RECOMMENDATIONS FOR BUILDING, MANAGING AND PROTECTING THE BRAND EQUITY IN VIASIA JOINT STOCK COMPANY

RECOMMENDATIONS FOR BUILDING, MANAGING AND PROTECTING THE BRAND EQUITY IN VIASIA JOINT STOCK COMPANY

ENGLISH FOR BUSINESS DEPARTMENT

~~~~~~*~~~~~~

TRUONG THUY CHI

RECOMMENDATIONS FOR BUILDING, MANAGING AND PROTECTING THE BRAND EQUITY IN VIASIA

JOINT STOCK COMPANY

Hanoi, May, 2012

ENGLISH FOR BUSINESS DEPARTMENT

~~~~~~*~~~~~~

TRUONG THUY CHI

RECOMMENDATIONS FOR BUILDING, MANAGING AND PROTECTING THE BRAND EQUITY IN VIASIA

JOINT STOCK COMPANY

Supervisor:

Tran Thi Thu Giang, M.A

Hanoi, May, 2012

I would like to express my gratitude to all those who gave me the possibility tocomplete this research I want to thank the Viet A Plastic Joint Stock Company forgiving me an opportunity to practice and learn at there, and also give me permission tocommence this study in the first instance, to do the necessary research work and to usedepartment data I have furthermore to thank the bosses, Mrs Tran Bich Thuy, theFinancial Director and Mr Tran Trung Duong, the General Director who gave andconfirmed this permission and encouraged me to go ahead with my research

I am deeply indebted to my supervisor M.A Tran Thi Thu Giang from the Faculty ofForeign Languages, English for Business Department whose help, stimulatingsuggestions and encouragement helped me in all the time of research for and writing ofthis report

My colleagues from Viet A Joint Stock Company supported me in my research work Iwant to thank them for all their help, support, interest and valuable hints I also want tothank many students from Nguyen Phong Sac Secondary School, National EconomicsUniversity, and employees from Hung Thuan Plastic Company, Huu Nghi PlasticCompany and Lac Viet Media Company who support me to answer my questions andmany Viet A Company’s consumers who help me to complete my survey

Especially, I would like to give my special thanks to my family and my friends whogive me many conditions to complete this study

