Strategic marketing for sme securities company nguyen van chung

It is very useful for securities firms since the majority of the securities companies in Vietnam do not have their own marketing strategies.. APPENDIX, TABLE, CHART AND FIFURE APPENDIX

TRƯỜNG ĐẠI HỌC MỞ TP HCM UNIVERSITÉ LIBRE DE BRUXELLES

HO CHI MINH OPEN UNIVERSITY SOLVAY BRUSSELES SCHOOL

MBMM5 NGUYEN VAN CHUNG

STRATEGIC MARKETING FOR SME

SECURITIES COMPANY

MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

HO CHI MINH CITY

2012

DECLARATION

With honor and personal responsibility, I assure the completion of the final project with reference to other documents, but be prepared and completed an independent, creative under the devoted guidance of Dr Nguyen Van Thuan

HCMC, February 07th 2012

NGUYEN VAN CHUNG

ACKNOWLEDGEMENT

After full time of training and research, based on the current status of SMES and with the knowledge I learned to contribute a little effort into the concerns and worries of the Company in the topic: "Strategic Marketing for SME securities company‛ This project carried out under the assistance and encouragement of the staff and leadership of the company

I would like to thank the dedicated guidance of Dr Nguyen Van Thuan, and company officials in collecting information from SME that help me to finish this project

I also acknowledge all the help extended from all my friends in the Ho Chi Minh Open University Special thanks to everybody for their constructive comments and suggestions

Finally, for the support that has mattered most in my efforts, I would like to give my special acknowledgment and precious thanks to my wife, Anh Thư for her love, patience and moral support I appreciate for all that she has done Her kindness has no bounds and her sacrifices have no match

TUTOR’S COMMENTS

The thesis meets the requirements for a marketing thesis It is very useful for securities firms since the majority of the securities companies in Vietnam do not have their own marketing strategies

During the time to go together with him to do this thesis, I noticed he collected opinions carefully and try the best of his ability to finish his thesis I am agree to let this student to defend his thesis at the committee

TABLE OF CONTENTS

1 INTRODUCTION………

1.1 Company description ………

1.2 Problem statement and Objectives………

1.3 Scope of works………

1.4 Literature review ………

1.5 Method to solve the problem and outline………

1 1 2 3 3 5 2 CURRENT MARKETING SITUATION ………

2.1 External environment analysis………

2.1.1 Macro environment analysis………

2.1.2 Micro environment analysis………

2.1.3 Competition………

2.2 Internal environment analysis………

2.2.1 Resources analysis………

2.2.2 Competence analysis………

5 5 5 10 13 17 17 18 3 SWOT ANALYSIS………

3.1 Strengh ………

3.2 Weaknesses………

3.3 Opportunity………

3.4 Threats………

3.5 Use SWOT analysis’s result………

3.5.1 Use the strengths………

3.5.2 Stop weaknesses………

3.5.3 Exploit opportunities………

18

18

19

19

20

21

21

21

22

3.5.4 Defend against threats……… 22

4 OBJECTIVES……… 22

5 MARKETING STRATEGY………

5.1 Products………

5.2 Pricing………

5.3 Distribution………

5.4 Attract investors to invest in securities through SMES………

5.5 Maintaining positive image………

5.6 Propagatethe general public………

5.7 Estimate expected results………

23 24 24 25 25 26 26 27 6 ACTION PLAN………

6.1 Alternative plans and mixes………

6.1.1 Media relations………

6.1.2 Publications and printed material………

6.1.3 Websites………

6.1.4 Events………

6.2 Schedules………

6.3 Budget………

6.4 Human resources………

6.5 Responsibilities………

6.6 Accountabilities………

27 27 27 28 28 28 29 30 31 31 32 7 RISK MANAGEMENT……… 32

8 CONCLUSION……… 33

ABBREVIATION AND ACRONNYMS

SSC State securities commission of Vietnam

UBCK State securities commission of Vietnam

APPENDIX, TABLE, CHART AND FIFURE

APPENDIX

Appendix 1: The Growth of Vietnam’s economy by quarter 36

Appendix 2: VN Index with time period for 10 years 36 Appendix 3: The securities brokerage market share of 10 leading securities

companies in the first 06 months 2011

37

TABLE

Table 2: Consumer Price Index (CPI) of the month in 2011 6 Table 3: Financial Index of SME Securities Company 13 Table 4: Financial Index of VND Securities Corporation 15 Table 5: Financial Index of ORS Securities Corporation 16

CHART

FIGURES

EXECUTIVE SUMMARY

To develop Marketing strategy is a very important task of every business to make the most effective three targets: profit, position and secure

