LV Thạc sỹ_Brand building and development in Lienvietbank

LEEDS METROPOLITAN UNIVERSITY FACULTY OF BUSINESS AND LAWMASTER OF INTERNATIONAL TRADE AND FINANCE LIENVIETBANK JOINT STOCK COMMERCIAL BANK – BRAND BUILDING AND DEVELOPMENT Dissertation

LEEDS METROPOLITAN UNIVERSITY FACULTY OF BUSINESS AND LAW

MASTER OF INTERNATIONAL TRADE AND FINANCE

LIENVIETBANK JOINT STOCK COMMERCIAL

BANK – BRAND BUILDING AND DEVELOPMENT

Dissertation prepared by

…

ID: 77084333

Supervisor: Professor …

January 2011

Statement of Originality and Authenticity

This dissertation is an original and authentic piece of work by myself Ihave fully acknowledged and referenced all material incorporated formsecondary sources It has not, in whole or part, been presented elsewherefor assessment

I have read the Examination Regulations and I am aware of the potentialconsequences of any breach of them

Signature:

Name: …

Date:

Table of contents

ACKNOWLEDGEMENTS 6

Chapter II: Literature Review 12

1.1 What is Brand? 12

1.2 Types of brands 14

1.3 What is the strong brand? 16

1.4 The benefits of strong brand 19

2.1 What is branding? 21

2.2 Branding Challenge and Opportunities 22

2.3 Strategic brand management concept 23

3.1 Overview of International and Vietnam banking industry 28

3.2 The nature of branding service, especially in banking industry 32

Chapter III: Research Methodology 56

Chapter IV: Solution for LienVietBank branding case 73

1 Strengthening the brand identity 73

2 Redesigning the brand identity elements 73

3 Making the brand identity consistent throughout 75

4 Improving brand management 75

5 Developing business incorporated with building brand 76

6 Training and engaging employees in building brand 77

7 Delivering compelling brand experience 79

8 Improving frontline staffs’ performance at service counters 79

9 Investing in advertising campaigns 79

Chapter V: Conclusion 81

APPENDIX 1: INTERVIEW QUESTIONS AND LIST OF INTERVIEWEES 86

APPENDIX 2: CUSTOMMER SURVEY QUESTIONAIRE 86

APPENDIX 3: REFLECTIVE SUMMARY 89

TABLE OF FIGURES Figure 1: HSBC Logo – Source: <http://upload.wikimedia.org/wikipedia/en/thumb/5/54/HSBC.svg/500px-HSBC.svg.png> 13

Figure 2: The CBBE Pyramid Source: Strategic Brand Management: Building, Measuring and Managing Brand Equity – K L Keller (2008) 17

Figure 3: Three key aspects that contribute to the assessment of brand success criteria of Interbrand Source: <http://www.interbrand.com> 18

Figure 4: Top 10 Global Brands in 2010 and HSBC rank Source: <http://www.interbrand.com> 19

Figure 5: Banks in Vietnam Source: SBV and Internal Data of 29

Figure 6: Lending Market share of banks in Vietnam (2000-2010) Source: SVB Data 30 Figure 7: Capital mobilization market share of banks in Vietnam (2000- 2010) Source: SVB Data 30 Figure 8: Number of banks in Vietnam (1991 -2010) Source: SBV Data 31 Figure 9: LienVietBank Organizational System 41 Figure 10: The LienVietBank Business Development Plan for 2010 45 Figure 11: Names of some Vietnamese banks 48

http://polygon.vn/VN/Admin/Media/Picture/Article/TinTuc/BaiViet/YNghia MotSoLogoVietNamPhan2/LienVietBank.jpg 48 Figure 13: Do you know why LienVietBank has been building its brand? 62 Figure 14: Are you aware of the brand objectives? 62 Figure 15: Can you recall the key messages of LienVietBank including mission, vision, values statements? 63 Figure 16: Do you understand your role in building LienVietBank brand? 64 Figure 17: Customers’ awareness of LienVietBank 65 Figure 18: Customers’ thought about the name LienVietBank 66 Figure 19: The frequency customers hear about LienVietBank slogan .66 Figure 20: Customers’ rating of LienVietBank logo 66 Figure 21: The personality of customers associate with LienVietBank .68 Figure 22: Customers’ familiarity with LienVietBank messages 68 Figure 23: Customers’ beliefs about LienVietBank 69 Figure 24: Customers’ dissatisfaction with LienVietBank’s products and services 70 Figure 25: The issues customers complain on LienVietBank’s products and services 71 Figure 26: The most important thing to customers when dealing with LienVietBank 71

Vietnam’s banking sector has developed rapidly in recent years By 2007,there have been five state-owned commercial banks, five joint venturebanks, 37 joint-stock commercial banks and 33 branches of foreign banks.After WTO accession, State bank of Vietnam has been receivingconsiderable numbers of applications for opening joint stock commercialbank from domestic investors (LienVietBank and TienPhongBank are thefirst two banks permitted to open among the others in 2008) And underWTO rules, two leading European banks HSBC and Standard Charter Bankalso have the license to open their independent branches In addition,Deutsche Bank, BNP Paribas, Cathay Bank and OCBC Bank arestrengthening their ties with local institutions and opening ones

In such competitive marketplace, where large number of banks providealmost the same services, branding can be the final factor that affects aconsumer's decision of where to bank “A good brand name is gold in thefinancial services industry Banks rely heavily on their reputation After all,banking only works if the consumer is willing to trust the bank companywith large sums of money” (Andrew, 2003) Branding is a top priority forVietnam’s commercial banks, to achieve a sustainable competitiveadvantage, particularly when the financial and banking market isdeveloping strongly

Vietnamese banks become much more aware of the importance ofbranding but relatively few of them understand the method of buildingstrong brand Up to now there has not been strong brand in Vietnambanking sector LienVietBank officially opened in March, 2008 As a newbrand, it has to compete with not only established bank brands but alsoother new brands The bank needs to consider and implement effectivebranding activities from the beginning

