Branding BIDV to individual customer segment for sustainable development

Table 4 Estimated marketing budget 2009 – 2013 Table 5 Marketing communication cost breakdown 2009 – 2013 Table 6 Average deposit and average loan structure by customers of BIDV from 2

HUYNH MY TRUC

BRANDING BIDV TO INDIVIDUAL

CUSTOMER SEGMENT FOR SUSTAINABLE

DEVELOPMENT

MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor’s Name: Dr Nguyen Minh Kieu

Ho Chi Minh City

(2011)

DECLARATION

I declare that this study does not incorporate without acknowledgment any material previously submitted for a degree or diploma in any university; and that to the best of knowledge it does not contain any material previously published or written by another person except where due reference is made in the text

Huynh My Truc

Master of Business and Marketing Management – Intake 5

ACKNOWLEDGEMENT

This thesis was completed with great support and encouragement of the author’s instructors, family and colleges

First of all, I wish to express deep appreciation to Dr Nguyen Minh Kieu for his thorough guidance and valuable feedback on the preparation and writing of this final project

I would like to thank all Facilitators, Coordinators, Classmates and the numbers of the Postgraduate Office at Open University HCMC and Solvay Business School for their encouragement and assistance in completing this project

I also send deep thanks to the Board, managers of BIDV who were always willing

to provide me the related necessary documents

Last, but not least, I would like to say thanks to all of my classmates, my family who have give me much encouragement and support during the time I perform this thesis

All of these support and encouragement were acknowledged in this thesis as an indispensable part for its final result

TUTOR’S COMMENTS

………

………

………

………

………

………

………

………

ABBREVIATION

BIDV : Bank for Investment and Development of Vietnam

WTO : World Trade Organization

APEC : Asia Pacific Economic Cooperation

AFTA : Asean Free Trade Area

ADB : Asian Development Bank

JBIC : Japan Bank for Internation Cooperation

SOCBs : State-owned Commercial Banks

SOEs : State-owned Enterprises

JSCBs : Joint Stock Commercial Banks

SMEs : Small and Medium Enterprises

SWOT : Strengths – Weaknesses – Opportunities – Threats

SLEPT : Social – Legal – Economic – Political – Technology

Vietinbank : Vietnam Bank for Industry and Trade

ATM : Automated Teller Machine

ISO : International Organization for Standardization

CRM : Customer Relationship Management

R&D : Research and Development

GDP : Gross Domestic Product

IPO : Initial Public Offering

LIST OF TABLES/FIGURES/CHARTS

Table1 The rate funding in GDP from 2004 - 2020

Table 2 SWOT analysis

Table 3 BIDV’s sale objectives by type of customer at the end of 2013

Table 4 Estimated marketing budget 2009 – 2013

Table 5 Marketing communication cost breakdown 2009 – 2013

Table 6

Average deposit and average loan structure by customers of BIDV

from 2005 – 2007

Table 7 Numbers of bank from 1991 to 2011

Table 8 Lending market share of banks from 2000 – 2007

Table 9 Lending market share of banks from 2000 – 2007

Table 10 Comparison about market share of 4 big SOCBs

Figure 1 The sources of brand equity

Figure 2 The Strategic brand management process

Figure 3 The brand value chain

Figure 4 The relation between factors of customer equities

Figure 5 The cooperation model in working process within BIDV

Chart 1 Percentage of individuals using banking services calculated on age and income Chart 2 Type of banking services which individual customers want to use

Chart 3 Banks which banking individual users want to use

Chart 4 Prior elements in choosing bank

CHAPTER III: BRANDING BIDV TO DEVELOP INDIVIDUAL

4.1 The brand objectives at the end 2013 23

4.2 The sale objectives by types of customers at the end 2013 23

5 Branding process for BIDV to develop individual customer segment 23 5.1Identifying and establishing brand positioning and values 23

5.2 Planning and implementing brand marketing programs 27 5.3 Measuring and interpreting performances 29

2 Recommendation on training brand awareness of staffs 31

3 Setting up a specialized department and improving the cooperation

among brand department and other departments

33

3.2 Improving the cooperation among marketing and brand department

among other departments

33

4.1 Improving effectiveness of PR programs 34 4.2 Improving effectiveness of advertising campaign 35

As 2010 was the final year in the 2006-2010 business plans towards the Bank’s equitization, the whole system has strived to achieve outstanding results despite numerous challenges arising from the business environment

BIDV with the long-term strategy is to become a strong group in the financial market dealing with difficult challenges according to the complicated situation of the economy in general also of the monetary market in specific

With the IPO plan in December 2011, BIDV is concentrating to develop as a joint stock commercial bank – a retail bank To do that, increasing individual customer segment

is the key element to build up a sustainable development

Branding has ever been a strategic calculation of managers Thus, building a brand which creates the awareness of customers to use banking services is a long-term strategy of

BIDV to find the answer for the question “How BIDV can position its brand to gain individual customer segment in order to gain competitive advantages?”

