Dissertation summary: Brand development of joint stock bank for foreign trade of Vietnam system – Vietcombank

MINISTRY OF EDUCATION AND TRAINING

VIETNAM UNIVERSITY OF COMMERCE

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NGUYEN TIEN DAT

BRAND DEVELOPMENT OF JOINT STOCK BANK FOR

FOREIGN TRADE OF VIETNAM SYSTEM – VIETCOMBANK

MAJOR: COMMERCIAL BUSINESS

CODE NO.: 62.34.01.21

SUMMARY OF DOCTORAL THESIS

HANOI, 2015

The Thesis was completed in:

Vietnam University of Commerce

Scientific Instructors:

1. Associate Prof. Dr. Nguyen Quoc Thinh

2. Associate Prof. Dr. Nguyen Van Thanh

Reviewer 1: ………………………………………………………………………

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Reviewer 2: ………………………………………………………………………

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Reviewer 3: ………………………………………………………………………

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The Thesis will be defended before University Level Thesis Assessment Council

met at Vietnam University of Commerce

at……….. hours………… date ………. month ………. year………….

For more details of the thesis, refer in:

National Library

Library of Vietnam University of Commerce

List of the Scientific Research Works Published By The

Author Related To The Thesis

Name of Papers, Name of Scientific Works researched

Year of publica tion 2012 The issues raised for the

The level of participation (Author or Co-author) Co-author

The papers published in scientific journals, research works

brand development of bank sector

2012

Co-author

Name and Number of Publication Review, Title, subject code Financial and Monetary Market Review, No. 13 (358) dated 01/07/2012, ISSN 1859-2805

Factors affecting the ability of sustainable development of commercial banks 2012 Assessment of the level of

Co-authors

Financial and Monetary Market Review, No. 17 (362) dated September /2012, ISSN 1859- 2805

competition of the banks in the system through market concentration index

Co-author

Financial and Monetary Market Review, No. 18 (363) dated September /2012, ISSN 1859- 2805

2012 Commercial banks' synchronous implementation of many solutions to improve the quality of human resources

2012 Brand Development for

Co-author

Financial and Monetary Market Review, No. 22 (367) dated November /2012, ISSN 1859- 2805

Commercial Banks in Vietnam

2012 Risks in lending coffee

Author

Banking Review, No. 12 dated June/2012, ISSN-0866-7462

commercial business enterprises

Co-author

2012 Brand development and the issues raised for the brand development of bank sector

2015

Co-author

Banking Review, No. 23 dated December /2012, ISSN-0866- 7462

Solutions to enhance the brand power in the Vietnam Commercial Banks

Proceedings of Scientific Conference of ONA and Vietnam Union of Science and Technology Associations, dated 12/08/2012 Financial and Monetary Market Review, No. 3+4 (420+421) dated February/2015, ISSN 1859-2805

1 FOREWORD

1. URGENCY

In the economy, the banking sector fully knows that the challenge of integration process is very large and increasingly complex, especially in the accession process of international economic integration will help the banking sector to take opportunities for growth, thereby enhancing the position and competitiveness of the banking system and the Vietnam enterprises on international market. Therefore, the duty and role of the banking sector in the overall economic development as a basis for becoming a high-tech center of Vietnam during international integration process in the future will be essential. Specifically, 2015 is in an important year for Vietnam, needs to have much more vigorous efforts in international economic integration for Vietnam to join the TPP as expected. Thus, the banking sector needs to focus on using its further efforts to complete the plans and objectives of monetary policy well, and actively and effectively implement the reform proposals and banking system innovations in Vietnam, and continue to perfect and execute powerfully the development and international integration strategies of the banking sector in the future.

In conditions of fierce competition among commercial banks at present, it is necessary for commercial banks to constantly improve operational efficiency and increase brand value in the international economic integration process. The brand development of commercial banks is not only a requirement for commercial banks in Vietnam in general but also the Joint Stock Commercial Bank for Foreign Trade of Vietnam System in particular, and it is not only a matter to banking leaders, state authorities but also researchers who are interested in. With the problems posed, student has chosen the topic “Brand Development of Joint Stock Commercial Bank for Foreign Trade of Vietnam System – Vietcombank” for his thesis. Research contents will be focused on assessing the real situation of Vietcombank brand development and then recommend the system of solutions for brand development of Joint Stock Commercial Bank for Foreign Trade of Vietnam System. 2. RESEARCH GOALS - Research goals: On the basis of brand development principles and brand development reality of Vietcombank system, recommending some solutions for brand development of Joint Stock Commercial Bank for Foreign Trade of Vietnam System– Vietcombank. - From such research goals, the research tasks include:  Overview and systematization of simple theoretical basis of brand, service, bank brand, bank brand development and brand development of banking system for commercial banks.  Research of branding experience of some domestic and international banks. Thence, drawing experiences for Vietcombank.  Analysis of real operations of brand development of Vietcombank system in recent years showing the limitations to be overcome in this bank.  Recommendations of some solutions to suit the new context for brand development of Vietcombank system. 3. RESEARCH QUESTIONNAIRE By considering the goals and objectives of this research, the following questionnaire has been set up to achieve the objectives and goals of the research:

- Question 1: What is the conception of brand or brand development? What are evaluation criteria of

brand?

- Question 2: For the banking sector, what is the conception and definition of brand? What is the feature

of the banking brand?

- Question 3: What are experiences in brand development of the domestic and foreign banks? - Question 4: What is the difference between corporate branding and banking branding? Which factor

will decide the bank brand development?

- Question 5: In the context of the banking sector in Vietnam, what is actual situation of brand

development in the banking sector at present? And what about Vietcombank?

- Question 6: What are solutions for brand development of Vietcombank system in period 2015-2020?

4. OBJECTS AND SCOPE OF RESEARCH - Research object: Brand development of Joint Stock Commercial Bank for Foreign Trade of Vietnam System. - Research scope:

 For space: Overview of researching situation on brand theory and brand development for commercial banks in Vietnam and around the world; the basic theoretical issues of bank branding and brand development of commercial banks in the trend of international integration; the basic issues of branding and brand development at Joint Stock Commercial Bank for Foreign Trade of Vietnam.