Chapter I: Introduction

1 Background of the Study

1.1 Vietnam banking industry overview.

Vietnam’s banking sector has developed rapidly in recent years.Vietnamese commercial banks are divided into three main groups:State-owned commercial banks (SOCBs); Joint stock commercialbanks (JSCBs); and Foreign and joint venture commercial banks(JVCBs) By 2007, there have been five state-owned commercialbanks, five joint venture banks, 37 joint-stock commercial banks and

33 branches of foreign banks After WTO (World Trade Organization)accession, State bank of Vietnam has been receiving considerablenumbers of applications for opening joint stock commercial bankfrom domestic investors (Lien Viet bank, Lien Viet bank are the firsttwo banks permitted to open among the others in 2008) And underWTO rules, two leading European banks HSBC (Hong Kong andShanghai Banking Corporation) and Standard Charter Bank also havethe license to open their independent branches In addition,Deutsche Bank, BNP (Banque Nationale de Paris) Paribas, CathayBank and OCBC (Over-sea Chinese Banking Corporation) Bank arestrengthening their ties with local institutions and opening ones

In such competitive marketplace, where large number of banksprovide almost the same services, branding can be the final factorthat affects a consumer's decision of where to bank “A good brandname is gold in the financial services industry Banks rely heavily ontheir reputation After all, banking only works if the consumer iswilling to trust the bank company with large sums of money”(Andrew, 2003) Branding is a top priority for Vietnam’s commercialbanks, to achieve a sustainable competitive advantage, particularlywhen the financial and banking market is developing strongly

Vietnamese banks become much more aware of the importance ofbranding but relatively few of them understand the method ofbuilding strong brand Vietnam banking industry is in an early stage

of development It is lacking up-to-date banking products and

services; modern technology; strong corporate governance… Up tonow there has not been strong brand in Vietnam banking sector.

1.2 Lien Viet Joint Stock Commercial Bank

LienViet Joint Stock Commercial Bank (LienVietBank) was grantedofficial license with registered charter capital of VND 3,300 billion inMarch 2008 The bank had honor of being one of the first two bankswhich State bank of Vietnam (SBV) licensed after 10 years ofstandstill on licensing new bank Lien Viet bank was officially opened

in March, 2008 after nearly two years of preparation

Three founding members of the bank are Him Lam Corporation;Saigon commercial Corporation (SATRA) and Tan Son Nhat airservices Corporation (SASCO) The considered investment andalliance brought about by these organizations has given Lien Vietbank undisputable legacy in international trade, construction andbuilding industry, services and finance

The current banking market and economic climate have taught LienViet bank that strong brand will become more important than everbefore Lien Viet bank started focusing on branding The bank hasconsidered and implemented many branding activities during oneyear since its debut It is time to track the effectiveness of thebank’s branding effort after one year of foundation (June, 2008 –June, 2009) As a new brand, it has to compete with not onlyestablished bank brands but also other new brands The bank needs

to consider and implement effective branding activities from thebeginning

3 Significance of the Study.

The key purpose of this research is to assess the effects of Lien Vietbank branding efforts In this research, the author approached theissue by listing and analyzing all of the branding activities, which the

bank has implemented during the past one year; in order to discoverthe strengths and weaknesses of those branding activities Andthrough customer survey and employee in-depth interviews, theauthor determined the effect of the bank’s branding activities.Taking into account of such findings, some recommendations wereintroduced for enhancing the effectiveness of the bank’s branding

4 Research Objectives and Research Questions of the Proposed Study

4.1 Research Objectives

• To understand the branding activities, which Lien Viet bank hasimplemented during the past one year

• To point out the strengths and weaknesses of the bank’s branding

• To discover the effects of the bank’s branding efforts

• To suggest Lien Viet bank to enhance the effectiveness of itsbranding activities And/or giving supplementary elements which thebank is lacking in their branding activities and strategies

• How have those branding activities been implemented?

• What were the strengths and weaknesses of the bank’s branding?

• What were the effects of the branding efforts which the bank hadmade so far?

• What should be improved for the bank’s branding activities? Whatother branding activities Lien Viet bank need to do?

5 Research Methodology and Research Design.

In principle, the qualitative research method has been applied inundertaking the study The author’s approach is divided into twophrases The first phrase is desk research in which a large quantity

of literature and Lien Viet bank’s branding activities was reviewedand analyzed The second phrase involves a field study that consists

of customer survey and in-depth interviews with the bank’semployees

In order to determine the effect of Lien Viet bank’s branding efforts

on engaging employees to deliver its brand, and building customer’s

perceptions of the brand, the author has conducted a number of depth interviews with Lien Viet bank employees to find out how theemployees engage in delivering the brand In addition, a customersurvey on brand awareness, brand associations and customer hasbeen carried out.

Chapter II consists of four sections describes general knowledgefound in the literature review The first section reviews majorconcepts and definitions of brand The second section elucidates thebranding activities This section also introduces the strategic brandmanagement introduces the concept of the strategic brandmanagement The third section addresses the branding in bankingindustry And the last section provides an insight into Lien VietBank’s branding activities

Chapter III describes the research strategy as well as the methods ofdata collection and analysis adopted to implement this research.Moreover, this chapter identifies the limitations and potentialproblems of the chosen research strategy and methods And finally,

it deals with the data gathering and data summary process

Chapter IV provides the author’s recommended solution of how toimprove branding activities in LienVietBank The solution includesthe strengthening the brand identity, the improvement of the brandmanagement and the delivery of the compelling brand experience

And all recommendations are making based on the survey that hasbeen established previously.