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

EXECUTIVE SUMMARY iv

INTRODUCTION 1

1 Research topic 1

2 Rational 2

3 Research question 2

4 Scope of the research 2

5 Methodology 2

CHAPTER I: INTRODUCTION OF THE VIET A PLASTIC JOINT STOCK COMPANY AND THEIR PROBLEMS ABOUT BRAND EQUITY 4

1 Viet A Plastic Joint Stock Company 4

2 Problems about brand equity in Viet A Plastic Joint Stock Company 5

CHAPTER II: OVERVIEW OF BUILDING AND MANAGING BRAND EQUITY FOR A BUSINESS 6

1 Brand equity 6

1.1 Definition 6

1.2 Elements of brand equity 7

1.3 Brand Awareness 7

1.4 Perceived quality 8

1.5 Sources of brand equity 9

2 The concept of Customer- Based Brand Equity 9

2.1 Definition 9

2.2 How to create strong brand based on Customer- based brand equity 10

3 The Benefits of Brand Equity 10

4 Protecting and Managing Brand Equity 12

4.1 Managing Brand Equity 12

4.2 Protecting Brand Equity 13

CHAPTER III: ANALYSIS AND FINDINGS 14

1 Viet A Brand Equity 14

1.1 Customer’s awareness of plastic doors 14

1.2 Brand recognition 16

1.3 Viet A brand awareness 17

2 The ways that Viet A build the brand equity and its results 18

2.1 Customer’s reaction to promotion 18

2.2 Customer’s satisfaction 18

3 Problems in brand equity of Viet A Plastic Joint Stock Company 21

3.1 Problems in product’s criteria 21

3.2 Problems in Viet A slogan 22

4 Common evaluation 22

4.1 Advantages of Viet A Plastic Joint Stock Company 22

4.2 Difficulties of Viet A Plastic Joint Stock Company 23

CHAPTER IV: RECOMMENDATIONS 24

1 Building and Managing Brand Equity 24

1.1 Building Customer- Based Brand Equity 24

1.2 Building Brand Awareness 25

1.3 Building Perceived Quality 27

2 Managing Brand Equity 27

3 Protecting brand equity 28

CONCLUSION 31

APPENDIX 32

REFERENCES 39

TABLE OF FIGURES

Figure 1: Customer's knowledge of plastic doors 14

Figure 2: Customer's usage of plastic doors 15

Figure 3: Percentage of brand recognition 16

Figure 4: Viet A Brand Awareness 17

Figure 5: Customer's reaction to promotion 18

Figure 6: Customer's satisfaction of Viet A product quality and service 19

Figure 7: Customer' satisfaction of Viet A product price 19

Figure 8: Customer's evaluation criteria about Viet A plastic door products 21

Figure 9: Customer's evaluation about Viet A slogan 22

 The brand awareness of Viet A Company is low Although the price is lowerthan other competitors, the company cannot attract a lot of customers

 The slogan is not impressed with customers and they cannot remember it

 The company does not have financial support for the advertising

Recommendations:

 Building customer- based brand equity to gain the customer’s confidence

 Building brand awareness: through improve customer service and advertisingactivities

 Building perceived quality: depends on the customer’s evaluation criteria

 Protecting brand equity: through the marketing mix elements

1 Research topic

Building brand equity is a long process and requires a huge expenditure According toresearchers, the strong corporations and companies in the world spend about 10% of itsrevenue on advertising to building brands However, the number of studies to enhancebrand equity is not much in Vietnam The ignorance about building and managingbrand equity in some small and medium enterprises in Vietnam put them to a difficultsituation to compete to larger companies, specially, from abroad

At the international trade fair about brands which was held in 2004 in Vietnam, the

Deputy Minister of Science and Technology, Mr Le Dinh Tien said that: “Brand

equity of a business is the reputation Building brand equity is one of the ways to compete in the market” (2009) Mr Thomas B Shepard- the Executive Vice President

of Marketing and International funding in Visa International also completely agree that

the brand equity will survive as a part of the most important assets of the company

(2009) Therefore, a business which wants to operate in a long – term and sustainabledevelopment, needs to pay more attention to building and managing its brand equity,because that is the key measurement to evaluate business’ development Brand equity

is not only a symbol, but also an effective tool to maintain and develop in the domesticand aboard market in the future That is the reason why some people said that brandequity is the money, the profit of enterprises

According to the report about “The situation of building brand equity in Vietnam”(MA Dang Ngoc Su, 2012), the result of a consumer surveys which was launched in

Ho Chi Minh City pointed out that 89% of consumers used brand as a main factor toselecting products That means consumers will be loyal to the brand if they trust thebrand-name products To create the customer’s confidence, one of the main factors is

to create the long- term relationship The business needs to reflect and expresssimultaneously in all three aspects: reliability, honesty and sustainability

Therefore, understanding about the brand equity, the business would provide theexplanation of problems which occur in the market and bring out the suitable solution

at right time and right place to strengthen its brand equity

2 Rational

Recently, the rapid growth in manufacturing and trading plastic door leads to manyproblems in competition between enterprises One of them is the brand equity, whichplays an important role in increasing awareness and improving engagement ofcustomers in the Vietnamese market The Viet A Plastic Joint Stock Company was alsofaced with that problem Without the difference in products’ quality and customers’service, it is very difficult to gain the customer’s confidence for Viet A Company thanother big enterprises (such as Euro window) Therefore, the purpose of this study is todetermine the Viet A Plastic Joint Stock Company’s brand equity in Vietnamese plasticdoor like name awareness, perceived quality and so on Moreover, this research alsoapplies these lessons to offer suggestions and solutions in improving and strengtheningthe brand equity for Viet A Plastic Joint Stock Company

3 Research question

This study was designed to analyze the customers’ views about Viet A Plastic JointStock Company’s products and services to get the conclusion about its brand equity.Specifically, the study seeks the answers to three questions:

1 What is Viet A brand equity?

2 What are the ways that Viet A build their brand equity?

3 What are the problems in brand equity of Viet A Plastic Joint Stock Company?

4 Scope of the research

The research is carried out from March 5th to April 10th, through the data launched byViet A Plastic Joint Stock Company, the reports and information from the internet Atthe same time, the survey and interviews also will be conducted through the Internetand social network

5 Methodology

The research will follow this methodology:

 Survey: from March 5th to March 25th, there are 200 surveys were sent and 188surveys were received The age of people surveyed from 14 to 50 years old.Most of them are the officers, who pay much attention to the products There is

a survey for the Viet A Company’s customers and a survey for the Vietnamesecustomers.

 Interview: from March 20th to March 30th, there are 30 people were interviewed.They are pupils at Nguyen Phong Sac High School, students at NationalEconomics University, employees at Hung Thuan Plastic Company, Huu NghiPlastic Company and Lac Viet Media Company The researcher also interview

…

CHAPTER I: INTRODUCTION OF THE VIET A PLASTIC JOINT STOCK COMPANY AND THEIR PROBLEMS ABOUT BRAND EQUITY

1 Viet A Plastic Joint Stock Company

Viet A Company was established in September, 2007 with the full name is Viet APlastic Joint Stock Company In the first years, Viet A Company has faced manydifficulties in both financial and human resources At that time, the Vietnamese plasticdoor market has been manipulated by the pioneers Eurowindow Moreover, by thistime, using plastic doors has not become popular in Vietnam The Vietnameseconsumers tended to spend wood doors than plastic door which requires a lot ofmoney In December, 2009, the company operated a brand in Ho Chi Minh City withthe purpose is to explore the southern market This is a remarkable step of Viet APlastic Joint Stock Company in expanding the Vietnamese market, gaining thecustomer’s confidence and building the brand equity

However, overcoming many difficulties, after nearly 5 years, Viet A Plastic Joint StockCompany has achieved many certain successes in the Vietnamese plastic doors market.The company has recently cooperated with many large construction companies such asVan Phu- Invest Investment Joint Stock Company, Hanoi Housing Development andInvestment Corporation and so on It was received certification from the InternationalOrganization for Standardization- ISO 9001:2008, Gold medal from Viet BuildExhibition in Hanoi in 2011

Background information about Viet A Company

Name of transaction: Viet A Plastic Joint Stock Company

Name abbreviations: VIASIA, Inc

Head office: 23 Dong Cac Street, Dong Da District, Hanoi

2 Problems about brand equity in Viet A Plastic Joint Stock Company

Despite achieving many successes in the Vietnamese plastic doors market, thecompany still faces many challenges One of main difficulties is how to build andmanage the brand equity Brands have higher brand equity to the extent that they havehigher brand loyalty, name awareness, perceived quality, strong brand associations and

so on After an internship period in Viet A Company, the researcher found that thiscompany has cooperated with Eurowindow in producing many details and productswhich play an important role in assemble the Eurowindow’s products in theVietnamese market Therefore, the researcher can assume that the Viet A Company’sproduct quality and Eurowindow’s product quality are equal Besides, becauseEurowindow is a large company from Europe and also have strong brand, the costwhich customers have to pay for Eurowindow’s products is always higher than those ofother plastic door manufacturers from one to three million for a product However, thiscompany still attracts a large number of customers in the Vietnamese market.According to the data launched in 2012 by Viet A Company, the brand awareness ofEuro window in Vietnamese plastic doors market account for 57.6%, while Viet APlastic Joint Stock Company just made up 1,28% To explain this situation, this studywill focus on the Viet A Company’s brand equity Because of limited time andconditions, the study will do research and give commendations in two main factors ofbrand equity: brand awareness and perceived quality