 For time: The thesis focuses on researching brand development situation at the Joint Stock Commercial Bank for Foreign Trade of Vietnam in the period from 2010 to 2014; and sets out the brand development

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orientation and solution for Joint Stock Commercial Bank for Foreign Trade of Vietnam for the period 2015 – 2020. 4. RESEARCH METHOD

Measurement of branding results is done with the aim of gathering information to measure the perceived value of the Joint Stock Commercial Bank for Foreign Trade of Vietnam’s brand. However, the purpose of the research is to explain the role and development of the Joint Stock Commercial Bank for Foreign Trade of Vietnam system. Moreover, the purpose of the research is also to resolve the inspection and determination of relationships between the variables studies and measuring efficiency of Vietcombank’s brand value. Research approach refers to the way used to answer the questionnaire. Four types of research methods have been developed, including:

- Qualitative research methods. - Quantitative research methods. - Comparison, analysis, synthesis, interpretation and inductive methods. - Interview and investigation methods. These research methods used in this research will help the generalization of results on objects selected for survey and investigation. Moreover, the quantitative tools are used to collect and analyze data to identify and clarify the effectiveness of brand value measurement of Vietcombank.

The research has selected objects to be surveyed, including individual customers using banking services and other ones are organizations/companies with relationship to Vietcombank. In this research, the number of individual customers and companies nationwide surveyed directly was 456 individual customers and 152 corporate customers. 5. THESIS STRUCTURE Besides the foreword, conclusion and list of references, the main contents are structured into four chapters as below: Chapter 1: Overview of studies Chapter 2: Some theoretical issues of brand and brand development of commercial banks Chapter 3: Brand Development Reality of Vietcombank system Chapter 4: Brand development orientation and solution of Vietcombank system

CHAPTER 1 OVERVIEW OF STUDIES

1.1. THE SITUATION OF DOMESTIC STUDIES Currently, there were a lot domestic and international scientific research projects, books and magazines mentioning the contents related to brand theory. Some studies of science and domestic policies, students have referred the conception of brand as follows:

Scientific studies in 2010 - Le Thi Kim Tuyen – “Building a sustainable brand for Vietnam Joint-Stock Commercial Bank for Industry and Trade – Vietinbank” has been successful when systematizing the basic issues of brand, leading problems logically from corporate brands to Commercial Bank ones. Le Thi Kim Tuyen has gone toward a new direction: building a sustainable brand for Vietinbank. She has systematized the brand theories as well as the evaluation criteria of the same.

Scientific study, Assoc. Prof. Dr. Nguyen Quoc Thinh & Master Le Thi Thuan, a scientific research of sectored levels: “A number of major solutions to build and protect brands for Vietnam goods exported in the context of international economic integration”; and Can Anh Tuan, in his doctoral dissertation: “Developing a powerful brand for Vietnamese enterprises” where has discussed on the conception of brand is sign to distinguish goods and services among enterprises’ ones, is image of the goods and services of each enterprise, and is the corporate image in the minds of consumers.

In the opinion of Assoc. Prof. Dr. Nguyen Quoc Thinh & Master Le Thi Thuan in their scientific research of ministry level (2003), there will be no any particular and sustainable pattern for the building and development of goods brand.

Can Anh Tuan has been succeeded in systematizing the theoretical base of issues related to brand and powerful brand building of Vietnam enterprises. He has systematized and interpreted more clearly some theoretical issues of powerful brand building for enterprises; delimiting and clarifying the conception and connotation of the brand, brand valuation method, thereby making the conceptions of powerful brand, powerful branding order, evaluation criteria system and factors affecting the powerful brand building.

Scientific studies “Building and development of brand for Vietnam Bank for Agriculture and Rural Development” by Dr. Tran Ngoc Son (2009), has succeeded in developing solution system for the Bank for Agriculture and Rural Development, including five solutions:

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With view of brand accession by Doan Cong Khanh in scientific research of ministry level (Ministry of Commerce, 2005), the term of brand is understood: “Brand is a man, has quality, personality, empathy, name, logo, appearance and color, etc. Mentioning brand is to refer goods labels has come to life, was saved in the memory of consumers. Thus, in fact, brand is the specific expression of the t goods label in commercial life, is something sticking to operations of an enterprise”.

Dr. Tran Thi Ly, in his doctoral dissertation: “Building and development of Hoa Loc mango brand, Cai Be, Tien Giang”, have the same view of the approach to brand as the same of Doan Cong Khanh. She has presented the theoretical basis of brand from the role, function and component, core value in production and operation activities of enterprises in the economy opening worldwide economic integration.

With her research in a doctoral thesis on “Building and development of Hoa Loc mango brand, Cai Be, Tien Giang”, she has found that brand development is to resolve all beneficial relationship. As the results of linear regression model, she has showed that the building and development of Hoa Loc mango brand last time was successful and built its reputation to consumers. Regarding to the brand development, Nguyen Thi Quy (2005), has evaluated that the brand development of commercial banks in Vietnam is still poor and mainly limited by competitive capacity.

Theme “Branding for Trong Tin Garment Company Limited by increasing online touch points to brand”, Nguyen Thi Diep Anh, Department of Electronics and Commerce, University of Commerce (2011). This has mentioned the main contents is to propose some measures to develop the brand for Trong Tin Garment Company Limited by increasing brand touch points, however, it is not focused on perfecting the brand touch points. 1.2. THE SITUATION OF FOREIGN STUDIES

Regarding to issues of brand development, now there are more works with different viewpoints. Currently, according to the research and understanding of Student, there are some researches on frontal brand development for the banking system in Vietnam and only a few topics mentioning these problems such as:

According to research by Joe Marconi (1999), how to create a value-added brand in the global competitive market at present, it is to create an appropriate and effective strategy covering advertising, marketing, public relation and investigation. He has compiled and given to the reader how to build a successful brand strategy and build loyalty to the brand.

In Designing Brand Identity Book: An Essential Guide for the Whole Branding Team, given the main contents of design and development by designing application, introduced five stages and methodologies for the creation and implementation of effective brand identity. In The Brand Gap Book: How to Bridge the Distance Between Business Strategy and Design, considered the book offered the unified theory of branding.

In Logo Design Love Book: A Guide to Creating Iconic Brand Identities, provided a guide for designers (and customers), those who want to understand the mystery behind the logos of a company, access to the brand identity system as an important touch point contributing to feelings to customers.

In Building Better Brands Book: A Comprehensive Guide to Brand Strategy and Identity Development, seem to be an essential guide to create and develop brand towards building brand identity. The problems of touch points and brand dialogue emphasized are conditions required for the service brand.

