MINISTRY OF FINANCE ACADEMY OF FINANCE FACULTY OF FOREIGN LANGUAGE ======  ====== GRADUATION PAPER DEVELOP MARKETING SKILLS OF CUSTOMER RELATIONSHIP EXPERTS IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM, HA TINH PROVINCIAL BRANCH TRẦN THỊ THU HÀ CQ47/51.02 Hanoi – 2013 MINISTRY OF FINANCE ACADEMY OF FINANCE FACULTY OF FOREIGN LANGUAGE ======  ====== DEVELOP MARKETING SKILLS OF CUSTOMER RELATIONSHIP EXPERTS IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM, HA TINH PROVINCIAL BRANCH SUMMITED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF BACHELOR OF ART IN ENGLISH FOR FINANCE AND ACCOUNTING STUDENT : TRẦN THỊ THU HÀ CLASS : CQ47/51.02 SUPERVISOR : MA TRẦN THU HOÀI Hanoi - 2013 ACKNOWLEDGEMENT To begin with, I would like to give my sharp thank to my supervisor MA Tran Thu Hoai for helping, suggesting and encouraging me during the time I research for and write this paper I am also indebted to Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch for giving me permission to take part in the internship program, to necessary researches, collect data and complete my own paper I have furthermore to thank the director of the BIDV Ha Tinh branch who confirmed my study and facilitated me to go ahead with the research Especially, I am really happy when I always have my family by my side and I want to thank them all for their love and encouragement to me Finally, because of the limitation of time and knowledge, mistakes are unavoidable So, I hope to receive more comments and contributions to make my paper better Page i ABSTRACT In the current economic recession, especially when the number of bankrupt enterprises is rising, the term of marketing sale has become more and more important, for commercial banks in general, and Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch in particular Therefore, my paper with the topic “Develop marketing skills of customer relationship experts in Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch.” will point out the importance of practicing marketing skills in customer relationship experts’ work The main content is reflected in three chapters The first chapter is about the literature review for every commercial bank, mainly showing what provides a background theory of marketing in banking sector, including relationship marketing, some necessary marketing skills for customer relationship experts, and some challenges in bank marketing as well In chapter 2, by taking a scenario in BIDV Ha Tinh provincial branch, the paper focuses on real marketing skills practiced in actual situations of the branch’s customer relationship experts From that, chapter points out the bank marketing approach in upcoming future and suggests some solutions to develop marketing skills of customer relationship experts in Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch In conclusion, the paper has already been completed in comparison to proposed objectives and targets in the introduction Page ii TABLE OF CONTENT Acknowledgement i Abstract ii Table of content iii List of abbreviations iv List of figures and tables viii INTRODUCTION 1 Rationale of the study Aims of the study Methods of the study Scope of the study Organization of the study Significance CHAPTER 1: LITERATURE REVIEW 1.1 Definitions of marketing in banking sector 1.2 Relationship marketing (RM) in banking sector 1.2.1 Origin of RM term 1.2.2 Definitions of RM 1.2.3 Functions of RM 1.3 Some necessary marketing skills needed for CREs 1.3.1 Skill of searching and determining customer sources 1.3.2 Skill of starting an appointment successfully 11 1.3.3 Skill of collecting information of customers at the first appointment12 1.3.4 Skill of making an appointment with customers 13 1.3.5 Challenges for bank marketing sector 14 Page iii CHAPTER 2: CURRENT SITUATION OF PRACTICING MARKETING SKILLS OF CRES IN BIDV HA TINH PROVINCIAL BRANCH 16 2.1 Introduction of Bank for Investment and Development in Viet Nam, Ha Tinh provincial branch 16 2.1.1 Introduction of Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) 16 2.1.2 Introduction of BIDV HT 16 2.1.2.1 History 16 2.1.2.2 Functions 17 2.1.2.3 Organization 18 2.1.2.4 Performance 20 2.2 Current situation of practicing marketing skills of CREs in the customer relation department of BIDV Ha Tinh branch 22 2.2.1 Customer relation department in BIDV HT and its performance 22 2.2.2 Weaknesses in marketing skills 28 2.2.2.1 Weakness of making an appointment 28 2.2.2.2 Loss of loyal customers 29 2.2.2.3 Failure of keeping promises with customers 30 2.2.2.4 Failure of compromising with customers 31 2.2.2.5 CREs concerning too much about their own benefits 32 2.3 Analysis framework of practicing marketing skills of CREs in BIDV Ha Tinh branch 33 2.3.1 Achievements 33 2.3.2 Shortcomings 35 2.4 Reasons for achievements and shortcomings 37 2.4.1 Reasons for achievements 37 2.4.2 Reasons for shortcomings 38 Page iv CHAPTER 3: SOME SUGGESTIONS FOR DEVELOPING MARKETING SKILLS OF CRES IN BIDV HA TINH BRANCH 40 3.1 Orientation of BIDV about Marketing in banking sector - A two pronged approach 40 3.2 Some suggestions for developing Marketing skills of CREs in BIDV Ha Tinh branch 44 3.2.1 Fully understanding bank’s target customers 44 3.2.2 Better defining and monitoring bank’s competitors 45 3.2.3 Always