Chapter V analyzes the conclusions for Lien Viet Bank to reduce theweaknesses and enhance the effectiveness of its branding activitiesand strategies

Chapter II: Literature Review

1 Brand

1.1 What is Brand?

Nowadays, firms are increasingly realizing the importance of their brandnames among their products and services There are many argumentsabout the exact definition of the brand between scholars Some of themassumed that brand is related to marketing program with the first P –Products; others postulate for certainty that brand is separate frommarketing program and should be seen as the importance aspect thatfirms need to concern To understand what the brand philosophy is, weshould firstly examine some brand definitions Branding has been aroundfor centuries as a means to distinguish the goods of one producer from

those of another In fact, the word brand is derived from the Old Norse word brandr, which mean “to burn”; as brands were and still are the

means by which owners of livestock mark their animals to identify them.1

According to AMA (American Marketing Association), a brand is a “name,

term, sign, symbol, or design, or a combination of them, intended toidentify the goods and services of one seller or group of sellers and todifferentiate them from those of competition” (American MarketingAssociation) In technically words, brand is the distinguished feature of thefirm within the competitors and when a marketer designs a name, term,sign, symbol, etc, he or she is building the brand or in other words brand issimilar to brand elements Brand elements include Brand Names, URLs,Logos and Symbols, Characters, Slogans, Jingles and Packaging

• Brand Names: is typically called trademark and often captures thecentral theme or key associations of a product to customers Brandname is the most difficult element for marketer to change so theyhave to carefully follow the procedure of naming a brand like: easy

to pronounce and spelling even in translation to another language,has the meaning and the familiarity, unique and different from othercompetitors

1 Interbrand Group, World’s Greatest Brands: An International Review (New York: John

Wiley, 1992)

• URLs: stands for Uniform Resource Locators which is the web pageaddress, refers to domain names With the improvement ofinformation technology lead to the development of electronicbusiness, the URLs are very important with every firm, especiallyinternational firms

• Logos and Symbols: refers to visual element of the brand

• Characters: relates to special type of brand elements that using thehuman or cartoon characters to represent the brand

• Slogans: are short phrase that communicate descriptive orpersuasive information about the brand

• Jingles: are musical messages around the brand that deliver to thecustomers

• Packaging: is the design of wrappers for products Packaging is notonly for protecting the products, but also for other purposes likeadvertising, customer usage, present the corporation responsibilities(recycle packaging), etc

An illustration of specific brand is provided following is the example ofHSBC:

Figure 1: HSBC Logo – Source:

But the concern is that whether the brand simply refers to the outwardappearances

An internationally agreed legal definition for brands does exist “A sign or aset of signs certifying the origin of a product or service and differentiating

it from the competition” (Kapferer, J.N 2004, page 10) A key point in thislegal definition is that brands have a birthday which is their registrationday From that day they become a property which needs to be defendedagainst infringement and counterfeiting Brand rights disappear when theyare not well enough defended, or if registration is not renewed One of thesources of loss of rights is in degenerescence This occurs when acompany has let a distinctive brand name become a generic term

The now classic definition of brand which focuses exclusively on therelationships customers have with the brand is: “A brand is a set of mentalassociations, held by the customers, who added to the perceived value of

a product or service” (Keller, 2008, page 2-10) The definition alsoindicates the gain in perceived value brought by the brand

1.2 Types of brands

As the different types of products, there are also various kinds of brands,which are physical goods, services, retailers and distributors, onlineproducts and services, people and organizations, sports, arts andentertainment, geographic locations, ideas and causes

2 HSBC from Wikipedia – the free encyclopedia Retrieved on 26 th December, 2010 at link

<http://en.wikipedia.org/wiki/HSBC#Brand_and_advertising>

• Physical Goods: Physical goods’ brands are the most popular type ofbrand in the business environment It is related to the consumergoods, with many successful brands like Coca Cola, Apple, Sony,Uniliver, Toyota, etc Nowadays, the competition of consumer goodsindustry requires the firms make more efforts in building the strongbrand

• Services: To build the good brands for services industry, themarketer has to face the challenge in which services are lesstangible like physical products Examples of the successful servicesbrands are Hilton Hotels in hospitality industry, TNT Express indelivery industry, HSBC in banking industry, Ernst & Young inauditing consultant industry, or British Airways in airline industry,etc

• Retailers and Distributors: Retailers and Distributors also have theirown brands because the strong retailers and distributors brands arevery important for them to gain the customers Some famousretailers and distributors brands are Wal-Mart, Mark & Spencer,Tesco, etc

• Online Products and Services: With the improvement of informationsystem its wide cover to every aspects of life, online products andservices brands are born to save time, cost and geographicaldistance for customers Because customers cannot “look” and “try”the products directly, the brand equity is quite significant with onlinebusinesses, such as eBay, Amazon, Google, etc

• People and Organizations: People and Organizations brands are thenew trend in modern life It is used by some entertainers, athletes,politicians, which refer to the brand of their reputation, such asDavid Beckham, Bill Clinton, Madonna, or organizations like NationalGeographic, WTO (World Trade Organization), etc

• Sports, Arts and Entertainment: is the special case of people andorganizations brands Illustrations of these are Olympic, World Cup,Cannes, Oscar, Movie, Music, etc

• Geographic Location: Geographic Location brands are often used bythe tourism industry They can make a brand for a place, a building,

even a country For example, Singapore with “Your Singapore”,Malaysia with “Truly Asia”, etc.