In Brand Meaning book, Mark Batey, offered a holistic perspective and general view of how consumers search and how to create a meaning of brand. It explored the underlying conscious and unconscious factors connecting people with products and brands. The conception of traditional marketing and a meaningful framework of new brand were introduced.

In How to Launch a Brand Book, Finien Consultancy, given a comprehensive guide to launch a brand: from the name to differentiate, how to design based on over a decade of professional experience transforming a new company of products and services from the idea stage to tangible brand reality. 1.3. COMMON POINTS AND GAPS OF STUDIES In addition to the results of previous studies has been achieved, there were still some gaps of previous authors have not studied, clarified and the thesis will conduct further research and clarify some gaps as follow:

Firstly, theoretical basis of the banking brand is still limited and needs to continue to improve the contents of banking brand. It should continue to improve the theoretical basis of banking brand associated with competition in current business environment theoretically and particularly.

Secondly, access theoretically and particularly the brand development of banking system and specifically set on banking services. Building sequences and contents of developing a brand for a particular bank in Vietnam and Joint Stock Commercial Bank for Foreign Trade of Vietnam.

Thirdly, expanding to research on the development of “brand touch points”, which are factors that can realize the worst points and best ones. On that basis, approaches and solutions to enhance brand value is mostly effective. Fourthly, expanding to research and propose link between “internal brand” and “corporate culture”.

4 Researching the relationship of “corporate culture” to develop the internal and external brand of commercial bank. Fifthly, building a solution system based on the development orientation of Joint Stock Commercial Bank for Foreign Trade of Vietnam and mutual development of the banking sector in particular. Researching the model “brand center” at Joint Stock Commercial Bank for Foreign Trade of Vietnam.

Thesis has approached and clarified the above-mentioned gaps in the research and use of assessment tools of inside and outside environmental factors to assess the reality of the brand value of Joint Stock Commercial Bank for Foreign Trade of Vietnam compared to the competitors on the target market and found out its basic advantages.

CHAPTER 2 SOME THEORETICAL ISSUES OF BRAND AND BRAND DEVELOPMENT OF COMMERCIAL BANKS

2.1. OVERVIEW OF BANK BRANDS 2.1.1. Operational Features of Commercial Banks 2.1.1.1. Bank and bank forms 2.1.1.1.1. State Commercial Bank

By law on credit organizations, the banks is considered the type of commercial bank when it is established with 100% state-capital and commercial banks now have 51% of dominant shares defined as the state commercial banks. 2.1.1.1.2. Joint-stock commercial bank: a bank is established as a joint stock company. Individuals or organizations will hold a certain number of shares of the bank and cannot hold the executive management. 2.1.1.1.3. Joint venture bank: is a form of capital contribution between foreign bank established in Vietnam and commercial banks in Vietnam 2.1.1.1.4. Foreign Bank Branch: a form of foreign bank is allowed to be opened and established in Vietnam. Such as: Citibank; Bangkok Bank; Deutsche Bank; 2.1.1.1.5. Commercial banks with 100% foreign capital:

This is a form of bank established as a limited liability company with one member or two or more members and is established in Vietnam with 100% charter capital owned 50% of charter capital.

Year

Number State commercial bank Joint stock commercial bank Joint venture bank Foreign bank Finance companies, finance leasing Cooperative Bank Policy Bank Development Bank

Table 1: The number of credit organizations in Vietnam in period 2010 - 2015 5/2015 123 5 33 4 50 29 1 1 1

2013 123 5 33 4 48 29 1 1 1

2011 126 5 37 4 48 29 1 1 1

2012 124 5 34 4 48 30 1 1 1

2014 123 5 33 4 50 29 1 1 1

Source: National Financial Supervisory Commission

2.1.1.2. Operational Features of Commercial Banks With the understanding of the commercial banks, commercial banks include the following three main operational features: Firstly, the operations of the commercial banks are business activities aims to earn profitability and profit objectives through monetary operations and banking services.

Secondly, the operation of commercial banks have to comply with the law, it means that only if commercial banks fully satisfies the strict conditions as prescribed in law, such as capital requirements, business plan, approval by the state bank, ... before being allowed to operate in the market. Thirdly, the operation of commercial banks is a form of business has a higher risk than other forms of business, and often has a profound impact on other sectors and the entire economy. In addition, the banking sector has used the brand development strategies to evaluate effectively and

increase brand value by receipt of feedback from consumers concerning its brand. 2.1.2. Brand Approach and Bank Brand 2.1.2.1. Brand Approach

Brands can be understood the conception of product with the manufacturer's sign attached to the face, packaging of goods in order to confirm the quality and origin of product. Brand is usually associated with ownership of the manufacturer and is usually authorized official trade representative. Thus, brand is understood

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as a form of non-material assets. 2.1.2.2. Brand Bank

In the opinion of the author: “Brand bank is understood as the image of the bank to customers and is distinguished from other commercial banks (competitors) in the provision of products and services in the field of finance-banking. Bank brand represents value perceived by customers with the bank itself and the banking products and services to market supply (through the separate elements including brand name, logo, symbol, slogan, ... and the confidence of customers)”.

Also, for the brand conception of banking system, in view of the author, the “Brand of banking system is understood as corporate brand consisting of many different subjects related closely to the brand of banking system and this have a influence on common brand through economical value as well as the image in the minds of customers using products of finance- bank services supplied by bank system”. 2.1.2.3. The Elements of a Brand 2.1.2.3.1. Brand Name: The first factor is known and helps confirm the existence of a brand. Any success in branding are closely related to a brand name. Therefore, the brand name is one of the most important and difficult decisions before the introduction of a brand 2.1.2.3.2. Symbol: Symbol of a brand is the use of an image/symbol replacing the wants to reflect by an enterprise. Typically, in the service business, sector will use the logo of that one. 2.1.2.3.3. Logo: As defined by the law of Vietnam, the brand logo is a graphical element, sign, or symbol of a brand or label accompanying its typeface, i.e. it is put up in one set by unique word or arranged in a particular way. A typical brand logo is designed to be recognized the immediate right of the viewer. The basic notable features when designing are to make a difference, simple, easy to remember, easy to adapt, make sense, shape, and most importantly, color. 2.1.2.3.4. Slogan: The slogan is a message that an enterprise wants to target customers, and is usually a brief prose succinctly describing the product benefits and reminiscent. Slogan should reflect the characteristics of the image, product, service, brand promise, and the core value of an enterprise. 2.1.2.3.5. Others: Studies have shown that if brand gives customers hear/see/taste/smell/judgment ... such brand easily impresses customers and delves into their minds than other brands. Therefore, the enterprises have continuously used the tools to expand the brand elements such as musical theme, packaging, music video, label, product design, etc. 2.1.3. Brand Classification