trying to grasp new opportunities 46 3.2.4 Better defining and monitoring bank’s competitors 47 3.2.5 “Changing blood” CREs staff to be well-organized to carry on effective and efficient marketing 48 CONCLUSION 49 REFERENCES ix Page v LIST OF ABBREVIATIONS No Abbreviation Full phrase Bank for Investment and Development in Viet BIDV HT CRE Customer relationship expert CRM Customer relationship management Dep Department RM Relation marketing STP Segmentation, targeting and positioning Nam, Ha Tinh provincial branch Page vi LIST OF FIGURES AND TABLES No Figures and tables Contents Page Figure 2.1 The organization structure of BIDV HT 20 Figure 3.1 The two pronged approach to bank 44 marketing Table 2.1 E/A statistic in recent years 21 Table 2.2 Bad debt statistic in recent years 22 Table 2.3 Differences between individuals customer 24 relation and enterprises customer relation departments Table 2.4 The status of using capital in recent years 25 Table 2.5 Annual EBIT of branch 25 Table 2.6 Branch’s performance mark 26 Table 2.7 Situation of mobilizing capital 27 The performance rating table of BIDV 28 10 Table 2.8 HT 11 Table 2.9 Rate of accomplishing plans of BIDV HT 35 12 Table 2.10 The number of active enterprises accounts 35 Page vii REFERENCES Vietnamese references Nhiều tác giả (2004) Giáo trình Marketing NXB Tài Chính Hà Nội Nhiều tác giả (2009) Giáo trình Marketing ngân hàng NXB Ngoại Thương Hà Nội Báo cáo tài năm tài khóa từ 2010 đến 2012 ngân hàng BIDV chi nhánh Hà Tĩnh Bảng chấm điểm kết hoạt động chi nhánh thuộc ngân hàng BIDV từ năm 2010 đến 2012 References in English Kotler P (2004) Ten deadly marketing sins: signs and solutions John Wiley & Sons Inc Kotler P (2008) Principals of marketing 12th edition Prentice Hall Gordon I (1999) Relationship marketing: New strategies, techniques and technologies to win the customers they want and keep them forever John Wiley and Sons Publishers Berry L (2002) Relationship Marketing American Marketing Association Chicago Websites: Trang chủ tin tức tài Việt Nam: http://vneconomy.vn/ 10 Trang chủ ngân hàng BIDV: http://www.bidv.com.vn/ 11 Diễn đàn cộng đồng ngân hàng nguồn nhân lực: http://ub.com.vn/ Page viii It cannot be denied that some danger signs still exist in BIDV business activities, especially in marketing field These are two facts that the bank has not identified any exciting new opportunities in recent years; and the new ideas it has launched have failed  The CREs’ marketing planning process is deficient Many CREs in BIDV HT still cannot build a sufficient marketing plan for their own because of common three reasons that are the marketing plan format does not include the right components or logic; the planning software does not allow CREs to simulate the impact of alternative strategies; and the plan does not consider contingencies  The CREs staff sometimes not carry out effective and efficient marketing plans well The signs of this include: the head of marketing group does not seem very effective; the CREs lacks some marketing skills needed in the 21 st century; there are bad vibes between marketing group in customer relationship department and the other ones 2.4 Reasons for achievements and shortcomings 2.4.1 Reasons for achievements  BIDV’s strategy The BIDV’s target of being the most favorite retailed commercial bank in Viet Nam means that at the upcoming time, this bank will mainly focus on two fields: professionalizing its staff, especially a whole number of CREs and providing services as much as possible Moreover, the market segment that BIDV tries to compete is private customers, which facilitates CREs to communicate with customers, persuade them to use bank’s services more  BIDV’s working environment Page 34 The bank has a very young staff as well as a professional working culture, and polite manners as well as competition among colleagues are also promoted, which increases staff’s qualification  BIDV’s human resource BIDV always concerns about its investment in human factor, and one of bank’s criterions is to choose employees who have right qualification and aspiration to prove their abilities  BIDV’s training The bank usually holds training lessons for its staff, which aims to improve their specification and necessary skills The bank is always proud of its high qualified human resources, who create a general power to directly help this organization develop stably 2.4.2 Reasons for shortcomings  Customers Because Vietnamese not understand much about laws, so they usually get many difficulties in solving paper work, preparing and signing contracts, which makes CREs’works become more complicated Besides, customers not have enough information to evaluate comprehensively the benefits they can get from banks Sometimes, many customers give complex demands which easily make CREs misunderstand, this is one of the domestic customers’ main features that CREs have to usually deal with more often  Competitors Nowadays, banking system has witnessed a tough competition among commercial banks, which promotes BIDV to explore more advanced orientations and strategies to improve serving quality and marketing sale as Page 35 well Besides, salary and compensation regime of other banks also affect to BIDV staff’s spirit as well  Domestic economic situation Viet Nam’s