BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - YENBAI BRANCH HOÀN THÀNH CHIẾN LƯỢC MARKETING CHO NGÂN HÀNG ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM - CHI NHÁNH YÊN BÁI

G1_00162 ACCOMPLISHMENT OF MARKETING STRATEGY FOR THE BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - YENBAI BRANCH HOÀN THÀNH CHIẾN LƯỢC MARKETING CHO NGÂN HÀNG ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM - CHI NHÁNH YÊN BÁI Moreover, with the desire to partially contribute to completing Marketing strategy of Yen Bai BIDV in order to fully meet all customers’ demands, carry out business given targets and st

CAPSTONE PROJECT REPORT ACCOMPLISHMENT OF MARKETING STRATEGY FOR THE

| BANK FOR INVESTMENT AND DEVELOPMENT OF

VIETNAM - YENBAI BRANCH

1 Phung Quang Hai

2 Loc Hoang Long

ACKNOWLEDGEMENT

In the first words | would like to send my best thankfulness to teachers and profzssors in Centre for Educational Technology and Career Development — Higher Eduwation — Vietnam National University America Griggs University for creating the best favorable situation for all trainees during the whole course, especially, when we caring out this thesis

Our group also thank to Bank for Investment and Development of Vietnam — Yen Bai Branch and related sections for guiding enthusiastically and providing necessary dat: for us to complete this thesis

Despite of trying our best in studying and collecting data, the thesis still have sone unavoidable shortcomings We sincerely hope to receive comments of teachers and frieids to makes it more meaning full

TABLE OF CONTENTS

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CHAPTER I: METHODOLOGY OF MARKETING STRATEGY OF THE

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CHAPTER II: ANALYZING AND EVALUATING CONDITION OF CURRENT MARKETING STRATEGY OF THE BANK FOR INVESTMENT AND

DE/ELOPMENT OF VIETNAM —- YENBAI BRANCH -.- << <<5 43

2.1 OVERVIEW ON BANK FOR INVESTMENT AND DEVELOPMENT OF

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CHAPTER III: SOME MEASUREMENTS FOR PERFECTING MARKETING STRATEGY OF BANK FOR INVESTMENT AND DEVELOPMENT OF

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INTRODUCTION

1 The imperativeness of the topic:

Vietnam is a developing country in the process of active and intensive integration into the regional and international economy

In order to meet demands of integration, domestic commercial banks are speeding

up its structural rearrangement, financial reinforcement, network development, and preparing for equalization, strategic planning for an active integration, etc in order to enhancing completive capacity These are basic preparations because banking is one of crucial point in the economic integration

Together with equalization for extensive integration in order for a modern bank which operates according to normal banking practices with enough strength and competitive capacity for sustainable existence and development, and at the same time, States its position, brand and real image in the long term, Bank for Investment and Development of Vietnam (BIDV) needs to renovate in thinking, business operation, management and makes through-breakings for its development In addition to mapping Out business strategy of the unit marketing activities play a very important role in the bank's success

In the current market economy of fierce competition, it is difficult and complicated to map out a successful marketing strategy It is even more difficult to gain pre-eminence of products

With the purpose of putting theory into strategic management and marketing, the bank applies this into the situation of its subsidiary - Bank for Investment and

Development of Vietnam - Yen Bai Branch (BIDV Yen Bai ) Moreover, with the desire

to partially contribute to completing Marketing strategy of Yen Bai BIDV in order to fully meet all customers’ demands, carry out business given targets and strategies well, Wwe, the 10 group have chosen the subject of “Improvement of Marketing strategy for Yen Bai Branch - Bank for Investment and Development of Vietnam”

3 Subjects and scope of research:

Subjects of research: Current business and marketing strategy of BIDV - Yen

- Annalistic and comparative method:

- Statistic and economic analytic method;

To collect information from reports, media means, socio-economic development plans at local, sectoral and national scale The researching method of using annalistic models such as SWOT, marketing-mix, etc in marketing service, analysing internal and external environment, marketing segmenting as well as identifying targeted markets

Data: To use collective method through customer sastifaction questionares, synthetize opinions from Customer Association through reports of the current functional sections (especially feedback opinions from customers, report on handling of functional

Sections, ect )

Tools of handling: analysis comparison and synthesis

9

5 Contributions of the graduation paper:

- To systematize fundamental issueses on theory of strategic manegement and banking marketing

- To propose some solutions for accomplishing marketing strategy of commercial banks in general and BIDV Yen Bai in particular

- To prove the effiencency of banking marketing theory in pratice

6 Struture of graduation paper:

Beside INTRONDUCTION and CONCLUSION parts, the report is devided into 3 chapters, including:

Chapter I: Methodology of marketing strategy of the company

Chapter 2: Analyze and assess current business and marketing strategy of BIDV Yen Bai

