Perceived competitiveness of bac giang provincevin viet nam a basic for marketing plan

The model of place planning based on principles of marketing named Strategic Market Planning SMP that consists of the process of developing strategies so that a place can reach its growt

_

A DISSERTATION Presented to the Faculty of the Graduate School Southern Luzon State University, Lucban, Quezon, Philippines

in Collaboration with Thai Nguyen University, Socialist Republic of Vietnam

MAI SON

entitled

PERCEIVED COMPETITIVENESS OF BAC GIANG PROVINCE IN

VIETNAM: A BASIS FOR MARKETING PLAN

Submitted in Partial Fulfilment of the Requirements for the Degree

DOCTOR OF BUSINESS ADMINISTRATION

A program offered by Southern Luzon State University,

Republic of the Philippines in collaboration with

Thai Nguyen University, Socialist Republic of Vietnam

has been approved by Oral Examination Committee

WALBERTO A MACARAAN, EdD EDUARDO T BAGTANG, DBM

MELCHOR MELO O PLACINO, PhD ALICE T VALERIO, PhD

CECILIA N GASCON, PhD

Chairman Endorsed by: Recommended by:

EDWIN P BERNAL, DBA APOLONIA A ESPINOSA, PhD

Accepted in Partial Fulfilment of the Requirements for the Degree

Doctor of Business Administration

_ WALBERTO A MACARAAN, EdD

Date Vice President for Academic Affairs

and encouraged me to complete the doctoral course Their help was valuable for me

First of all, I would like to thank my parents who gave birth to me They have encouraged me to complete this doctoral course not only by words but

by their hearts as supportive parents who are proud of their son

A thousand thanks to my wife, Trieu Thi Nhung, for her great sacrifice for me and for my children She has given me immeasurable help, not only by raising and teaching our children so that I could have time for my work and study, but also by pampering me with her good meals, medical care, and undying love and inspiration She is a true Vietnamese wife!

Special thanks to my adviser, Professor Edwin Bernal, for his understanding, encouragement, and support during my candidature The completion of this scholarly work would not have been possible without his guidance and support

I wholeheartedly thank the entrepreneurs and all the leaders of my province for their encouragement and for patiently taking time to put their minds into the work that I completed Their participation in this project was, to

me, a source of inspiration and motivation so that I continue to dream and to accomplish noble tasks for my province and for my constituents in our hope of making a difference in the way we work towards achieving authentic development for everyone

precious jewels that I will bring along with me in my un-ending journey towards excellence These definitely are much more than a dissertation