economy has been in recession with high inflation, bankruptcy and unemployment, especially since 2010, so the fiscal policy has been tied, and the living standard has become more difficult  International economic integration Recent years, after participating WTO, Vietnam has welcome many multinational banks in banking sector; especially ANZ and HSBC have attracted domestic customers with great reserved capital, professional working manner, and fast working process In conclusion, this chapter shows the general introduction and the current situation of practicing marketing skills of CREs in BIDV Ha Tinh provincial branch in detail, which includes the performance of customer relation department and some main weaknesses in CREs’ marketing skills After that, the analysis framework of practicing marketing skills of CREs in the branch is also given with achievements, shortcomings as well as relevant reasons Based on these shortcomings above, suggestions for developing Marketing skills of CREs in BIDV Ha Tinh branch will be given in the chapter Page 36 CHAPTER 3: SOME SUGGESTIONS FOR DEVELOPING MARKETING SKILLS OF CREs IN BIDV HA TINH BRANCH 3.1 Orientation of BIDV about Marketing in banking sector - A two pronged approach Bank marketing in general and Customer Relationship Management (CRM) in particular are of vital importance for commercial banks particularly in the current context when banks are facing tough competition from other agencies, both local and foreign, which offer value added services Competition is confined not only to resource mobilization, but also to lend and other revenue generating areas of services offered by banks Under the circumstances, it has become essential to develop a close relationship with valued customers and come out with innovative measures to satisfy their needs Customer expectations for quality services and returns are increasing rapidly and, therefore, quality in the future will be the sole determinant of successful banking corporations It is, thus, high time that retailed commercial banks like BIDV organically realize the imperative of proactive bank marketing and CRM and take systematic steps in this direction Banking industry is essentially a service industry which provides various types of banking and allied services to its clients Bank customers are such persons and organizations that have surplus or shortage of funds and those who need various types of financial and related services provided by the banking sector These customers belong to different strata of economy, different geographical locations, different professions and businesses Naturally, the need of each individual group of customers is distinct from the needs of other groups It is, therefore, necessary to identify different homogenous groups and even sub-groups of customers, and then with utmost precision determine their needs, design schemes to suit their exact needs, and deliver them most efficiently Page 37 BIDV is one of commercial banks that generally have been working out various services and products at the level of the head office and these are traded through their retail outlets (branches) to different customers at the grassroots level This is the so called ‘top to bottom’ approach However, bank marketing requires a change in this traditional outlook It should be ‘bottom to top’ approach with customers at the grassroots level as the focal point for working out various products or schemes to suit the needs of different homogenous groups of customers Thus, bank marketing approach, in general, is a group or “collective” approach CRM, on the other hand, is an individualistic approach which concentrates on certain select customers from the homogeneous groups, and develops sustainable relationship with them for adding value to the bank This may be termed as a “selective” approach Thus, bank marketing concept, whether “collective” approach or “selective” approach, is a fundamental recognition of the fact that banks need customer oriented approach In other words, bank marketing is the design and delivery of customer needed services worked out by keeping in view of the corporate objectives of the bank and environmental constraints In recent years, banking system has witnessed a strong development, and the market has been formed clearly So that, banks has to determine a suitable inclination – a comprehensive growth, which is not only in scale, but also in quality According to Mr Tran Bac Ha, the director general of BIDV, the orientation of the bank in the next three years is not to try to be the biggest bank in Viet Nam but all effort to become the most favorite one (cited in BIDV’s bulletin in 2012) Therefore, BIDV considers this two pronged approach as its orientation at the upcoming time The following chart gives an overview of the two pronged approach to bank marketing that BIDV applies: Page 38 Figure 3.1: The two pronged approach to bank marketing Bank marketing A two pronged approach Design and delivery of customer needed services worked out by keeping in view corporate objectives and environmental constraints Objectives Methodology Collective approach Selective approach To satisfy all customers of the bank and to develop a positive image of the bank in term of quality of service To develop sustainable relationship