Classification of some architectural models of the brand can be divided into several groups, as follows:

According to the levels and form of expression, the brand is divided into 4 types as follows: According to the coverage of the brand; According to branded objects; According to the leading role of the brand and According to form of expression. 2.1.3.1. Classification according to the coverage of the brand: Including the types of the brand commonly used for all types of goods and services of the enterprise; for individual type of goods and services of the enterprise; and may be the general brand of many enterprises in the same link. The brand types include: Family brand, Individual brand, Collective brand, and National brand. 2.1.3.2. Classification according to branded objects: This is the form used for the tangible and intangible products. 2.1.3.3. Classification according to the leading role of the brand: Master-Brand: This is a strategy-oriented form of classification for the products and services. Sub-Brand: This is an extension of the brand, in which its name still remains the link level with parent brand. 2.1.3.4. Classification according to the form of expression: Traditional brand: This is the brand for products and services in traditional commercial environment and has not much modern technology applications for traditional products and services. The traditional products of the handicraft villages or areas are understood as the traditional brands. Electronic brand: This is utilization of the development of the Internet to build brands using the tools on the internet. The products and services advertised and introduced on the internet as Facebook, Google, Yahoo, etc. are the products and services supplied only through the Internet and these are E-branded products. 2.1.4. Architecture and models of the brand 2.1.4.1. Brand model by the product 2.1.4.2. Umbrella brand model 2.1.4.3. Horizontally extended brand model 2.1.4.4. Brand model by the commodity group 2.1.4.5. Brand-sharing brand model 2.1.4.6. Brand sponsorship brand model

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2.1.5. Functions and roles of the brand 2.1.5.1. Functions of the brand

Identifying and differentiating the brand: This is a very important and characteristic of the brand. The identifiability of the brand is not only an important factor for consumers but also for enterprises in the governance and administration of their activities. Providing information and guidance: This function is expressed in that through the images, language or other signs, consumers may somewhat identify the value of use and utility of goods.

Creating the perception and trust: This function is the perception of consumers about the differences, the preeminence, peace of mind, comfort, trust, while consuming goods and services when choosing which that brand brings. Economic function: The brand carries both a current value and a potential value. That value is

expressed most clearly when transferring the brand. 2.1.5.2. Role of the bank brand

The brand builds the image of bank and products and services in the customer's mind. The brand is regarded as a commitment on products and services between customer and enterprise. The brand helps the bank to segment the market The brand makes a difference in the product development process The brand benefits directly to the bank The brand contributes to improve the competitiveness and financial capacity of the bank The brand is a very valuable intangible asset of the bank

2.2. BRAND DEVELOPMENT OF COMMERCIAL BANKS 2.2.1. The concept and the need for brand development of commercial banks 2.2.1.1. The concept of brand development By author: “Development of the bank's brand is harmonized combination of measures to increase competitiveness, business strategy and results of business operations of the bank through perferting business strategy, developing financial - banking products and services and constantly implementing activities to increase the perceived value, financial value, the coverage and dominance of the brand in order to influence the brand value of the bank in the minds of customers using financial - banking products and services supplied.”.

Regarding the concept of brand development of the banking system, from the viewpoint of the author: “Brand development of the banking system is harmonized combination of measures to increase the brand value of the banking system and component parts in the system affecting the result of brand development of the entire system. Measures taken are directed to not only Customers using financial-banking services but also affect the whole objects in the banking system, including staffs and officers, managers, partners, customers, media, .... And component parts themselves of the banking system, composing of branches, subsidiaries, associated companies and representative offfices, etc. In addition, brand development of the banking system affects not only financial - banking products and services in the minds of customers, but also the entire business strategy, competitiveness and the overall development of the entire banking system”. 2.2.1.2. The need for brand development of the banking system 2.2.1.3. Conditions for the brand development of commercial banks

The concepts of brand and brand building in the financial - banking sector are relatively different. Commercial banks serve the number of customers with different needs so they face many difficulty in building a brand related to all its customers. Thus, due to the increasing concentration of the organizations for brand building, commercial banks determine commitment to positively manage their brands.

In fact, the studies giving brand management skill of commercial banks are relatively new and based on the creative strategies and techniques. Awareness of brand management relates only to consumer goods and by cognitive limitations, one realizes that commercial banks now have no ability to manage strong brands.

We can find that, in almost all fields of business, banking and financial activities always play the most important role for any economic system of the countries. The change and development of the banking sector reflect the true development of the economy. Therefore, although commercial banks have no strong brand such as the enterprises of business and production, service supply, etc., the role of commercial banks has far greater value in other sectors. Therefore, to achieve these objectives more effectively, the role of the brand to commercial banks is to make further efforts to create a strong brand.

2.2.2. Contents of brand development of commercial banks 2.2.2.1. Development of the perceived value of customers to the brand This content aims to constantly improve the quality of products and services, the value added to the

7 products and especially enhance personal value to consumers when consuming branded products. It is unlikely to have a strong brand when the product does not obtain good feelings of the customers and of course, it will only have good feelings when the product has satisfied quality with appropriate supplementary services and makes consumers confident, feel excited when consuming them. Development of the perceived values is not purely improving product quality but more important making the customers feel and see the differential values, outstanding features, personal values confirmed when consuming branded products. 2.2.2.2. Development of financial value of the brand

This Content aims to develop brand links in various levels under various forms of links, including brand license and commercial franchise operations in order to increase the prestige, the level of influence and domination of the brand on many fields of activity and market areas, thereby increasing financial value of the brand. Link activities can appear as Co-branding in brand communication (E.g., Discount products in Supermarket A if using payment services through Bank B, etc.) or forming brand alliances (for example, co- financing of projects, dominant capital contribution in the joint ventures, etc.) and the co-branded products (the co-branded credit cards for example). 2.2.2.3. Increasing the level of coverage and dominance of the brand

This content is aimed at strengthening the brand communication activities, including internal communications and outbound communications (such as advertising, public relations activities, exhibitions and other promotion activities).