Mai Son

With much thanks and gratitude,

I wholeheartedly dedicate this dissertation paper

Mai Chi Hieu and Mai Minh Dung

They have given me valuable support

to complete this hard work

Without their love and support,

this dissertation would not have been possible

MS

APPROVAL SHEET ……… ii

CERTIFICATE OF ORIGINALITY ……… iii

ACKNOWLEDGEMENT ……… iv

DEDICATION ……… vi

TABLE OF CONTENTS ……… vii

LIST OF TABLES ……… ix

LIST OF FIGURES ……… xi

ABBREVIATIONS ……… xii

LIST OF APPENDICES ……… xiii

ABSTRACT ……… xiv

CHAPTER I INTRODUCTION ……… 1

Background of the Study ……… 2

Objectives of the Study ……… 3

Hypotheses of the Study ……… …… 5

Significance of the Study ……… 5

Scope and Limitation of the Study ……… ……… 6

Definition of Terms ……… 7

II REVIEW OF LITERATURE ……… 10

Theoretical Framework ……….… 57

Conceptual Framework ……….… 59

III METHODOLOGY ……… 61

Locale of the Study ……… 61

Research Design ……… 61

Population, Sample and Sampling Technique … ……… 62

Research Instrument ……… 63

Data Gathering Procedure ……… 64

V SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

Summary of Findings ……… 98

Conclusions ……… 100

Recommendations ……… 102

REFERENCES ……… ……… 107

APPENDICES ……… 111

CURRICULUM VITAE ……… 138

1 Sample Distribution 62

3 Composition of Respondents According to Working Years

4 Composition of Respondents According to Line of

5 Composition of Respondents According to Capital Size

6 Composition of Respondents According to Capital Size

7 Over-all Respondents’ Perception on the Competitiveness

of Bac Giang Province by Line of Business 73

8 Mean Distribution of Respondents’ Perception on the

Competitiveness of Bac Giang Province in Terms of Entry

9 Mean Distribution of Respondents’ Perception on the

Competitiveness of Bac Giang Province in Terms of Land

Access and Tenure by Line of Business 76

10 Mean Distribution of Respondents’ Perception on the

Competitiveness of Bac Giang Province in Terms of

11 Mean Distribution of Respondents’ Perception on the

Competitiveness of Bac Giang Province in Terms of

12 Mean Distribution of Respondents’ Perception on the

Competitiveness of Bac Giang Province in Terms of Time

13 Mean Distribution of Respondents’ Perception on the

Competitiveness of Bac Giang Province in Terms of

Business Support Services by Line of Business 81

15 Mean Distribution of Respondents’ Perception on the

Competitiveness of Bac Giang Province in Terms of Labor

16 Mean Distribution of Respondents’ Perception on the

Competitiveness of Bac Giang Province in Terms of Legal

1 Theoretical Framework 58

ASEAN: Association of Southeast Asian Nations

EU: European Union

GDP: Gross Domestic Product

GSO: General Statistic Office

HCM City: Ho Chi Minh City

JICA: Japan International Cooperation Agency

KOICA: Korean International Cooperation Agency

MOLISA: Ministry of Labor, Invalids and Social Affairs

ODA: Official Development Assistance

OLS: Ordinary Least Squares

PCI: Provincial Competitive Index

SMEs: Small Medium Enterprises

SMP: Strategic Market Plan

UNDP: United Nations Development Program

UNESCO: United Nations Educational, Scientific, Cultural Organization USAID: United States Agency for International Development

VCCI: Vietnam Chamber of Commerce and Industry

VNCI: Vietnam Competitive Index

VND: Vietnamese Dong (Currency of Vietnam)

WB: World Bank

A Survey Questionnaire 112

B Statistical Tests of Factors Affecting Respondents’

Perception on the Competitiveness of Bac Giang

GIANG PROVINCE IN VIETNAM: A BASIS FOR MARKETING PLAN

Researcher : MAI SON (JACKSON)

Degree Conferred : DOCTOR OF BUSINESS ADMINISTRATION

Name and Address

of Institution

: Southern Luzon State University, Lucban, Quezon, Philippines and Thai Nguyen University, Socialist Republic of Vietnam

Adviser : Dr Edwin P Bernal

Year Written : 2013

The study aimed to propose a system of criteria to describe the perceptions of the investors on the factors affecting the provincial competitiveness of Bac Giang as basis for introducing place marketing innovations as inputs to the province’s Market Plan model This study can be considered as an essential tool for the growth of urban economies in the global context The model of place planning based on principles of marketing named Strategic Market Planning (SMP) that consists of the process of developing strategies so that a place can reach its growth objectives through identifying and meeting its target market demand Place marketing is said to

be both a consequence of, as well as a necessity for, increased competition among places for the development of resources

This study basically used the descriptive method of research It is the appropriate method for collecting, processing, and analyzing data on the factors affecting the competitiveness of Bac Giang province, namely entry costs, land access and tenure, transparency, informal charges, time cost,

this study to analyze the factors that influence the competitive capacity of Bac Giang province The study was conducted involving a sample size of 122 The

122 investor-respondents were picked out using random sampling technique

It was found out that most of the enterprises in Bac Giang are young and small-medium sized, and the entrepreneurs do not have disparities in perception to Bac Giang Province's competitiveness Base on the findings, the dissertation then suggested nine programs to enhance the competitiveness of the province including (1) Private-Public Partnership Program, (2) Accelerated Business Processing and Registration Program, (3) Strategic Belief Improvement Program, (4) Effective Administration Improvement Program, (5) Administrative Image Improvement Program, (6) Land Reform Policy Program, (7) Business Support Service Program, (8) Human Resource Development Program for Investors and (9) Entrepreneurs and Administrative Transparency Improvement Program

Keywords: Strategic Market Planning, Place Marketing, Competitiveness,

Provincial Competitiveness

Chapter I

INTRODUCTION

The often-recited mantra of marketing professionals who want to have

the best access to their customers is “Location Location Location.”