with selective high value customers and making effort for their retention for added value to the bank To introduce a system of objective assessment of the standard of customers services to find out areas and causes of deficiencies and take appropriate corrective actions To concentrate on selective valuable customers through CRM to find out their latent and felt needs and to develop ways and means to satisfy them to ensure sustainable relationship Definition of target group of customers and their needs Development of proper marketing mix in term of product, place, price and promotion - - Page 39 3.2 Some suggestions for developing marketing skills of CREs in BIDV Ha Tinh branch 3.2.1 Fully understanding bank’s target customers To solve problem of determining target customers, BIDV HT needs to more sophisticated customer research at first The current buzzword is customer insight, and the bank gaining deeper insight into customers’ needs, perceptions, preferences, and behavior will gain the competitive edge Sometimes, the best research consists of continuously dialoguing with bank’s target consumers, individuals and in groups While valuable, this sort of "street talk" is not sufficient, so that more formal approaches are needed These might include focus groups, surveys, depth interviewing, in-home research, in-store research, and mystery shopping But beyond collecting raw data, consumers’ needs can be probed more deeply through projective techniques such as word association, sentence completion, and thematic apperception tests Some CREs use a laddering technique in which they follow the consumer’s explanation with another probing question Besides, the branch can also use a number of techniques to assess consumer preferences Among the simpler approaches are consumer ratings and rankings At last, CREs in the branch can also increasingly gather information about a customer’s past purchases, demographics, and psychographics in the hopes of gaining a fine understanding of each customer Of these strands of information, past purchases serve as the most useful information, indicating the customer’s revealed preferences Page 40 In conclusion, well understanding bank’s target customer, CREs in BIDV can improve their own marketing skill, serve exist customers better and easily find much more customer sources 3.2.2 Better defining and monitoring bank’s competitors BIDV HT branch has to better define and monitor its competitors, and these following suggestions can be useful in this current situation: To begin with, the branch should establish a person or office responsible for collecting and disseminating all the competitive intelligence It is better to find someone who would function as a librarian and is gifted at tracking news about competitors on the Internet and developing competitor profiles It is better to tell employees who face competitors to check in with this person to be briefed on how the competitor thinks A solution, which sometimes appears useful, is to hire people away from bank’s major competitors This should not be done to steal secrets that belong to the other banks (which is unlawful) but to get to know how the competitor thinks and acts Another suggestion is that BIDV HT should also prepare offerings similar to those of competitors, and monitor every new technology that might hurt bank’s business, because there is no greater threat to many banks than a new or better technological advance View these threatening technologies as investment options Adopt the maxim: "Every company should cannibalize itself before someone else does." In short, BIDV HT in general and CREs in particular should pay attention to the race with competitors more, which can help them to be advance in this touch banking sector This is also an important marketing strategy that directs the way to get the mission assigned of the bank Page 41 3.2.3 Always trying to grasp new opportunities The solution in this actual situation is to set up a system for stimulating the flow of new ideas from all CREs and to find a way to use creativity systems for generating new ideas No bank has to go without new ideas First of all, the bank’s employees probably have many ideas for improvement All they lack is a place to send these ideas and the motivation to send them Second, the branch’s smaller transaction departments, advertising agency, and other partners probably could suggest many new ideas Third, there are systematic ways to help employees generate new ideas The branch can also use group or individual creativity techniques to stimulate new ideas These include brainstorming and several other techniques Many of the best ideas will come from observing major shifts in the market environment These shifts may be political, economic, social, technological, or environmental So, CREs have to practice their own marketing sale abilities to grasp all possible opportunities and adapt to the changing business movement at this crisis stage 3.2.4 Building sufficient marketing plans and planning process The solution includes establishing a standard plan format A marketing plan should string together the following components: situational analysis, SWOT (strengths, weakness, opportunities, and threats), major issues, objectives, strategy, tactics, budgets, and controls