The economy is in fierce competition, a business wants to survive and develop, it must

be conducted to mobilize all resources, know how to manage all elements to achieve the set goals Through strategic marketing, businesses can develop their internal resources focused on the attractive opportunities in the market and thus will help them

to improve business efficiency, enhance competition in the process of the economy development Generally, the role of marketing is not new anymore, but how to implement such marketing activities most effectively is the interest of business administrators

The year of 1996 was a memorable event in the development of Vietnam's securities market that was the establishment of the State Securities Commission And then in

2000, Securities Trading Center in Ho Chi Minh City was born that laid the foundation for a new development stage of Vietnam's stock market, created favorable conditions for all enterprises develop in the equitization and freedom transfer of shares as well as support for investors with an attractive investment channel Setting up Vietnam stock market also reflects the strong growth of the economy and the increasing demand for production and investment of Vietnamese in the coming years

From the urgent need to develop a marketing strategy for SME to have a specific program of marketing actions to promote the development and the driving force for the generation of staff working at the company as well as to create competitive advantage

in the more harsh market After more than six years of operation, the company has to face many business rivals and has many lessons in this securities field

Develop marketing strategies for SME Securities Company is an urgent action that needs to be implemented soon to meet and enhance the brand value of the company and professionalization and modernization of public sector marketing Since Vietnam has a stock market, many securities companies have been established and now there

are 105 securities firms in the country With a pressure of market competition as well as personnel and the macro environment of the new market, SMEs also faces a change in legal basis apply for Vietnam's stock market

Although Vietnam stock market is still new, the rate of establishment of securities companies is so fast that led the competition for status customers is fierce Besides the number of shares means the supply of market is sometimes become scarce due to the equitized enterprises remains small so the number of outstanding shares listed is few from which customers have little choice of goods lead to competitive sale of shares in a fierce and push up stock prices unusually high With the number of securities companies are direct competitors with SME so the company has chosen the market segment is the small investors to serve and built software e-commerce systems applications to serve customer service easier and more convenient

After determining the own market segment, SME focused strategies to encourage investment and good relationships with the joint-stock companies to increase intimacy

in a relationship of professional investment advice and underwriting securities for stock companies The advice will be studied in the Analysis department of the company and then send email to customers regularly In addition, the company holds seminars to evaluate the portfolio as well as comments on the situation of macro and micro world and domestic to support the investors timely in their decision on the sale of shares From this marketing strategy, SME will have specific directions in marketing activities and thus strengthen the competitiveness and attract more investors towards building fully operational procedures of the company to become a great name of securities company on the Vietnam stock market In the coming years, SME will grow strong enough to overcome the difficulties of Vietnam's economy in particular and world in general, offer new products and meet the international standards of market securities in the future

1 INTRODUCTION

1.1 Company description

The full name of SME Securities is Securities Corporation SME (SME Securities/ SMES), established under License No 35/GP-UBCK dated 26/12/2006 of the State Securities Commission The founding shareholders of SME Securities are businesses and individuals with experience and credibility in the financial sector, banks belonging

to the Association of small and medium enterprises in Vietnam (VinaSME) SME Securities has headquarters at 39 Ngo Quyen, Hoan Kiem, Hanoi and branch at 11 Tran Quoc Thao Street, Ward 6, District 3, Ho Chi Minh City SME is a member of the Securities Exchange Securities and the Ho Chi Minh Securities Trading Center and Hanoi Securities SME implements the business activities include securities brokerage, dealing, securities custody and financial consultant Initial charter capital of the Company is 51,000,000,000 VND (Fifty-one billion) Currently charter capital of the Company is 225,000,000,000 VND (Two hundred and twenty five billion) The total charter capital of the Company is divided into 22,500,000 shares with a value of VND 10,000 / share

In the development strategy, SME Securities focuses on investing and developing human resource based on modern technology With nearly 100 employees with professional ethics and high professional level, SME Securities is providing more professional services in the securities field and other versatile financial services to investors as well as business enterprises of all economic sectors One of the objectives

of SME Securities is a link to support and engage investors to companies, support business in the Association of Small and Medium Enterprises in Vietnam to improve competitiveness, access to the capital as well as domestic and foreign partners

With the motto "Cooperation and Sharing", SME Securities desires to cooperate and share with partners, customers the success, as well as takes on the difficulties of the partners who are participating in the stock market

Chart 1: Organizational Chart

(Source: The Prospectus of SME Securities Company)