However, marketing professionals recognize the fact that finding a good

location is one thing but maximizing the potential of a location is another

Conversely, anyone who is engaged in the marketing of a place needs to fully

understand that location is an area concept and that the potential locators

and/or investors look into some relevant factors that will all redound to the

best possible return on investment This business concept has a far reaching

implication and covers even the business of a state or its governmental unit

like that of Bac Giang province As the province technically competes with the

other provinces in attracting investors, both within and outside, there is,

therefore, a need for the province to look seriously into how it can make a

dent in the competition by way of capitalizing on its most relevant competitive

features such as entry costs, land access and tenure, transparency, informal

charges, time cost, proactive, business support services, labor training

and legal institutions

The desirability of Bac Giang province as a priority investment area

would strongly depend on how existing and potential investors see the

appropriateness of the relevant competitive features of the place As products

and services are conceptualized on the basis of the customers’ quality,

delivery and price expectations, in like manner, the province shall market the

place primarily on the basis of the investors’ expectations Therefore, in order

to respond to the investors’ expectations, it is imperative that place marketing

innovations should find their way into the province’s strategic development

plan to attain a holistic approach in enhancing the province’s competitiveness

for attracting investors

Background of the Study

In the past years, strategic market planning had been used as a

strategy for enhancing competitiveness that led to achieving growth in the

economies of some successful cities worldwide Some scholars have judged

this approach as an essential tool for the growth of urban economies in the

global context (Ashworth 1994; Ashworth & Voogd 1990; Gold 1994; Jessop

1998; Kotler et al 1999; Kotler, Haider & Rein 1993; Kotler et al 2002; Levine

1998; Luo & Zhao 2003; Wells & Alvin 2000) They have been generalizing

and conceptualizing this phenomenon in an effort to build a model of place

planning based on the principles of marketing Kotler (ibid.) named this

approach as Strategic Market Planning (SMP) which consists of the process

of developing strategies so that a place can reach its growth objectives

through identifying and meeting its target market demand A place’s target

market might be businesses and entrepreneurs, visitors, residents, investors,

donors and international financing institutions

Place marketing is said to be both a consequence of, as well as a

necessity for, increased competition among places for the development of

resources The concept of city marketing has gained increasing attention as a

means of enhancing the competitiveness of cities (Paddison 1993 cited in

Short & Kim 1998) In the effort to respond to the demands of competition

and to attract the desired target groups, place administrators have recognized

in marketing theory and practice a valuable ally (Kavaratzis, 2005) Some

scholars pointed out that competition among places is not new Cities have

always existed within a market context of one sort or another, and they

compete among one another for resources, activities, residents and services

(Ashworth & Voogd, 1990) Many examples of marketing solutions, mainly

promotional measures, which cities used in much earlier time, were provided

in Ward (1998) However, these early place marketing activities were intuitive

and random (Kavaratzis, 2005; Ward, 1998), whereas a more focused,

integrated and strategic implementation of place marketing has been evident

in recent decades (Kotler et al 2002) The reason given for this change is

increased competition among places as a response to fundamental changes

in markets, investment and technology as a result of a common globalization

trend in which people, capital, and companies have become more footloose

(Kotler et al., 2002; Short & Kim, 1998)

The competition among developing places and/or among

post-industrial cities has resulted in more aggressive and complex forms of

competition As a consequence of the increasingly wide-ranging and

aggressive competition, a place marketing strategy for retaining and attracting

investment has become essential

Objectives of the Study

The general objective of this study was to describe the perceptions of

the investors on the factors affecting the competitiveness of Bac Giang

province as a basis for introducing place marketing innovations into the

Strategic Market Planning (SMP) model for the province

Specifically, this study aimed:

1 To describe the profile of the respondents in terms of:

2 To analyze the competitiveness of Bac Giang Province based on

the perception of the investors measured in terms of:

4 To compare perceived competitiveness when the investors

respondents are grouped in terms of selected characteristics

Hypotheses of the Study

Hypothesis 1: There are significant relationships between the

competitiveness factors (independent variables), namely entry costs, land

access and tenure, transparency, informal charges, time cost, pro-activeness,

business support services, labor training and legal institutions, and the

competitive capacity of Bac Giang Province

Hypothesis 2: There is no significant difference between the

respondents’ perception when they were grouped by selected profile

Significance of the Study

The result of this study is envisioned to contribute knowledge to

effective and efficient management; hence, it will benefit the following:

For the investors, this paper will enable the Bac Giang’s government

to build special action plans to improve the competitiveness of the province

Hence, the investors may have more facilities, infrastructure, and relevant

services by the time they invest in Bac Giang

For Bac Giang government, this study will help government

administrators to understand the province’s strengths and weaknesses In

addition, Bac Giang’s government will understand what investors are thinking

about business environment of the province, especially in terms of entry

costs, land access and tenure, transparent, informal charges, time cost,

pro-activeness, business support services, labor training and legal institutions

Hence, the government can build action plans to improve business

environment of Bac Giang province in order to attract more investors

For the researcher, this is the first research which proposes a

combination of theories of place planning, marketing and regimes to provide a

new theoretical base for the practice of place planning This theoretical base,

as judged by the practice outcomes with the case study in Bac Giang

Province, will bring a deep understanding on the applicability of this theory to

practice The judgment will assist to develop a theoretical perspective toward

a more appropriate SMP model for the provinces in Vietnam This study will

help the researcher acquire skills in research method, to obtain useful

knowledge of management at provincial level This research is the foundation

for the researcher to propose possible solutions for trouble in the Bac Giang

province's competitive capacity

Scope and Limitation of the Study

Based on the perception of investor-respondents, the study assessed

the competitive capacity of Bac Giang province in terms of the following major

nine variables: entry costs, land access and tenure, transparent, informal

charges, time cost, pro-activeness, business support services, labor training

and legal institutions The study was confined in Bac Giang Province only and

involved respondents coming from 122 local enterprises

On the basis of these analyses, the paper came up with some

meaningful recommendations on how the province will proceed at formulating

strategies in order to effectively market the place and hopefully attract

investors to put their resources in the province

Definition of Terms

The following terms were defined conceptually and operationally for

better understanding:

Business Support Service is a measure of provincial policies for private

sector trade promotion, business partner matchmaking, etc It attempts

to measure how well provincial officials are performing in resolving

these problems on behalf of the firms

Entry costs, a measure of the time and difficulty it takes firms to register,

acquire land, and receive all the necessary licenses to start business

Informal Charges the indicator whether the presence or the absence of

informal charges makes the province more competitive

Labor Training is a measure of the efforts by provincial authorities to

promote vocational training and skills development for local industries

and to assist in the placement of local labor

Land access and tenure, a measure of how easy it is for firms to access

land In 2006, this sub-index has been amended to include one new

dimension to measure the security of tenure once land is acquired The

first dimension comprises whether firms possess their official land use

rights certificates, whether they have enough land for their business

expansion requirements, whether they are renting from SOEs and an

assessment of land conversion efforts The second dimension includes

perceptions of various tenure security risks such as expropriation,

unfair compensation values or changes in the lease contract) as well

as the duration of tenure

Legal Institutions is a measure of the confidence of the private sector in the

provincial legal institutions, whether firms regard provincial legal

institutions as an effective vehicle for dispute resolution or as an

avenue for lodging appeals against corrupt official behavior

Line of business (LOB) is a set of one or more highly related products or

services where a business generates revenue

Pro-activeness of Provincial Leadership is a measure of the creativity and

cleverness of provinces in both implementing central policy, designing

their own initiatives for private sector development, and working within

sometimes unclear national regulatory frameworks to assist and

interpret in favor of local private firms

Provincial Competitiveness Index (PCI) refers to the set of indices

formulated by Vietnam Chamber of Commerce and Industry (VCCI)

which was a USAID-funded Vietnam Competitiveness Initiative (VNCI)

