(Luận văn thạc sĩ) developing the business of commodity future contract at techcombank from a marketing perspective

Benefits of Commodity Future Contract1.2.4.1.. Target customers of the Commodity Future Contract... implemented successfully under the strategic guidance and oversight of the Board o f D

VIETNAM NATIONAL UNIVERSITY, HANOI

SCHOOL OF BUSINESS

M

— H S 13 —

1 H A D K R S M i P K X C » I I h N C f c

Nguyen The Tung

DEVELOPING THE BUSINESS OF COMMODITY FUTURE CONTRACT

AT TECHCOMBANK - FROM A MARKETING PERSPECTIVE

Major: Business Administration

Code: 60 34 05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisors:

1 Dr Tran Doan Kim

2 Ph.I) Candidate Tran Phuong Lan

Hanoi - 2009

T A B L E O F C O N T E N T S

A c k n o w l e d g e m e n t i

A b s t r a c t ii

T ó m t ắ t V T a b l e o f c o n t e n t s v i L i s t o f T a b l e s X L i s t o f F i g u r e s x i P R E F A C E 6

C h a p t e r 1 L i t e r a t u r e R e v i e w 9

1 1 G e n e r a l t h e o r y o f M a r k e t i n g 9

1 1 1 D e f i n i t i o n o f M a r k e t i n g 9

1 1 2 E x t e r n a l a n d I n t e r n a l E n v i r o n m e n t s 9

1 1 2 1 M a c r o E n v i r o n m e n t 1 9

1 1 2 2 I n t e r n a l E n v i r o n m e n t 11

1 1 3 S e l e c t i n g M a r k e t S e g m e n t 1 1 2

1 1 4 P o s i t i o n i n g 1 1 4

1 1 5 M a r k e t i n g M i x ' 1 6

1 1 5 1 P r o d u c t 1 6

1 1 5 2 P r i c e 1 7

1 1 5 3 P l a c e 1 7

1 1 5 4 P r o m o t i o n 1 8

1 1 5 5 P e o p l e 1 9

1 1 5 6 P r o c e s s 2 0

1 1 5 7 P h y s i c a l E v i d e n c e 2 0

1 2 1 D e f i n i t i o n o f C o m m o d i t y F u t u r e C o n t r a c t 2 0

1 2 2 T y p e s o f C o m m o d i t y F u t u r e C o n t r a c t 2 2

1 2 3 T h e d e v e l o p m e n t o f c o m m o d i t y f u t u r e c o n t r a c t i n t h e w o r l d 1 2 2

1 2 4 B e n e f i t s o f C o m m o d i t y F u t u r e C o n t r a c t 2 4

1 2 4 1 T a r g e t c u s t o m e r s o f t h e C o m m o d i t y F u t u r e C o n t r a c t 2 4

1 2 4 2 B e n e f i t s o f c o m m o d i t y f u t u r e c o n t r a c t 2 5

1 2 5 I s s u e s o n d e v e l o p i n g C o m m o d i t y F u t u r e C o n t r a c t 2 7

1 2 5 1 T h e S t a g e o f e c o n o m i c d e v e l o p m e n t 2 7

1 2 5 2 P r i c i n g C o m m o d i t y F u t u r e C o n t r a c t 2 8

1 2 5 2 1 G e n e r a l P r i c i n g M e t h o d s 2 9

1 2 5 2 2 P r i c i n g M e t h o d f o r C o m m o d i t y F u t u r e C o n t r a c t 3 0

1 2 5 3 T h e d i s t r i b u t i o n c h a n n e l s 3 1

1 2 5 4 P r o c e s s i n d e l i v e r i n g c o m m o d i t y f u t u r e c o n t r a c t 3 2

1 2 5 5 S p e c i f i c a t i o n o f t h e C o m m o d i t y F u t u r e C o n t r a c t 3 5

1 2 5 6 P e o p l e 3 6

1 2 6 O v e r v i e w o f t h e d e v e l o p m e n t o f c o m m o d i t y f u t u r e c o n t r a c t i n V i e t n a m