CHAPTER II: OVERVIEW OF BUILDING, MANAGING AND

PROTECTING BRAND EQUITY FOR A BUSINESS

1 Brand equity

1.1 Definition

Brands vary in the amount of power and value they have in the marketplace Somebrands are largely unknown to most buyers Other brands have a high degree ofconsumer brand awareness Still others enjoy brand preference- buyers select themover the others Finally, some brands command a high degree of brand loyalty

A powerful brand has high brand equity Brands have higher brand equity to theextent that they have higher brand loyalty, name awareness, perceived quality,strong brand associations, and other assets such as patents, trademarks, and channelrelationships A brand with strong brand equity is a valuable asset In fact, it caneven be bought or sold for a price (Gary Armstrong, Philip Kotler, Principle ofMarketing, 7th Ed)

According to Wikipedia.com, brand equity is a phrase used in the marketingindustry to try to describe the value of having a well- known brand name, based onthe idea that the owner of a well- known brand name can generate more moneyfrom products with that brand name than from products with a less well knownname, as consumers believe that a product with well- known name is better thanproducts with less well- known names Another word for “brand equity” is “brandvalue”

Brand equity represents a relevant research line in marketing This concept hasundergone an important evolution in its understanding and in the variable thatcomprise it Brand equity was born a simple construct in the late 1980’s, with asingle variable meaning changed according to each author: the additional price aconsumer is willing to pay for a brand; the extension capacity of a brand; thefinancial value of a brand as an intangible asset; or its capacity for generating

loyalty among customers Nowadays, brand equity has to be understood as “brand

equity based on customer” or customer- based brand equity (“Study of the Brand

Equity Based on Customer Loyalty”, Ph D Andy, 2012)

1.2 Elements of brand equity

According to “Managing Brand Equity” by David Aaker (1991), there are fourelements of brand equity:

 Brand Loyalty: Brand loyalty is a measure of the attachment that a customer has

to a brand It reflects to how likely a customer will be to switch to anotherbrand, especially when that brand makes a change, either in price or in productfeatures

 Brand Awareness: Brand Awareness is the ability of a potential buyer torecognize or recall that a brand is a member of a certain product category

 Perceived Quality: The customer’s perception of the overall quality orsuperiority of a product or service with respect to its intend purpose, relative toalternatives Perceived quality is a perception by customers

 Brand Association: A brand association is anything “linked” in memory to abrand

1.3.2 Value of Brand Awareness

 Anchor to which other associations can be attached

 Familiarity and liking

 Signal of substance/ commitment

 Brand to be considered

1.3.3 How to achieve Brand Awareness

 Be different, memorable

 Involve a slogan or jingle

1.4.3 Value of Perceived Quality

 Reason- to- buy

 Position

 A price premium

 Channel member interest

 Brand extensions

1.5 Sources of brand equity

 Marketing Research: Introducing brand in the market needs quantities orqualitative research to get familiar with the trends and different attributes

Proper market research allows the company to launch a right brand for the rightsegment.

 Quality: New product must incorporate quality ingredient because firstimpression is the last impression If customers are satisfied with the quality ofyour products then customers will suggest other people to go for this product bysharing good thoughts

 Brand Name: Brand name should be related to the product and easy toremember

 Brand Positioning: Position brand is such a way that customers can remember itfor a long time and position in his mind

 Marketing Mix: The proper use of marketing mix adds value in the brandmarketing Promotion and personal relation increase brand equity

 Brand Extension: To polish your brand, bring some new products and servicesunder of umbrella of same brand name

 Customer opinion: Always look for customers’ opinion because they know thebest and the worst about the products

2 The concept of Customer- Based Brand Equity

To further stress point of brand knowledge, an experiment was conducted by LarryPercy with respect to brand equity Result lead to conclusion that brand knowledgecontributes a lot in understanding customer- based brand equity

Brand knowledge which is crucial in evolution of brand equity consists of brandawareness and brand image As the author said above, brand awareness means theability created by brand with which consumer can recall and recognize in any give

environment On the other hand, brand image are visuals, logo, style and so on withwhich brand is associated Customer- based brand equity results in creation ofstrong brand and this is achieved when brand awareness and image are at highlevel.

