LV Thạc sĩ Appealing Cultural factors for television advertising on FMCG in hanoi

Table of contens Acknowledgment 1 EXECUTIVE SUMMARY 2 CHAPTER I: RESEARCH BACKGROUND 3 1.1 Research Problems 3 1.2 Research Objectives 4 1.3 Research Methodology 4 1.4 Data sources 5 1.5 Research scope and limitation 6 1.6. Thesis’s Structure 6 CHAPTER II: THEORETICAL BACKGROUND 7 2.1. Advertising 7 2.2. Fast moving consumption goods (FMCG) 14 2.3. Culture and cultural elements 15 2.4. Cross culture consumer behavior 16 2.5. Advertising and consumer behavior 18 2.6. The link between culture and TV advertising 19 CHAPTER III: RESEARCH FINDINGS 22 3.1 Television Adverting in Vietnam 22 3.2. Culture factors in advertising 27 3.3. Assess the importance of these factors to make successful television advertising 41 CHAPTER IV: RECOMMENDATIONS TO CUSTOMIZE ADVERTISING ON FMCGs IN HANOI MARKET 43 4.1. Advertising companies 43 4.2 Companies to develop plan for one TV advertising 46 CHAPTER V: CONCLUSION 48 REFERENCES 49 APPENDIX I: 50 APPENDIX II: TRANSCRIPTS OF FOCUS GROUP DISCCUSSION I 52

For the completion of this dissertation, I would like to express my special appreciation to

my Supervisor, Professor … (P.H.D) who provided me valuable comments and guild me how to apply all theory into real business activities.

My sincerely thanks is also extended to my manager Ms … as Associate Director of Nielsen Company Vietnam who offers me precious advices for my research paper as well

as the research survey methods applied

I would like to thank to all lecturers in CFVG for the past two years for knowledge, skills gained in MBA program

Especially, my thanks are also given to my family, friends, my boss, co-workers and class members of … who support me during the hard time of research study They are really strong motivation which has inspired me to fulfil my missions

EXECUTIVE SUMMARY

Vietnam has undergone major development over the past decade with significantincrease in production and consumption It has become very lucrative markets especially forthe retail industry in general and FMCG (Fast Moving Consumer Goods) in particular

In order to compete in the potential market, it is required to make out a soundmarketingư strategy to build a strong brand Television advertising has been chosen as thevery effective mean to promote and strengthen product’s image in the customer’s mind Themore economic is developed, the more sophisticated the demand of consumer is Vietnamesecustomers are considered as very potential ones but they have certain requirements for theadvertising which are exposed to them every day

With the booming of television advertising for the past decades, the customers havemore choices for the products Under the data by TNS Gallup Media, everyday people areexposed to around 3,000 advertising messages on average With the overloaded advertisings,consumers are harder to please Advertising is not merely a mean of communication, a tool ofmarketing mix, but it is an art which requires the different elements, especially culturalelement In the research paper, the author focuses on cultural factors which are considered thehard barrier to win the customers’ preference However, it is not easy for the advertiser,especially for the international firm to have successful advertising which takes into account ofVietnamese cultural elements

As the research scope is limited within Hanoi, the author is ambitious to analize theappealing cultural factors for Hanoians in specific FMCG products With the research paper:

“Appealing cultural factors for television advertising on FMCG in Hanoi”, the author expects

it can analyze all the factors especially cultural ones to appeal customers in television Inorder to give insights on the importance of those factors as well as the effects on theirconsumer behaviors, the author conduct the survey for 150 questionnaires (92 out of those arevalid) to understand what the audience/consumer think about the cultural factors appealing tothem Futhermore, the author analyzes the cases of both successful and unsuccessfuladvertisings in Vietnam to bring the important findings for the report With the utmostobjective of the research paper, the author shall provide recommendations for advertisers aswell as the companies/enterprises to evaluate successful television advertising

CHAPTER I: RESEARCH BACKGROUND

1.1 Research Problems

Vietnam economy has experienced rapid development for the last two decade.Especially, after being official member of WTO, Vietnam has been known as fast emergingeconomy in Asia Since then, Vietnam has made progressive integration into the globaleconomy With the total population of around 86 million people ranking 3rd in ASIANcountries and 13rd in the world (General Population and housing survey, 2009), Vietnam hasabout 60.6 million consumers under TNS World-Panel This number is anticipated to increase

up to 70 million by 2018 It is not exaggerating to affirm that Vietnam is a promising andlucrative retail investment market with huge number of consumers Even undergone hard time

in economic crisis in 2009, Vietnam retail market is still an attractive destination not only fordomestic enterprises but also international/global one

Though being promising market, Vietnam is not easy market for international/globalcompanies to dominate As our living conditions have been improved incredibly especially inHanoi and Hochiminh city, the consumers are more and more sophisticated and demanding.Amid this fierce competition, all enterprises acknowledge that if they do not have wisemarketing plan, they shall be leg behind in this potential market Many international/globalcompanies in their “first landing” and “go native” stage believe that advertising shall bedangerous weapon in their marketing plan to win customers rapid developing markets such asHanoi and Hochiminh city

They have aggressively launched advertising programs in Vietnam with huge budget inorder to lure more customers Obviously, annually those companies often spend huge amount

on TV advertisements with an aim to attracting new triers and maintaining the loyalty of theircustomers, and strengthen their brand image in Vietnam However, whether those advertisingscan meet the expected objectives set my marketers is questionable In order to save the cost,some international companies have launched regional advertising video Many of advertshave showed high effectiveness in some other countries in the region However, whenlaunching the same advertising in Vietnam, it copes with barriers which are traditionalVietnamese customs and practices Mr Sam, director of Bates advertising company said:

“Before I do not understand clearly about Vietnamese culture When working in Vietnam,especially in this creative sector, I need to study thoroughly your country’s customs andpractices to initiate ideas appropriate with Vietnamese culture”

It does not mention only the different traits by countries, but it also exist differentsegmentations for localities within Vietnam Especially, there have been many differencesbetween Hanoians and Hochiminh city and Hanoians are well-known to be the hard to pleasecustomers

In fact, not all advertising campaigns work well as desired by marketers Lessons frominternational big guys so far show that not all their advertising campaigns work well and theyeven worsen their brand image In order to penetrate successfully into this lucrative market, it

is required for international firms/enterprises to understand Vietnamese consumers’ traits and

to adapt into its typical market’s features “Thinking globally, acting locally” is famous slogan

by HSBC seems to be also appropriate for other foreign enterprises who want to be successful

in Vietnam market So, how to utilize factors contributing to the success and effectiveness of a

TV advertising campaigns has been great concern of marketers in international companiesoperating in Hanoi in particular and Vietnam in general This concerns by international/global

companies has inspired me to pursue my research on “cultural factors in TV advertisingcampaigns on FMCG for Hanoians” for the final dissertation.