on assisting the competition to go in the right direction, relying on

private business’ perceptions of the local business environment, as

well as credible and comparable data from official and other sources

regarding local conditions

Strategic Market Planning is a process that allows an organization to

concentrate its resources on the optimal opportunities with the goals of

increasing sales and achieving a sustainable competitive advantage

Strategic market planning includes all basic and long-term activities in

the field of marketing that deal with the analysis of the strategic initial

situation of a company and the formulation, evaluation and selection of

market-oriented strategies and therefore, contributes to the goals of the

company and its marketing objectives As used in this study, strategic

market planning refers, specifically, to the process involved on how the

Bac Giang province should create place marketing innovations towards

a long-term strategy of making the province a competitive destination

and beneficiary of productive investments

Transparency and Access to Information, a measure of whether firms have

access to the proper planning and legal documents necessary to run

their business, whether those documents are equitably available,

whether new policies and laws are communicated to firms and

predictably implemented, and the business utility of the provincial web

page

Time Costs of Regulatory Compliance, a measure of how much time firms

waste on bureaucratic compliance as well as how often and how long

firms must shut down their operations for inspections by local

regulatory agencies As such, it considers two dimensions of time

costs, which are weighted equally, Bureaucratic Procedures and Time

Lost to Inspections

Type of business refers to the legal forms of business entity such as

corporations, cooperatives, partnerships, sole proprietorships

Working years refers to the length of time (in years) that an investor

respondent had been working for and with the company

CHAPTER II REVIEW OF LITERATURE

This chapter discusses the literatures and the studies having significant

bearing on this study which was aimed at providing relevant inputs to the Bac

Giang province’s formulation of strategic market plan to market its place,

particularly, among investors The theoretical framework and the conceptual

framework which served as an important guide for undertaking and

completing this research project are, as well, presented in this chapter

As this research project carries an inherent responsibility to be able to

contribute to the development of theory in the field of business administration,

it is but necessary that the researcher must possess a thorough familiarity

with both the related theory and previous research outputs This is the reason

why this review was conducted Specifically, this review allowed the

assessment of the amount of work done in the area on place marketing as

well as in the general context of strategic market planning as a tool for

enhancing competitiveness Needless to say, the review has provided some

strong bases for formulating relevant insights regarding strong points and

limitation of the previous studies while enabling the creation of unbiased

perspective which led to the improvement of the current investigation

Brief Background of Bac Giang Province

Bac Giang province is a competitor in attracting investment Located at

the Nanning (China) - Lang Son - Hanoi - Hai Phong economic corridor and

adjacent to the northern key economic region covering Hanoi, Hai Phong and

Quang Ninh, Bac Giang is included in the Hanoi regional construction

planning towards 2030, with a vision to 2050 The province boasts a rich

source of young labor It is promoted as a destination for development of high

technologies and supporting industries It has set out a plan for six industrial

parks (IPs) with a total area of about 1,400 hectares In agriculture, the

province has rich land resources and is one of the main suppliers of

vegetables for Hanoi and the neighboring provinces Transport network, when

fully developed, has a great potential advantage for Bac Giang as it is

connected to ports, airports, and borders It is also a connection point

between Northern provinces and other provinces in the region Bac Giang has

planned to become a commodity logistics centre of the northern region

Remarkably, Bac Giang possesses abundant tangible and intangible cultural

resources Highlights include the Quan ho folk, recognized by UNESCO as an

intangible cultural heritage of humanity and the Vinh Nghiem Pagoda

woodblocks, recognized as the world's documentary heritage for the

Asia-Pacific region

Bac Giang’s economic growth rate in 2012 was estimated to be 9.7

percent Its export value reached $1.297 billion and total capital investment

for social development reached VND 17, 200 billion ($826.9 million) The

province’s trained labor rate is 40.5 percent Industry and construction

account for 37.2 percent, services at 32.4 percent, and agriculture, forestry

and fisheries at 30.4 percent of the province’s GDP The province achieved

GDP of VND 25.3 trillion ($121.6 million) in 2011 and the figure for 2012 is

estimated at VND 30.4 trillion ($1.46 billion)

For 2013, Bac Giang targets its economic growth rate to go up by 10

percent, its annual per capita income to reach VND 23 million ($1,106), and

export turnover of $1.65 billion It plans to mobilize VND 21,000 billion ($1

billion) for social development and reduce the poverty rate by 1.5-2 percent

against 2012

As part of its plan towards 2015, Bac Giang is striving to become a

medium-income province in the northern mountainous area in terms of per

capita income target and economic growth target The province expects an

average GDP growth rate of 11-12 percent per year, per capita income of

$1,315-$1,380 per year, and an export turnover of more than $2 billion

Around VND 80 trillion ($3.8 billion) will be needed for social development

during the period and the number of poor households is planned to decrease

by 2-3 percent per year

There are four existing issues that hinder the socio-economic

development of Bac Giang, namely land compensation, quality human

resources, administrative procedures and infrastructure In particular,

infrastructure is a pre-requisite for economic development However, more

than 50 percent of the province’s roads are in bad and very bad condition

The province has only few transportation routes for container trucks Given

the current budget constraints, the province has been actively taking

advantage of all sources of capital Its immediate action is to mobilize

investment from government bonds, from the state budget and especially

official development assistance (ODA) funds Since 2002, donors and

international financial institutions have shown increasing interest in Bac Giang

province Donors include international financial institutions such as the World

Bank (WB), the Asian Development Bank (ADB), the United Nations

Development Programme (UNDP), the European Union (EU), Japan

International Cooperation Agency (JICA), and the Korean International

Cooperation Agency (KOICA)

In recent years, Bac Giang has mobilized, received and implemented a

total of 22 ODA projects with a total capital commitment of nearly VND 3

trillion ($148.3 million) Total disbursement of projects across the province

reached VND1, 481 trillion ($74.061 million), of which $60.323 million came

from ODA and the rest has been contributed by the government (GSO, 2012)

Although, the provincial government has already achieved significant

milestones in its development efforts, it must inevitably continue to work

towards achieving the level of development that it aspires for its people and

the province It must continue to attract and encourage investments to

support its efforts towards gaining steady progress in transitioning beyond

being a developing economy It is in this context that the need for devising a

Strategic Market Planning model, particularly for the Bac Giang Province in

Vietnam, that this research project was conducted

Globalization, place competition and place marketing

When facing economic difficulties over the past decade, a large

number of cities or regions (hereafter described as ‘places’) around the world

have applied a marketing approach to planning to enhance their competitive

capacity and to boost their local economies, in an effort to find a new way to

grow (Kavaratzis 2007) This approach is called ‘place marketing’ The place

marketing approach implies that the place adopts a marketing philosophy to

draw development strategies and applies marketing techniques and solutions

to identify its target markets (which can bring development resources – such

as desired investors, tourists and human resources – to the place) and then to

create and market offerings, which the place believes may satisfy the target

market’s needs in a better manner than other places can do, to the target

markets (Colomb 2011; Eshuis, Braun & Klijn 2011; Gertner 2011; Hospers, G

2011; Kavaratzis 2007; Kotler & Gertner 2012; Kotler et al 2002)