CHAPTER I INTRODUCTION

1 PROBLEM STATEMENT:

Following with the open-door economic policy, which started in 1986, the economy of Vietnam developed with a banking boom in terms of the number of banks and banking services However, the weaknesses in the banking system are lack of market thinking and banking skills such as identifying risks and risks management, asset and liabilities management, and especially marketing banking services and brand strategy

Additionally, banking industry in Vietnam is facing with challenges than ever Pressure such as globalization, demanding customers, increased competitions, increased regulation, mergers and acquisition are urging all the banks to do for their survival and development

Like other three big state-owned banks (Vietcombank, Vietinbank and Agribank), BIDV has almost focused on state-owned enterprises (SOEs) as target customers to run business Previously as SOEs contributed the majority to GDP in characteristically subsidized economy, BIDV have gained certain successful achievements However, with the emergence of variety of business models along with the remarkably increasing profitability of SMEs and households to banking industry, long-term strategies should focus on retail banking market Fully aware this tendency, the domestic commercial banks and foreign banks have indeed started setting up plans, strategies to penetrate this potential market BIDV is one of the biggest banks in Vietnam, has missed this segment Up to now, all actions BIDV has done aim to make BIDV become a multi-functioned bank, and retail banking is one of that strategic plans

With available strengths, the matter of this final project is how BIDV can position its brand for individual customer segment in order to maintain competitive advantages and sustainable development

2 OBJECTIVE:

This research is to explore problems existing in brand building process of BIDV, giving the suggestion for building a strong image of BIDV brand for individual customers based on a combination of other competitive advantages and market situation

The research firstly concentrates to systematize theories relating to brand & brand building process Then, it describes, analyzes and evaluates the current BIDV brand building process, to find out its strengths, weaknesses and explore problems existing in this brand positioning process And then, it helps to find out what are the attitudes, awareness

of the targeted segment for BIDV brand Finally, it proposes appropriate recommendations for BIDV branding to develop sustainably individual customers

3 SCOPE AND LIMITATION OF RESEARCH

3.1 Scope of the research:

This project just mentions BIDV business in individual customers within banking domestic market

Due to the limited time, the author selected Hochiminh city as the main city to carry out the research In which, the targeted customers will be selected randomly to do the survey Therefore the research analysis mainly base in actual practice in Hochiminh city

The research will focus at analyzing and evaluating BIDV brand building process from 2009 – 2013

3.2 Limitation of research:

Since the time and budget constraints, the author just could carry out the research in Hochiminh area with limit number of survey data Therefore, during the time of summarizing the primary data collected, the author has to take into consideration the comparativeness of this data and statistics and compare with the practical situation of BIDV in order to give the most reasonable one

4 STRUCTURE OF THE PROJECT:

Apart from the acknowledgement, abbreviation, executive summary, and appendixes, the project is structured with 4 chapters:

Chapter 1: Introduction

Chapter 2: Literature review

Chapter 3: Branding BIDV to develop individual customer segment

Chapter 4: Recommendations

5 RESEARCH STRATEGY AND METHODOLOGY

5.1 Theoretical background:

The problem will be analyzed in several models, concepts and management theory

as followed:

SLEPT analysis: this model will be applied to analyze the external environment

and changes in which BIDV operate The analysis will point out the changes in politic, economic, society and technology which directly affect banking industry The author will also refer partly to M.Porter’s 5 forces analysis to analyze the competition situation in banking market

Marketing Management theory of Philip Kotler: This theory will provide some

key concept such as: brand, brand positioning, branding process…The research also reference to some theories of positioning brand form Al Ries & Jack Trout These standpoints will help to understand more the nature, the real “soul” of brand and how to strengthen it

5.2 Research methodology:

In order to get enough data and information for the research, the author will apply both quantitative and qualitative method in collecting data The data is from many sources including primary and secondary data

5.2.1 Collection of secondary data

The secondary data are collected and study to review the situation of banking industry and BIDV in the banking market

5.2.2 Collection of primary data

Up to now, the brand building of BIDV is still under the implementation time and there is still no official evaluation for its effectiveness The author has carried out a preliminary examination in order to evaluate the effectiveness of this branding This research will help to provide more updating facts and figures supporting for the analysis and evaluation 2 methodologies have just been carried out:

Questionnaire: The questionnaire applied for respondents (60 samples) The

questionnaire is designed with reference of previous survey experiences; focusing on details so as to get response of people about the awareness of BIDV brand, brand image, logo, slogan as well as the habit of using banking products that customers perceived Base

on that detail, the author will calculate to find out the level of brand recognition, perceived

values and brand loyalty toward BIDV brand

Due to the limitation of time and budget, the author just can deliver questionnaire

to limited group in some areas in the city This group does not present for all targeted customers of BIDV Therefore the data collected from this survey has relativity During the time of analyzing data, giving out the finding and evaluating about the whole process of BIDV brand building, the author has considered the relativity of the data, combine and compare it with the fact in reality in order to give the most exact and reliable statistics and findings The result of the survey is the main important base which resulted in findings, comments and evaluations However, it is not the only base The author considered the branding process itself from the steps of implementing and communicating to have a look

at the whole process

Data analyzing Method: The author uses excel software to synthesize the result of

the questionnaire

6 FEASIBILITY AND PRACTICAL OF THE RESEARCH:

Feasibility of Research: BIDV is just the author’s working environment Deep

understanding about existing problems, the support of managers in and out the unit in the process of collecting data & various available text-books, research & actual application of brand position strategy in many others units would help to make this research proposal &

thesis feasible with abundant data

Practicality of Research: Because BIDV is still in the initial steps of brand

building implementation, this research would be practical as regard to looking back what BIDV have done and what they should done in the near future for better result

CHAPTER II: LITERATURE REVIEW

1 BRAND AND BRANDING:

1.1 What is a brand?

According to the American Marketing Association, brand is defined as “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”