1.2 Research Objectives

As mentioned above, in order to solve the concerns by international marketers in Hanoimarket in particular and Vietnam market in general, my dissertation shall analyzecomprehensive factors contributing to the most effective advertising Due to limit time, theresearch paper cannot go thoroughly all aspects of this problem but focus more on culturalfactors which are considered to be very important especially in Hanoi market

My ambition does not constrain to understand which cultural factors to be taken intoconsideration for TV advertising campaigns but also to investigate Hanoian consumers’attitude towards those and to develop best advertising campaign Therefore, the dissertationset out all objectives clarified as bellow:

 WHAT? Clarify which cultural factors need to be taken into consideration for TVadvertising on FMCGs It is very important to define cultural factors in advertising as theyshall be the basis for strategy of international marketers for their decision making in Hanoimarket

 WHY? Assess the importance of these factors in the success of a TV advertisingcampaign Through insightful analysis, the author shall help evaluate their effectiveness ofcultural factors

 HOW? Give a guide on how to customize TV advertising effectively in Hanoimarket The author shall provide recommendations on how to build a successful TVadvertising campaign as the ultimate objective of the research for the advertising companies

as well as the companies/enterprises

I do expect that by answering those three questions “WHAT”, “WHY”, and “HOW” by theend of the research, it somehow can help international/global companies acknowledgeimportant issues to tailor TV advertising campaign in Hanoi in particular and in Vietnam ingeneral

1.3 Research Methodology

In the research paper, qualitative, quantitative and observation methods are applied

 Qualitative methods: 1 focus groups (10 peoples)

- Target Interviewees: age ranging from 6 to 60, include female and male, different job,

and low, medium and high income …)

- Objectives of focus group discussions: how and why cultural factors in those

advertising shall affect to their perception, emotion, impression on the brand

- Implementation of discussions

The author will show at least 2 different adverts for FMCG products from samecompany (Coca Cola, KFC, Nest Café,…) which one advertisement is shown in their homecountries and one is in VN All these TV adverts shall be collected by authors

During those discussions, we shall answer these following questions:

1 Do they often watching TV Advertising?How often? (minute/day)

2 Do they like those adverts? Which one they prefer, adverts in home countries or adverts in VN? (Please be noted that they are same company adverts)

3 How do they think about these adverts?

4 Why do they like/don’t like these advert?

5 Shall their impression on TV adverts affect their shopping decision? buy or not buy?

6 Do they think that International/global manufactures shall take into consideration of Vietnamese cultures in their adverts?

 Quantitative method: Distributed to 150 respondents

- Target interview: age ranging from 20 to 56, include female and male, different job,and low, medium and high income …)

- Questionnaires shall be prepared basing on the ideas suggested from qualitativemethods with aim to qualifying whether their comments/ideas represent for the majority ornot The questionnaires shall include 13 questions to analyze which cultural factor are themost important in adverts The questionnaire are designed to capture all thethought/comments of the customer on the factors appealing to the advertising The survey wasintended for 150 respondents, and the author received 92 valid answers out of 150

- Qualitative method shall be conducted firstly because it is necessary to define exactlytheir interviewee’s answers to these questions: “what factors”, “why?” and “how” The focusgroup including 6-8 people from backgrounds shall provide the author different points ofviews on TV advertising programs Exploring interviewees from diversified aspects would beimportant step to bring the author overall picture on what’s on their mind and to orient theresearch questionnaire survey

 Observation method: around 70 television advertising in Vietnam and other

countries

- The author has selected around 70 TVC advertising in Vietnam and other countries in

different channels During the observation, the author analyzes the elements which contribute

to the success as well as failure of the advertising

1.4 Data sources

In order to provide insightful analysis, I utilize two kinds of data resource includingsecondary and primary data Primary sources of information I collected from availableinformation in reference books, reports by AC Nielsen as well as articles in newspaper andinternet

Besides, I use secondary sources collected from the questionnaire survey and hearingsurvey for the findings In additional, I have collected and observed hundred advertisements

in different TV channels especially VTV3, VTV1, VTC and other cable channels This source

of information is valuable and useful for me to give recommendations to build effectiveadvertising campaign in Vietnam.

1.5 Research scope and limitation

The research scope for the survey is restrained in Hanoi where consumers are well- known to

be very hard to please as they have stricter requirements than Saigonese Therefore, thesurvey result shall not present the ideas/opinions for the whole Vietnamese Thus, the remarksand insights shall be more suitable for the Hanoi context but not Vietnam nationwide.Especially, the FMCG products are different from other products as they have short life cycle,

so the recommendations shall be not cover all types of products

Due to the limit of time and budget, I have not deeply covered all the cultural factors inadvertising in Vietnam through the questionnaire survey, so there might have some missingpoints of analysis Futhermore, the sample of the survey deem not sufficient enough to presentthe overall information because I don’t have much time to collecting more questionnaires

1.6 Thesis’s Structure

Chapter 1: Introduction

This chapter shows the research problem research objectives and the research designwith the explanation about the scope and limitation of the thesis

Chapter 2: Theoretical background

In this chapter, the author recalls relevant theories on advertising, its dimensions andbasic objectives In addition, the author reviews the definition of culture and its culturalelements, and cross culture consumer behavior Through the theories on advertising andculture, the author studies the linkage between advertising and consumer behavior as well asthe co-relation between the culture and advertising Based on that, the author covers the basicand main points to answer the question how culture and advertising work to appeal theconsumer’s behavior and trigger their purchasing

Chapter 3: Research findings

This part of the thesis presents the research findings including the cultural factors inVietnamese advertising With comprehensive information collected from the questionnairesurvey as secondary data as well as studies, report by research market companies such asNielsen Company and TNS Media Vietnam, the author bring the overall picture on thetelevision advertising development in Vietnam as well as the typical features of Hanoianscustomers This chapter also provides the important insights analyzed from over 25advertisers broadcasted in Vietnam Through case analysis, the author summarizes what are

the key points to be taken into consideration to develop a successful advertising of FMCG inHanoi The research findings come to end with evaluation of those cultural factor appealingconsumers.