• Ideas and Causes: Numerous ideas and causes are branded, mostly

by the NGOs (Non Government Organizations), such as AIDS ribbon

1.3 What is the strong brand?

K L Keller has provided the CBBE (Customer Based Brand Equity) Model

to answer for these questions: What makes strong brand? From theperspective of the CBBE model, in order to make a strong brand, firmneeds to have the brand knowledge with two dimensions: brandawareness and brand image The marketer must not take shortcut anysteps in the CBBE model, to avoid the mistakes and failures Keller alsosaid that “when the consumer has a high level of awareness andfamiliarity with the brand and holds some strong, favorable, and uniquebrand association in memory” (Keller, 2008, page 53), customer-basedbrand equity will occur

In customers’ mind, the strong brand needs to have salience,performance, imagery, feelings, judgments and resonance dimensions.Salience means that the product-category structure must not always betop-of-mind of customer, but at the right time and places, it must be Inother words, the products must be organized in customers’ memory atreliable point Performance means that products must have primarycharacteristics and supplementary features; reliability, durability, andserviceability; with good style and design, at reasonable prices Imagerydimension is evaluated by customers based on customer profiles such asdemographic and psychographic characteristics, reference group, etc;purchase and usage situations; personality and values; history, heritage,and experiences, etc Whereas, the judgment dimension is the waycustomers assess the brand about the quality, consideration, superiority,and creditability The feeling more refers to the emotional dimension of thecustomers at how they feel about the brand, such as fun, excitement,protective, safe, etc And finally, the resonance reflects a completelyharmonious relationship between customers and the brand, such asfrequency and amount of repeating purchases, feeling love and being

proud of brand, having sense of community, and seeking brandinformation and sharing with others by joining the forum or website Somesuccessful brands based on this model may start with Apple, HarleyDavidson, Vespa, Blackberry, etc

Figure 2: The CBBE Pyramid Source: Strategic Brand Management: Building, Measuring and Managing Brand Equity – K L Keller (2008)

But in the total view, including financial and competitive evaluation, whatare the most successful brands in the world? The annual report ofInterbrand about Top 100 Global Brands 2010 has used the method that islooking at the ongoing investment and management of the brand as thebusiness asset

There are three key aspects that contribute to the assessment: thefinancial performance of the branded products or services, the role ofbrand in the purchase decision process and the strength of the brandwhich are:

Figure 3: Three key aspects that contribute to the assessment of brand success criteria of Interbrand Source: <http://www.interbrand.com>

From these criteria, they rank the top 100 global brands in 2010, and wecan see the familiar names in the top 10, such as: Coca Cola, IBM,Microsoft, Google, Nokia, etc and HSBC is also ranked as the numberthirty-second “Despite the damage inflicted by the financial crisis on allfinancial services brands, HSBC remains the most differentiations in themarketplace and, like J.P Morgan, emerged with its brand intact Yet while

it still aims to be the leader in its sector, customers are watching it closelydue to its involvement in the subprime mortgage scandal, and even morerecently, the data theft of its customers’ personal account information.Despite being well known due to a heavy media presence, HSBC’s lack ofretail presence in non-core markets has consistently harmed the brand Itactively seeks the expansion opportunities, particularly as brands likeSantander extend their reach This year, HSBC has continued to explore itsopportunities in emerging markets, though the economic results in Asiawere less rosy than anticipated” (Interbrand, 2010)3 Here is the top ten ofglobal brands 2010:

3 From the website http://www.interbrand.com Retrieved on 23th November, 2010

Figure 4: Top 10 Global Brands in 2010 and HSBC rank Source:

<http://www.interbrand.com>

1.4 The benefits of strong brand

The strong brands are supporting various firms and organizations creatingthe strong reputation day to day There are numerous competitiveadvantages related to a strong brand

Firstly, the strong brand can be defined as the competitive advantages ofcompany among other competitive advantages like R&D (Research andDevelopment) process, good customers’ services or high quality products.Therefore, with such strong and unique competitive advantage, firms canincrease their market share among various competitors because they haveless vulnerability to competitive marketing actions as well as earning moremargin profits

Secondly, in customer perception, a strong brand generally involves thegood quality, good services, safety, last-long usage, etc, so the customers

are more willing to pay a higher price for strong brands Consequently, themore inelastic consumer response to price increases and more elasticconsumer response to price decreases For example, there are manycustomers say that between two banks: HSBC and one new and unknownbrand bank, if the unknown brand bank has the equal or even higherinterest rate, they still decide to choose HSBC for their transactionbecause as their perception, HSBC is a famous global bank related to lessrisky, more stable and safer

In addition, a strong brand simplifies customer’s choices When a customerhas purchased a brand, “he/she would not need to go through the entiredecision-making process again, but instead will rely on past experience toguide them Strong brands will thus help to reinforce clients’ decision tochoose a firm and to stay with them over time” (Steven, R, 2003)

Moreover, strong brand helps firms to receive the trade corporation andsupport easily which means that the partners will want to work with suchfirms, opening the opportunity for licensing as well as the company canthink about the brand extension plan or up-selling and cross-selling theirproducts There are various illustrations of these like the case of somefamous fashion brands such as Hermes or Louis Vuiton, besides thefashionable products, they also have some limited collection like Hermesbicycle, Louis Vuiton helicopter and get success Or Converse All Startshoes expand their products category to clothes with premium prices;Apple with Iphone mobile, Google with Android system, G-mail andYouTube, etc

Finally, people are naturally attracted to firms with strong brands, whichtranslate to a better pool of talent applying for positions Once employeesjoin a firm, if they see evidence that the brand is well managed and isprioritized in the company, they are more likely to have confidence in thefirm and will thus more strongly support their management decisions

2 Branding

2.1 What is branding?

Understanding the nature and the benefit of strong brand is not enough,it's important to build and manage them effectively In other word, it isbranding According to B Chiaravalle & B F Schenck the concept ofbranding is “the process of building a positive collection of perceptions inthe customer’s mind” (Chiaravalle, 2007, page 21)

According to ID Branding – a full service branding agency in Portland,

“branding, at its best, is more than a marketing responsibility - is anintegrating business practice Branding should span organization, weavingacross and through personal interactions, corporate culture,communications, products and services It should both reflect and informbusiness decisions, and it should guide all of customer contact points.Brand should be championed by top management and embodied from theinside out by all of employees, product offerings and communications - atall times Branding should never be treated as a project that has abeginning or an end” (Hahn, 2007)

There are some trends in branding activities that firms need to upgradeand follow Two trends of branding will be discussed lately in thisdissertation are narrow (niche) branding and branding to aim atcustomers’ senses

