OPEN UNIVERSITY OF HOCHIMINH CITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL PROGRAM ON MASTER OF MANAGEMENT (MMVCFB6) NGUYEÃN CHAÙNH TRÖÏC DEVELOPING “VIETCOMBANK” BRANDNAME IN THE INTERNATIONAL ECONOMIC INTEGRATION THESIS OF MASTER OF MANAGEMENT HOCHIMINH CITY (2007) OPEN UNIVERSITY OF HOCHIMINH CITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL PROGRAM ON MASTER OF MANAGEMENT (MMVCFB6) NGUYỄN CHÁNH TRỰC DEVELOPING “VIETCOMBANK” BRANDNAME IN THE INTERNATIONAL ECONOMIC INTEGRATION THESIS OF MASTER OF MANAGEMENT Adviser: Mr. Hồ Diệu, Ph.D HOCHIMINH CITY (2007) OPEN UNIVERSITY OF HOCHIMINH CITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL PROGRAM ON MASTER OF MANAGEMENT (MMVCFB6) NGUYEÃN CHAÙNH TRÖÏC DEVELOPING “VIETCOMBANK” BRANDNAME IN THE INTERNATIONAL ECONOMIC INTEGRATION THESIS SUMMARY OF MASTER OF MANAGEMENT HOCHIMINH CITY (2007) OPEN UNIVERSITY OF HOCHIMINH CITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL PROGRAM ON MASTER OF MANAGEMENT (MMVCFB6) NGUYỄN CHÁNH TRỰC DEVELOPING “VIETCOMBANK” BRANDNAME IN THE INTERNATIONAL ECONOMIC INTEGRATION THESIS SUMMARY OF MASTER OF MANAGEMENT Adviser: Mr. Hồ Diệu, Ph.D HOCHIMINH CITY (2007) - 1 - CHAPTER I : BRANDNAME AND THE CHARACTERISTIC ON BUILDING IT IN VIETNAM BANKING SERVICE. 1.1 –The concept of brandname : In the market economy, competition is an indispensable rule, the core value of products and services is not much differentiated. So brandname is the key that creates the differentiation. The brandname itself is making increasingly not only the value of products and services but also the revenue to business , or in other way, brandname is an intangible asset . The brandname is a signal of entity on the market. It is used to recognize and distinguise this entity to others . However, if brandname is only a signal, it can not become an asset. Therefore, if it is simply a name, it can not a brandname. According to view of many marketing specialists, brandname must be the total of many factors and be given an intellectual proprietary right in that country. The factors such as the name of entity, logo, slogan, theme, picture and design of products are called the part of outside, the brandname is the part of inside and showed out vision and mission. In addition, if it is not known and understood the vision and mission in right way (due to not advertisement), it will not be enough idea or value. 1.2- The concept of brandname of the bank : “Brandname of the bank” is the term of marketing. It is the name of the bank with its prestige and charater. It makes the clients getting deep memories to the bank and differentiating to others in banking service. In the competing and integrating condition, the brandname of a bank exists not only history, network but also the philosophy of right, obvious business, the advantages and the prominence on high quality service and soft - 2 - price that are created on the basis of using mordern technology and restructuring the organization and management. 1.3- The composition of brandname of the bank : The composition of brandname of the bank is protected by the State according to the law on intellectual proprietary right . The banks create the value in the way of making the obvious differentiation on banking service on the basis of brandname, holding and developing the loyalty of the clients to the brandname. These values can change into financial income. In fact, the most valuable asset of the bank is not only tangible asset but also intangible one such as brandname. Therefore, the brandname of a bank is the intangible asset that is valuable and must be cared and properly invested. In the developing of brandname, we must think it brandname, not a name of product and service that we are seeing on the ads at the beginning. We must do it famous. At the beginning, the brandname must be a prism. We need to have a strategy and a project with the clear and specific details to appraise and be quantitative. Because of the developing of new product/service is so important, the marketing specialists are often to get a mistake on the history of brandname to manage it. Example : Vietcombank brandname, a long time, these products/service to those, this ad to another and it has become easy to mind to clients. Today, Vietcombank brandname has got an enough position. Brandname management means to get lessons and experiences from the history in order to save the time. To brand is to see it as second hand one at the beginning. - 3 - 1.4- Branding and developing brandname in the Vietnam commercial banks : 1.4.1- The fact : Nowadays, brandname is a new thing, the banks have not yet been interested in. It is only mentioned when the joint stock commercial banks have issued the shares to public and the equitization of the state owned ones. So, the branding and developing brandname are more and more interested in and awaked of . In 1990s, the Vietnamese commercial banks have had the activities to brand, however, it was unprofessional because they have not yet recognized the importance of brandname toward the business. Up to now, most banks have recognized the branding and developing brandname , so there are many programs that are more specific for branding and advertising brandname. Many banks have got many success and stably stood on their own brandnames. In 2004, Vietcombank is elected to be the bank having the strongest brandname. Vietcombank brandname had a 43 – year history. To be a bank that keep the most important role in Vietnam banking system, having trustworthiness in financing, export – import settlement, foreign exchange and international banking financing service. From 1996 to 2003, Vietcombank was continously elected to be the bank having the best service on international standard settlement. In April 12 th . 