2.2.3. Strategy and tools for brand development of commercial banks 2.2.3.1. Brand development strategy

Brand strategy are the orientations in the short term and long term for the bank in the process of brand development. Through which to gain a competitive advantage compared with competitors in the market. Also, it can be understood, the brand strategy is a plan made to achieve the objectives set out for the brand development of the banks. 2.2.3.1.1. Roles of brand development strategy Brand development strategy plays a very important role for banking activities. As follows: - In the fiercely competitive environment today, thanks to the brand development strategy, the banks will be oriented their brand consistent with more competitive environment.

- Help to concentrate the resources for brand building - Brand strategy will ensure consistency in implementation of the decision to build and develop the brand.

- Prevent the risks that may occur to the banks in the process of building and developing brands. - Improve the efficiency of implementation of bran decisions through the discovery and remedy of the errors in making decisions on brand development. - Contribute to enhance brand value through image and trust of the public with branded products.

On the basis of building brand development strategy, the implementation stages include: Brand strategy

2.2.3.1.2. The relationship of brand development strategy with the other strategies of the banks 2.2.3.1.3. Measurement tools of banking brand development strategy planning; Implementation of brand strategy; Review and assessment of brand strategy. 2.2.3.2. Measures and tools for brand development of the banks

The development of brand development tools needs to achieve the objectives for the brand development, which is developing the perceived value of the customers; developing financial value of the brand, and developing the coverage of the brand. Therefore, the main tools for banking brand development should focus on the following main tools: Brand development by communication activities; Brand development by extension / refresh of the brand; and Brand development by the development of financial value of the brand. 2.2.3.2.1. Brand development by communication activities

Brand communication is communication about the brand that means the information about the brand is exchanged and conveyed to the targeted audience of the communication. Information about the brand is the information on the name, logo, brand identity system and the supporting information as additionally introducing and promoting brand. Information is forever just information. The assessment of this information is entirely dependent on the subjectivity of each person receiving this information.

When it comes to brand communication activities, One can not fail to mention two popular communication activities currently as Below the line (BTL) and Above the line (ATL). To get effective communication strategy and brand development, banks need flexibility to use the tools effectively on a basis of combining both communication tools Above the line (ATL) and Below the-line (BTL). 2.2.3.2.2. Brand development by extension / refresh of the brand 2.2.3.2.3. Brand development by the development of financial value of the brand.

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2.3. FACTORS AFFECTING THE BRAND DEVELOPMENT IN COMMERCIAL BANKS 2.3.1. Group of macro environmental factors: Several factors that may affect the business operations and brand development of commercial banks include: Factor of political institution, environmental law and policy regimes of the law. 2.3.2. Group of sector environmental factors: From overview research, the evaluation criteria of brand development are identified as evaluation criteria to develop the brand based on several components. These components can include distribution channel strategy, brand development and brand promotion plan. 2.3.3. Group of internal factors of the enterprise: Some internal factors of commercial banks will decisively affect brand development activities at commercial banks including: Bank management apparatus, Modes of Personnel and Salary, financial ability of commercial banks, the characteristics of service publication, technology and culture and business strategy of commercial banks. Regarding Bank management apparatus:

Commercial banks operate in the market mechanism, commercial banks' management apparatus plays a special role for the survival and development of the commercial banks, commercial banks' management apparatus must simultaneously perform many different tasks.

2.4. EXPERIENCES ON BUILDING AND PROMOTING HE BRAND OF SOME LOCAL AND INTERNATIONAL COMMERCIAL BANKS 2.4.1. Experiences of some international banks 2.4.1.1. Barclays Bank 2.4.1.2. RBS 2.4.1.3. HSBC 2.4.1.4. ANZ Bank 2.4.1.5. Citibank 2.4.2. Experiences of some local banks 2.4.2.1. Vietinbank 2.4.2.2. Agribank 2.4.2.3. BIDV 2.4.2.4. Techcombank 2.4.3. Lessons learned for commercial banks

On the basis of experiences on implementing brand development of some local and international banks, we can draw some lessons for brand development of Trademark Development of Joint stock commercial Bank for Foreign Trade of Vietnam System - Vietcombank in particular and commercial banks in general, as follows:

First, perfecting brand strategy associated with business strategy of the banks. Second, building and implementing a unified brand identity system system-wide and internationally. Third, developing and attracting human resources of high quality. Fourth, expanding cooperation and joint venture with other commercial banks and constantly expanding and developing local and international network Fifth, building enterprise culture and grasp thoroughly to each staff on how to communicate internally and with customers.

Sixth, continuous innovating, developing and improving the quality of products and services. Seventh, having specialized sections in implementing brand development.

CHAPTER 3 CURRENT BRAND DEVELOPMENT OF VIETCOMBANK SYSTEM

3.1. GENERAL INTRODUCTION OF VIETCOMBANK 3.1.1. History of the formation and development 3.1.1.1. History of the formation and development 3.1.1.2. The organizational structure of Joint Stock Commercial Bank for Foreign Trade of Vietnam

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Diagramme 3.1 : Organisationnel Structure of Vietcombank System Management apparats is structured and organized as follows :

Diagramme 3.2 : Vietcombank Structure of Executive Management Model of Vietcombank 3.1.2. Characteristics of the resources of the Joint Stock Commercial Bank for Foreign Trade of Vietnam 3.1.2.1. Characteristics of human resources

With the view that human resource is a core element deciding the success of the bank, Vietcombank has always implemented policies of recruitment and use of human resources seriously and arrangement of personnel consistent with their working capacity. By the end of October/2014, the total number of officials and employees of Vietcombank reached more than 14,000 people - Vietcombank's Leadership Board Vietcombank has always seen it as key to the bank's success throughout the years. 3.1.2.2. The financial resources

In the world, currently, Joint Stock Commercial Bank for Foreign Trade of Vietnam has had dealer Financial resource of the commercial banks is the financial ability of the Banks to perform and develop business activities that are most effective and ensure the stability of production and business operations. The financial resources of the bank are not only the financial resources to ensure business activities of the bank but also the ability to exploit, manage and use these resources effectively serving for business operations. Financial resources not only demonstrate current strength but also demonstrate the potential, prospective financial strength and development trends in the future of the bank. 3.2.2.3. The customer relations and economic links