1.2 Problem statement and Objectives

In recent years, the world economy has faced many serious problems such as financial crisis in the United States, debt crisis in European countries and the domestic economy is facing inflation and high interest rates while Vietnam's stock market has been reduced depth, trading conditions became gloomy and investors are leaving this important investment channel The risks will be an opportunity for businesses to embrace opportunities and have enough potential

Board of Shareholders

Board of Management

Board of Directors

Board of Control

BranchHead office

Finance Department

IT Department

Administration

& HR

Legislation &

internal control

Business Developmen t

Securities Service

Financial Service

Investment Analysis

Financial advisory

Finance Department

IT Department

Administration

& HR

to overcome this difficult period If passed, the businesses will rise up and create a good reputation in the market So now it is time to consolidate the entire company's operations and build the development strategies appropriate for the coming years The marketing strategies for SME are considered as the top priority and this work to address important issues:

1 What are the strengths, weaknesses, opportunities and threads of SME to determine the position of SMEs in Vietnam?

2 How to attract new companies to select SME consultants or investment accounts?

3 How to encourage the investors in the country?

4 What are the lessons learned in the process of working to improve and develop the company?

5 What are the improvements to enhance the image of SME?

1.3 Scope of works

The objective of this writing is to design five-year marketing plan for SME to concentrate its limited resources to get the best results in attracting individual customers and organization customers

1.4 Literature review

Developing Marketing strategies and plans

 Value delivery process

- Choose the value

o Customer segmentation

o Market selection

o Value positioning

- Provide the value

o Product, service development

o Pricing

o Marking/Sourcing

o Distributing

o Servicing

- Communicate the value

 The central role of strategic planning

- Managing a company’s businesses as an investment portfolio

- Assessing each business’s strength by considering the market’s growth rate and the company’s position and fit in that market

- Establishing a strategy For each business, the company must develop a game plan for achieving its long-run objectives

 Corporate and division strategic planning

- Defining the corporate mission

- Defining the business

- Assessing growth opportunities

- Organization and organizational culture

 Business unit strategic planning

- The business mission

- Feedback and control

1.5 Method to solve the problem and outline

The study focused on data collection of SME’s activities and data on a number of competitors in the country such as VND and ORS And then, analyzing and interpreting the data to identify the key issues affecting the development of SME Base on this, the strategies and action plans will be proposed

The writing is divided into 8 parts as follows:

2 CURRENT MARKETING SITUATION

2.1 External environment analysis

2.1.1 Macro environment analysis

Economics: in 2011, the world suffered consecutively many crisis, from debt crisis to crisis geopolitics, the face of the economic and financial of the world has changed quite

a lot European economic brink of recession, five European governments collapsed because the debt crisis and the credit rating dropped again, S & P downgraded USA from AAA down to AA +, USA’s bonds are rated lower than the British government bonds, Germany, France or Canada Geopolitical crisis in the Middle East - North Africa comes from the situation of food prices too hot and distribution of wealth and welfare shortcomings in some countries in the Middle East, North Africa The inflation

in the world, especially in emerging markets, the main reason is because of the demand

for consumption goods increases, the impact from the economic stimulus of Fed In addition, natural disasters cause heavy economic losses worldwide

In 2011, with the complete change in senior personnel of the country, focusing term inflation, exports reached a record high of over 96.3 billion USD, up 33.3% compared

to last year, FDI and ODA disbursements decreased slightly increased, capital restructuring the entire economy, reduce taxes and stretch for many businesses more objects, GDP growth Vietnam increase 5.89%

Table 1: Vietnam GDP Index 2010-2011

Divided by economic sector

(Source: Vietnam Statistics Bureau)

Table 2: Consumer Price Index (CPI) of the month in 2011

Unit: %

Compared with

previous month 101,74 102,09 102,17 103,32 102,21 101,09 101,17 100,93 100,82 100,36 100,39 100,53 Compared to

December

2010

101,74 103,87 106,12 109,64 112,07 113,29 114,61 115,68 116,63 117,05 117,50 118,13

(Source: Vietnam Statistics Bureau)