2.2 How to create strong brand based on Customer- based brand equity

Brand equity resides in the mind of the customer, so conviction has to be brought instrategy as to permanently occupy consumer mind space First step is to establish arelation between customer need and product offering, meaning for given productthe brand is the best customer can get This is done by appropriate brand awarenessand image Second step is connection, by churning out predictable, reliable andquality performance during each purchase This establishes imprint in customers’mind which further can be cemented by visual, logos, packaging, quality, customerservice, warranty and so on Next, create emotional level response in form ofpositive reaction or opinion brand creates long term, sustainable and healthyrelationship

3 The Benefits of Brand Equity

Consumers have different reactions before the commercial activities, in thepresence of known brands and before unknown ones A real brand equity for aconsumer is brought forward from the relevant knowledge of the brand with a set offavorable associations in a given purchase decision context The brand generatesreal value for the consumer when the brand is perceived in a differentiable, specialand attractive manner from other rival brands When brand value is generated forthe consumer, benefits can be expected for the company that owns the brand.Briefly, this creation of value has benefits: Allows generating greater loyalty fromthe consumers by increasing the value offered to them; Allows for a reducedvulnerability to strategic marketing moves by competitors and market crises;Reduces the elasticity of demand facing a greater value; Helps generate trust andsupport from the distribution channels already stimulated to work with higher valuebrands

Sponsoring products with higher value brands allows for increased effectiveness ofthe communication efforts directed towards the consumer, because a recognizableand valuable element is attached to them.

Higher value brands usually possess broader umbrella effects that allow for moresuccessful brand extensions by transferring the perceived brand value towards thenew business entities With the brand overpricing, companies can manage amplerprofit margins than other competitors with lesser value brands This last argumentconcentrates all the relevance related to the strategic management of brands andjustifies the marketing management based on “brand equity” This relevance stemsfrom the increased margins of profit that companies with greater relative marketshare tend to generate, and at the same time it is these market leaders who generallyown the greater value brands in their industrial sectors David Arnold demonstratesthis argument when he talks about three principles of brand performance:

 First, there is evidence to assert that the market leaders tend to receive suchadvantage as a result of generating brands with grater “perceived quality”, andnot solely due to the inherent quality of their products, thus making this

“perceived quality” one of the key aspects to maintain market leadership.Having achieved this leadership, additional benefits can be attained, such asgreater negotiation power with customers and clients

 Second, although leading companies in the market tend to be businesses withgreater efficiency production systems based in economies of scale, whenapproached on a case to case basic, it seems that it was the greater perceivedquality brands which allowed their companies to overtake their competitors andthen be at ease to implement these more efficient cost structure and from agreater competitive power that allows them to implement superior pricing Thisadvantage of being able to handle higher process derives directly from thesuperior value of their brand

 Last, greater perceived quality brands provide a long term competitiveadvantage for the companies, because, if maintained adequately, they are notsubject to a product life cycle Brands can outlast their products if renewed and

modified in their associated perceptions to maintain their validity in loyalconsumer groups

Well managed brands must be understood as tools to establish long termrelationships with clients The composition of brand equity is complex It isknown that a buyer is willing to pay an over price for a product bearing highperceived value brand, although the value of this same brand is influenced to agreat degree by the quality of the product it sponsors

4 Protecting and Managing Brand Equity

4.1 Managing Brand Equity

In his 1989 paper, “Managing Brand Equity”, Peter H Faquhar outlined thefollowing three stages that are required in order to build a strong brand:

 Introduction: introduce a quality product with the strategies of using the brand

as a platform from which to launch the future products A positive evaluation bythe consumer is very important

 Elaboration: make the brand easy to remember and develop repeat usage Thereshould be accessible brand attitude, that is, the consumer should easilyremember his or her positive evaluation of brand

 Fortification: the brand should carry a consistent image over time to reinforce itsplace in the customer’s mind and develop a special relationship with thecustomer Brand extensions can further fortify the brand, but only with relatedproducts having a perceived fit in the mind of the customer

However well a brand is initially positioned in a market, the company may have

to reposition it later A competitor may launch a brand positioned next to the

company’s brand and cut into its market share Or customer wants may shift,leaving the company’s brand with less demand Marketers should considerrepositioning existing brands before introducing new ones In this way, they canbuild on existing brand recognition and consumer loyalty.