Chapter 3: Some solutions to accomplishment of marketing strategy of BIDV

Yen Bai

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CHAPTER I: METHODOLOGY OF MARKETING STRATEGY

OF THE COMPANY

1.1 BUSINESS STRATEGY OF THE COMPANY:

1.1.1 Concept and essence of business strategy:

Strategic concept was from ancient Greece, the term which derives from the profound military To around 330 BC, that is ancient Greek times the strategy refers to the management skills to exploit these forces to crush the enemy and to develop a system of overall administration In human history there are many theories of the military as Sun Tzu, Napoleon, Alexander mentioned and wrote about strategic on many different points of view " Basic views of the strategy is a adversary party can crush opponent even it is more powerful opponent, if they can lead the battle and put opponent on the battlefield advantage for the implementation of their abilities "

In today's business world, business strategies are particularly interested and

considered the strategic construction as platform for the activities of enterprises (in the

United States if in 1947 only 20% of enterprises had business strategy come to 1970 had 100% enterprises build business strategy)There are many concepts of strategy as a model

of strategic objectives and scientific intentionally to achieve that goal (Benneth 1965), or the strategy of red thread through the activities of the (An Ssofg, 1965) using the Strategic concept of Jonson, G Scholes K (1999) whereby "Strategy is the direction and scope of the organization long-term to regain competitive advantage for organization through the format of the resources of the organization in the changing environment to

1

meet market demand and meet expectations of stakeholders " -"Strategy is the direction and scope of the organization in the long term: to bring strategic advantages to organizations through the optimum arrangement of resources in a competitive environment to meet market demand and expectation of the capital contribution (* Source: Entrepreneur 3600, "The concept of business strategy" 2008)

Can see that the concept of strategy covering all activities of the enterprise The establishment of enterprise's strategy requires the understanding the external and internal environment of the enterprise from which to determine an appropriate business strategy to help enterprises survive and develop even there are remarkable and different activities against competitors Enterprise's strategy as ways by which the mission of the enterprise as Well as long-term goals can be achieved, the strategy of enterprises has the main content: Restructure Strategy, Acquisition Strategy, Merger Strategy, Market Development Strategy and Product Diversification Strategy

Strategy is extremely important role in the operation of enterprise Strategies contribute to make an organization to be more active in forecasting the changes of the environment from which can control their activities In the current market economy, the strategy make to increase competitiveness of enterprise, ensure strong advantage of the enterprise

In Vietnam, since the move to market mechanisms, especially in the trend of integration, enterprises have polarized Some adapt to the new mechanism, built right business strategy and quickly boom Conversely, those companies also have become confused not find the exit The construction of the business strategy will help enterprises find clear direction to their future, seeing clearly the opportunities and risks occur in the business activities within integration economy to make enterprise give the decision to deal with each of the business environment to improve business efficiency

Therefore, business strategy construction is to become indispensable to the enterprises want to survive and grow

1.1.2 The characteristics of business strategy:

The characteristics of the business is derived from the historical mission (strategic vision) of the enterprise and building on the basis of analysis of external and internal environment is reflected in the diagram below:

Figure |.1 Characteristics of business strategy

MISSION (Strategy purview)

- Be reflected throughout the continuous process from building strategies, organizational implementation, testing and evaluating and controlling strategies

- Business strategy must have thought advancing winning victory Basic characteristics of the business strategy of globalization, integration of international economy is always in the dynamic environment, always use the attack strategy Therefore, strategic management must be considered a special importance to predict and actively anticipate the changing business environment and to map out solutions to attack,

in order to take advantage of opportunities, risks are limited appear in the business environment of enterprises

1.1.3 The role of business strategy:

The business strategy construction is one of the most important activities of the enterprise management Some organizations do not have a strategy like the ship without rudder most business failures are due to the lack of a proper strategy, or lack of proper

implementation Building business strategy to make practical benefits for enterprises, they are:

- Clearly define objectives in each stage of the enterprise, helping enterprise find clear directions in the future to reach the objectives

- Help the enterprise's leaders clearly see the opportunity and challenges from outside the reality strengths weaknesses of enterprises themselves predict the future changes to find the solutions to cope and adapt to environmental new business

- Help enterprises to exploit and use up their resources, develop at the best enterprise's power to grow to up

- Help to allocate resources in a reasonable way at each period, improving operational efficiency of enterprises

- Help increase the cohesion and consensus of leadership staff in implementing the common objectives of the enterprise

- Help enterprise increase labor productivity increase sales and increase administrative efficiency, avoid risks, increase preventative capability and prevent difficult problems happening to enterprise