Technology: The mechanisms and policies, the events of National technology renewal fund established (dated 05/08/2011) was the most prominent With charter capital of 1,000 billion VND from the State budget, this fund is the national financial institutions,

operating not-for-profit, it has a function to provide preferential loans, support loan interest, guarantees for loans, financial support to organizations, individuals and businesses to undertake research, transfer, innovation and technological perfection Ministry of Science and Technology has invested 145.7 billion for the project "Design and manufacture chip card and reader" (11/24/2011) that has been selected This is the largest amount for a scientific project There was an event - nuclear reactor in Da Lat was restarted up by the scientists of Vietnam (dated 30/10/2011) The workshop of international integration on science and honor technology was successful organized and chaired by Vietnam together with a ministerial meeting of ASEAN countries in science and technology (in November) This is the first time Vietnam has hosted successful Ministerial meeting of ASEAN Science and Technology This is also an opportunity to reaffirm the role and position of Vietnam in the international arena after successfully expressed the Chairmanship of ASEAN in 2010 The sector of application technology has honored four events in which the most prominent is the Vietnam Oil and Gas Group launched jackups 90 m of water (on 10th September 2011) This is the national key engineering, was first detailed design and erection of water, a mechanical engineering projects and has the largest capital in Vietnam today As a result, Vietnam has become one of three countries in Asia and one in ten countries around the world for detailed design and erection of jackups meet international standards

- Politics – Legal

The National Party Congress XI has successfully helped Vietnam to keep a stable political environment Government pays much attention to adapt to the economy by issuing market reforms make a favorable environment for domestic and foreign investment The legal framework has also been improved Investment Law, Enterprise Law, Land Law, Securities Law and Education Law have been "released" by National Assembly Among the documents was prepared, issued and effective, legal framework consistent with international But Vietnam still not fast in administrative procedures and remain bureaucracy that is a barrier to domestic and foreign investors

- Culture – Society

In 2011, there are many cultural achievements of the country New7Wonders organization published a list of new Seven Wonders of the World, including Ha Long Bay Ho dynasty citadel was officially recognized by UNESCO as Cultural Heritage of Humanity It was built in 1397, this was the massive structures were built of stone unique in Vietnam 2011 was also the year recognized with a series of disorder in the national college entrance or university Many schools attract candidates even breaking the regulations of the Ministry of Education while the time to approve the aspiration 2,3 has not approved yet The spread of ‚hand-foot-mouth‛ disease in all the provinces, Vietnam ranks fourth in the world with 100.08 patient/ 100.000 people, after Japan, Singapore and Macau Many problems of sport in the country also remain inadequate and cause endless story However, Vietnam still prouds of its own cultural environment and social stability that are important factors to attract tourists and foreign investors With the opening of the economy and the high level of standard of living, new industries such as banking, finance and technology are rapidly entering the economy A large number of potential investors and skilled workers are what is expected in the near future

- Future:

Inflation decreases but it is likely to re-flare up again

+ Vietnam's inflation made the top in August 2011 and start declining as the economic rule when tightening monetary in February 2011

+ The inflation will remain moderate and down more in 2012

+ Dominating the inflation has some advantages, due to debt problems of Europe, the U.S’s economy is slowdown lead to the world’s economic growth slower as commodity prices is down

+ However, the natural disasters, epidemic diseases can push the price of essential commodities rise, such as floods in Thailand accelerated rice prices In addition, floods in the central, Mekong Delta could push food prices increase as well

+ Also, if the big countries continue to pump money to support the economy that will push commodity prices higher over the world, affecting the inflation in Vietnam

Interest rate is stable, reducing but not falling, and still remains some the dark sides + With the determination of lower interest rates of State Bank when rate ceiling shall be 14% to be taken seriously and the commercial banks offer loan packages with interest rate of 17-19%, the lower interest rate can be done, but very slowly lower in the long run when inflation shows signs of completely stable

+ The downside of monetary policy pushed the smaller banks extremely difficult, they cannot balance their liquidity so they have to borrow the interbank market

at high interest rates, black credit is develop then the average lending rate of the economy remains very high

+ The interest rate is lower but not much businesses can access to capital, and although interest rates is lower but still high, many businesses still do not dare to borrow to invest in the current difficult period

+ This is the problem not be solved soon before the merger of the problems banking And the problem bank mergers need a roadmap to implement so the money market issue will last until 2012 and the peak of the difficulty will fall in June 2012

+ Exchange rate continues to trend up

+ There are many factors affecting the trend growth rate as the trade gap, the gold price fluctuations, foreign currency credit growth imbalance it is important that the exchange rate has been kept too long in the past when inflation and interest rates is regularly high in Vietnam, thus it is pressure the rate in future years Therefore rates will continue to fluctuate in 2011 and upward trend during 2012-2016

Restructuring of the economy

+ Restructuring the economy and change the economy model are the outstanding issues of Vietnam economy in 2011, 2012 and 2013-2016

+ As the world economic is difficult, the structure and growth pattern of the economy of Vietnam before is no longer appropriate at the present time

+ Restructuring is deep and wide After changing the model of economic growth, when restructuring of corporations, state corporations to private companies, restructuring of economic sectors such as banking, securities, real estate, electricity, petroleum…