Chapter 4: Recommendations

Based on the research finding, the author proposed a set of recommendations to develop

a successful advertising on FMCGs in Hanoi through objectives setting, budget planning andmessage generation which has been taken into consideration of Vietnamese culture

CHAPTER II: THEORETICAL BACKGROUND

2.1 Advertising

 Definition of advertising

Every day, we as consumers are exposed to hundred of brands intentionally andunintentionally We can see them everywhere It may be in newspapers in the morning we arereading, in the bags we are carrying, in the websites we are surfing, in mobile phone messages

we received, in coupons we are seeing in the shop, in the sign boards on streets we are going

to office or back to home, or on bus driving on the roads, or on Television we are watching…All the forms we defined ourselves as means of advertising So, what’s the advertising?

It is such a long time since advertising has appeared in our mind as familiar terms.There have been many definitions on advertising from different point of views As forjournalists, advertising can be interpreted as communication and persuasion process; but formanufactures advertising might be defined as a marketing process…

A century ago, Albert Lasker, founder of Lord & Thomas understands “Advertising assalesmanship in print driven by reason why” However, this seems to no longer true thanks torapid development of diversified and modern communication means Although advertisinghas been developed considerably for the past two decade in Vietnam and there also existspecific understanding about advertising Under the article 102, Vietnam trade law in 2005defines advertising is trade promotion activity of the business to introduce to customers itsproducts, services” However, this definition does not cover all aspects of advertising

Advertising is not merely printed, but it comes to consumers by radio, internet and

television… William F Arens in his Advertising book defines “Advertising as the structured and composed non-personal communication of information, usually paid for and usually persuasive in nature, about products (goods, services, and ideas) by identified sponsors through various media”.

In order to understand this definition, we would better to analyze all the elementsembedded As advertising is type of communication, William F Aren perceived advertising as

a definitely structured form conveying both verbal and nonverbal elements that are composed

to fill in specific context at the specific time It is necessary to distinguish the meanings of

“personal communication” versus with “non-personal communication” For example, whatrequires personal selling is the presence of the seller and the buyer together This interactionbetween the seller and the buyer shall be an opportunity for them to discus everything aboutthe products The buyer can raise questions about products’ function, features, and also can

examine them for the final purchasing decision Via personal communication, all five sensessuch as smell, touch, taste, sound and sight can be experienced by the potential buyer

Meanwhile, non-personal selling delivers very quick message via different means ofcommunication and there is no way to examine the customer’s response to the messagedelivery In addition, by non-personal communication, the customer can use only two senses:sight and sound for their products’ examination

To some extends such as information delivery, interaction between the seller and thebuyer, personal communication shall be preferred However, when it comes to cost matter,non-personal communication shall be effective solution Through advertising, themanufacture also tries to send the message to their potential customers with information such

as its feature, shapes, color, functions, ect

As purpose of advertising is to introduce, indentify and differentiate the product fromothers with an aim to persuading customers to buy the products That is to say, it might causeinducement to their customer through perceptible difference; namely, shape, colors, orimperceptible differences which is not obvious features or function For example; Coca Colashall try to persuade Vietnamese customers through their advertising campaign bydifferentiate their product features by color, shape, taste, emotion from Pepsi or other brands All advertising shall be conducted by identified sponsors, i.e who launch theadvertising to prevent the audience from misleading their ideas and contents If the sponsorfor the advertising is not identified, the audience might understand it as the news about theproducts but not an attempt to induce their purchasing Advertising shall be shown in variesmeans such as newspaper, radio, televising, billboards, posters or anything which helpcommunicate through non-personal ways from one/groups of people to the others

According to Philip Kotler, managers need to make 5 M decisions in developing anadvertising program: Mission, Money, Message, Media and Measurement

Figure 2.1: “5-Ms” model in advertising

Source: Marketing Management, Eleventh Edition by Philip Kotler 2003

Firstly, in setting the objective of advertising program, manager needs to base on theprior decision on target market, market positioning and marketing mix Secondly, managershould know how much to spend on advertising tool by considering: stage in the product life

cycle, market share and consumer base, competition and clutter, advertising frequency andproduct substitutability and market characteristic Thirdly, they must choose the advertisingmessage, determining how the message will be generated, evaluating alternative message fordesirability, exclusiveness and believability and executing the message in appropriate style.And next, they must make decision on the media they will use

There are a number of vehicles to deliver reach, frequency and impact Each have itsown advantage and limitation as showed the below table

Table 2.1: Profile of major media types

Source: Marketing Management Millennium Edition, Tenth Edition by Philip Kotler 2002

This decision is made based on several factors such as: target audience media habit,product, message and cost

Finally, marketers need to evaluate the effectiveness of advertising on sales andcommunication goal Though the fundamental research on ad effectiveness is small, it’snecessary to know potential effect on awareness, knowledge and preference as well as the ad’ssales effect

In the consumer survey, the Nielsen Company evaluates the degree of trust for differenttypes of advertising globally Accordingly, advertising from recommendation from peopleknown is the most trustful sources for consumers In fact worth-of-mouth communication isthe most effective way because people tend to put their trust in friends’ or neighbors’recommendations In addition, other sources such as consumer opinions posted online orbrand website also reliable for consumers with 70% and 69% respectively Television as one

of the most popular means of advertising, win the 62% of consumers’ trust However, uponthe different kind of products, the source of trustful advertising is different Therefore,manufacture/company is required to consider appropriate means of advertising to promotetheir products