CREs have to make sure that each stage follows from the previous one The situational analysis leads to sorting out the company’s major strengths, weaknesses, opportunities, and threats This leads to setting the right objectives or issues A strategy is formulated that promises to achieve the objectives Tactics are developed that flesh out the strategy The tactics have Page 42 costs that add up to the budget request Controls are put in place to check on whether the plan is delivering the objectives or whether changes are needed in middle course Using all this information, the provincial branch can allocate money to those who can the best with their adjusted budgets The workability of flexible budgeting depends on the credibility of the estimates After repeated use of this system, it will become clear which CREs can competently forecast results and which ones are not to be trusted In summary, it is really necessary for CREs to design their own sufficient marketing plans and planning process, which is considered as a crucial basic strategy to apply marketing skills in actual situations 3.2.5 “Changing blood” CREs staff to be well-organized to carry on effective and efficient marketing This last suggestion is just only the comparatively ultimate solution in the urgent need to “change blood” CREs staff The solutions begin with appointing a stronger leader of the marketing group of customer relationship department The chief marketing leader must gain the respect of the CEO and everyone else in the bank by making accurate marketing forecasts, and by demonstrating how marketing expenditures are contributing to return on investment Another way to solve this problem is by building new skills for CREs in this department These skills include positioning target segment, bank’s brand asset management, customer relationship management, partner relationship management, and Internet marketing as well At last, the branch can “change blood” some CREs who are not suitable to the job in this department and have no dedication to all works assigned This solution costs much time and money but it help the branch have a new Page 43 right staff who are well-qualified and always willing to be sacrificed for the branch’s business results In conclusion, because of the crucial role of marketing group in customer relationship department in BIDV HT branch’s operation in particular, CREs staff has to always be ensured to have right qualifications and necessary marketing skills, too They can create a total power helping the provincial branch to meet its business target Page 44 CONCLUSION In conclusion, the paper with the topic “Develop marketing skills of customer relationship experts in Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch.” has already achieved its aims step by step Firstly, the paper has completely reflected the theoretical background of bank marketing and marketing skills for customer relationship experts Secondly, almost all of banking activities related to marketing sale of BIDV Ha Tinh provincial branch were listed and analyzed Thirdly, through the above analysis, the strengths and weaknesses of practicing marketing skills of customer relationship experts were revealed Thanks to understanding the marketing skill’s weaknesses of customer relationship department and the budget limitations as well as managerial level, the paper is has drawn some possible solutions such as fully understanding bank’s target customers, better defining and monitoring bank’s competitors, always trying to grasp new opportunities, building sufficient marketing plans and planning process, and “changing blood” CREs staff to be well-organized to carry on effective and efficient marketing Page 45 DECLARATION I hereby declare that this paper is my own work and effort and that has not been submitted anywhere for any award Where other sources of information have been used, they have been acknowledged The data and results described in the paper are derived from the actual situation of the bank where I have taken part in internship Ha Noi, 1st May, 2013 Student Tran Thi Thu Ha SUPERVISOR’S JUDGEMENT Name of supervisor: MA Tran Thu Hoai Comment on Graduation paper of: Student: Tran Thi Thu Ha Class: CQ47/51.02 Course: 47 Topic: “Develop marketing skills of customer relationship experts in Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch.” Mark – In number: – In word: Hanoi, … /… /2013 Supervisor REVIEWER’S JUDGEMENT Name of reviewer: Comment on Graduation paper of: Student: Tran Thi Thu Ha Class: CQ47/51.02 Course: 47 Topic: “Develop marketing skills of customer relationship experts in Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch.” Mark – In number: – In word: Hanoi, … /… /2013 Reviewer ... and Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch in particular Therefore, my paper with the topic Develop marketing skills of customer relationship experts in Bank. .. to develop marketing skills of customer relationship experts in Bank for Investment and Development of Viet Nam, Ha Tinh provincial branch In conclusion, the paper has already been completed in. .. Introduction of Bank for Investment and Development in Viet Nam, Ha Tinh provincial branch (BIDV HT) 2.1.1 Introduction of Joint Stock Commercial Bank for Investment and Development of Vietnam