According to Kotler (2003), a brand is essentially a marketer’s promise to deliver a specific set of features, benefits and services consistently to the consumer Brands therefore serve as significant communication functions and, in so doing, establish beliefs among customer about the attributes and general image of a product

1.2 Brand Equity:

Brand equity is the value of a brand related to the brand’s ability to attract future customers’ reliability (Solomon & Stuart, 1997) It generates value to the customer that can emerge as enhanced brand loyalty (Aaker, 1996) Brand equity is formally defined as a set

of brand assets and liabilities linked to a brand, its name and symbol, which add to or subtract from the value provided by a product or service to an organization and/or to that organization’s customers (Sheth, Mittal & Newman, 1999)

Brand Equity is the added value endowed on products and services It may be reflected in the way consumers think, feel and act with respect to the brand, as well as in the prices, market share, and profitability the brand commands for the firm

The major asset categories of brand equity are brand loyalty, brand awareness, perceived quality and brand associations (Aaker, 1996)

Figure 1: The sources of brand equity

(Adapted from Aaker 1996)

BRAND EQUITY

Brand associations Brand loyalty

Perceived quality Brand awareness

1.2.1 Brand awareness:

Brand awareness refers to the strength of a brand’s presence in the consumer’s mind (Aaker, 1996) It is a measure of the percentage of the target market that is aware of a brand name (Bovee et al., 1995), which may include brand recognition, brand recall, top of mind brand and dominant brand (Aaker, 1996)

Brand awareness provides a host of competitive advantages for the marketer such

as a sense of familiarity It can be a signal of presence, commitment and sustaining Also, it

is an asset that can be remarkably durable and thus sustainable

1.2.2 Perceived quality:

According to Aaker (1996), Perceived quality is a brand association that is elevated

to the status of a brand asset for various reasons Perceived quality drives often a major strategic thrust of products and drives financial performance It is linked to other aspects of how a brand id perceived

Marketers can create perceived quality by having an understanding of what quality means to customer segments, and by having a supportive culture; finally, having a quality improvement process that will enable an organization to deliver quality products (Aaker, 1996)

Building brand loyalty involves continuing to serve customer in a satisfactory way (Marconi, 1999) From placing a value on the future purchases expected from customers so that existing customers receive appropriate resources, measuring the loyalty of existing customers, conducting exit interviews with those who leave the brand to locate points of

vulnerability, having a customer culture to rewarding loyal customers with frequent-buyer programs and improving closely relationship with customers

Strong brands go beyond product attributes and differentiate on brand associations, such as company associations, brand personality, symbols, emotional benefits and self-expressive benefits

The brand, and its image and equity all allow the customer to perceive a promise of value (Webster, 2003) Marketers should build strong brands to ensure that the right message is conveyed to the consumer by following:

 Ensure identification of the brand with customers and an association of the brand in the mind with a specific product class or customer need

 Establish the totality of brand meaning in the customers’ mind by strategically linking a host of tangible and intangible brand associations with certain properties

 Elicit the proper customer response to this brand identification and brand meaning

 Convert brand response to create an intense, active loyalty relationship between customers and the brand

1.3 What is branding?

Branding is when that idea or image is marketed so that it is recognizable by more and more people, and identified with a certain service or product when there are many other companies offering the same service or product Advertising professionals work on branding not only to build brand recognition, but also to build good reputations and a set of standards to which the company should strive to maintain or surpass Branding is an important part of internet commerce, as branding allows companies to build their reputations as well as expand beyond the original product and service, and add to the revenue generated by the original brand

When working on branding, or building a brand, companies that are using web pages and search engine optimization have a few details to work out before being able to build a successful brand Coordinating domain names and brand names are an important part of finding and keeping visitors and clients, as well as branding a new company Coordination of a domain name and brand names lends identification to the idea or image

of a specific product or service, which in turn lets visitors easily discovery the new brand

Branding is also a way to build an important company asset, which is a good

reputation Whether a company has no reputation, or a less than stellar reputation, branding can help change that Branding can build an expectation about the company services or products, and can encourage the company to maintain that expectation, or exceed them, bringing better products and services to the market place

Branding is endowing products and services with the power of a brand It’s all

about creating differences between products Marketers need to teach consumers “who” the product is – by giving it a name and other brand elements to identify it – as well as what the product does and why consumer should care Branding creates mental structure that’s helps consumer organize their knowledge about products and services in a way that clarifies their decision making and, in the process, provides value to the firm

According to Kotler (2003), branding is the art and cornerstone of marketing It creates and communicates a three-dimensional character for a product that is not easily copied or damaged by competitors’ efforts (Brassington & Pettitt, 1997)

According to Brassington and Pettitt (1997), branding has numerous benefits for both consumers and marketers Brands, on the one hand, helps consumers to identify specific products, create differential advantages; defends against competition and also helps positioning/targeting This, in turn, branding helps to attract customers

Marketers, on the other hand, branding helps easily product identification, product evaluation and creates interest Branding also creates communication features and benefit for the marketers

2 BRANDING PROCESS:

In order to build a strong and stable brand which can develop in long term, a branding process normally includes 4 steps as follows:

Figure 2: The strategic brand management process

(Adapted from Keller, 2003)

2.1 Identifying and establishing brand positioning and values:

The strategic brand management process begins with the identification and establishment of the position of the brand by determining customer-based brand equity and establishing brand positioning and values