Figure 2.2: Degree of trust in Advertising

(Source: The Nielsen Company)

 Dimension of Advertising

However, to grasp the full meaning of advertising, it is important to analyze itsdimensions William F Aren in his “Advertising” book mentions four dimensions ofadvertising including communication dimension, marketing dimension, economic dimensionand social and ethical dimension

Firstly, communication is the foremost dimension of advertising As shown in the graph

below for advertising flow:

Figure 2.3: Communication process

(William F Aren, Advertising)

As can be seen in the flow, the communication process begins when the source generateideas in the first step, then they are encoded through message The message shall be transfervia channels The receiver shall decode the message as the final step of the communication.Similarly, advertising process is also trigged by source as sponsor to generate ideas Afterideas are encoded through message, it will be delivered by channels which might be radio,printed means, internet or television…The message shall be decoded by potential customers

as the receivers The Stern model of advertising communication is illustrated in the chart 2.2

Figure 2.4: The Stern model of the advertising communication process

Source Message Receivers

Within the text of advertisement

(Source: Contemporary advertising, p.11)

As can be shown in the diagram, the source comes from the sponsor who takes the legalresponsible for the consumers They shall bear all the costs and fund all activities for theadvertising The sponsor authorizes the author who can be advertising agency to generate theadvertising message

To the consumer, this person who represents the sponsor is the source for the textmessage They are invisible to the audience but plays important role in composing the textand convey the message The message can be delivered by different forms such asautobiography, narrative or drama In autobiographical messages, the main character shall tellstory about his/her own experiences Meanwhile, narrative massage shall be sent by thirdperson to tell story about others Different from those two kinds message, drama messageleads the character acting out of event in front of imagined audience The key point of theadvertisement is how the author of message uses the persona or literary forms consideringemotion, culture, attitudes, and motives to aims at the target audience

As mentioned in the diagram, the ultimate destination of message is the receiver As forWilliam F Aren, the receiver is also multi-dimensional and the implied consumers are the oneaddressed by ad’s persona They are imagined by ad’s author to be the idea consumers.According to William, there always presume audience for all texts or advertisings When weremove text out of the ad, the first audience is sponsor of company who give the firstideas/evaluation on the advertising content In other words, sponsorial consumers are the one

to decide whether launch the adverting or not Since the advertising is approved by thesponsor, it shall be launched to the actual customers They are actual and final receiver andthey possibly do not share the same thoughts with implied consumer or sponsor consumers

Implied consumers

Sponsorial consumers

Actual consumers

Therefore, it is very important to study how actual consumers decode and interpret themessage delivered In order to understand the actual consumers, it is necessary to analyze allaspects considering all related factors.

In additional to communication, as for the manufactures/companies, advertising also

carries marketing dimension For a long time, advertising is considered as component in the

marketing process Marketing always take the main role to generate revenue for business As

defined by William in his Advertising book, marketing is the process of planning and executing the conception, pricing, distribution, and promotion of ideas, goods and services to create exchanges that satisfy the perceive needs, wants, objectives of individuals and organization.

The role of advertising is to inform, persuade and remind groups of customers aboutvalue worth of product/service and the ultimate goal of advertising also aims at revenuegenerating In order to launch advertising program, the author is required to fully understandthe whole marketing process to propose their advertising in line with company’s marketingprocess If in marketing, we need to answer the questions: “what”, “who”, “when”, “where”,and “how”, and we also have to answer to the similar questions for advertising Eachcompany can use different type of advertising depending on the marketing strategy it is nowpursuing As quoted by William the marketing strategy will determine who the target ofadvertising should be, where the advertising should run, what media should be used and whatpurpose of advertising should be accomplish Depending on the product type, the author shallmade decision on which type of advertising shall be used For example, for fast movingconsumer goods, advertising shall make full use of its aesthetic features such as package fortheir program Meanwhile, for electronics or equipment, author shall focus more on its hightech advertising…

In order to understand how marketing elements influence advertising type, it isnecessary to thoroughly study marketing mix with 4 Ps including product, place, promotion,price Pricing is also marketing element which affecting the advertising style In order tocompete with the rivals on pricing, author shall try all means to bring strong impression on theaudience on the pricing For example, such kind of information as “buy one get two” or “plusvolume with the same price”, ect…in the advertising can trigger the audience for theirpurchasing decision

In addition to product and pricing elements, placing element also affect advertising type

If the firm determines their target market as international market such as Coca Cola, Sonny,Nokia…, they shall choose international advertising In case that their target market isdomestic one, they need to apply national advertising By each market, there exists distinctivefeatures for the consumers; therefore, it is required to take into consideration of placingelement to decide advertising type

The last but not least marketing element is promotion or communication As analyzed in thefirst part of the dissertation, advertising indeed is kind of powerful means of communication

It is especially true for the marketing as advertising is effective tool for manufacture to access

to their customers For each purpose of the sponsor, the author shall identify the exact type ofadvertising can be used Depending on the communication strategy, the author can chooseproduct advertising, non-product advertising, awareness advertising, ect…As analyzed byWilliam, advertising enable marketers to reach more prospects at lower cost than asalesperson could ever do Actually, the creativity inherent in advertising allows the marketer

to convey an image or personality full of symbolic meanings and benefits for the companybrand

The third dimension which play very important role not for only advertising but also

others is economic dimension No one can deny the fact that economics is the motivation for

adverting growth Since the earliest beginning of advertising, the sponsor acknowledges theeconomic benefits brought by advertising Economic evolution has been followed by theadvertising development In the ancient time, when people cannot read or write, they do nothave demand for advertising and the marketer use symbol or signs to advertise their products.The economic development marked by the population broom, technology development,advertising has been on the gold age thanks to different means of media such as printed, TV,Internet…In conclusion, advertising can play an important role in the process of an economicsystem In such a system, advertising can be a useful tool for sustaining honest and ethicallyresponsible competition that contributes to economic growth in the service of authentichuman development

Furthermore, from the aspect of consumers/ users, advertising also carry social and ethical dimension Advertising, by one or other ways informs audience about the availability

of the products and service It can be very useful reference for their purchasing behavior.Moreover, advertising contributes to improve living standard of people That is to say, peoplecan have more options to choose and they are total free for their decisions By sponsordifferent media means such as newspaper, magazines, books, TV, internet…, adverting seems

to be the key revenue which helps maintain the operation of those media This reallyfacilitates the freedom of press and information to the audience Advertising does this, amongother ways, by informing people about the availability of rationally desirable new productsand services and improvements in existing ones, helping them to make informed, prudentconsumer decisions, contributing to efficienicy and the lowering of prices, and stimulatingeconomic progress through the expansion of business and trade All of this can contribute tothe creation of new jobs, higher incomes and a more decent and humane way of life for all Italso helps pay for publications, programming and productions —that bring information,entertainment and inspiration to people around the world

 Awareness building and information provision is the foremost functions of advertising.