3 6

Chapter 2 Analyzing the marketing situation of TechcombankDs

Commodity Future Contact Business 3 8

2.1 Overview of Techcombank 3 8

2 1 1 I n t r o d u c t i o n a b o u t T e c h c o m b a n k 3 8

2 1 2 V i s i o n a n d M i s s i o n 4 1

2 1 3 M a n a g e r i a l S t r u c t u r e 4 1

2 1 4 B r a n d C o m m i t m e n t 4 4

2 1 5 C o r e V a l u e 4 4

2.2 External and internal Environment 45

2 2 1 P E S T ' a n a l y s i s 4 5

2 2 1 1 P o l i t i c a l F a c t o r s 4 5

2 2 1 2 E c o n o m i c F a c t o r s 4 6

2 2 1 3 S o c i a l F a c t o r s 4 7

2 2 1 4 T e c h n o l o g i c a l F a c t o r s 4 8

2 2 1 5 I n t e r n a t i o n a l F a c t o r s 4 8

2 2 2 S W O T a n a l y s i s 5 0

2 2 2 1 S t r e n g t h F a c t o r s 5 0

2 2 2 2 W e a k n e s s F a c t o r s 5 1

2 2 2 3 O p p o r t u n i t y F a c t o r s 5 1

2 2 2 4 T h r e a t F a c t o r s 5 2

2 3 T a r g e t S e g m e n t 5 3

2 4 P o s i t i o n i n g 5 4

2 5 M a r k e t i n g M i x 5 5

2 5 1 P r o d u c t 5 5

2 5 2 P r i c e 5 6

2 5 3 P l a c e 5 7

2 5 4 P r o m o t i o n 5 7

2 5 5 P e o p l e 5 7

2 5 6 P r o c e s s 5 8

2 5 7 P h y s i c a l E v i d e n c e 6 0

2 6 R e m a i n e d p r o b l e m s 6 1

2 6 1 E x t e r n a l 6 1

2 6 2 I n t e r n a l 6 2

C h a p t e r 3 M a r k e t i n g R e c o m m e n d a t i o n s f o r d e v e l o p i n g t h e b u s i n e s s o f

C o m m o d i t y F u t u r e C o n t r a c t s a t T e c h c o m b a n k 6 4

3 1 S t r a t e g i c O b j e c t i v e s o f T e c h c o m B a n k 6 4

3 1 1 T h e w h o l e B a n k ' s O b j e c t i v e s 6 4

3 1 2 T h e C o m m o d i t y F u t u r e C o n t r a c t O b j e c t i v e s a t T e c h c o m b a n k 6 5

3 2 M a r k e t i n g R e c o m m e n d a t i o n s f o r d e v e l o p i n g t h e b u s i n e s s o f 6 6

C o m m o d i t y F u t u r e C o n t r a c t s a t T e c h c o m b a n k 6 6

3 2 1 E x t e r n a l f a c t o r s 6 6

3 2 2 I n t e r n a l f a c t o r s 6 7

3 2 2 1 T a r g e t S e g m e n t 6 7

3 2 2 2 P o s i t i o n i n g 6 7

3 2 2 3 M a r k e t i n g M i x 6 8

3 2 2 4 B u d g e t f o r M a r k e t i n g 7 5

3 2 2 5 C h a n n e l D i f f e r e n t i a t i o n 7 6

3 2 2 6 P u b l i s h i n g a h a n d b o o k f o r C u s t o m e r s 7 7

C o n c l u s i o n 7 9

R e f e r e n c e 8 1

A p p e n d i x 1 : Q u e s t i o n n a i r e 8 3

A p p e n d i x 2 : P r i c e D i f f e r e n t i a l o f C r u d e O i l a n d G o l d 9 3

A p p e n d i x 3 : H e d g i n g R e g u l a t i o n s a n d M e t h o d s 9 5

A p p e n d i x 4 : 9 6

2 7 1 C o m m o d i t y F u t u r e C o n t r a c t f o r R u b b e r 9 6

2 7 2 C o m m o d i t y F u t u r e C o n t r a c t f o r C o f f e e 1 0 1

2 7 3 C o m m o d i t y F u t u r e C o n t r a c t f o r C b o t 1 0 3

2 7 4 C o m m o d i t y F u t u r e C o n t r a c t f o r M e t a l 1 0 4

List o f Tables

a b l e 2 1 M a n a g e r i a l S t r u c t u r e a t T e c h c o m b a n k

a b l e 2 2 C o m m o d i t y F u t u r e C o n t r a c t a t T e c h c o m b a n k

Chapter 1 Literature Review

1.1 General theory of Marketing

E n v i r o n m e n t , M a c r o - e n v i r o n m e n t T r e n d s a n d F o r c e s

M a r k e t i n g M a n a g e m e n t S e c o n d E d i t i o n - P h i l i p K o t l e r

1.2 General Concept of Commodity Future Contract

1.2.1 Definition of Commodity Future Contract

T o f u l l y u n d e r s t a n d a b o u t t h e C o m m o d i t y f u t u r e C o n t r a c t , y o u n e e d t o

k n o w w h a t c o m m o d i t i e s a n d F u t u r e F a c t o r s a r e T h e M e r r i a m - W e b s t e r s

d i c t i o n a r y d e f i n e s t h e m a s " a r t i c l e s f o r s a l e " I n t h e f i n a n c i a l w o r l d , t h e y a r e

1,2.4 Benefits of Commodity Future Contract

1.2.4.1 Target customers of the Commodity Future Contract

1.2.5 Issues on developing Commodity Future Contract

1.2.5.1 The Stage of economic development

1.2.5.2.1 General Pricing Methods

Chapter 2 Analyzing the marketing situation o f

T e c h e o m b a n k ’s C ommodity Future Contact Business2.1 Overview of Techcombank

2.1.1 Introduction about Techcombank

implemented successfully under the strategic guidance and oversight of the Board o f Directors as well as the Board o f Management will give it competitive advantages.