4.2 Protecting Brand Equity

The marketing mix should focus in building and protecting brand equity Forexample, if the brand is positioned as a premium product, the product qualityshould be consistent with what consumers expect of the brand, low sale pricesshould not be used compete, the distribution channels should be consistent withwhat is expected of a premium brand, and the promotional campaign shouldbuild consistent associations

Finally, potentially dilutive extensions that are inconsistent with the consumer’sperception of the brand should be avoided Extensions also should be avoided ifthe core brand is not yet sufficiently strong

CHAPTER III: ANALYSIS AND FINDINGS

1 Viet A Brand Equity

1.1 Customer’s awareness of plastic doors

To understand about the Viet A brand equity in the Vietnamese market, it is important

to study about the amount of people who knew about the plastic doors products, as well

as the amount of customers who used them They are the foundation to evaluate theViet A brand equity The first two questions in the survey were designed to meet thispurpose

Figure 1: Customer's knowledge of plastic doors

The figure from the chart collected strongly supports the comment that almostVietnamese people know about plastic doors products Therefore, the conclusion beingwithdrawn from the chart is the plastic doors products are very popular in theVietnamese market It is a good foundation for evaluating the Viet A brand equity.Because the more people know about this kind of products, the more successcompanies which do business in this industry can get

Moreover, considering the age of surveyed people, 13 out of 188 people who said theydid not know about the plastic doors products are almost at the age of over 50 andothers are under 18 These observation shows that most of consumers (from 18 to 50years old) who have ability to make decisions to use plastic doors products for theirhouses, offices or companies, know about this kind of product line It is an advantagefor enterprises which are operating in this field

Although there are many consumers know about the plastic door products, the number

of people who used them in the past is fewer

Figure 2: Customer's usage of plastic doors

Compared withthe result of thecustomer’sawareness ofplastic doors inVietnamesemarket, thenumber of people has used this kind of products just account for a little number.Besides, 26 out of respondents that used plastic door products said they used Viet Aproducts This figure shows that the Viet A brand equity has not been appreciated inthe Vietnamese market at the present

Other brands which were listed by the customers are Euro window, Austdoor, Vietwindow and so on And with the consumers who answer that they do not want to usethe plastic door products, the researcher also interview them about the reasons whichmake them choose this option Most of the answers are that they prefer to use thewooden products because wooden doors are colorful, luxurious and cheaper thanothers

1.2 Brand recognition

Figure 3: Percentage of brand recognition

The survey just mentions and compares to 4 names of brands: Euro window, Austdoor,Viet A and Hanowindow According to the researcher’s view, Austdoor Company andViet A Company are the head- to- head competitors at middle size, Euro window is athigh size and Hanowindow is at lower size

Based on the results, it is not difficult to recognize that Euro window is the manufacture brand which is known by most of the customers 180 out of 188 peoplerecognize this producer as well as its products Compare to the survey which wasconducted in 2010 by Viet A Company, as the researcher have mentioned above, thebrand awareness of Euro window in Vietnamese plastic doors market made up 57.5percent, the reason that leads to the difference between two surveys’ results is there is afewer of people who was requested for these questions However, the first position ofEuro window in the scale of plastic doors manufactures in Vietnam is remained Thenext positions are Austdoor Plastic doors manufacture with 39.9 percent and Viet ACompany with 33.5 percent These figures do not match with the survey’s result in

plastic-2010 It reported that the brand recognition of Austdoor made up 19.1% of the plasticdoors market, while Viet A just was 1.28% This data also points out that theVietnamese plastics doors market has a little change and the consumers also knowmore about the Viet A Plastic Company Nowadays, the Vietnamese tend to use thedomestic goods because of good quality and cheap prices Viet A Plastic Companyshould capture these thoughts with one of the advantages is the Vietnamese name