Advertising can help to create awareness to the audience on the brand and the products.That is to say it is the most effective tool to launch the new product into the market Forsales representative, they can only communicate with a group number of customers;meanwhile, just with 30s advertising, half million of people can know the presence of theproduct This function can be listed specifically as below:

To provide information of the new products in the market

To inform the functions/advantages of the product

To announce pricing changes

To explain the working/operation/usage principles of products

To notice current services

To adjust/correct wrong impression For example, Coca Cola used their ads tochange consumer’s perception on product terminated with Dioxin chemicals.

To reduce concerns on products before purchasing For example, consumers arwworried that front door washing machine often has problem compared to othertypes Therefore, the consumers shall decide to look for the suplementary feature

to make it perfect or to switch to new brands

To build company image

 Persuading : Advertising not only provides information but it also has power to

persuade customers For example, Sunsilk shall use advertising on new variant ofshampoo for hair smooth feature to persuade customers to buy it if they want to havesmooth hair In fact, this function is considered to be the toughest requirement for theadvertisers In fact, it is not easy to persuade somebody to switch or try to use the newbrand because we need to have rational evidence to trigger the customer’s purchasingdecision It is big step from thinking to the action In order to understand how advertisingcan persuade customers, it can be referred to the following points:

To persuade the new triers

To persuade customer’s purchasing

To encourage customer to switch to the company’s brand

To create brand preference

To change buyers’ awareness on products’ specifications/feature

 Efficient Reminding : Customer can be aware of presence of product but time after

time, they might forget it Knowing about the product is not enough to motivate customers

to buy it Therefore, advertising plays important role to remind the prospects who are notready to buy it for the product and it would be more economical than other means

To remind the shoppers that products shall be needed in coming time

To remind the product selling places

To remind price promotion

To remind the products’ position in the shoppers’ mind For example: consumersshall notice in some advertising: “Glad to see you again!”, “Introduced inVietnam since ”, or “Together discover one more time”

2.2 Fast moving consumption goods (FMCG)

MCGs include food and non-food categories which are consumed everyday Basically, thoseproducts are purchased by the decision of individual consumers Therefore, those FMCGs arestrongly supported through advertising, promotion activities by the manufacturers Thoseproducts are the necessity things in daily life and have shorter consumption cycle than otherproducts There are some criteria to classify the FMCG as follows:

• High possibility of good repurchasing

• Low margin on good sold

• Manufactor buy raw materials from the suppliers and produce in a large scale

• Short using time

2.3 Culture and cultural elements

As mentioned above, we can have comprehensive understanding on the definition aswell as all aspects of advertising In order understand how important cultural factors inadvertising, it would go through the brief definition of culture and its key elements

“Culture” has been defined by many scholars and conveys different meanings RalphLinton (1945.P.21_Marketing across Culture) defines “culture as the configuration of learnedbehavior and results of behavior whose component elements are shared and transmitted by themembers in a particular society” For this, Linton emphasizes that there exists the speciallinkage between the individual and the society As Child and Kieser’ understanding, culture is

simply a pattern of thought manners which are widely shared Meanwhile, Gooenough

believes that culture is a set of belief or standards shared by a group of people which help theindividual decide what is, what can be, how to feel, what to do and how to go about doing for

By this understanding, the individual can follow different cultures with different groups In aparticular situation, the individual might switch to the suitable culture which is suitable forthem

According to Philip Kotler (2003), culture, subculture, and social class are particularlyimportant influences on consumer buying behavior Culture is the fundamental determinant of

a person's wants and behavior The growing child acquires a set of values, perceptions,preferences, and behaviors through his or her family and other key institutions

Each culture consists of smaller subcultures that provide more specific identification andsocialization for their members Subcultures include nationalities, religions, racial groups, andgeographic regions When subcultures grow large and affluent enough, companies oftendesign specialized marketing programs to serve them (chapter 7, p.183)

Multicultural marketing grew out of careful marketing research, revealing that differentethnic and demographic niches do not always respond favorably to mass-market advertising.Recent study done by Nielsen Vietnam in June 2009 on consumer behaviors in both cities of

Ho Chi Minh City and Hanoi Capital, shows a number of behavior differences betweenconsumers in each location That helps marketers to apply different campaigns in advertising,promotion or so on in each location to gain the customer satisfaction

However, regarding to the culture, it much more than a process but it is collection ofelements including which are set to form culture As for Jean-Claude Usunier and Julie AnneLee, there are four important elements of culture: language, institutions, material productions,symbolic productions Language is considered as mean of humankind communication andespecially it has prominent role for culture Language conveys more than the words itself but

it implies meaning, feelings, attitude, and also culture As language was born together with thecommunity and it closely connect individual in the community Obviously, language isindispensable element to form a community where we are born, raised up and share worldview as well as our social behavior