Risk management is another matter that is receiving our great attention, fechcombank’s business controls are governed by an ongoing focus on risks

in compliance with our overall strategy Risks are grouped under three main categories: market risks, credit risks and operational risks At Techcombank, they do not only integrate risk management processes into all of our business planning, execution and monitoring procedures, but also in the establishment

o f branch-wide independent risk management frameworks and infrastructures

in the form of documented credit policies and handbooks, industry monitoring system, customer rating system, bad debts alerting and monitoring systems, liquidity and daily interest rate fluctuation supervision systems

Since the end of 2003 Techcombank has developed one o f the most advanced Information Technology Banking Systems in Vietnam, and its Globus on-line network now connects all branches and transaction offices

In September 2004 the Quality Management System ISO 9000:2000 was implemented by Head Office, certificated by BVQI, and is now being applied

in all branches The quality management is clearly customer-focused and helps to improve our service quality and better manage the risks

Striving for high quality customer service, we have also developed and implemented many projects in the staff training, customer relationship management, and we are in preparation for launching new products in

leading Bank in the world has become a strategic partner o f Techcombank with 20% chartered Capital

Looking ahead, Techcombank knows that there are still many challenges facing it in its quest to become one of the largest and most successful banks in Vietnam However, this aspiration will come true by its staff members’ confidence, commitment and decisiveness They are all committed in their thoughts and actions to the future development and success o f the Bank This

in turn will provide more benefits for our customers, and added value for our shareholders: “Techcombank for empathy and reliability”

2.1.2 Vision and Mission

Techcombank - A leading urban commercial bank in Vietnam providing full scale o f diversified and highly competitive financial serv ice to individual and corporate customers aiming at customer satisfaction, shareholders value creation, employees benefit & development and contribution to the economy growth

Techcombank aspires to be part of leading commercial banks in Vietnam for its high reliability, profitability and quality by proving suitable products and services with a view to diminishing risks for customers as well as bringing benefit for the Bank

2.1.3 Managerial Structure

There are five managerial structures at Techcombank, they are : Board of Directors, Superv isory Board, Board of Managers, Managers at Head Quarter and Managers at Branches as well as transaction Offices (POS)

In order to provide the Commodity Future Contract, Techcombank has set

up a Board of Commodity directly under the Treasury Center with the supports from the Risk Management Department and BackOffice under the Accounting and Financial Department to manage its activities

H o C h i M in h

B ranch

D a k L a k Branch

O th e r Branchs

Table 2.1 Managerial Structure at Tec hc omb an k

i r

Board of Commodity

/ Comm oditỷx Future Contract

Table 2.2 Com modity Future Contract at T e c h c o m b a n k

After receiving the orders from customers with the necessary information about the money o f customers, their position as well as their limits to trade provided by the Risk Management and BackOffice, the staffs

o f Board of Commodity will put orders into the system or make phone call to brokers at Exchanges If those orders are done, BackOffice will make financial reports to send to customers with the confirmation o f the authorized person who Techcombank assigned

2.1.4 Brand C o m m it m en t

The Brand Co m m it m en t

Techcombank provides products and services with the best quality, it ensures that the Bank is a reliable partner for you to work with It is committed to building lasting and mutually beneficial relationships between the bank and our clients, our stockholders and our employees

The Brand Value

Techcombank trusts in the potential of individuals and in the benefits of teamwork and professional leadership In all we do, we act with integrity and creativitv

The Brand Personality

Techcombank expresses its identity through our communications, its environment, and its customer care Together, these create an experience for its customers and partners that is STAE3LE, RELIABLE, PROFESSIONAL, MODERN, ATTENTIVE and CARING

The Brand Consistency

That experience must be consistent Any time, anywhere, you can expect the same commitment to quality and the same values from Techcombank on the telephone, at an event, in print and online

2.1.5 Core Value

Orientating Customer is the target for all activities o f the Bank

Harmonization o f mutual benefit among customers, shareholders and employees is the factor of success

Being always inquiring and innovative

Communication is the key point for change management process within the Bank

Trust & Commitment, Explicitness & Accountability, Transparency & Innovation are the base to build behaviour and business culture of the Bank.

2.2 External and internal Environment

2.2.1 PES T analysis

Political, Economic, Social and Technological Factors are factors that will play an important role in beginning operation process These four factors will have to be affected directly to each industry These are macro factors and enterprises will based on these factors to give out the suitable strategies and business plans

2.2.1.1 Political Factors

This is the factor that has an important impact on all enterprises o f the country It can have an impact on existence and development o f a company or enterprise and vice versa

- The stability of a country As you see, Vietnam is considered as the most stable, peaceful country all over the world There is no any conflict occurring all over the country Up to now, after many years against colonialism, Vietnam is trying to open arms to all people of every country around the world Vietnam wants to be friend of every people, every country with a view

to developing together and making the whole world better

- Vietnam has just given up from the controllable planning economy to become the market economy so the taxation is gradually improved to adjust to the new conditions At the moment while many countries don’t put tax on trading commodity future contract, Vietnam still put tax on that, so many enterprises don’t want to trade because this is a tool to avoid risk in varying price, not doing business And may be this taxation law can be given up in coming years Moreover, other related laws, such as: investment law, labor law, enterprise law, dumping price law, anti monopoly law, etc can be