10 banking transaction relationships with approximately 1,700 banks and bank branches in over 120 countries and territories, in which Joint Stock Commercial Bank for Foreign Trade of Vietnam has always placed primary dealer relations with leading banks in each country and territory. In Vietnam, Vietcombank does have relationship with all banks operating in Vietnam including: 4 state commercial banks; 34 joint-stock commercial banks; 4 Joint Venture Banks and 50 branches of foreign banks. 3.1.3. Introduction to major products and services of Vietcombank 3.1.3.1. Services for individual customers 3.1.3.2. Services for enterprise customers 3.1.3.3. Services for financial institutions 3.1.3.5. Other Services 3.1.4. Vietcombank's business results through some recent years 3.1.4.1. Regarding general business result of Vietcombank from 2010 to 2014

During this period, Vietcombank continued to have many innovations in business operations and in management activities. Parallel to the efforts to improve asset quality, promote safe and efficient credit growth, control credit quality, the acquisition and disposal of bad debts continued to be focused on promoting. The service business operations, foreign currency business had good growth. The operational safety targets were guaranteed, apparatuses of audit, inspection and control continued to be consolidated and strengthened. The result of business operations of Vietcombank during the period of 2010-2014 were as follows: Unit: %, billion dong About total assets:

About capital mobilization: Chart 3.3: Vietcombank's total assets over the years from 2009-2014 Unit: Percentage, billion dong

Chart 3.4: Vietcombank's Capital mobilization from the economy over the years from 2009-2014 Vietcombank's Capital mobilization has had relatively high growth over the years, achieving this result is due to flexible and sensible capital mobilization interest rate operation which impacts to lead the market; further improvement of the efficient capital sources and capital use. In the period of 2010 - 2014, the average mobilization growth rate reached 18%, higher than the average growth rate of the previous 5 years (13.8%) and higher than the average growth rate of the entire banking sector of 13.6%. That confirmed the belief of the market for Vietcombank's prestige and brand.

About Credit: Unit: Percentage, billion dong

11

Chart 3.5: Vietcombank's Loans outstanding from the economy over the years from 2009-2014 Vietcombank's credit has sustainably grown over the years and concentrated on the priority areas, good projects. During the period of 2010 - 2014, Vietcombank maintained the credit growth rate of 14.5% in average, lower than the average growth rate of 23.5% of the previous hot credit growth period (2005 - 2010), however, still higher than the average growth rate of the entire banking sector of 11% / year. 3.1.4.6. The service activities The service activities have grown quite well and almost achieved targets set out. In retail operations, Vietcombank always makes the flexible price and fee policies, cross-sells products to adapt to the market; actively organizes training courses in customer care skills, implement marketing programs throughout the system to offer services to customers and see it as a stable revenue source of the bank. In card operations, Vietcombank has always led the market in card operation arrays, is the bank that international card organizations have always appreciated in card issuance and payment, risk management, as well as also granted many awards from international card organizations and Vietnam Bank Card Association in the card business operation. Unit: percentage, billion dong

Chart 3.7: Vietcombank's financial targets over the years from 2009-2014

3.1.5 Summarize the prizes gained by Vietcombank in 2012-2014 3.2. ANALYSE THE BRAND OF VIETCOMBANK SYSTEM IN THE PAST PERIOD 3.2.1. Introduce generally about Vietcombank's brand 3.2.1.1. Vietcombank's logo through periods From 04/1963 to 12/2007: Type of monogram of Vietcombank with Vietnamese and English rounded.

Figure 3.1: Vietcombank's logo in the period of 1963-2007

With the image of Vietcombank's logo used, it simply showed abbreviations of Vietcombank letter and surrounded line was Vietnamese and English names of the bank. By the period from 01/2008 to 03/2013: The type of monogram of VCB, was used.

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Figure 3.2: Vietcombank's logo in the period of 2007-2013

The brand identification system of Vietcombank in the period of 2013 backwards can be recognized the most obvious characteristic is the logo's color, which was traditional symbol and looked very monotonous and not prominent. Green is prominent for the brand and its tone is heterogeneous. The Branch's outside, ATM, Transaction office,.. before 04/2013.

Figure 3.3: The image of outside brand of a Branch in the system

Basically the brand's image was not homogeneous and uniform throughout the system. Identification system in this period did not have general regulation and standard therefore, the use of image was very confusing. The image of staff uniform of Branches with Vietcombank brand before 2013: we can see that each Branch in the system had a separate uniform and without any common points among Vietcombank's officer in whole system.

Figure 3.4: Image of officers’ uniform The period from 04/2013 to the present: New logo has been used.

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In addition, since 04/2013, Vietcombank basically has had a brand recognition part and used

consistently throughout the system. 3.2.1.2. Brand recognition part of Vietcombank

New brand identification department was launched in 04/2013, by customer surveys using Vietcombank's services, the poll results reflect relatively true the content's nature related to Vietcombank's brand identification part. From 04/2013, Vietcombank has developed its new brand identification part with its logo "Vietcombank" and slogan "Together for the future". Color code is used for the brand identification system:

Form of monochrome identification system:

Figure 3.7: Some forms of monochrome identification Unit: person

Chart 3.8: Customer's assessment of the brand identification part from 2013

3.2.2. Investment status for branding Vietcombank during the past period 3.2.2.1. Status of financial investments for branding Vietcombank 3.2.2.2. Status of arrangement of HR for branding Vietcombank

For its branding, currently Vietcombank has a sole part established in 2000 with its name is Public Relation Department. Total officers of this Department maintains under 20 officers. Moreover, the number of staff branding with principle works: 3.2.2.2.1. Organize to implement with organizational units performing proactive information channels from Vietcombank 3.2.2.2.1. Maintain relationships with media, press agencies, managerial offices and build media plans to proactively publish external information in accordance with business plans and development orientation of Vietcombank

14 3.2.2.2.3. Build and organize to implement all works related to training and management of Vietcombank brand 3.2.2.2.4. Plan, implement/ coordinate with relevant units to deploy communication, advertising the whole system 3.2.3. Brand architecture Commercial Bank for Foreign Trade of Vietnam 3.2.3.1. Chart of brand architecture Commercial Bank for Foreign Trade of Vietnam

Vietcombank's brand architecture by an investment portfolio: name of member companies starting with 3 letters "VCB", the following letters are is an abbreviation names of member companies. Since Vietcombank has the new brand identification part, subsidiaries, affiliated companies has also adjusted upon the new identification system. From 04/2013, all staff of Vietcombank system has been building the sole identification system.