In any stage of development, to maintain their economic position and to

grow, places need to retain and develop resources In earlier stages of

development, retaining and developing resources could be supported to a

greater degree by non-competitive factors such as protectionism, domestic

market growth suitable for local industries, the dependence of enterprises on

conditions in a particular country or region, and technical difficulties in

investment and labor mobility For some countries, such factors might have

been so strong that international competition played a relatively weak role

However, while they are still relevant, the influence of these non-competitive

factors has decreased during the progress of globalization, as a result

investment flows (enclosed by technology, managerial know-how, working

capital and cultural factors) have become increasingly mobile The strong flow

of traditional industries from cities in developed economies to those in

developing countries has been well documented, as has its impact on the

growth of these developing cities

One influential discussion of these issues is that of Ohmae (1995), who

described these changes in terms of ‘the four Is’ The first is investment

Investment flows move across borders, with the cross-border flows driven by

the quality of the investment opportunity, the investment will go to where the

best opportunities are to be found The second is industry The strategies of

modern multinational corporations are shaped and conditioned by the desire -

and the need - to serve attractive markets wherever they exist, and to tap into

attractive pools of resources wherever they sit The movements of both

investment and industry have been greatly facilitated by the third “I” or

information technology This technology makes it possible for a company to

operate in various parts of the world, resulting in “the shrinkage in the space -

time networks” (Short & Kim 1998, p 55) Finally, individual consumers have

also become more global in orientation With better access to information

about lifestyles around the globe, consumers are much less likely to want to

buy American or French or Japanese products merely because of their

national associations They increasingly want the best and cheapest products,

no matter where they come from (Ohmae 1995) This opens more

opportunities and pressures for investment and industry flows, by exposing

more local markets to outside suppliers The effects of these four factors have

become stronger over time and are often referred to in many works

These global trends open up opportunities for many different places,

but are a complex process to make an opportunity into a reality In particular,

the increased mobility of the factors or production and the need to relocate

traditional manufacturing industries provide great opportunities for places in

developing economies But, although the pressure to move these industries to

developing countries is strong, these flows will not of course come to all

developing cities As a rule, they will come to, and concentrate in, places

where investors can maximize their benefits, i.e to the places which are able

to offer the best solution to investors It is necessary to note that the best

solution is that as perceived by the investors, not as seen by the place

authorities The opportunities will turn into reality only for the cities or regions

that can provide a high quality solution to investors

Post-industrial cities, despite being hurt seriously by relocation of

industries, have opportunities to build on the foundation created in the

industrialization period to develop hi-tech industries, for both goods and

services, which promise high value added An advanced base of technique,

science and education and a high level of management and organization are

advantages that post-industrial cities possess in developing high-tech

industries Although the potential of post-industrial cities to develop hi-tech

goods and services industries is significant, these high technology industries

will not come by themselves To develop and then apply them, cities need

resources (investment and human capital) and the right strategies As in the

case of developing cities, investment flows come to and concentrate on

locations where investors can maximize their benefits Moreover, the

high-tech developments have a higher degree of locational flexibility, because they

are more concerned with access to information than with closeness to

traditional resources (such as coalfields or sources of power) (Short & Kim

1998), although they have tended to cluster around high quality knowledge

resources But the situation in both developing and post-industrial cities in the

face of globalization is driven by the common rule, global investment and

industry flows will go to where investors can get the greatest benefits

With the more limited role of non-competitive factors which prevents

the mobility of investment, competition has become unavoidable and a major

means for places to retain and/or obtain the necessary resources With the

progress of globalization, an increasing number of places/cities participate in

this competition, and the movement of global factors can create the potential

for even small places to take part in the competition (Kotler et al., 2002) It is

now regularly the case that products which are made in small places in

developing countries are penetrating supermarkets in the cities of Australia or

of other industrialized countries The participation of these small places in the

world market means that they are also participating in the competition among

places Although their names might be not be widely known, thousands of

such small competitors have drawn big investors away from developed

economies, leaving gaps in employment and in the tax base in post-industrial

cities The shift of the former socialist economies from closed markets and

centralized planning systems towards a market economy and to participation

in global trade has made the competition among places even more intense

In addition to the severity of this competition, a mounting number of

cities in emerging economies are able to compete to attract resources for

developing high-tech industries For example, Intel has announced that it will

open a wafer fabrication facility in China in 2010 to produce chipsets first, and

then possibly other types of chips, after negotiating with the Chinese

government and also getting U.S government approval The project, costing

around US$2.5 billion for building the plant located in the north eastern city of

Dalian, is referred to as a significant milestone for both the industry and China