1.1.4 Business strategy system of enterprise:

1.1.4.1 Levels of strategy in enterprise:

Figure 1.2- Levels of strategy in enterprise:

ad, Enterprise-level strategy: The strategy to answer the question: What business ficld will enterprise be located in? Position of enterprise on the environment? Role of each industry in the enterprise? The business-level strategy for any enterprise must be built

b, Business-level strategy: Strategy determine that enterprise how should to rival

in each line of its possession

Thus, for small enterprises operating in a line of business and for big enterprises

to be specialized their business-level strategy like enterprise-level strategies

However while enterprises operating in many different businesses fields, often, these enterprises will be classified into strategic business unit (SBU) Each SBU undertake one or several branches of business, self-making strategy for their own enterprises consistent with the strategy and the overall interests of the whole enterprise

c, Functional level strategy: Is the lower-level strategy than business-level strategy, to be built for each functional part to implement the business-level strategy

1.1.4.2 Strategic types in enterprise:

a, Tvpes of enterprise-level strategy:

a.l, Stable strategies: A strategy that is characterized by no significant changes This strategy is applied appropriately when condition of the competitive environment is relatively stable and enterprises satisfy with the results of their current activities

a.2, Growth strategy: is the strategy when enterprises want to seek growth in their activities This strategy often includes objectives: increase sales, increase market share

a.3 Narrowing strategy: is the strategy when the enterprises sought to cut the size and diversity of activities of enterprises Enterprises implement this strategy in the following cases: The fierce environment of competition forced enterprises to cut the size and market share dominate: cutting off the scale of administrative machinery to innovate and ensure efficiency: State policies to narrow the enterprises’ ineffective activity

a.4, Mixed strategy: Companies pursuing the same time on two or three strategies

b, Types of business-level strategy:

b.1 Adaptive strategies, including small strategies:

- "The defender” strategy is the strategy only pursuing stability by producing only limited products directed at narrow piece of the overall potential market This Strategy is often achieved through activities to create products and services of high quality prestige

- "Searcher" strategy is the strategy pursuing innovation by searching and exploiting new products, new opportunities in the market

- "The analysis” is the strategy sought to reduce risky minimum followed by the renovation of its competitors when the renewal was successful

- "The Response" strategy is the strategy which is typical of the type of making decision instability, lack of consistency, depend on the fluctuation of the market

b.2, Competitive strategy: Request to analyze simultaneously the competitive advantage of industry 1s a competitive advantage of the enterprise

- Analysis of industry, through analysis of factors: Barriers to join, the threat will

be replaced, the customer's prestige, prestige of suppliers and fierce competition between competitors

- Select a competitive advantage:

+ Strategy leading prices: is a strategy which enterprises pursue when they want

to product with the lowest cost in the industry

+ Unique strategy: is a strategy which enterprises pursue when they wish to become unique in the industry about the scientific parameters are appreciated

+ Focus strategy: a strategy when enterprise directed at the cost advantage (cost focus) or the unique advantages (unique focus) in a narrow piece of the market

+ Strategy stuck in the middle: Enterprise is not selected on all three strategies

- Maintain competitive advantage: the enterprise must know to maintain their competitive advantage This is not simple because technology and customer's preferences are changing while the competition never stands still

c, Types of functional level:

c.l, Financial strategy: Building funds and set up an appropriate financial structure, assisting enterprises to achieve the their objectives It was decided to consider the enterprise's strategy in the financial perspective and choose the optimal strategy

c.2, Human Resource Development Strategy: Managing the implementation of the objectives through people Human resource development strategy is the decisive significance to the success or failure of your enterprise The objective of human resource development strategy is to have the human resources and do everything possible for workers to reach the best thing they can reach

c.3, Marketing strategy: marketing strategy can strongly affect to efficiency and cost structure of an enterprise Through strategic marketing, enterprise won the position

by the activities coordinator pricing, promotion, advertising, product design and distribution It can play a key role to increase the efficiency of enterprise

1.2 BASIC CONTENTS OF MARKETING STRATEGY:

1.2.1 Definition and role of marketing strategy:

Marketing strategy is a functional strategy in the overall business strategy of a company Marketing strategy is the way where the company intends to go to reach the desired goals in the market such as increasing competitive strength, increasing product quantity or market share

Marketing strategy plays an important part in general strategy of the company by providing specified information about the current position of the company in the market and its chances in the future Moreover strategies of products customers distribution channels in marketing strategy will be combined at many levels to form the official

strategy of the company According to independent marketing strategy the company will define sales personnel, develop products and other functional activities

Marketing strategy has to be developed from the overall strategy of the company and it relates to the contents such as location for products strategies for product brand, choosing target markets, methods for market entry use of Marketing-Mix license plates

in implementing strategy and other contents

1.2.2 Steps of building marketing strategy:

1.2.2.1 Establishing marketing targets:

Targets of marketing strategy are usually oriented from targets of the company, in case the company orients marketing completely these two groups of target coincide Marketing targets are often provided as activity standards or a job needed to be achieved

at a certain time These targets provide framework for implementation of marketing strategy Marketing target is established from analysis of capacity of market and evaluation of marketing capacity of the company This analysis is based on related data about the products, competitive market, marketing environment, and from that helps to learn about potentialities of the market that needs to be exploited and chooses suitable target ideas with marketing capacity of the company