Chart 3.4: Vietcombank's brand architecture from 04/2013

Although Companies operate quite independently and actively in business operations and business strategy / brand strategy, if any Units affecting the outcome and reducing the brand's value shall decrease common brand value of Vietcombank. 3.2.3.2. The list of strategic brand of the Bank for Foreign Trade If split by segment of investment equity, Vietcombank includes the brands as follows:

Chart 3.5: Vietcombank's brand list participating in investment from 04/2013

3.3. STATUS OF BRAND DEVELOPMENT OF VIETCOMBANK SYSTEM 3.3.1 Status of strategy and performance of strategy to develop the brand before changing the brand identification system 3.3.2. Status of planning and strategy's content of Vietcombank

With the objective of striving to become the best bank in Vietnam, one of 300 the largest financial groups in the world and managed under the best international practices, in recent years, Vietcombank always proactively and actively has restructured with a clear roadmap.

In the period of 2011-2013, Vietcombank reformed its business operation upon Vietcombank's business strategy in the period of 2011-2020. Since mid 2012, implemented the policy of the Government and the State bank on reformation of banking sector, based on Business Strategy 2011-2020, Vietcombank has built the Scheme on reformation in 2015 with a focus on improving financial capability, positive handling bad debts, improving administration capacity, developing the roadmap for gradually applying Basel 2.

Currently, Vietcombank is lack of a Schedule to implement detailed Strategy therefore, the implementation of Strategy in Vietcombank is sporadic and not systematic, its effectiveness is not high. In Vietcombank has 2 departments with the same function on Strategy and not have specific functional division to coordinate to deploy, leading to many overlappings, not scientific, the quality of planning is limited. 3.3.3. Status of implementation of brand development content of Vietcombank 3.3.3.1. Status of development of customers’ feeling value for the brand in Vietcombank system Major changes to the new brand identification part of Vietcombank has been supported by units and

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implemented relatively detailed. The repositioning the brand through Vietcombank brand somehow made a difference from other competitors on the market.

Customers make a assessment of VCB's brand identification, most of the reviews are positive. Recognizability is appreciated with over 53%, followed by the spectacular design and understandability with very high rate alternately 47% and 42%. The reviews also agree that identification part is significant although not as high. However, the uniqueness of identification part is not appreciated, 37% say that the identification part's uniqueness is in normal level, and over 10% underestimate ist uniqueness.

Synthesize answer of question 7

Mean

Std. Deviation

Minimum Maximum 5 5 5 5 5

1 1 1 1 1

4.27 4.18 3.95 4.00 3.57

.996 1.024 .980 1.099 1.089

N 448 444 446 445 447 438

Recognizability Spectacular design Significance Understandability Uniqueness Valid N (listwise)

Chart 3.1 Synthesize assessments of Vietcombank from customers However, enterprise customers make an assessment of Vietcombank's brand, most of reviews says that it is in average level, even many criteria is undervalued, 59% says that the brand's recognizability is in average level, 61% makes an assessment of aesthetics of brand design is in average level, the understandability is the same with 52% of reviews. Many criteria are underestimated such as: 56% says that the brand has no significance, 64% says that it has no uniqueness. It really is a remarkable issue for officials in charge of branding in Vietcombank (Details in Appendix 8)

3.3.3.1.1. Practice of deployment of promotional activities to develop the brand Vietcombank's communication activities in the past years was only mantained in the following activities: Press relation, electronic newspapers, television, and print advertising in public places. According to statistics, the number of press relation just focuses on advertising upon monthly period and focuses on: The Banking Times, New Hanoi newspaper,banking magazine, trade finance magazine,... Average total for years totaled more than 100 items of the press; For electronic newspaper, just advertises on the Websites of Smarrtlink and Vnexpress companies and television programs mostly upon arising without any orientation for specific brand strategy.

On the appeal of marketing activities, public relations of Vietcombank

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

6.0 58.9 87.4 94.7 100.0

Very low Low Average High Very high Total System

Missing Total

9 80 43 11 8 151 1 152

5.9 52.6 28.3 7.2 5.3 99.3 .7 100.0

6.0 53.0 28.5 7.3 5.3 100.0

Table 3.3: Synthesize assessments of marketing and PR from enterprise customers

3.3.3.1.2. Status of implementation of PR activities in brand development The PR tool basically be deployed at Branches and Head Offices of Vietcombank basically meet the requirements of the brand identification system. However, categories are inadequate and should be revised, as well as commented at brand Handbook will be issued. Unit: person

16 Chart 3.11: Assessment of promotional activities of Vietcombank of individual

In general, although there are many shortcomings in the process of implementing a brand identity system from 2013, the customers highly appreciate the brand value of Vietcombank with 358/456 customers reviewing highly and very highly. Thus, it is possible that the identity system is only a component so that individual customers can rate the brand value of the banking industry and not a prerequisite.

3.3.3.1.3. Practical application of other trade promotion tools in developing the brand The current brand promotion tools of Vietcombank are mainly through the channels of the press, relatives, etc. Unit: Quantity

Synthesis of the results answering question 1

N Minimum Maximum Mean 454 452 453 453 452

4.16 4.07 3.89 3.80 3.92

1 1 1 1 1

5 5 5 5 5

Std. Deviation .979 1.051 .949 .947 .923

451

The transaction has a favorable location for travel The facilities are fully equipped and modern Convenient facilities for making transactions Facilities feels friendly, professional The ATM location convenient, safe and comfortable when the transaction Valid N (listwise)

Chart 3.13: Percentage of the customers how to know to the Vietcombank brand However, the Vietcombank’s promotion programs are at very limited level and the majority of the customers does not highly appreciate the Vietcombank’s promotion programs and think that they are inefficient.

Synthesis of the results answering question 4

N

Minimum Minimum Mean

452

1

5

4.11

Std. Deviation 1.030

For reasonable level of the interest rates and service fees For the transparency in the provision of the services For the diversification of the services For the convenience when using the services For the safety, reliability For the accessibility of the services For the consultancy services

454 453 453 453 452 449 451

1 1 1 1 1 1 1

5 5 5 5 5 5 5

4.27 3.94 3.97 4.28 4.20 3.77 3.51

.922 .900 .883 .973 .973 .927 .985

For the appeal of the promotion services

Valid N (list wise)

441 Table 3.7: Synthesis of the scientific and technological evaluation of Vietcombank service product According to a survey on communication activities, the survey’s results for the individual customers are to highly appreciate the brand value of VCB (over 50% assessed very highly and 28% assessed highly), however, the majority of the reviews show that communication activities, promotion of VCB are not really attractive. Approximately 40% of the reviews show that the media activities, promotion of the new products, services and the attractiveness of the marketing activities, public relations of VCB at the normal levels. Many reviews even underestimate these activities (over 10%).