Firstly, narrow or niche branding is warmly responded by the medium sizefirms because they often confused that participating in the large scale ofcommunicating campaign will bring more profits but in fact, they have tocompete with big size firms and rarely get the success The opportunity forthese medium size firms is niche or narrow branding which begins with thetypical segment then classify such segment into the smaller groups thathave similar lifestyle and interest Finally, it creates the brand image thatall experiences, accommodation, content, etc seem to be born for thosecustomers group only Especially, it makes customers feel that they caninteract, even influence and own the brand, such as Harley Davidson,Apple, Dell, etc

The second trend is the branding which aim at customers’ senses.Normally, the brand attracts the eyesight and hearing the sound But withdifferentiation, Singapore Airways can satisfy nearly all senses of theircustomers by their foods, services, attitudes, interior, music, etc

2.2 Branding Challenge and Opportunities

Although brands may be important to both customers and firms, in reality,brand management is really a difficult process Any changes in thebusiness environment create both challenges and opportunities for thefirm to build the strong brand

The recent customers are defined as savvy consumers Increasingly, bothcompanies and customers contact with the new marketing and brandknowledge, product innovative because of the expansion of internationalbusiness is fading the edge between different nations Consumerinformation and support is available in every place provides to customersthe comparison between different brands They also have more options tochoose the brand and increasing demand of products and servicesperfection However, those changes can also be the opportunities for thefirms, customers are more likely to believe in what they can see, touch orhear directly and if the brands that they choose meet their satisfactionthey are more loyalty with such brand Savvy customers sometimes, canhelp firms to evaluate and improve their brand activities When customersfeel that they are in love and belonged to the brand association they mayattached with the specific brand, join into the brand, discuss and shareinformation with other, even become the one who advertise effectively forbrand

Another significant change in the branding environment is the proliferation

of new brands and products which is the result of increasing product lineand brand extensions Therefore, one brand name can represent a number

of different products Sometimes, it makes customers confused but inother case, firms have opportunity to up-sell and cross-sell their products.For example, Johnson & Johnson has the range of shampoo, shower, soap,powder, etc for babies and now they also develop the products for adults Media fragmentation is also the significant change that affects the

branding environment In details, this is the fragmentation of traditionaladvertising media like television, newspaper, radio replacing by theemergence of interactive and nontraditional media, promotion and othercommunication alternatives like online news, forum, blog, social network,etc Some companies looked at this trend as the threat but others defined

it is as the opportunity for them For examples, the cost to advertise on TV

is much more than the cost to build the forum or social network thatcustomer can discuss about the products and services They also inventnew ways to promote brands such as sports and event sponsorship likeRed Bull, in-store advertising; mini-billboards in transit vehicles like bus ortaxi; products placement in TV like Audi Car in the movie Transporter,Mercedes Car in James Bond series, etc

The other thing that every firms feel worry is the increased competition.Both demand-side and supply-side factors have added to theenhancement in competitive concentration On the demand-side,consumption of some specific goods and services has reached thematurity stage in PLC (Product Life Cycle), even the decline stage so thefirms need to increase the market share by taking away from theircompetitors On the supply-side some changes like globalization, pricewar, brand extension and deregulation lead to the increase in competitionbetween the firms

In addition, the costs of introducing new products or reinforcementexisting products has increased rapidly, making it difficult to keep trackwith the investment and level of support that brands were able to receive

in the past

2.3 Strategic brand management concept

a Brand Positioning and Values

Firstly, firms need to create the customer value because it is the

foundation of brand resonance and loyalty With the purpose ofadding value for customers, firms usually use the customer-centricmodel Some famous brands, however, still have to pay the lessonfor making mistake when thinking little of customers focus Forexample, “by 2005, Volkswagen experienced the stagnant sales and

lost money in its critical United States Market and CEO BerndPischetsrieder recognized that: The biggest failure in Volkswagen istoo little customer focus In his view, the company was paying toomuch attention to technology and features that customers did notnecessarily want to pay for it”(Keller, 2008, page 79)

As the consequence, firm should consider to apply CRM (CustomerRelationship Management) which “uses a company’s data systemsand applications to track consumer activity and manage customerinteractions with the company” (Keller, 2008, page 79) Many firmshave presented customer relationship marketing programs toimprove customer interactions which encourages firms to create anddeliver values to their customers The concept of customer equitycan be useful in that view Customer equity related to CLV(Customer Lifetime Value) criticizing value of customer based on theformula of churn rate – the percentage customers leave the brand,discount rate – discount cost for customers, contribution margin,retention cost and period Wal-mart retailers has classified theircustomers into two categories called Angels and Devils that based

on the CLV formula than they have the different strategy meet thosetwo kinds of customers’ needs Customer equity has the relationship

to brand equity in which both of them will be incorporate andintegrate with each other because customer drives the success ofthe brands and brands are like the bridge for firms to connect withtheir customers

Brand positioning is at the heart of marketing strategy It is the “act

of designing the company’s offer and image so that it occupies adistinct and valued place in the target customers’ minds” (Kotler andKeller, Marketing Management, 2006, page 288) To define andestablish the brand positioning concept, firms will follow theguideline that including the steps of positioning among differentstakeholders: (1) define target market (customer) (2) establish point

of parity and point of different among competitors (3) Internalbranding: create the brand mantras within the organization

• Define target market:

Different customers will have different perceptions and preferencesabout the brand Moreover, firms are impossible to touch in allcustomer needs, wants, and satisfaction so that they need tosegment the market into the smaller pieces and chose target marketsegment to focus on Firms can rely on some segmentations bases,such as behavioral, demographic, psychographic and geographic

• Establish point of parity and point of different among competitors

Point of parity is the similarity of the brand and other competitorswhereas point of different is defined as competitive advantage, orunique of the brand to the customers For example, Apple Inc.positioned it point of parity is innovative and point of different is userfriendly among technology competitors like Sony, Dell, Acer, Nokiaetc