1.2.2.2 Choosing target market:

Researching, choosing exactly target market for the company requires to be implemented based on careful analysis of data about market and customers This is the work of identifying customers’ demand and choosing potential groups or sections of customers who the company will serve with each of its product The company can choose, decide to penetrate one or more specified market segments These market segments can be classified according to different criteria in which factors of macro environment have much influence on the division of market into smaller market segments Thus to choose target market for the company, it is required to research, analyze carefully factors of macro and micro environment of the company These factors

18

are the base to evaluate and segment different market segments, the company will have

to decide how much to serve and which market segments

1.2.2.3 Building strategic orientation:

Before establishing marketing strategy for products in target market the company has to put forward strategic orientations for the products, which need to achieve in target market These orientations provide specific ways for marketing strategy

1.2.2.4 Forming marketing strategy:

The company needs to base on the first analysis about marketing environment, market, customers and strategic targets to establish a division of the most suitable variables in order to satisfy the target market and achieve targets of the company

1.2.2.5 Building marketing programs:

Marketing strategy must be implemented in form of new marketing programs and Strategies to represent main features of marketing in order to achieve targets Therefore, the company has to build action programs to implement marketing strategies, that is the concretization of marketing strategy by marketing variables that is planned in detail in target market

Thus, to establish a thoughtful effective marketing strategy that is suitable with target market of the company, that company has to clarify market factors, business Strategies, real situation of the company, competition, customers Those are the bases to build targets, choose target market build strategic and defined orientations design an effective marketing strategy for products in target market with specific action programs

1.2.2.6 Control result of implementing Marketing strategy:

Research activity environment of the company and planning Marketing strategy is only the first step to direct Marketing administration The company also has to carry out necessary activities to implement Marketing strategy and organize testing regularly,

evaluate activities and result in order to ensure certainly target of Marketing strategy is implemented

* The purpose of checking marketing: Measure and evaluate specifically the process to implement defined marketing target On this base ensure to provide accurate information about level and result of each section, individual as well as their existence in implementing Marketing program Therefore, only by checking, Marketing department can find out errors from different sections, in order to offer actively suitable adjustment methods

Checking process have to base on sources of information In order to gain this, building effective information system is very essential in each company

Combine checking techniques and methods: Direct check - indirect check, regular check — extraordinary check

+ When checking have to specify gained results and achievements fully, accurately as well as weaknesses and their causes

+ After checking have to recommendations and solutions

+ Checking staffs have to understand banking Marketing field

* Content of checking Marketing:

Checking of implementing targets: Checking Marketing is the method use techniques to evaluate missions targets of company on base of analysis, compare in order to specify implemented targets implementing targets and unimplemented targets

as Well as main causes On this base company find out punctual solutions in order in carry out all objects

Information and document system mainly serve marketing check process of company include: financial reports detail report about revenue in each section, each entity each market section and report of customer research

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Checking method is mainly used is to compare between posed object and real capacity Result can occur some situations: Gained objects lower than proposed levels Gained objects as much as proposed levels, Gained objects higher than proposed levels

In each situation, checker must find out causes and offer actively solutions and the way to solve

Check adequate capacity of marketing activity:

When checking of implementing mentioned above targets, the person who carry out bank Marketing aware adequate capacity of Marketing activity before changing of market for bank production On other hand, level of implementing targets specifies adequate capacity of Marketing activity and reserve

To implement to check adequate capacity of Marketing activity, have to find out following information: Information about competitors, Research customer according to content: Information from media; Report of research result of each section: opinion of company staffs

In order to evaluate adequate capacity of Marketing activity companies usually base on criteria as follows:

- Customers’ satisfaction level to bank service products in the aspects: usefulness, price communication,

- Customers’ reaction to new bank service products

- Effectiveness achieved after deploying Marketing programs

- Reasonability level of steps in Marketing process, as well as structure of each part in Marketing strategy

Comprehensive check of Marketing strategy of bank:

Marketing strategy is an important functional one in Business strategy system of bank Therefore Marketing strategy of company has to be checked assessed comprehensively to be able to develop its effectiveness to business activity of bank

Process of checking Marketing strategy of bank often focuses on the following main

contents:

- Proposed system of targets includes short-term target long-term target

- System of policies (products price distribution, expansion — communication) to implement the target of strategy through each different stages

- Comprehensive effectiveness of Marketing strategy

Comprehensive check of Marketing strategy 1s conducted frequently in every time, however, its content and features are different through each operation stage of company

Checking is the last stage of Marketing activity to ensure that tasks, programs of Marketing strategy are suitable with requirements and changes of business environment

of company in both present and future Thus, good checking requires to build clear requests: have specific program, comprehensive content When finishing checking, the company will find out potentiality of Marketing that needs to be developed, at the same time specify existing problems, make petition and proposals about plan in the short term and long term in order to complete, develop to improve comprehensive effectiveness of Marketing in business activity of company