(Barboza 2007; Kanellos 2007) Despite being limited by strict US regulations

in putting cutting-edge chip-making equipment in production overseas, Intel’s

intention to move to China reflects China’s rise as the world’s second largest

information technology market, which according to some sources, has

become the number one market in 2010 This process of setting-up a global

network of production reveals the strong benefit-maximizing dynamic behind

the moves of corporations and the great efforts of China and other countries

to attract advanced technology design and manufacturing Manufacturing this

type of chip is not the most advanced technology, but a US $2.5 billion chip

manufacturing plant is certainly attractive for both developing and

post-industrial cities as well The competition is, therefore, not only among

developing places or among post-industrial cities but also between developing

places and post-industrial cities, which has resulted in more aggressive and

complex forms of competition As a consequence of the increasingly

wide-ranging and aggressive competition, a place marketing strategy for retaining

and attracting footloose investment has become essential

New context in model world: Reformation and restructure leading

change in role of nation-states and cities

Under the impact of technological advances and the trend of global

integration, economies in the world have been reforming and restructuring

toward globalization, leading to a rapid change in the order of cities in the

world Some have been emerging and growing fast with ‘boom and bust’

characteristics while many others are falling into decay In the new context,

the nation-state’s system itself is an inadequate mechanism for dealing with

the threats and opportunities of a global economy (Buelens 2000; Cerny

2000; Ohmae 1995) The limitation of the action of national governments has

shifted the responsibility and the capacity for development of the economy to

lower levels of government, such as cities (Kresl & Fry 2005) As a result of

both economic restructuring and the shift of responsibility as well as power,

cities are facing challenges and opportunities more than ever Their emerging

role in that process is to solve their own problems City planning, therefore,

has also been becoming more critical than ever

The global context of the increasing competition among cities in

attracting and retaining investments

Cities nowadays are facing increasing competition for a limited pool of

available investments Markets are more exposed to foreign competition and

the competition has been becoming more global Advances in communication

technology enable even small or remote places to take part in the competition

The shift of communist economies from closed markets and centralized

planning systems toward a market type of economy makes the competition

fiercer Globalization-driven process or the logic of growth has privileged

some regions and cities over others (Berg, Burns & Klaassen 1987;

Marcotullio & Lo 2001) Over the last decade, Chinese cities have become

magnets attracting investment flows, leaving a decline in many cities of other

regions in the world City planning in this context needs to move towards

creating and raising competitive capacities

Context of a new Asia

The picture of Asia features a contrast One extreme is the fast growing

places and the other extreme is the many places in the darkness of poverty

and unemployment The less developing extreme needs a proactive way of

thinking to find their own capacities and promote them to the outside world

For the fast growing extreme, the 1997 crisis pointed out their vulnerability

Many of them have been relying on speculative investment That requires

strategic planning for a turnaround Although these Asian places have not

been without strategic planning, much of this has been featured by the

restriction of co-operation between public and private sectors and large public

subsidies (Kotler et al 2002) The new context requires more understanding

of businesses and close private-public cooperation in planning

Context of Vietnam

Vietnam is a common picture in Asia Many provinces are in an

entangled situation and are making every effort to seek a way out A few

provinces have been growing relatively fast with 15-20% industrial growth

rates for the period 2005-2010 (Vietnamese General Statistics Office 2010,

2011) HCM city only contributes one-fifth of national GDP and one-third of

national budget However, signals of a vulnerable economy are emerging

such as a rapid increase in real estate prices, degradation of infrastructure

and a larger income gap The 2003-2005 surveys conducted in 28 cities in

Asia present the fact that the office rent of Vietnam’s two largest cities of

Hanoi and HCM is 1.4 times as high as Jakarta, twice that of Kuala Lumpur

and Bangkok, and three times that of Manila (JETRO 2006) In appraising for

its ODA’s strategy, Japan remarked that although having achieved high

growth rates, Vietnam is facing difficult challenges The lack of urban

infrastructure may be worsened by economic growth and that growth does not

resolve environmental degradation or urban congestion (Daisuke 2006) The

results of the reliable largest surveys of 2005-2006 on provincial governance

practices with participation up 6300 private firms indicates that, although

Vietnam proclaims its orientation toward a market economy and its

commitment to supporting private businesses, not many of its provinces have

put a business-friendly environment into practice (Malesky 2005; Ray 2006)

All this shows urban problems and necessity for renovating provincial

authorities’ thought of urban planning In addition, Vietnam is a transition

economy with specific characteristics of economic and political systems

which, according to urban planning theory, are determinants of methods as

well as objectives of planning

Context of reorientation of development thought – a new approach

This reorientation reflects changes in the world economy On a national

scale, the failure of subsidies from central or federal governments along with

up-down approaches or solutions for ‘national interests’ in saving their cities

or localities from being in crisis is evidential On a larger scale, the failure of a

range of huge amounts of foreign aid for developing countries in the past

decades has been admitted, while some case studies point to the fact that a

number of nations could overcome their stagnancy themselves before

receiving aid resource from outside (Dollar & Pritchett, 1998) The failure

leads to the so-called ‘New Thinking on Development Strategy’ When a

nation or a locality does not have a vision for its development, it is likely to fail,