In addition to language element, institution is also very crucial in cultural process.Institution can be a family, a group of people who are sharing same value and comply withsame rules As can be seen easily, family is institution where members are integrated by bloodconnection or marriage commitment based on reproduction principles Furthermore,territoriality is also principle to form institution That is to say cooperation among peoplecoming from the same village, same region, or same territory shall be stronger than others.The principle of institution also based on sex, physical traits, age and it functions to helpconnect people For example, there exists women union for the same sex, youth union forsame age… Moreover, institution also can be defined by spontaneous tendency, occupationaland professional activities… Especially in modern society, people tend to have more demands

to join in different institutions

Material production also is the third element of culture Production is diverse and itincludes machine, factories, paper, instruments, media of communications, food, ect, Asquoted by the writer of “Marketing across Culture”, there exists many different culturalattitudes to the material world and people shall give preference or priority to production andmaterial achievement This can be seen from the difference between India and China asreferring to Kumar Indian deems to respect their inner spiritual world based on Brahmanism.They shall emphasize the spiritual value over the wealth or acquisition Meanwhile, Chineseworld-view is based on Confucian to achieve harmonious social order That is to say itappreciates the meritocracy and hard working and action in the material world rather thanspiritual world

The final element to form the culture is symbolic production Symbols, like artifacts,are things which act as triggers to remind people in the culture of its rules, beliefs, etc Theyact as a shorthand way to keep people aligned

Symbols can also be used to indicate status within a culture This includes clothing,office decor and so on Status symbols signal to others to help them use the correct behaviorwith others in the hierarchy They also lock in the users of the symbols into prescribedbehaviors that are appropriate for their status and position There may be many symbolsaround an organization, from pictures of products on the walls to the words and handshakesused in greeting cultural members from around the world

2.4 Cross culture consumer behavior

As by Jean-Claude Usunier and Julie Anne Lee, the influence of culture on selected aspect ofconsumer behavior has been shown as the table below:

Table 2.2: Possible impacts of cultural differences on selected aspects of consumer behavior

Aspect of consumer

behavior

Impact of cultural differences: Value involved/issues to be addressed

Perception Perception of shapes, colors and space varies across cultures

Motivation Motivation to own, to buy, to spend, to consume, to show, to share,

in the society

Influence processes across age groupsHow is purchasing power distributed across generations?

Self concept

Group influence Individual/collectivism

To what extent are individual influenced in their attitude andbuying behavior by their group?

How does consumer behavior reflect the need to self-actualizeindividual identity or to manifest group belonging?

Social class Are social classes locally important?

Is social class belonging demonstrated through consumption?

What type of products or services do social-status-mindedconsumers buy? Are there exclusive shops?

Sex role The sexual division of labor; who makes the decisions? Shopping

behavior Who shops; he or she, both of them?

Attitude changes Resistance to change in consumer behavior (possibly related to

high level of uncertainty avoidance, past orientation, fatalism)especially when change could clash with local value and behavior(e.g resistance to fast-food restaurants in France)

Decision making Family models (nuclear versus extended family) involvement

Compulsive buying Purchase Loyalty Environment factors, especially legal Influence of

salespersons on clientsPost purchase Perception of product quality

Consumer complaining behavior Dissatisfaction/Consumerism

(Source: Marketing Across Culture)

Based on the table above, it is important to acknowledge the co-relation between theculture and consumer behavior Depending on each feature of consumer such as age, sex role,social class, attitude changes, decision making, perception and so on, there exist specificimpact on the relevant cultural differences

2.5 Advertising and consumer behavior

As mentioned above, there are not only co-relation between cultural differences andconsumer behavior, but also the linkage between advertising and consumer behavior Thefact shows if the consumers feel the advertising as expected by the advertising, theadvertising achieve the success For example, after watching the ads, what remains in theconsumers’ mind is their reliability of product, or advance technology or the trendy fashion

The advertising is considered as irreversible effect Meanwhile, if the feelings of the consumers are opposite to the objectives of the advertiser, the advertising causes reverse effect

It can be said that the process to make the consumer accept their product through theadvertising is long and complicated one The advertising is not only restrained to theinformation provision but it is expected to trigger the consumer for the demand andpurchasing As referred from the diagram below, the advertising input via the messagecontent and media repetition comes to filters through motivation and affect to the consumers.There are three stages for the purchasing process of the consumers: the 1st stage: cognition,the 2nd stage: affect/feeling and the 3rd stage: experience After the advertising helps formulatethe consumer’s experience, it shall reach to the final consumer behavior

Figure 2.5: Advertising impacts on consumer behaviors

(Source: D.Vakratsas & T.Ambler, How Advertising Works, Journal of Marketing,

mouth communication rather than information discussed in media mass Secondly, Asianconsumers tend to follow the group consensus until there is evidence that new product isbetter In a sample of eleven western European countries, it found that consumerinnovativeness was higher than people from more individualist culture, from more masculineculture from cultures with less uncertainty avoidance They found that uncertainty avoidanceand collectivism were both positively related to loyalty, suggesting that companies enteringmarkets with these characteristics will face more obstacles Where consumers are more loyal,

it may be necessary to build a loyal consumer base from scratch Where consumers are lessloyal, it may be more effective to persuade consumers switch from established brands to newbrands

 Consumer involvement

The involvement of the consumer in products purchase or consumption varies acrossculture Yang (1989) depicts the Chinese consumers as being in a low-involvement situationwhen products are used for private consumption In this case, Chinese consumers are likely

to adopt a simple cognition, favoring the physical function of the product and moreconcerned with the price and quality Conversely, there is high level of purchase involvementwhen Chinese consumers buy products for social symbolic value These consumers greatlyvalue social harmony and the smoothness of relationship within the extended family.Therefore, the social significance of a product is very important because it may expressstatus, gratitude approval or disapproval According to study of Kim et al (2002), it examinedthe relationship between need and loyalty for women in their clothing purchase and it willhave higher involvement In line with his research, Chinese female consumers brought thesame brands to satisfy experiential need and social needs, and only to a much lesser extentfor functional needs

2.6 The link between culture and TV advertising

In this dissertation, the author would like to focus mainly on the correlation between TVadvertising and culture Among other type of advertising, TV is the most popular mean andhas many advantages In TV advertising, the audience can see, hear, and feel the productthanks to the combination of sound, music, and color through impressive messages to theaudience

As can be referred to the advertising dimensions and culture elements, there alwaysexist cultural factors in advertising Culture is indispensable factor in communication processand it presents in all aspects of our daily life and advertising is no exception That is to sayculture is embedded in the language, the color, the image, the sound and also the feeling