Statistics Publishing House-2000-Page 166)

In Marketing-Mix there are many different tools each tool is a variable that can

be controlled and classified according to 4 main factors called 4P: Product, Price, Place

and Promotion

- Decision about types and list of products

- Decision about product quality

- Decision about product brand and packing

- Decision about customer service

al Decision about types and list of products:

of product list shows the total number of specific products offered in each individual line

of product type group Harmony of product list retlects close relationship among products of different groups of product type according to the final level and aim of usage requirements of manufacture organization, distribution channels or some criterion

The above specific parameters of product list opens strategies for the company to expand product list:

+ Expanding product list by adding new products

+ Extending each type of product and increasing the length of product list

+ Supplement product programs for each kind of product and increase the depth

Product quality is total functions and features of one product or service that bring

to it the ability to satisfy said or implicit requirements

Between product quality and service, customers’ satisfactoriness and capacity bring benefit of enterprise have close relationship The higher quality is, the higher level

of customers’ satisfactoriness is and lead to price is counted higher

Product quality is the first and the most important feature that customers notice when they choose their product provider Product quality of enterprise is expressed though parameters: product resistance safety coefficient, technical design ensuring and conformable capacity

Therefore, to ensure high product quality enterprise has to pay attention to both technical design and quality of product manufacture process Manufacturing high quality products will ensure that enterprise attract many customers, increase its capacity on the

market.

a3, Decide package and label:

When planning marketing strategy for each kind of product enterprise has to decide a number of issues relating to product label

Basically label is a promise of seller to ensure to provide to buyer a given list of features, benefits and services Decisions relating to label are usually:

+ Stick label for its product or not?

+ Who is owner of product label?

+ Correlative with selected label, which feature does product quality have?

+ How to choose the name for label?

+ Should expand usage limitation of label name or not?

+ Use one or many labels for products that have different features of an item? Decisions about label are important decisions in product strategy because label is considered as long term and important asset of an enterprise Managing label is also considered as a primary marketing mean in product strategy

a4, After sales service:

This is an important mean to increase competition advantage of enterprise After sales service is carried out well will help to increase customers” benefit and raise their satisfactoriness This is efficient mean to create difference for products

b Price fixing strategy:

Price is direct factor in Marketing-Mix strategy to create income and is one of the most flexible factor of Marketing- Mix, it can change quickly, unlike features of product and commitments of channel, also price fixing and price competition are highlight issues for marketing staff

Price fixing strategy depend on marketing target of enterprise When define the price for product enterprise need to examine steps of price fixing process as follows:

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Firstl, l:nterprise select markeUne tareet thoueh pricc fixing they are: fee benefit increase maximum immediate income increase sales level or gain leading position for quality of product

Secondly, Enterprise define estimate market demand scale and elasticity in order

to define suitable price

Thirdly, Enterprise estimate price and this is floor price of product

Forth, Find out about price of competitor in order to define itself position of price

Fifth, Select the method for price fixing, including: Fix price by additional price, fix price by target benefit, fix price by sensitive value of customer, fix price by value, fix price by current price and fix price by bidding

Sixth, Enterprise select their final price combine with other factors of marketing- mix Strategy

Because of competition and changes of market lead to enterprise has to change, adjust suitable, adjustment strategy can be as follows: Fix price by geographical principle, sales discount, promotion price fix distinguish price and fix price for product list

When implementing price change and adjustment enterprise has to study

carefully responses of market, customers and competitors

c, Contribution strategy:

Contribution is key tool in marketing-mix strategy including different activities that enterprise carries out in order to bring products towards where target customer can approach and buy them

Important decisions in contribution strategy are decisions about contribution channel Contribution channel is created as a system flow that specified by levels of channels including manufacturer intermediates and consumer Contribution channel carry out the transfer products from manufacturers to consumers overcome distance of

lime space and ownership right between commodity and service with people use them Basic decisions about channel including:

+ Decision about design channel and

+ Decision about managing channel

d, Mix promotion strategy:

This is one of four key strategies of marketing-mix and it become more and more effective and important that enterprise can use to affect to target market The nature of promotion activities is to notice product and enterprise to customer in order to persuade them to buy product

Mix promotion strategy including 5 key tools:

- Advertisement: Including any method is introduced indirectly and express ideas, products and services is carried out according demand of advertisement entity and the entity must pay for fee and charge

- Direct marketing: Use letter, telephone and other indirect tools to inform available customers and expectation customers or require them to have their responses

- Sales promotion: Is award method in short time to encourage trial or buy a

promotion structure such as: Kind of product market push and pull strategy, ready

period of buyer period in lifetime of product

Carry out content of methods above enterprise need to pay attention to following issues:

+ Define who is customer of enterprise

+ Which method is the most suitable one

+ Which feature of product does content need to emphasis

+ Time and frequency of using this method

1.3 BANK MARKETING STRATEGY

1.3.1 Characteristics of bank marketing strategy and its impact on

marketing strategy

1.3.1.1, Characteristics of bank marketing:

In fact, the bank marketing is manipulate the principles and techniques of commercial marketing in the business of banking But itself has unique features compared with other areas of marketing, expressed by the following characteristics:

* Bank marketing is type of the service marketing:

Bank itself is a form of enterprise trade in currency services, making the job of monetary intermediaries, customer charges, it is ranked belong to the service sector The study of the characteristics of the service as a basis for well-organized process of marketing the bank Banking products and services have different characteristics, which

is its invisible, no separate calculation of products and services, without storage and hard to define quality These features affect the work of organizing bank marketing activities:

- The invisible characteristic: is the main characteristic to distinguish products with the bank's product material and other manufacturing industries, the bank's customers often have difficulty making decisions using product selection Customers can determine the product quality during and after use So banks have to make up a marketing image the reputation of banks and strengthen trust with customers by improving service quality, increase the utility of the product

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- hmpossible-separated characteristic: The process of supply and consumption of products occur simultaneously and with the participation of customers The supply of banking products and services usually follow a certain process not product progress reserve storage This feature requires banks to have marketing coordination among departments in the supply of products, identifying customer needs

- Unstable and difficult to determine: Banking service Product are made up by several factors: staff qualifications, technology, time customer these factors often fluctuate, so difficult to determine a precision

* Bank marketing depend mainly on human factors:

This feature is also completely true to the general principles, because man is the decisive factor in all economic - social activities

Bank marketing is based on many factors: the level of technology banking, education level, quality and stability of the products or services; the level of management; in which human factors are important added This feature requires banks

to create marketing skills for all staff management and professional staff, the staff even security guard, receptionist, clerical, telephone

* Banks marketing tightly associated with the operation of the units in the organizational structure of the apparatus of the bank:

Popularity of the organizational structure of commercial banks is an opportunity office, together with the subsidiaries and affiliated units Therefore, most of the marketing work for the commercial banking system there But there are some specific task implementing by a branch in a certain locality, or a unit attached to a product deployment services that do the specialized business units, it also requires specific marketing for branch or unit

At the main office and at each branch or attached units of commercial banks have the room, board different parts Other parts departments have relationships directly with

each other and must be oriented general marketing, image promotion brands products and services of the bank attract customers

* Bank marketing depend mainly on relationships with customers:

Bank marketing strategy often need to classify different customer groups, in different times to carry out specific marketing activities especially in evaluating profitability of each customer group Or evaluating the potential development of each customer group

* Marketing banks have to deal with harmonization of two elements: Medium improve competitive performance while improving the effective cooperation in the banking

Nature and objectives of marketing activities is to improve efficiency, enhance competitiveness, attract customers, dominate market share Therefore, the intermediate goal of marketing is to promote the image bank going into the subconscious of the customers making customers more and more crowded the banks know know the new products and services, quality have superior computer market Song itself due to the nature of banking operations, the nature of banking requires mutual cooperation to attract customers to implement effectively a service or a professional Therefore the bank marketing must reflect this specific requirements

* Bank marketing is strongly dominated by legal environment:

Marketing activities must comply with the law profession, often competition laws or advertisement laws, consumer protection laws, Accordingly, the general principles of image promotion, advertising and introduce products and services, specific marketing activities, to be honest is not misleading consumers, harm the reputation, honor, defamatory distort the truth about other bank your competitors

Bank marketing activities must strictly comply with laws on banking monetary activities Accordingly must respect the law and the direction of consumers guiding

customers to comply with the provisions of general law on currency bank observing the procedures prescribed by law

Marketing activities must also comply with international law relevant

1.3.1.2 Characteristics in bank business activities:

Characteristics of Product:

Banking is a organization trade in money a special commodity The bank's main product is services related to money that banks provide to customers to meet their needs Therefore, the bank's products carry the full nature of the products and services have the following characteristics:

¢ Products with non-physical morphology;

¢ The production and consumption occur simultaneously services:

* Products of the bank is difficult to distinguish recognize the benefits immediately, their use:

* The level of uniformity of the product is high:

* Products of the bank have been increasingly diversified, a series of services during the year

* Characteristics of clients:

Bank customers are diverse and abundant including class population, the economic organization, politics and especially the bank's customers are becoming Today the bank is conducting diversify its services should the number of customers of banks increasing quickly But customers of the bank as a whole is quite complex and contains many different criteria segments Besides the demand of customers for banking Services is not uniform and many changes

* Characteristics of competition:

Along with the general trend of the economy business banking is taking place in

an environment of extremely fierce with the intensity of competitive and contain no less risky Today the trend of competition from banks expressed in three forms:

- Competition on automatically:

- Competitive Marketing activities:

- Competitive scale (merger consolidation, linked to increased competitiveness) 1.3.2 Mixed marketing strategy in banking:

1.3.2.1 Product strategy (P1):

In fact, bank’s products are services that bank provide customers, including:

* Deposit service: Deposit is the most resource in monetary capital therefore bank focus on mainly about marketing into this capital source resource by money of bank including types as follows:

Table 1.3-Capital sources from Bank cash

I eprosits of - 2qHk loans from Tổ gyyệp

Source: “Commercial Bank Management.’, Nguyen Thi Mui

* Credit services: Making capital loans is the most significant activity of the bank and the main service that earns the bank on basis of disproportion of interest rate and funding ratio of the bank There are many ways to classify loan services according to criteria as follows: sources of capital loans, terms of loans, assurance characteristics, ways of loan supply, ways of debt settlement nature of interest rate, methods of interest disposition types of loan currency quantity of capital loan sources

* Investment services:

Beside loan services in order to make use of unused capital effectively the bank can operate investments into valuable sheets - which are defined by investment bank as

two main groups: the 1“ reserve and the 2™ reserve

Valuable sheets of the I“ reserve are used to gain earnings for the bank, mostly

long-term valuable sheets and enable to highly profitable Valuable sheets of the 2"

reserve are used to improve its settlement capacity more than income

* Other services:

The bank operates these services in order to ensure subsistence income and limit risks for the bank These consist of a number of services including non-bank services: cash settlement foreign currency service other post services, value preservation services, consultancy services, information services, auditing services, technical- economic verification services, guardian services, insurance services, and other services

A proper service classification helps the bank to build a proper organization framework enables the bank to concentrate its potentials on which’ service's development, based on the balance of ability between itself and the market

- Strategies to develop bank products

To make strategies of service development personnel in bank marketing firstly must work out analysis on bank service products and base on that, make the best on structures of bank services provided in general, and design a new product development

Strategy

+ Product analysis:

All products must be regularly analyzed to identify which process of life cycle does the type of product exist That would be done by research on criteria of each service's consumption, costs and benefits of each type of products

Mostly bank services has a relatively long life-cycle, therefore analysis on periods

of bank product’s life cycle will help the bank re-design the product or change into a proper sales policy select the best structure for bank products The structure of products must also be balance between profitability and diversification of services to avoid accidentally sharp changes of the market or customers’ needs

+ Presenting new products:

Presenting new products to a bank is a significant factor of Marketing Research and design of new products depend on financial capacity (capital) and experience of the bank staffs Thus, the process of researching and deploying new products could be done with the lowest cost and the most suitable time

Presenting new products must process step by step so as to avoid “overload” to the bank’s management and personnel system as well as market saturation with quantity

of new products, avoid the case that new products representing with no effect results impact on reputation and prestige of the bank

In building product development strategies the bank should concentrate on:

Firstly, mostly the services provided by banks are similar to each other

Secondly, once a customer satisfies with one service of a bank, he is supposed to use another or other services of the same bank as well

Therefore, in range of bank services provided the bank should concentrate on One Trademark for one service superior than other banks, so that this service will remind on public about the bank Based on that the bank will make it own prestige - the

bank trademark to attract customers to other services of the bank

a lower cost than competitive products However each strategy has its own advantages

One of the advantages to apply skimming strategy is that there are always customers who do not care of the price of whatever new products or services This strategy will help the firm achieve the highest benefit on each service/ product unit, and then quickly withdraw the expenditure made for research and development of the

product itself When its rivals join in the market the bank still can offer price reduction

to get competitive advantage The second advantage but not less important is the high primary price means good image of the firm Higher price is supposed to present high quality as well Particularly in banking, the service products seem invisible to customers, therefore the price (visible factor) is supposed to be a quality indicator In banking, there

is one special reason for encouraging “skimming” strategy appliance Every service needs human and procedures As usual demand increases will cause procedure’s re- design: the higher price will help limit the rapid growth speed of demand Disadvantage

of this strategy appears when the bank expects enough number of customers to gain definite effect, as well as encourage other rivals join in the competitive market

Advantage of penetration strategy is to prevent new competitors enter into the market, and motivate the demands One of the problems if choosing this strategy is that the bank must have a thorough grasp of the cost and price for a product unit The firm has to make sure price on sale including both cost price and target benefits

In fact, bank activities in the world have accumulate much experience in strategy design to formulate price To put an appropriate price for each customer group, ensure benefits of customers as well as profits of the bank, and comply with price offered by its rivals, the whole procedure of price strategy for banking business activities designed by Bank marketing staffs is used widely the most

1.2.2.3 Place strategy (P3):

Requirements of Marketing activities include not only producing high quality products to meet customers’ demands not only verifying the right price for products, but also distributing products to all customers Therefore, the bank needs a system of distribution channels to distribute products appropriately to customers, time and place providing bank services as well as serving quality

Currently, banks combine to use two main groups of distribution channel:

+ Traditional distribution channel: Yraditional distribution channels exist during the same time as banks Characteristics of these based on direct labor of the bank, allocate network of branches and transaction offices to complete wholly or partially bank Services or by bank agents

+ Modern distribution channel: Modern distribution channels formed on basis of progress of information technology Characteristics of these are based on making use of

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achievements of information technology Modern distribution network consists of

automatic branches and e-banks

Selecting the appropriate supply system as well as the right place for branches carry out on basis of analysis: aims of the bank capacity of bank in service providing competitive level, and characteristics of customers Though the general trend gradually increases modern distribution channels banks still should concern about where to build office and branches, because place can take the view of public or customers about the image and prestige of the bank

1.2.2.3 Promotion strategy (P4):

In business operation environment banks have a system of complicated relationship: to customers, to many different financial institutions, to public, etc Due to those relationships have different directions and interleaving, the bank has to deal with responsibilities for formulating and maintaining images of products as well as of organizations in eyes of society and potential customers If so, the bank has to operate miscellaneous promotion activities As many other material and service producing fields, the miscellaneous promotion system in bank includes 4 factors as follows:

* Individual sale:

Individual sale means providing bank products by individual meeting between the bank representative and the customer Through the meeting, the bank knows more about customers and satisfies their needs the best if possible In the highly risky and severely competitive environment this method gradually gets concern of banks However expenditure for the meeting remains high so it is applied only to serve large customers

* Activating consumption:

Including apply multiple tools to promote the target public’s feedback with different methods in scale of marketing strategy and information strategy of customers Activating consumption cannot execute regularly to bank products and attract new customers for long-term relationship However the effects it brings relatively more

quickly than other activating methods Currently banks usually apply consumption

activating tools in three main directions:

- Activating customers: with some methods such as competitive examination, exhibition reward model propagation etc

- Activating business fields: apply when bank services provided indirectly through the third party Activate tools include: special sale-off, general exhibition, free- of-charge goods supply, commission for agents, souvenirs or other gifts, etc

- Activating bank staffs: to improve quality of serving customers and develop professional skills with some tools such as rewards, competition, gifts, etc

* Advertisement:

Banks use advertisements for public presentation to introduce products and promote demand of the bank’s products in the target market A rising problem is that the

bank’s products mostly are invisible (not in material form), so it is quite difficult for

customers to realize Therefore using advertisement is necessary for customers to clearly identify the bank’s products and the benefits they will receive if they use products provided by the bank

* Propagation:

This is the most important working component for social relationship, the organized activity of the bank aiming at forming good images of banks in the eye of public by providing significant and reliable information of its activities on mass media Propagating campaigns are usually organized by banks to deal with marketing missions such as forming, improving or repairing the bank image: propagating bank's products to ensure support from different groups of customers

1.4 MODELS USED IN ANALYSIS:

1.4.1 P.E.S.T analysis model:

PEST analysis plays an important role in the environmental assessment before Starting the macro conduct marketing activities in general and banks in particular

marketing Macro environment has strongly influenced the development of the bank Macro factors (PEST) including politics, economy culture, society and science and technology (* Source from: The concept of business strategy of Business Forum New,

November 26, 2005)

Political factors: Politics has tremendous influence policies to the economic development of the sector Institutional problems of political stability like? Government policies affecting the sector policy and adjust your behavior in society, including increased tax reduction issues

Socio-cultural factors: socio-cultural factor of the local effects difference between domain areas across the country They include: Habits mainstream of the local people's attitudes to the exotic factor consumption habits, level of position,

Economic factors: Marketing banks need to consider state's economy short medium and long term Factors such as: rates, inflation levels, national economic income

Technology factors:

Science and technology are important factors in winning competitive advantage and is the driving force behind the integration process in the national and international economy

Applying science and technology permit bank supply products and services with cheaper price, better service quality Science and technology to help consumers and enterprises make more than material wealth through innovative creativity Science and technology to help banks get information channels to customers

1.4.2 Model of Michael Porter's five pressures:

Michael Porter is the famous strategic administrator of Harvard University in his book "Competitive Strategy: Techniques Analyzing Industries and Competitors" has made the comment about the competitive pressure in every industry and business Like oither business industries banks must determine the competitiveness, attract customers aind develop their markets

Although the market competition often related to customers but banks also compete with each other to attract qualified human resources In general competition between banks can exist under many different aspects or on the basis of different competition: Towards customer human resources toward the works of promoting and advertising the brand image

Figure 1.4- Model of Michael Porter's five pressures

Potential new

competitors

Risk ofnew Competitors

1.4.3 S.W.O.T analysis model:

SWOT is the abbreviation of the collection of the first letter of the English words: Strengths (Strengths) Weaknesses (Weaknesses) Opportunities (Opportunity) and Threats (Risks) This is extremely useful tool to help us understand the problem or decision in the organization and management as well as in business It is said in other

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