2.1.1 Customer-based brand equity:

Customer-based brand equity is defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand (Keller, 2003) Customer-based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favorable and unique brand associations in his or her memory (Keller, 2003)

The customer-based brand equity model approaches brand equity from consumer’s perspective The customer-based brand equity model formulates a series

of steps for building a strong brand including establish the proper brand identity, create the appropriate brand meaning, elicit positive brand responses and forge strong brand relationships with customers

2.1.2 Brand positioning and values:

Keller (2003) defines brand positioning as the act of designing the company’s offer and image so that it occupies a distinct and valued place in the

Step 1: Identifying and establishing brand positioning and values

Step 2: Planning and implementing brand marketing programs

Step 3: Measuring and interpreting brand performances

Step 4: Growing and sustaining brand equity

target customer’s mind Brand positioning involves a specification of the appropriate core brand values and brand essence Core brand values refer to attributes and benefits that characterize a brand, while brand mantra refers to the principal aspects of a brand and its core brand values

According to the CBBE model, deciding on a positioning requires determining a frame of reference and the ideal points of parity and points of difference brand associations

Once the brand’s position has been established, the brand value should be established Customers’ perception of strong, successful brands comprises several different value dimensions According to Nilson (1999), marketers should keep two fundamental facts about brand values in mind Firstly, successful brands are built on

a combination of product benefits, which might include tangible or intangible values, and secondly, depending on the product, a few or many value dimensions are of importance to the customer

2.2 Planning and implementing brand marketing programs:

Building brand equity requires creating a brand of which consumers are sufficiently aware and with which they have strong, favorable and unique brand associations This knowledge – building process depends on the initial choices of the brand elements or identities making up the brand and the marketing activities and supporting marketing programs and the manner in which the brand is integrated into them (designing marketing programs to build brand equity)

2.2.1 Decisions relating to brand elements:

Brand elements, also known as brand identities, are those trademark devices that serve to identify and differentiate the brand (Keller, 2003) The main brand elements include brand names, logos and symbols

When choosing brand elements, there are six criteria as follows:

Firstly, brand elements can be chosen to be inherently memorable, both in terms of brand recall and recognition Secondly, brand elements can be chosen to be inherently meaningful so that they convey information about the nature of the

product category or particular attributes and benefits of a brand, or both Thirdly, the information conveyed by brand elements does not necessarily have to relate to the product alone and may simply be inherently appealing or likeable Next, brand elements can be chosen to be transferable within and across product categories and across geographic and cultural boundaries and market segments Next, brand elements can be chosen to be adaptable and flexible over time Finally, brand elements must be chosen that are legally protectable and, as far as possible, competitively defensible

2.2.2 Marketing activities:

The enterprise carries out new approaches, such as relationship marketing, mass customization, after marketing and loyalty programs can help marketers to design marketing programs (Keller, 2003)

2.3 Measuring and interpreting brand performance:

The CBBE is defined as the differential effect that knowledge about the brand has on consumer response to the marketing of that brand, there would seem to

be two basic approaches to measure brand equity An indirect approach could assess potential sources of CBBE by identifying and tracking consumers’ brand knowledge structures A direct approach could measure CBBE by assessing the actual impact of brand knowledge on consumer response to different elements of the marketing programs

2.3.1 Developing a brand equity measurement and management system:

A brand equity measurement system is a set of research procedures designed

to provide timely, accurate and actionable information on brands to enable marketers to make the best of possible tactical decisions in the short run and strategic decisions in the long run (Keller, 2003)

A useful tool in evaluating brand performance is the brand value chain (Keller, 2004) This chain traces the value-creation process for brands to better understand the financial impacts of brand marketing expenditures and investments, and also help to direct marketing research efforts It is structured of assessing the

sources and outcomes of brand equity and the way in which marketing activities create brand value

The brand value chain assumes that a number of linking factors intervene between the various stage These linking factors determine the extent to which value created at one stage transfers or multiplies to the next

Figure 3: The brand value chain:

The program multiplier: refers to clarity relevance distinctiveness and consistency

of the quality of the marketing program

The marketplace multiplier: refers to competitor reactions, channel support,

customer size and profile

The investor multiplier: refers to market dynamics, growth potential, risk profile

and brand considerations

According to the brand value chain, sources of brand equity arise from the customer mindset, and it is therefore essential to use the various measuring sources of CBBE in the measurement of brand equity

2.3.2 Measuring sources of brand equity:

This process requires answering the question “How much more value does the product have with the brand name attached?”(Lehmann & Winer, 1997).The marketers

have used various methods, such as equalization prices, brand attributes, price premiums, stock price analysis, replacement cost and brand loyalty analysis to determine brand equity (Hollensen, 2003)

Qualitative research techniques are used to identify possible brand associations and sources of brand equity These techniques are also a mean to better approximate the

Marketing programs investment

Customer mindset

Market performance

Market performance

Program quality

Marketplace conditions

Investor sentiment

MULTIPLIER

VALUE

STAGES

breadth and depth of brand awareness, the strength, favorability and uniqueness of brand associations, the favorability of brand responses, and the nature of brand relationships

Whereas qualitative research typically elicits some types of verbal response from customers, quantitative research typically employs various types of scale questions so that numerical representations and summaries can be made There are some quantitative techniques to determine the brand awareness such as direct and indirect measures of brand recognition and aided and unaided measures of brand recall