When advertising is on, the audience immediately has negative or positive feelings They donot like the ads because they hate the sound in the TV ads, or because they don’t like thecontents of the ad or they just don’t like because of the actors/actress in the Ad clips.Meanwhile others can have positive feeling because of the exact reasons analyzed above Wetake the example of one TV advertising program on Moon Cake by Kinh Do, the audience canhear the sound (the language), institutions (the family), material productions, symbolicproductions (the family tradition)

Jonna L Holland, University of Nebraska-Omaha studied on the “impact of culturalsymbols on advertising effectiveness” and he has proposed the theory of interculturalaccommodation Jonna and his partners in the study find the answer of marketers “How canmarketers enhance communication by using the target group’s language, symbols, and culturalmarkers” As the world becomes more diverse and intercultural interactions expand,marketers are increasingly aware of the need to improve communication with groups fromvarying cultural backgrounds.? The Theory of Intercultural Accommodation help us to answerthe question: “How does the presence of cultural symbols in an ad impact its effectiveness?What happens when customers react negatively to accommodation attempts, and whathappenhis zs when they react favorably?”

As for Jonna, in the context of intercultural communication, companies attempt toaccommodate their targeted audience by adapting their messages to the receivers’ culture.They often go beyond merely matching their target’s speech or language styles, however, anduse many aspects of cultural symbols to become more similar to and gain the approval of theiraudience In the study research, The author concludes the following points:

 People who identify strongly with their ethnic group will have stronger affectiveresponses to the use of cultural symbols in advertisements

This states that respondents with stronger ethnic identification will have strongeraffective responses tothe use of cultural symbols in ads as compared to weaker ethnicidentifiers The consumer’s feelings about the ad are often the primary determination of theirattitude toward the advertisement

 Ad evaluations will be significantly correlated with affect

The second hypothesis states that attitude toward the Ad will be significantly correlatedwith affective response across all treatment conditions Affect and Attitude toward the Brand.Brown and Stayman’s (1992) provided support for a strong direct, as well as an indirect,influence of Ad Attitude on Brand Attitude Given the strong correlation between affect andAttitude toward the Ad, it is fairly safe to predict a relationship between affective response to

an ad and Attitude toward the Brand In the context of ethnically targeted advertising, in fact,this correlation was found Pitts et al (1989) studied the relationship between actor’s race andviewer’s responses to an advertisement in the context of positive portrayals The authorsreported a positive correspondence between brand evaluations and affect when the actor was

of the same race as the viewer For positive affect resulting from the use of cultural symbols

in the ad, similar results are expected in this study

 When consumers experience a positive affective response to the use of culturalsymbols in an advertisement, the direct correlation between Affect and Attitude toward theBrand will be stronger than for those who have a negative affective response or those who seeadvertisements with no cultural symbols

This predicts that Affect and Attitude toward the Brand will be more highly correlated inthe positive affect condition than in the control or negative affect condition

 Negative affect resulting from the use of cultural symbols in advertisements will impede the effectiveness of advertisements as measured by feature recall

 Positive affect resulting from the use of cultural symbols in advertisements willenhance the effectiveness of ads as measured by feature recall

CHAPTER III: RESEARCH FINDINGS

In this part, the author would summarize all the findings which are resulted from bothprimary and secondary information As the survey is conducted in Hanoi and the interviewsamples are peoples living in Hanoi, thus the results do not represent for the generalVietnamese for those samples

3.1 Television Adverting in Vietnam

Television service providers in Vietnam

As mentioned above, we do have thoroughly understanding on the linkage betweenadvertising and culture In this part, the author will analyze current TV advertising which isdominant media in Vietnam

In Vietnam, there are around 60 central and local television broadcast firms VietnamTelevision (VTV) and Vietnam Multimedia Corporation (VTC) are the biggest national firmsfollowed by the strong development of local television firms such as Hanoi Television, HoChi Minh Television, and other local televisions With the long development history, VietnamTelevision offers free channels such as VTV1, VTV2, VTV3, VTV4, VTV5, VTV6, andVTV9 nationwide 1995 is marked by the new launch of VTV3 with many advertisingprograms which have sponsored for the television operation It cannot be denied that the birth

of VTV3 has triggered the strong development of immature advertising industry Current,thanks to booming of TV services with many channels including HBO, CNN, DisneyChannel, Cinamax, VCTV1, VCTV2, etc., advertising industry has more “land” for thedevelopment TV shopping is the persuasive evidence for this as it is channel for onlyadvertising

According to the report by TSN for three year 2006, 2007, and 2008, there has beenincreasing of the rate of TV owning in household in Vietnam As for 2008, nearly 99%peoples interviewed own TV and this number is expected to increase in the coming future.This fact indicates that Television is the best communication means which can reach to almostthe population

This claim has been confirmed by the data survey by TNS Vietnam conducted inJanuary and February 2010 On average, each urban household in the North has two TV sets,those in center is only 1.7 and in their South, 1.8 The rates for the rural areas are 1.4, 1.2, and1.3 respectively VTV1 and VTV3 are most favoured by viewers while HBO, Star Movies andCinemax are the leading foreign pay channels

Figure 3.1: Report on owing of electronic devices in Vietnam

(Source: TNS Media Habit Survey 2006-2008)

Based on result of the TNS Media Habit Survey for the base of male and female age15+ across four major cities (Ho Chi Minh, Hanoi, Da Nang and Can Tho), although there

have been more choices for other means of communication, TV is the best choice for theVietnamese to spend time

Accordingly, the time spending on TV in 2006, 2007 and 2008 is 295, 253, 233minutes/day respectively A recent study by TNS also indicated that in 2009 Vietnam spend anaverage 4.3 hours per day sitting before their TV sets, slightly more in the north with 4.6hours, while the figure is 4.2 hours in the south Generally, viewers prefer news andVietnamese films More audiences in the centre prefer game shows, while more southernviewers prefer Vietnamese TV series and reality TV programmes

Figure 3.2: Minutes spending on TV, Newspaper, magazine, Radio and Internet

(Source: TSN- Habit Survey 2006-2008)