2006, Vietnam chamber of commerce and industry (VCCI) officially announced that the Asia commercial bank (ACB) has been ranked to be one of the 500 famous brandnames in Vietnam. With the aim of becoming a top banking brandname, ACB is continuously giving out many products, services, developing the technology in order to meet the clients’ needs that are more and more increasing. A bank’s characteristic is to actively participate in the social activities, it is a resposibility to the community development. - 4 - 1.4.2- The activities : 1.4.2.1- Intensifying to advertise the brandname, the image of the bank : - The symbols, the logoes or the images of the banks are more and more appearing on the mass media, from television, newspapers, magazines, internet, etc. to the panoes on the routes, especially in international airports, ports, fashion shows, variety shows, football matches and sports events. - Logoes, symbols of many banks are also more and more appearing on the front pages or first pages of many kinds of newspapers, magazines such as Saigon Times, Saigon Entreprenuers Magazine, Financial Magazine, etc. - The banks are also paying attention to present logoes, symbols, images that are salient, easy to look and making impression on the clients from head offices to brands, transaction offices. - Some are increasingly advertising the brandnames, the images by the way of sponsoring to some activities such as : Vietcombank with “Stock Exchange Bulletin” on VTC1 channel; Incombank with fashion shows, other charity, social activities, the scholarship to the students; Techcombank with education programs on TV; VP bank with “information on 24 hour market price” on VTV1; ACB with “The knowledge on financing and banking” on HTV9, etc. - Some are connecting to many famous brandnames to allure the clients such as : East Asia Bank and Vietcombank in issuing ATM, ANZ with Sacombank and Southern bank in widening banking service. 1.4.2.2- Public Relation : - Organizing the advertizing show on the time of giving out new products , services such as fund mobilization, card issuance, loans ect. They are advertised not only on mass media but also on banrons, brochures. The contents of advertisement are not only insisting on usefulness but also having promotion and - 5 - after sale activities; must comply with the tendency that is honest, making salient to products, services, not to compromise to the trustworthiness of other banks; diversified and modern, designed by the famous advertising companies. - Organizing the clients meetings, marketing - The sponsorship to the sport games such Agribank with Agribank Cup, Viecombank with Vietnam Football Team, East Asia Bank took the power on Ho Chi Minh Police Team and renamed “Dong A – Pomina” Team and sponsors to Vietnam badminton championship. - Filing to patent in overseas such as Bank of Investment and Development of Vietnam (BIDV) in USA. - Differentiating to products, services . - Applying to soft price on the basis of public relation in stead of the transaction in passing time according to the strategy on bank – client relation. - Changing process of service supply that is making clients more convenient. - Widening channels and lenghthening the working time. Making the differentiation in channels by the way to set up specializing branches such as Sacombank with March 8 th branch that only serving to ladies. - Using modern equipments to serve clients quick, convenient and more accurate. - Upgrating service quality by the way to set up service center, call center - Applying new technology in management and service supply. - Employing and training. 1.4.3- Limitations : The process of building the brandname of the banks is not yet professional, still unprompted. Moreover, though the banks all have brandnames - 6 - but they are unsustainable. Example : Asia Commercial Bank (ACB) where there is a rumour, it has got the risk of liquidition immediately. The brandnames of the banks are only famous in domestic market , not in foreign ones. The main reason is that the competing capability of Vietnamese banks ia still low such as asset, safety and effectiveness in business, the capability on service supply, banking technology : Firstly, the equity of Vietnamese banking system is about one billion USD and is chiefly concentrated on five state owned commercial banks , in the meanwhile, the average equity of a bank in ASEAN such as : Singaporean bank is one billion USD and Citibank is 20 billions USD. Secondly, the products, services of the Vietnamese banks are not diversified. In average, the total of the services of the Vietnamese banks are 400, in the meanwhile, there are more than 2,000 in Thailand, 5,000 in Janpan. Thirdly, the return of a bank is characterized by ROE and ROA. ROE of the Vietnamese banks get from 4% to 14%, ROA from 0,2% to 2%. In the meanwhile, Malaysian banks get ROE 17,6%, ROA 3,6%. It is said that the business result of the most of the Vietnamese banks are not yet symmetrical to the widening scale of asset. 