2.4 Growing and sustaining brand equity:

Brand equity management concerns those activities that take a broader and more diverse perspective of the brand’s equity Managing brand equity involves manage brands within the context of other brands, and over multiple categories, over time, and across multiple market segments (Keller, 2003)

An organization’s branding strategy provides general guidelines on which brand elements it chooses apply across the product it offers Two main tools in defining branding strategy are the brand-product matrix and the brand hierarchy The brand-product matrix is

a graphic representation of all the brands and products sold by the organization, while the brand hierarchy reveals an explicit ordering of brands by displaying the number and nature

of common and distinctive brand components across organization products

CHAPTER III BRANDING BIDV TO DEVELOP INDIVIDUAL CUSTOMER SEGMENT

1 INTRODUCTION ABOUT BIDV:

Bank for Investment and Development of Vietnam is one of three leading banks in Vietnam BIDV is in collaboration with more than 800 banks in the world and is one of banks with largest distribution network in Vietnam In over 50 years of activities, BIDV has achieved important successes, effectively contributed to national monetary policy and the economic and social development of the country

Beside its banking business, BIDV has expanded activities to securities, insurance, financing investment and has some early successes in those new sectors

Logo:

Slogan: “Sharing opportunities - Successful Cooperation”

About vision, BIDV want to become a premier quality universal bank in Vietnam

with multi-ownership and multi-function, operating in compliance with international standards, keeping up with banks in the South East Asian region

About human resources, in the end of 2010, the total number of employees was

16,475; including 15,342 at the Head Office and branches; and 1,133 at the Bank’s subsidiaries, centers and representative office The workforce is young with an average age

of 32.8 in 2010 The quality of staff has been improved both educationally and professionally in recent years Graduate and post-graduate staff accounted for 85.29% of the total workforce, an increase of 2.69% compared to those of 2009 In general, BIDV’s employees are well equipped with foreign languages and computer skills efficiency to meet their job requirements

About products and services, BIDV provides a variable products and services for 3

types of customers as follows:

First, BIDV provides 3 types of products and services for individual customers The

basic products are deposits – savings, such as bonds in VND/USD, current account,

demand deposit account, fixed deposit account, promissory note/Certificate of short-terms deposit in VND/USD, Tich luy bao an savings Second, there are many types of loan such

as car loans, consumption installment loans, home loans, loan secured by the mortgage of

the Valuable Papers/Certificate of Fixed deposit – Discount of valuable papers, T-day securities loans and unsecured overdraft And, BIDV also provides E-banking including direct banking, BSMS and internet banking for individual customers

Second, BIDV provides 3 types of products and services for enterprise customers There are many types of deposit for them choosing such as automatic investment deposit, demand deposit, escrow account, long term valuable papers, securities trading deposit, short-term valuable papers, specialized capital deposit, time deposit Next, the series of payment services provided such as automated payroll, automatic collection, automatic fund transfer, home banking, cash collection/payment at re-defined location, cash-flow management, domestic remittance, international remittance, network collection, smart

@ccount and state budget collection

Third, BIDV provides export finance and import finance for corporate customers

for trade finance

About distribution network, BIDV has 114 branches and 500 transaction offices,

thousands of ATMs and POS transactions in 63 provinces and cities nationwide Besides, they also have non-banking networks: consists of Investment Securities Company (BSC), Insurance and Investment Company (BIC) and Leasing Company I and II with more than

20 branches nationwide

In international, BIDV has overseas representatives They trade on all three sectors including banking, insurance and financial investment in Laos, Russia and especially in the Cambodian market (Investment and Development Company of Cambodia – IDCC, Investment Banking and Development of Cambodia – Cambodian BIDC, Insurance Company – CVI).Moreover, BIDV have joint venture banks The co-operation more effectively with international partners such as Bank VID-Public Venture (partner Malaysia), Bank of the Lao-Vietnamese joint venture; Vietnam Russia Joint Venture Bank – VRB, BIDV Tower Joint Venture Company (partner Singapore), venture investment management BIDV – Vietnam Partner (U.S partner)

About customers, BIDV trades with 3 types of customers: the enterprises, the

financial institutions and individuals This segment has been continuously tried to reach the goal of becoming a retail bank of high standards

About technology, BIDV has innovations and technology applications serving

effectively for the management and development of advanced banking services, developing the most advanced information technology systems such as ATM, POS, Contact Center, to consolidate and develop all infrastructure systems such as monitoring of network resources, network-oriented services (SONA), access control workstation; enhance information processing service, banking executive management MIS; CRM

demand for banking services increased significantly

Vietnamese consumers tend to make buying decisions based on the strong and

reputed brands

The Vietnamese people live and work in foreign countries increasing the demand for money transfer services through bank payment increased The average income of

Vietnamese people has drastically been increasing

The habit of using banking services in the population is improving, especially in the cities and towns Monetization process will take place economy further The rate funding

in GDP increased from 37% in 2000 to 48% in 2002 and increased to 72.5% in 2007,

according to data in 2008 this ratio was 74.2% and is predicted to be 100% in 2020