+ The restructuring is good for the long term of a developing country but will face the difficulties occurred in the restructuring process and will need a medium to long term period to complete strategic restructuring mechanism

The Inflation in Vietnam is still rising and does not show the end sign The annual trade deficit is continuing, the effect of the global economy is under recession pressure, and bad debt crisis The Natural disasters and weather are more intense and unpredictable But Vietnam has a political background that is relatively stable is also a good environment to promote and attract investment and economic development For the stock market for years to come will witness a lot of screening as well as mergers and bankruptcy of securities companies, continue to equities the big business of creating more goods for the stock market In 2012 and 2013 will be a difficult period of most securities companies in Vietnam The stock market situation will get stable and grow

again in 2013-2016

2.1.2 Micro environment analysis

Securities competition between technological quality, intelligent software applications

to meet the growing needs of customers The market becomes "perfect" except for one problem cannot be stopped: the insider trading, price manipulation is opening to the public such as the acquisition did not disclose information of internal shareholders,

The main task of the broker is serving the customers, preparing documents, consulting

investment, arranging margin The responsibilities of brokers are parallel their interests

- the commissions on sales depending on company policy Many securities companies divide brokerage into two groups: trade inside and outside Brokerage transactions staffs only take care of customers of the company, fixed salary, no pressure sales, so not entitled to commissions, enjoy rewarded periodically In contrast, the outside broker will be free of sales commission, typically accounting rate from 20 to 30% (even up to 40%), but there is no fixed salary Overall, the number of free brokers will not rise too fast though transient mechanism, as it depends on the skill to invite customers have property and do transactions often

Low brokerage fee is not benefited the Securities companies, it is good for organization customers because they often held large volume transactions For individual customers, brokers premium is less important than the ability for good investment advice to clients: caring attitude, offering useful advice, considering the market sensitively, insightfully Therefore, for the Securities companies who focus on retail customer segment, the transaction fee in the average range is not a big problem

Mobilizing capital to be active in business as well as to ensure the liquidity of Securities companies is a worthy goal Securities companies of commercial banks, have an advantage because they are most proactive and flexible in mobilizing resources from the parent bank In addition, the Securities whose major shareholder is the real estate business, large corporations or customers have strong financial resources, benefit from the mobilization of resources

With 104 securities companies in Vietnam market, over 4 to 5 times the number of securities companies in developed markets, shows the trend of massive development, lack of sustainability The expenses for investing software, upgrading technology regularly is not less for each Securities to meet the business such as fixes, margin management, etc

Another critical issue for the Securities is risk management If not done well, Securities will face difficult if not manage well, not comply with the procedures set out

As an inevitable trend, the merger, trading among Securities will constitute a legal entity to have strong financial strength, good competition, eliminating the operation model ineffective, and take advantage of human resources, physical facilities of the former Securities M & A among the Securities will increase also create a better choice for investors in the existence context of the Securities model is preferred and dominant than fund management companies

104 securities companies are direct competitors on the Vietnam stock market Because there are so many securities companies so the small start-up companies often attract personnel of large companies, and brokerage team also entice old customers from large companies And recently, there is a surprise change in the market share position of securities companies Most securities companies are offering incentives for capital and customer service to compete However, the deposit rate is different for each company

as well as the way to take care of customers of brokerage team is also different that is the finance ability, technology investment and internal training programs of the securities company has made a competitive advantage in particular

SME must have a clear strategy and specific steps to sustain and attract investors and institutions participating in the stock market using the services of the company Specifically, SME has invested in software engineering in Korea to create a competitive advantage in serving customers and can maximize small the customer This can be compared to the competitors through the following criteria:

o The added value such as brand, raise capital and improve the profit rate to customers, help clients rapidly achieve their financial goals

Table 3: Financial Index of SME Securities Company

of such competition Understand competitors to know the strengths and weaknesses of competitors, and hence decide to invest to information technology, and itself has brought instant success in the early years Here are a few surveys of notably competitors:

VNDirect securities Corp (VND)

Strengths

- VND is strong at legal, legal department with a professional team is highly qualified and knowledgeable in the financial market of Vietnam

- VND is almost a pioneer in introducing new products to meet customer needs and this

is the tool to support their consulting and brokerage forces in attracting new customers and expand market share of the company

SME

SECURITIES

Capital 150.000.000.000 225.000.000.000 225.000.000.000 Revenue 72.364.000.000 107.456.000.000 18.451.394.353 Expense 49.483.000.000 93.409.000.000 26.802.114.765 Profit 22.881.000.000 14.047.000.000 8.350.720.412