• Internal branding:

Generally, firms also have to build the brand with employeesthrough a consistent execution called brand mantra which is thephrase that catch the spirit of the brand and make sure thatmembers of the firms are properly aligned with the brand and what

it represents

b Brand Marketing Programs

In order to build the successful brand marketing programs, firmsneed to choose the brand elements that included in thetrademarkable identifying and differentiate the brand There are sixcriteria for brand elements which are: memorability,meaningfulness, likability, transferability, adaptability,protectability4

• Memorability:

The brand should easy for customer to memorize there for facilitaterecall or recognition in purchase For example, Apple inc with logo isalso a white apple is memorable with consumers

things that they understand the meaning But sometimes, the brandthat is not meaningful by the descriptive way but still attractscustomers because of it imagery meaning can get the feeling ofcustomers

• Adaptability:

Because of the change continuously of market environment, goodbrand could be updated over time

• Protectability:

This criterion relates to the intellectual property of the brand

The brand marketing program also includes four Ps which are

Product, Price, Place (Channel) and Promotion

• Product:

“The product itself is the primary influence on what customersexperience with the brand, what they hear about the brand fromothers, and what the firm can tell customers about the brand”5(Keller, 2008, page 94) Through the products, customer can receivethe certain quality and value by the various dimensions, such asperformance, features, conformance quality, reliability, durability,serviceability, style and design The performance of products is thelevel at which products or service operate to the consumers, like theproducts’ performance are good or bad, the services are very bad orvery good The feature reflects the characteristics and functions ofproducts or services While the conformance quality is the degree atwhich the product meets specifications Reliability is the consistency.Durability decides whether product last-long or not Serviceability

5 Retrieved from Strategic Brand Management: Building, Measuring, and Managing Brand Equity – Kevin Lane Keller (2008) – page 94

refers to the complementary services that going with the productslike installation, maintenance, repairing And style and design is theappearance of products or services Along with the products orservices, firms needs to provide relationship marketing like customerrelationship management and loyalty program For example, a largehotel like Hilton Worldwide has provided the Hilton Honor programsfor V.I.P and loyalty guests

• Price:

Price also contributed to the customers’ perception of the brandbecause customers will find the price of the brand appropriate andreasonable given the benefits they feel they receive They often rankthe brand by the price among brand category Price premiums areamong the most important brand equity benefits of building a strongbrand And firms can set price to build brand equity such as Ferrariset their car at premium prices so that consumers perceived Ferrari

as luxury brand

• Place:

The manner by which a product is sold or distributed can have aprofound impact on the resulting equity and ultimate sales success

of a brand Channel strategy includes the design and management

of intermediaries such as wholesalers, distributors, brokers, andretailers There are direct and indirect channels Direct channel isselling through personal contacts from the company to prospectivecustomers by mail, phone, electronic means, in-person visits, and soforth Whereas, indirect channel is selling through third-partyintermediaries such as agents or broker representatives, wholesalers

or distributors, and retailers or dealers and using them to implementpush or pull strategy By devoting marketing efforts to the endconsumer, a manufacturer is said to employ a pull strategy.Alternatively, marketers can devote their selling efforts to thechannel members themselves, providing direct incentives for them

to stock and sell products to the end consumer This approach iscalled a push strategy

• Promotion:

Marketing communications are the means by which firms attempt toinform, persuade, and remind consumers—directly or indirectly—about the brands they sell There are various marketingcommunication options for brand such as advertising, promotions,event marketing and sponsorship, public relations and publicity,personal selling

3 Branding in Banking Industry.

3.1 Overview of International and Vietnam banking industry

Vietnam banking industry is in an early stage of development It is lacking

up-to-date banking products and services; modern technology; strongcorporate governance, etc Vietnamese commercial banks are divided intothree main groups: State-Owned Commercial Banks (SOCBs); Joint StockCommercial Banks (JSCBs); and Foreign and Joint Venture CommercialBanks (JVCBs) In which Lien Viet bank belongs to JVCBs Each group hasdistinctive customers; market share and business strategy

Includinglongstandingincumbent brandssuch as ACB (AsiaCommercial Bank),Techcombank,Sacombank … aswell as newcomerslike Lien Viet Bank

Foreign banksoperating inVietnam are globalbrands in top 100biggest banks inthe world like:Citibank, HSBC,

ANZ (Australia and

New ZealandBank)

Small mediumenterprises (SME)and Individualcustomers

100 percentforeign capitalcompanies; Joint –venturecompanies;Foreign individualcustomers

Business

strategy

State-ownedbanks are inprogress ofrestructuring toequities Afterequitizationthese willdevelop intoversatilefinancial groups

Focusing on retailbanking Somebanks are selling aparticular percent

of stake to theirforeign strategicpartners which arebig foreign banks inVietnam toenhance theirfinancial andmanagementcapacities

Developingmodern retailbanking products:Offering loans viaInternet, Mobilephone; andInternational credit

card

Figure 5: Banks in Vietnam Source: SBV and Internal Data of

Lien Viet Bank

• Development trends

In the last few years, Vietnam banking sector has witnessed some

development trends in the whole industry as well as in each group

- Market share of State-owned commercial banks is narrowing.Meanwhile, that of Joint stock commercial banks is increasing

- All banks are developing their technology in order to offeringmodern, diversified banking services to customers

- Vietnam banking market is becoming much more competitive asnumber of banks is increasing in foreign bank group In 2007, SBVreceived more than 30 applications from domestic investors and

5 ones from foreign financial groups to open joint stock

commercial banks and 100 percent foreign capital banksrespectively.

- Retail banking and investment banking are now developing due

to increasing consumers’ living standard

Figure 6: Lending Market share of banks in Vietnam (2000-2010).