Table 1: The rate funding in GDP from 2004 - 2020

2.1.2 Legal:

Strategies for banking services development in the integration phase of the

government contributed to perfect framework for banking regulations

The legal framework for banking services has been formed Supplemented and amended Laws on the State bank and law on credit Institutions became effective from 1 August 2003 and 1 October 2004 respectively During 2006-2010, the State bank continues

to compose, amend and supplement stipulations on credit institutions licensing,

organization and operation in compliance with commitments and roadmap to WTO

The legal framework for building, owning and registering bank in Vietnam are

inadequate

2.1.3 Economic:

From 2000 to 2006, the macro economy environment is relatively stable and healthy Vietnam has a low inflation rate and a favorable legal environment The State Bank implemented new policies under the direction of tightening monetary policy to curb inflation as increasing the required reserve ratio, issuing bonds to break the momentum of

credit growth

In 2008 the bank suffered the impact of the development status of the heating from massive capital inflows and the global economic crisis is the result of rising inflation, trade deficits, the real estate bubble, declining investment quality Second half of 2008, the

Government offers monetary easing, fiscal easing to prevent the risk of recession

In2009, to revive the economy from the dangers of the crisis, the Government

issued interest rate support policy to encourage businesses in Vietnam

The capital market in Vietnam developed ups and downs with the launch of the securities trading Center in HoChiMinh City in 2000 However, the relationship between

banks and the stock market do not support each other and not to reduce production costs

The vibrant economic growth rate is greater than 7% per year

Organization-WTO (from 07/10/2006), the bank is gradually implementing its

commitment to the community members

Vietnam has enhanced international status to become permanent members of the Security Council of the United Nations in 2007 The executive apparatus of the State bank with the efforts of economic- political –social domestic and foreign policy in recent years are also appreciated

2.1.5 Technological:

Bank infrastructures do not develop equally The technology in general, technology banking industry in particular has grown significantly; thus, it attract to the banks for implementing competition Besides, lack of IT experts who have adequate knowledge about finance and banking

Most banks have done modernization However, most banks are required to purchase the software technology of foreign countries with huge costs

2.2 Competitive analysis:

2.2.1 Current competitors:

The banking industry in Vietnam has achieved rapid growth in terms of both quantity and scale The number of banks increased from 9 in 1991 to 80 in 2007 Currently, there are 4 state owned commercial banks, 37 joint stock commercial banks, 5 joint venture banks, 45 branches of foreign banks, 05 banks with 100% foreign, 17 financial companies, 13 financial leasing companies, 1.035 people's credit funds (Source: State Bank March 2009)

Banks and financial organizations are present and direct competitors of BIDV

2.2.2 The market share:

Vietnam is still dominated by four large SOCBs who control 75% of all banking assets in the market The charter capital of JSCBs is just ¼ that of SOCBS on average, but

it has rapidly grown in recent years

The market is divided for SOCBS, JSCBs and foreign and joint venture banks The SOCBs still has the majority of market share in the main operations The JSCBS are rapid expansion of market share Besides, the foreign and joint venture banks maintain a fast and regular increase in the quantity of banks The market share expansion has been limited considerably

2.2.3 Branding strategy of Vietnamese banks analysis:

Brand value of Vietnamese banks, especially joint stock commercial banks is spectacularly increasing Yet this achievement has not been the result of branding strategies but merely because of the accumulation of domestically economic development, income increasing and the trend of internationalization and globalization

Besides, current branding strategies of many banks just focus on sponsoring events, developing representative networks and promotion activities But absent from their strategy is the development of a powerfully and meaningfully relevant brand that is a driver of differentiation, loyalty and competitive advantage

The customers choose aimlessly among look-alike banking brands They perceive little difference among banking institutions and believe that banking brands are interchangeable with delivering identical brand benefits

In reality, domestic commercial banks have also taken some actions relating to branding as follows:

First, advertise banks’ image and brand

Icons, logos or pictures of domestic banks appear more and more often in public from televisions, magazines, newspapers, internet to advertising panels in main streets, fashion shows, sports events, etc …

Sponsoring activities have become popularly For example, Techcombank with financial program broadcasting in television; Vietcombank as the main sponsor for the national football team, etc

Improve transaction procedures in favor of customers, for instance applying the model transaction at one door

Expand distribution network and lengthen opening time

Carry out social community activities For example, Sacombank granted scholarship to pupils and students in 26 cities and provinces

Second, connect the customers’ benefit to the brand

There is a revolution in customer services at many banks, such as it was no longer the time that customers were coldly and indifferently treated whenever they entered the banks Bank staff are now well-trained to serve enthusiastic, friendly and professional

Age of promotion and after sales services boom: almost banks compete to draw new customers by attractive promotion campaigns with high value prizes and retain loyal

customers by after sales policies such as sending birthday cards, gifts, VIP card, launching bonus saving marks, etc

Third, set up marketing department

Marketing department has been set up and run as other functional departments It includes marketing team, customer relationship team, somehow highlighting their professionalism improvement

3 BIDV BRAND ANALYSIS:

BIDV’s image and awareness

BIDV has gained good reputation and high prestige in construction field in Vietnam over the past few decades, resulting in wide awareness in domestic and foreign investors through many national big projects

Brand equity handbook

BIDV is one of the banks which pay early attention to the building up basic elements for a brand identity system Logo with its symbol in olivary fruit shape (but without “BIDV” phrase) was designed directly by Former Chairman of Director Nguyen Van Doan in 1990 and was officially publicized on 25th September 1991 by slogan

"Effective Business of customers is the goal of BIDV”