1.5- The building and development of Vietnamese banks’ brandnames in the international integration process : The international integration process is increasingly wide and deep, the pledges to the Treaties are obvious. There is no time to execute them while the competition of the Vietnamese banks is still very low. Therefore, the Vietnamese banks had to hurry up to build and develop their own brandnames in order to take a existence in globalization environment. [...]...-7- The Vietnamese banks should learn how to make brandname from the multinational banking corporation : - Meeting the customer needs in everywhere - Choosing the main target markets and advertising, developing the brandnames - Planning - Developing the competitive capabilities - Making the strategy for developing brandnames in the line with booking, supervision, technology renewal, training -8-... multinational corporation of the area in the next decade, with multipurpose activites in the market economy, Vietcombank is carrying out the slogan “Always take the success to the customers” In the process of the international integration, Vietcombank constructed a strategy for developing from 2001 to 2015 with these tenors : - Increasing competence and competitive power by striving for raising the. .. CHAPTER 2 From the above – mentioned analisys, Vietcombank has considered the importance of building and developing brandname In the passing years, Vietcombank has done many marketing activities in order building and developing brandname such as increasingly advertising the brandname, image of Vietcombank ; strongly investing in brandname; creating the differentiations on products, services in diversification... and the business activity That was the reason of the appearance the new organization chart in the big cities and provinces The Branch of State bank” in order to carry out the role of management on banking business and the system of the business branches of State Bank at the towns and districts That was the foundations for the State Bank carrying out the business for directly serving customers In the. .. requirements of the process of international economy intergration, Vietcombank defined the concrete target – becoming a financial banking holdings corporation that will rank in the number of 50 to 70 Asian largest financial holdings groups in the period of 2015 – 2020 with the range of activities in both country and global market Vietcombank trying its best to reach the proposed targets and now there was the first... CHAPTER I In this chapter, we have clearly made the concepts of brandname, brandname of the bank, the composition of the bank brandname, the fact of building and developing of Vietnamese banks in present In order to clearly understand the building and developing Vietcombank brandname, we shall continuously research in chapter 2 as below -9- CHAPTER 2 : BUILDING AND DEVELOPING VIETCOMBANK BRANDNAME IN PRACTICE... present, Vietcombank needs to execute a series of remedies in order to develop brandname This will be researched in chapter 3 as below - 30 - CHAPTER 3 : THE STRATEGY AND THE SOLUTIONS FOR DEVELOPING VIETCOMBANK BRANDNAME IN INTERNATIONAL ECONOMIC INTEGRATION 3.1- Strategy for developing Vietcombank from 2001 to 2015: 3.1.1 – Targets : In the target of becoming a top Vietnamese financial banking holdings... and being done business in the domestic and international markets as a professional bank for foreign trade of State Bank of Vietnam with the brandname Vietcombank - 14 - The history of brandname Vietcombank in the domestic and international market since 43 years before was a key feature in the history of Vietnam banking industry Nowadays, Vietcombank has played a crucial role in the banking system... banks in multilateral and bilateral alliance - 31 - - Continuously developing the foreign affair activities which are the traditional and strong points of Vietcombank by widening the relationship to the foreign banks around the world, establishing the branches in Singapore, Russia, France and Representative office in the USA, enlarging the activities of Vietnamese finance company (Vinafico) in Hongkong... apply the other state of the art methods, Vietcombank has been making steady advances in order to become a financial banking holdings corporation of the area and the world 2.2 – Business activities in 5 years (2001 – 2005) : From 2001 to 2005, overcoming 5 years in doing restructure program, Vietcombank has gotten the successful results : cleaning NPLs and upgrating financial power; widely opening the . the widening scale of asset. 1.5- The building and development of Vietnamese banks’ brandnames in the international integration process : The international integration process is increasingly. Meeting the customer needs in everywhere. - Choosing the main target markets and advertising, developing the brandnames. - Planning . - Developing the competitive capabilities. - Making the. in the way of making the obvious differentiation on banking service on the basis of brandname, holding and developing the loyalty of the clients to the brandname. These values can change into