Source: SVB Data

2000 2001 2002 2003 2004 2005 2006 2007 2010

(March) State-owned commercial

banks 77% 80% 79% 78% 75% 75% 69% 59% 48.3%Joint Stock commercial

• Entry Barrier for new entrance

Establishing a new bank requires investors to meet strict regulation ofState bank of Vietnam It is mandatory for domestic investors to have atleast VND 1,000 billion charter capitals for newcomers and reach VND3,000 billion by 2010 A foreign bank is allowed to acquire up to 20 percent

of the charter capital in a Vietnamese partner bank, with total foreignownership capped at 30 percent Its total asset must reach at least USD 20billions

• Opportunities

Vietnam banking sector presents some Asia’s biggest opportunities

- Although facing many difficulties in 2008, Vietnam economy isestimated having good growth speed in coming years According

to Business Monitor International Ltd (BMI), GDP growth will be 8percent on average during 2008-2012 This is crucial factor forthe development of Vietnam banking system

- Cash payment is still a popular payment method in Vietnam Thismakes Vietnam retail banking market very potential, especiallywhen Vietnamese banks are completing their payment productsand services and Government’s policy is promoting paymentactivities through bank

3.2 The nature of branding service, especially in banking industry

According to Kotler, “a service is any act or performance that one partycan offer to another that is essentially intangible and does not result in theownership of anything Its production may or may not be tied to a physical

product” (Kotler and Keller, Marketing Management, 2006, page 372-393) 6

There are many differences between physical products and services, evenbetween branding services and branding a product The differences whichmake branding in service sector difficult and challenging are also thenature of services which are: intangibility, complexity, and heterogeneityand process nature of service

• Intangibility:

Unlike physical products, services cannot be seen, tasted, felt, heard, orsmelled like tangible products meaning that customers cannot use theirsenses in order to make buying decision The intangibility enablescustomers realize a gap between buying physical products like shampoo,laptop, car, etc and buying services like banking, insurance, car fixing, etc.When a customer buys a pair of shoes, he or she receives a thing thatrepresents exactly what they have bought in the products In compare withthe case when a customer goes to the bank to transfer money, the mostobvious elements of services is only the interaction between customer andfrontline staffs, waiting area, and receipt, the transaction can be touched

or wore in

The intangibility makes customers difficult in assess the experience ofservices Some marketers has recognized this difficulty, they has tried toincrease tangible proofs and quality symbol For instance, insurancecompanies have tried hard to make their tangible symbols represent theirintangible services They create the logo that impressing the safety to thecustomers

Because of this characteristic, service brand managers shouldcontinuously and intensely communicate with customer by integratingtangible images like compelling brand name and logo; professional staffs;modern technology

6 Adapted from the book Marketing Management 12e - Philip Kotler & Kevin Lane Keller (2006) – page 372 - 393

of buying services is sometime beyond their capacities Services tend toinclude experiential characteristics and trust The characteristics which aredifficultly assessed, even after being used, for example, how well thedentist has filled the decayed tooth?

The more complexity held by services, the more difficulty customers face

in assessing their satisfaction and service quality So customers needsupport When a brand can represent its quality, customers will not beworry about assessing each element within its services and they willbelieve that brand brings about the assurance of service provider’scapacity

• Heterogeneity:

The service processes are varied from customer to customer and fromtime to time in a single customer’s experience The case of going to abank to transfer money as an example, a customer may experience theservice differently each time he or her come to the bank to order this Thetransaction may last shorter or longer, the bank staff may behave morefriendly or less, etc And even each customer may be spoken to differently

In comparison with packaged consumer goods without changing in theirformula, appearance, etc

Experts have admitted that the heterogeneity is the most difficulty inbuilding service brands If the service buying experience of customers isnot consistent, the information that brand conveys doesn’t play any role.Hence a brand may have different meaning across multiple customers

• Process nature

The last difference between physical goods and services is that servicesare described as processes which are done based on “real time”, unlikephysical goods, which are produced, stored, allocated through severalresellers, and consumed later, services are unpreserved The vacant tables

in Thursday evening in a restaurant cannot be transferred to crowdedFriday evening Similarly, the spare time at service counter of a bankcannot be reserved for peak time in here The customer experience control

in service sector is a science as well as an art The factor process naturecontributes to the complexity of the service experience Customer’sassessment is total sum of many elements Some are under thecompany’s control and some are not Internet banking service, forexample, is a competitive advantage of a bank The banker thinks theservice will be highly appraised, but customers sometime may encounterproblems when processing Internet banking transactions due to broadbandnetworks and they will assess the service based on all these

Therefore, branding with banking service is also different from branding atypical product in term of company acts as a brand, front line staffs arealso brands; they have to used internal marketing concept, self-servicesconcept and take care about creating the services network

• Company acts as brand

Many service companies have to cope with the truth that is their companyname act as brand for all of their products The company and the productstogether become brand Company names also act as primary brands forsome manufacturers like Ford For some service industries, the concept

company acts as brand is very important In some professional service

industries, customers find difficult to distinguish the services of a company

or they don’t have concept of brand for the industry The banking industry

is a fine example If bank customers were asked what bank brands theyknew, they probably would not know or understand what to answer Theyknow the names of banks but not bank brands

When company name becomes umbrella brand for all of its services,whatever affects the perception regarding the company, good or bad, thenaffects customers’ perception on the services of company So the

importance is: Company has to pay special attention to every its activitieswhich range from events, sponsorship to moral behavior of its staffs anditself; deliver consistent messages; and control communications aboutbrand as well as actual experiences of customers

• Frontline staffs are brand

The experience of customers with company is always more important thanthe communication of company with customers (advertising for example).The customer experience controls over their assessment (perception onquality, satisfaction, value, loyalty) and expectation of services in thefuture Hence the basic principle in branding for service sector is: frontlinestaffs are brand to customers While all of the staffs contribute to thesuccess of a company, client facing staffs are the key to establish andmaintain customers’ perception on the brand In many service industries,

A million dollar advertising campaign may thoroughly fails due to theincompetence or un-mindfulness of a low-paid frontline staff