The launch of "brand identity handbook" was a success in building BIDV brand in

2009 Brand identity system of BIDV becomes an effective promotional tool and is the property of BIDV

In 2003, BIDV edited its logo with two parts: image and text "BIDV" BIDV registered the logo at the Department of Intellectual Property of Vietnam BIDV registered the brand in the U.S market in 2005.On 12th March 2006, BIDV decided to use the motto:

"BIDV - Sharing opportunity and successful co-operation", the author of which is the Chairman of Board of Manager - BIDV Tran Bac Ha In the short, concise manner, the

slogan "Share opportunity and co-operate successfully” has accompanied with BIDV from

then on

To meet the requirements for using the logo of the enterprise flexibly and synchronically, the particular colors and details are adjusted to make it look strong and sharp After the pilot application of brand identity was executed in some branches and after the evaluation process, it showed the effectiveness of media

Handbook of BIDV Brand identity defines in detail about 5 document groups with

71 standardized items including: Logo and standard system; signage system; office

Publications System; Media Documents and uniforms (See at the Appendix 2)

Human Resources

BIDV has continued to increase both quantity and quality of staff At the present, the number of staff reaches nearly 12,000 people They are youth, enthusiasm, skillful and specialized education

Technology and products

When the World Bank sponsored the Bank Modernization Project, BIDV has applied a modern core-banking technology

Experiences in expanding retail distribution networks

BIDV has 114 branches, more than 500 transaction offices covering 64 provinces, cities

Expanding and diversifying and the customer base

BIDV focused on developing a stable customer base which included big corporations, groups in key industries in economy such as construction, infrastructure, cement, electricity, energy, etc

With the orientation of raising growth of private sector, BIDV has also established relations with individual customers, private companies in the market

3.2 Drawbacks of BIDV brand:

BIDV is lack of staff with branding knowledge The specialized teams for building and developing brand haven’t been set up although they are necessary for branding activities

The name “Bank for investment and development of Vietnam” causes confusion among enterprise that BIDV only provides services to investment projects Sometimes, it misunderstands BIDV is “Bank for Agricultural Investment and development of Vietnam”

BIDV brand together with logo haven’t been popularly and consistently used on documents, leaflets, brochures, etc … at every branches

3.3 SWOT analysis:

Table 2: SWOT analysis

- With a history of over 50years of

development and being the second ranked in

the banking sector

- Maintain the reasonable asset structure and

system of large customers with a system

wide branch network

- The financial indicators are likely to be

sharply improved when the risk

management measures fully applied

- The ability to grow through the advantages

of scale in both capital raising activities and

credit

- Human resources are focused on

stabilizing and training

-The structure of income are not diversified, the revenue relies heavily on traditional credit activities

- The performance of member units is low

- The capacity of risk management did not meet the requirement of development

- Funds from the individual and corporate customers are decreased by competitors -Management and administration activities are limited

-Large scale is difficult to change and adapt

to market changes

-The poorly coordinated community

-The support of the Government, the State

bank, the Ministry of Finance The

Government's support and participation of

an international financial group as the

largest shareholder after equitization

-The banking sector is on the rise with many

products and services

- The integration of international banking

sector contributed to market expansion,

improvement services

-The business environment is fair and clear

- The policies of stimulating investment and

consumption to combat recession

- The potential for Vietnam's economic

growth and demand for capital, credit and

banking services increased

- The pressure competition is increasing from domestic commercial banks and commercial banks entering the Vietnamese market

-The business decisions based on the tradeoff between risk and profit rather than rely on existing relationships -The policies and regulations related to banking activities lacking synchronously

-Competitiveness is weak

4 BRANDING STRATEGY FOR INDIVIDUAL SEGMENT:

4.1 The brand objectives at the end of 2013:

Market share of individual segment: 25% of all market

Awareness about BIDV image: 65% individual segment

Logo, slogan: 70% individual segment remember and aware

Products and services of BIDV satisfy all the need of individual customers is to be aware of over 70% this segment

65% individuals feel that the locations of distributions are convenience

4.2 The sale objectives by type of customers at the end of 2013:

Table 3: BIDV’s sale objectives by type of customer at the end of 2013:

5.1 Identifying and establishing brand positioning and values:

5.1.1 Building customer equities:

BIDV should build up customer equities via 3 major factors: value equities, brand equities and retention equities

Figure 4: The relation between factors of customer equities

Value Equities

Brand Retention Customer

a Value equity:

Quality: BIDV was certificated ISO 9000:2001 – Total Quality Management Certificate

and applied the modern core banking system, BIDV has improved transaction quality and quantity However, in order to make better, BIDV should improve the quality by

performing orientations as follows:

- Standardize its procedure, create better conditions for individuals to approach banking services

- Consistently implement all the commitments with ISO

- Perfect backup data and securities centers to maximize safety and assure the continual business

Price: BIDV should apply penetration strategy with competitive price (such as high

deposit interest, low loan interest, low service fees) in order to gain the market share and

attract individual customers

Convenience: To provide customers with the highest convenience, BIDV should focus on

2 factors:

About the products: BIDV should create a cutting-edge retail package base on

core-banking aiming to specific demand For example with savings, BIDV should diversify all kind of savings account with variable terms to adapt different needs of customers Another example, with payments, BIDV should offer multi-utilities account which they can use for common transactions: bill of electricity, water, phone; payments at supermarket; shopping, salary payment; insurance payments, etc In the other hand, with service products, BIDV can divide in financial consultancy; securities consultancy, asset management, safety deposit, etc