The author’s survey also indicates that 44.57% of respondents spend from one to 3hours per days and the majority of the above respondents are women aged from 26 to 33 yearsold This can be easily understood as women in that age are almost married and they have tocare take of their family after working Because this questionnaire survey is mainly conducted

in Hanoi where the life pace especially is faster than other cities, they can enjoy many kinds

of entertainments Therefore, the average hours spending on television in big cities are lessthan other cities

25% of the respondents answer that they watch television for more than 4 hours Whatshall be noted from the survey below is that the objectives that spend more than 4 hours perdays are mainly male As shared, the male respondents who have more 4 hours for TV mainlysports programs such as football, tennis

Figure 3.3: Spending time on television

(Source: Author’s survey in 2010)

Figure 3.4: Advertising expenditure of Asia Pacific countries in 2008

Source: GroupM, TYNY December 2008, Estimated Net Expenditure (million USD) including agency

commission

Although global economy in general and Vietnamese economy in particular hasexperience hard time in crisis, enterprises have been more active in marketing and they aregenerous to their budget for advertising

Figure 3.5: Advertising growth in the first nine months

As for TNS, a market research company, the top 10 companies which spend the most foradvertising activities are listed in the table below:

Table 3.1: Top 10 companies spending expenditure on advertising for the first 6 months in 2010

Ranking position Company name

As can be referred from the recent report by Nielsen Vietnam, the advertising industryhas positive signals when 50% of business leaders plan to increase their advertising acrossTCV (29%) In brief, advertising have been acknowledged as the “dangerous weapon” of thebusiness and it shall be very promising industry in the future where “big guys” includingglobal and domestic companies do not hesitate to spend money on that

Advertising on Hanoi consumer behaviors

In order to understand the attitude of Hanoian consumer toward advertising, the authorindentify how long they spend on watching the advertising a day and what they think aboutthe TCV advertising

Figure 3.6: Time spending on advertising watch

(Source: The author’s survey in July 2010)

From the survey’s result by the author, nearly 49% of respondents in Hanoi spend lessthan 15 minutes a day on advertising and nearly 30% out of them watch TVC from 15minutes to 30 minutes The survey also indicates the majority of the group spending from 15minutes to 30 minutes is female

Obviously, in a typical Vietnamese family in general and in Hanoi in particular, womenare the shopper and decision makers or the influencer for their husband’s decisions They aremore patient then men and want more information of the products in detail before theirpurchasing decision In the focus group discussion, Mrs Phuong, 32 year old with 3 year old

daughter shared: “I like to watch TVC advertising especially when my daughter has meal The sound, image of the advertising attract her and she can eat more In addition, I can know about new products as well its information for more options My husband does not care much about it”

Mrs Phuong’s ideas seem to share the common points with other female shoppers Infact, man are less attractive for the TVC advertising then women as they are not patientenough to watch the advertising except the products are their current interest As shared bymale interviewees, they often switch to other channels when the advertising is broadcasted.Notably during our discussion with Mrs Tuyen, 59 year old who has retired for four years, weacknowledge that middle aged or old women seems to be more strict for the TV advertisingand they tend to not trust in advertising until they physically see the product The result fromthe qualitative methods has been verified by the author’s survey result in Hanoi as the belowgraph:

Figure 3.7: TVC Ads impacts on purchasing behavior

(Source: Author’s Survey in July 2010)

Based on the result, 45.56% and 8.7% out of 92 respondents have moderate and highimpact by TVC advertising for their purchasing behavior and almost answers are female.Meanwhile, men tend to not have advertising impact on their decisions

We have interview with Mr Hung whose wife, Huong, 28 year old working for aforeign company who is always obsessed by her dry and damaged hair She spends much

money on shampoo and hair conditioner Her husband complained that “If you see the shampoos in our house, you will be sock As whenever she heard in TV adverting on new hair treatment products, she goes to supermarket to buy”

Another case can be referred from Ms Anh who is now raising 1 year son Although sheconsulted from her doctor for the milk suitable for her kid, her mother in law till insists her touse different product Her mother in law is much influenced by the milk advertised in TVbelieving those products shall be good for her grandson

The author also raised the same question on the advertising impact on respondents’purchasing behavior and our result is not surprising compared with the Nielsen survey result.According to the quantitative survey in 2008 by AC Nielsen there exists the differencebetween Hochiminh City’s consumers versus Hanoian consumer 6% of Saigonese answerthat they like to watch advertising and are affected by them Meanwhile, in Hanoi this number

is 23% That is to say people living in Hanoi deem to trust more in advertising and they aremuch easily influenced by other sources of information

As can be referred from the Nielsen survey, there is big difference on the answer to the

question: “How important is each of these factors in influencing purchase decisions?”

Television advertising has great influence on the Hanoians with 91% compared to theSaigonese with 41% Taking into consideration of the factors influencing the purchasingdecision, Hanoians are more careful as they refer most of all channels such as website, forum,and internet, recommendation from the seller, newspapers, and TV advertising Whereas,Saigonese mainly based on two main types: paper and television advertising This resultindicates that Saigoneses are more independent for their purchasing behaviors; meanwhile,Hanoians tend to more collective and their decisions are easily affected by others source ofreference

Figure 3.8: How important each of these factors in influencing purchasing decision of

Hanoians

(Source: Nielsen Regional Differences Quantitative Study, 2008)

From the analysis mentioned above, Hanoians and Saigonese have big differences onattitude on the advertising for the purchasing decision Therefore, this regional feature isnecessary to take into consideration of TVC advertising in Vietnam

3.2 Culture factors in advertising

As one of the main objectives to the research paper, the author has conducted the focusgroup discussion for one family with 5 members to define the cultural factor in advertising.Those group members watched the fives advertising clips: Coca Cola, Nestle Café, KFC andthey give comment/evaluation on the cultural factors Based on the opinions of interviewer aswell as the questionnaire survey with Hanoians, there are five factors: color, language, shape,sound/music and Vietnamese customs & practices

 Color

Color is considered as one of the key factors which bring the success TV advertisingprogram As resulted from the questionnaire survey, product color has made strong impression

in audience’s mind To some extends, the color perception of the products are strong enough

to make the audience think about the product when they saw the color We can refer to the