The zero-defect state of touch point performance requires interactionsbetween frontline staffs and customers always are smooth, effective andcomfortable That is a hard task Because of the different competence andability among frontline staffs, the heterogeneity naturally appears inservice supplying systems Hence, service brand managers need to attachspecial importance to frontline staffs; and manage customers’ experiencewith their services at every touch points, that’s also means they have tomanage their service processes

• Internal marketing

Since frontline staffs form the majority of customers’ impression, theessential principle in branding for service sector is: the brand must bemarketed internally The staffs need to understand of their own importanceand they need to be respected Some managers think that low-paid staffsdon’t deserve such effort and cost, they don’t understand the decisive role

of frontline staffs in service branding Indeed, the importance of frontlinestaffs indicates that attracting and keeping qualified frontline staffs is animportant step to build service brand successfully

When frontline staffs understand their partner role in satisfying customers,the service quality becomes first-class As consequence, customer’ssatisfaction is created, customers are kept and profit is made

simultaneously The ultimate goal that is to provide high quality service forcustomers will become highest when a brand is effectively communicated

to the entire company’s staffs The communication between staffs andfunctional departments should be arranged to achieve this goal

• Self-service

In many service industries, services are provided partly or totally throughself-service technologies The brand messages are communicated throughintangible aspects like the form of kiosk or website, and customer’sexperience with these technologies The interactions which customersexperience with self-service technologies may impact on their serviceassessment and brand perception

The increasingly popularized technology in service sector may decreasethe level of heterogeneity, since every experience of every customer withself-service systems is alike and reaches standard However, for somecustomers who dislike technology may find the self-service systems toocomplicated, not friendly, then they feel dissatisfied

Frontline staffs are now required to be more qualified, they have to be able

to help customers when self-service systems have error or the systemsdon’t meet customers’ need Hence the co-ordination between technologyand people’s recovery actions becomes important in managing customers’brand perception

• Service network

The association of service providers in service network is a relatively newresearch field in marketing In the case when a company associates withother company to provide a service, the service quality of the other(s) willpartly reflect that of the company For example, when a bank provides anATM service which it associates with other banks, its ATM card holders areallowed to utilize the ATM machines of the others The quality of theothers’ ATM machines will partly impact on customer’s perception of that

of the bank

The heterogeneous service chains, which are complex by nature, nowbecome more serious The association with other company may bringabout particular risks or benefits, so deciding which company and howtight in association is a big issue Brand management now includes

partner management as company’s customers expanded their experience

Three founding members of the bank are Him Lam Corporation, SaigonTrading Group (SATRA) and Southern Airport Services Company (SASCO).The strategic investment and cooperation brought about by theseorganizations has given LienVietBank undisputable legacy in housingdevelopment, trading activities, and international trading related services

• Him Lam Corporation is the biggest shareholder which owns 18% ofthe share Housing development (residential for sales and rent), landutilize right to construct house for sales or rent, investment inbuilding infrastructure and housing construction, preparation forreassigning of land use right, real estate transaction, industrial andcivil construction, road bridge construction, road freight transport,transport services has been strength and spearheading business ofHim Lam Corporation It plays an important role in supportingLienVietBank in land and building issues

• Saigon Trading Group - one of the leading trading corporations inVietnam, owns 4.57% of the share It plays a strategic role insupporting LienVietBank in the trading transactions of consumergoods, art products, decoration products, furniture, jewelry, tobacco,stationery, petroleum; investing in construction, supermarket,trading centre, restaurants, hotels, industrial zone, and others

• Southern Airport Services Company owns 2.43% of the share Thisbusiness operation with duty free, trades, transportation services,import & export’ hotel & hospitality services, air ticket agent,advertising, investment in tourism and real estate projectcontributes to LienVietBank’s financial trading potential

The bank has made its debut in the situation of fluctuation in nationaleconomy, especially in foreign exchange, interest rates The last months of

2008 saw world’s economy crisis deepened as stock markets worldwidecrashed and entered a period of high volatility, and a considerable number

of banks, mortgage lenders and insurance companies failed This affecteddomestic growth as well as banking system in which LienVietBank is a newmember Although starting out at disadvantageous time for banking andfinance sector, LienVietBank has completed its infrastructure and otheressential factors to form a corporate

b Corporate Statements

Mission: LienVietBank tends to bring the best benefits to their stakeholders

including customers, community, shareholders, partners, suppliers, etc Inaddition, they promise to contribute their effort in the sustainable growthand security of the whole banking system as well as the Vietnam’seconomy LienVietBank also places their mission as always available forcustomers, passionate about other customers’ success, delightingcustomers with innovative products and excellent services that arecustomized to their needs Moreover, LienVietBank promise to act withhonesty and integrity in all their business dealings process and aim togenerate sustainable economic value for their stakeholders likeshareholders, strategic alliances, etc They also must be a good employerand manager for all their employees, advisors and collaborators in order tohelp their people to develop and improve, enabling individuals withinLienVietBank to make a difference through internal marketing

Vision: LienVietBank desires to grow to be a leading commercial bank of

Vietnam, which have dynamic banking operation that always createdpositive opportunity and circumstance for customers, shareholders andstaffs to reach a straightforward and well-organized financial procedure

Core values: LienVietBank has enormous spiritual power; the root of every

success is its people LienVietBank people always have respect for eachother; they have the spirit of Innovation, Teamwork, and Professionalmorality And the managers, who keep the spirit up are Selfless,

Exemplary, and Judicious Every LienVietBank people have to hold to thesecore values for the development of the bank

c Corporate Governance

LienVietBank headquartered is located at No 32, Nguyen Cong Tru Street,Ward I, Vi Thanh City, Hau Giang province Its organizational structure wasshaped in modern and orderly manner Besides implementing modernbanking management solution in accordance with international standards,LienVietBank is one of the first banks to put into practice ISO 9001:2000quality control standards during their operation