About distribution: BIDV should establish retail banking service department at

every branches and transaction offices Whole sales banking departments should still be kept paralleled but restricted to head office of branches BIDV also re-decorate all branches and transaction offices, expressing consistency of the logo, the banners

To widen distribution, BIDV should increase number of ATM and POS; place them

at convenient areas such as supermarkets, offices, restaurants, hospitals, entertainment

areas, universities and set up auto banks at shopping malls with easy-to-use function and safe the electronic distribution

b Brand equity:

Brand image: BIDV currently is a leading bank in Vietnam in terms of scale, total

asset, distributions network and has lots of contributions to the national constructions Therefore, BIDV will continue to develop this good image as an important factor in building a new image for individual segments, which is always friendly, willing to

sympathize with customers, understand their aspirations as well as ready to serve them

Logo: BIDV should maintain the current logo but with new interpretation Letter

“I” stands for “individual”, who is covered by BIDV ship over all the storms Simultaneously, the ship has also equipped these individual a growing sail, create good conditions to fly up with dreams when opportunity comes The overall view of the lozenge represents the Vietnamese enthusiastic heart, reflecting nationalism in sharing and helping each other to move forward

The brand equities management will be based on 3 key drivers as below:

First, brand awareness: As a result of the survey, BIDV has the low level of brand

awareness and recognition BIDV should use the integrated marketing communication approach to launch the new BIDV brand image into individual customers perception with

communication mix of mass advertising, PR, sponsoring, group events, sale force support

Second, customer attitude towards the brand: BIDV should use the

communication tools to drive the young people’s attitude to its brand, and change the

non-customer behaviors The message should be based on the non-customer insight “BIDV is

available anywhere at any time to welcome and serve customers as loyalty”

Third, perception of brand ethics: BIDV needs to build up an image of a bank

operates for the development of Vietnamese community by promoting charitable activities

or sponsoring events

c Retention equity:

Innovation: BIDV should continue to have considerable investment on research

and development of new products and services to meet the specific demand and maintain

customer loyalty

CRM: BIDV should put in customers’ mind a perception as a bank which always

listen to and understand their customers Then, we launch customer satisfaction surveys on

a frequent basis to promptly get feedback from customers If they are satisfied, the bank will do more of what they have been doing and also ask what they want more from the bank and try to do that If they are not satisfied, BIDV tries to find out the reason why and adjusts to meet their needs

5.1.2 Brand positioning and value:

a The potential of individual segment to banking industry:

The increasing in economy growth rate via GDP performance as well as the increasing flow of foreign investment in different sectors leads to the increasing in the living standard Thus, they are more interested in using banking services And hence, it will increase the market share of retail banking

Vietnam’s banks are in front of tremendous opportunity to exploit the potential individual segment BIDV should focus on this segment for the strategic development

b Key findings from customer study on individual segment (based on the survey in appendix 3 and result in appendix 4):

* Key findings from individual customers who are using banking services:

 Demographic: The potential individual customers are Vietnamese people who

aged 21-40 They are employees, working in the offices or factories, small

businesses They are living in the big cities, such as HCMC, Hanoi, Danang

 Customers’ demand: The individual customers are considerably interested in

services which bring lots of utilities and benefits to their daily life such as: ATM, payments, savings, personal loans (for purchasing of consumption goods,

housework facilities, transport vehicle, house)

 Current trend in customers: They are paying more and more attention to the cash transactions relating to the costs of living

non- Usage: Individual customers go to the bank 1 time/month And the income between

5 and 10 million dong has a high ratio of respondents

 Lifestyle: They desire to use the services of high convenience to save time They care much about simple and quick procedure when using banking services

Young people are characteristically independent, self-control They are more interested in and willing to use personal banking services

 Attitudes: Young people use banking services more than elderly people

* Key findings from individual customers who are not using banking services:

There are some major reasons that why some people does not use banking services First, the procedure transaction is so confusing and waste time The feeling of not being welcomed and appropriately respected is the reason why individuals don’t use banking services One reason is the habit of borrowing being considerable point of individuals

c Targeting:

We plan at the segment of individual customers who are in following characteristics They are from 21 – 40 years old They belong to the middle to upper social class in society They love to be independent, self-control, stylish And, they are looking for utilities and benefits from using banking services for livings

d Positioning:

As a result of the analysis from the target segment, BIDV’s brand should not be positioned just a collection of financial – service products but more than that, an open, friendly, customer-oriented and innovation bank It would be based on customers’ value:

The lifestyle: customers’ emotional benefits of personal freedom, self-control,

risk-taking and lifestyle

The convenience: the utilities and benefits for better work and life

Both elements target precisely what customer desires from the bank and are linked

to their loyalty drivers – the specific values and features that drive using services intent

5.2 Planning and implementing marketing program:

5.2.1 Build a marketing communication budget:

The budget for marketing is proposed around 5 – 6% per BIDV’s annual earnings after tax (EAT) In the first 2 years, branding activities should be thoroughly pushed up, thus proposed budget is 9% and 7%/EAT for 2009 and 2010 respectively

Table 4: Estimated marketing budget 2009 – 2013

2009 2010 2011 2012 2013

Estimate EAT (VND billion) 1,845 2,121 2,439 2,804 3,224

Total marketing cost (VND billion) 166 148 97 112 128

(Source: BIDV reports)