even if it can access large amounts of financial aid from outside (ibid.) The

research of SMP in which a vision is built up and a long-term plan is designed

by the locality, follows this approach, developing and testing it in the context

of developing-country places and globalization

Place marketing plan

Place marketing is an application of the marketing approach to the

place planning area, i.e its operation is based on the concepts and principles

of marketing Ashworth and Voogd (1990) argued that “the selling of places

within a market can and must be related to a set of basic concepts rooted

principally in marketing science.” However, place marketing has considerably

different features from many other forms of marketing, in terms of the nature

of the product which is marketed, the nature of the organization that does

marketing and the objective of marketing Thus, effective place marketing

requires that place marketing theory develop a relevant set of key concepts to

guide practice in this area This chapter aims to contribute to the elaboration

of these key concepts

Place marketing is a process in which a place creates and markets its

place products to its customers Place products exist and had been

exchanged for a long time, but the widespread nature and the intensity of the

competition between places, and the enhanced role of success in attracting

and retaining investors for economic development in the recent decades,

means that it is an essential requirement to manage this process effectively

Place marketing management starts when the place is aware of the role of

place marketing and makes efforts to seek models and means to improve the

efficiency of exchange Practices and theories have developed from ‘selling

places’ to ‘place marketing’, and from unsophisticated to more sophisticated

strategies

In the view of marketing performance, place marketing management

can be defined as the task of identifying target markets and then creating,

communicating, delivering and exchanging place products that meet the

needs of the target markets in a better way than those of its competitors

In some respects, place marketing can be considered as a decision

making process in which a place decides where it ought to be positioning itself

in a competitive world among other places? Which alternatives and action

plans for using its resources should be selected to move toward the desired

position? However, the process does not end when decisions have been

made The selected plans need to be implemented and various alternative

plans may need to be implemented before the place can reach the desired

position This is a planning and implementation process in which the

provincial or city government is a key player

From the concept of a place product, it can be recognized that, in the

regional government’s perspective on planning, place products for investors

would include different groups of attributes: (1) Planning of space and

infrastructure; (2) Planning of socio-economic policies, including management

of the institutions relating to shaping the investment environment; and (3)

Planning of and creating cultural values, and good quality living and working

environments

From the perspective of the regional government, these might well be

the different spheres, implemented by different government agencies In the

conventional viewpoint, the first group is urban/town planning activities The

second group is the area of economic development policies The third group

might be created by both the former groups and community activities

However, from the perspective of investors, these groups of basic attributes

are not separated at all and they constitute place products as packages

Consequently, they should be seen and monitored as a whole in close

coordination Place marketing, therefore, is planning in which spatial

development plans match up to socio-economic and cultural development

programs in order to create competitive place products to market to investors

A corporation, when renting an office in Sydney, may consider the office’s

spatial structure, infrastructure services, relevant human resources (created

by educational and social policies), economic policies (tax, government

supports, etc.) and livable and working conditions

Place marketing, as such, covers a broader area than the conventional

concept of urban planning Studying the evolution of urban planning theory

and practice at national and local levels, some authors claim that urban

planning has been expanded and become place marketing since the 1970s

and the 1980s, when urban planning was no longer limited to spatial and

infrastructure structure, but economic factors became vital in urban programs

(Ashworth 1994; Ashworth & Voogd 1990; Fretter 1993; Gleeson & Low 2000;

McGuirk 2005; Taylor 1998)

Since the 1970s and the 1980s, the fundamental political and

economic context of Western countries, and therefore, of town planning, has

changed fundamentally As a result, the nature of town planning has

significantly changed Before this period, the primary role of planning was

viewed as guiding the development of the place through the provision of basic

public infrastructure (roads, schools, leisure facilities, council housing)

(Forster 2004; Fretter 1993) and the use of planning controls to direct and to

limit private sector development (Fretter 1993) The widespread decline of

many traditional manufacturing sectors made this role become insufficient and

almost obsolete In many cases, the decline of the private sector led to

serious deficits in resources with which to fund the provision of public

infrastructure, and large decreases in incomes of residents Planning,

therefore, needed to take a reverse role: to find ways to have and retain

private resources for development, including for the provision of infrastructure

The job of the governmental planner changed from ‘spending money’ to

‘getting money’, or rather to ‘getting money’ before ‘spending money’ In that

situation, “the selling of places was starting to become big business” (Fretter

1993, p 165)

The function of planners was re-defined as that of actors in the market

mechanism and the planning became demand and customer-oriented rather

than supply-oriented as before Ashworth and Voogd (1990) explained that a

city marketing plan is inseparably linked with spatial policy and especially with

the physical structure plan which is largely instrumental in determining the

dimensions of the future ‘product’ Physical planning is, at least in practice, to

a considerable degree ‘supply-oriented’, i.e the attention is usually focused