Synthesis of the results answering question10

Std. Deviation

N Minimum Maximum Mean 3.39 443 3.33 443 3.38 442

1 1 1

5 5 5

.914 1.027 1.023

1

5

4.26

.959

441 433

For the communications activities of Vietcombank For the promotion of the new products, services the attractiveness of marketing, public relations activities of Vietcombank For the brand value of Vietcombank Valid N (list wise)

Table 3.8: Synthesis of the scientific and technological evaluation of Vietcombank brand

For the corporate customers, the Vietcombank’s communication activities are generally assessed as weak average with the very high assessment rate at this level. 46% is in average level, 39% is in low level. The promotion of the new products is assessed low and very low with the more than 60%, 20% is in average level. The attractiveness of the marketing, public relations activities is also rank at low (52%) and medium (28%). Although the targets of the promotional and media activities are assessed not highly, overall, the brand value of Vietcombank is still considered relatively good: 46% is in highly and 16% is in very highly with the value brand of Vietcombank.

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3.3.3.2. Development status of the financial value of the brand in the Bank System for Foreign Trade of Vietnam Unit: million dong/ percentage

2011

2012

2013

2014

%

%

%

Impl

Impl

Impleme

Impleme

Impleme

%

Implem

Plan

Plan

Plan

Plan

Implem

eme

emen

ntation

ntation

ntation

TH

entation

entation

ntati

tatio

on

n

Advertising

88,000

59,638

68%

140,000

98,082

70%

100,886

82,727

82%

284,236

244,443

86.00%

budget in HSC

Advertising

84,903

61,471

72%

160,000

121,049

76%

145,110

96,793

67%

205,400

162,266

79.00%

budget in Branch

Total advertising

172,903

121,109

70%

300,000

219,131

73%

245,996

179,520

73%

489,636

406,709

83.06%

budget

Table 3.9: Advertising implementation cost details of Vietcombank over years 2011-2014 Besides the financial values, focus on the brand development advertising activities, Vietcombank also develops the brand development through the joint venture, share purchase activities. This activity is focused on three areas: expanding investment for the subsidiary 100% of capital owned by Vietcombank (VCBS, VCBL, VCBF); joint ventures (VBB, MBB, OCB, EIB, etc.); and associated with some companies and other long-term investments (Infrastructure Development and Finance Investment Joint Stock Company, Viet Real Estate Commercial Joint Stock Company, Vietnam Credit Information Joint Stock Company, etc. By the end of 31/12/2014, Vietcombank has invested 5,170 billion VND for the investment activities in order to bring the economic benefits as well as the brand expansion and development of Vietcombank. For the purpose of developing the brand and increasing the confidence in the banking sector, Vietcombank has invested approximately 50% of total capital for the banking and financial sector. The list of Vietcombank’s investments are always being reviewed and evaluated periodically to ensure compliance with the provisions of the state and effectiveness of the investment items.

3.3.3.3. Brand development Human Resources Practice in the Bank for Foreign Trade of Vietnam In maturation and development over the past 50 years, Vietcombank has always focused on the use and development of resources for the development of its brand value. The resources serving for building the brand include the transaction location, facilities, ATM layout location, counselors ‘attitudes, staff, reputation with customers, etc.

Synthesis of the results answering question1

N Minimum Maximum Mean

Std. Deviation

The transaction location has advantages for travel

454

1

5

4.16

.979

The facilities are fully equipped and modern

452

1

5

4.07

1.051

The facilities are convenient for making the transaction

453

1

5

3.89

.949

The facilities make friendly, professional sense

453

1

5

3.80

.947

locations

convenient,

are

safe

and

452

1

5

3.92

.923

ATM comfortable for making the transaction

451

Valid N (list wise)

Table 3.13: Individual assessment synthesis of Vietcombank’s infrastructure Evaluation results surveyed the corporate customers of Vietcombank: Unlike personal, the review of most businesses into highly assess the properties of geographical location but do not highly assess the facilities of Vietcombank’s transaction locations. More than 80% review appreciates and high values transaction offices' convenience while more than 7% disagrees with this idea.. To evaluate the convenience of the facilities, the reviews say that facilities be convenient for transactions account for 60% and the rest say that they are normal basis or inconvenient. When assessing the facilities, up to 70% of the review says that the facilities of Vietcombank are modern inadequately, the mean, medium and mode indicators of these criteria are also around level 3. Friendliness, professional of the facilities are also ranked at average with 54% while the total reviews agreed and disagreed are only ranked at level of 30%. The reviews also assess the ATM location of Vietcombank average with 58% of review while the reviews agreed and disagreed are ranked at similar. (Details in Annex 8).

18 Synthesis of the results answering question2

N Minimum Maximum Mean Std. Deviation .961 451

3.77

1

5

staff are always courteous and

452

1

5

3.81

.951

453

1

5

4.19

1.031

449

1

5

4.26

.973

445

Vietcombank’s professional Vietcombank’s staff are always enthusiastic to help and serve customers Vietcombank’s staff have multiple channels to contact customers Vietcombank has always maintained credibility with customers Valid N (list wise)

Table 3.16: Synthetic of evaluation about question 2 of Science and Technology

Thus, unlike the review of the individual, the review of the business is somewhat stricter. While most individual’s reviews are good at evaluating the various aspects of Vietcombank trademark including facilities, human team, service quality, the brand identity department, the business has the diversifier look. There are criteria ranked at good such as facilities, there are criteria dispersed and no clearly dominant review, much underrated criteria such as brand identity department and promotional communications activities. Even if evaluating a criterion, the indicators of which have also been sharply divided. Many criteria are appreciated in this respect but are not appreciated at the different respect. It agrees with the conclusion of the individual customer, most reviews appreciate the brand value of Vietcombank, however, current promotions, PR of Vietcombank are still not match with this brand and needs to be improved in the future. 3.4. GENERAL COMMENTS ON BRAND DEVELOPMENT OPERATING OF VIETCOMBANK SYSTEM 3.4.1. Achievements

With the flexible and decisive leadership of the leadership collective, cadres and employees of Vietcombank, Vietcombank’s business activity in recent years is continuously achieved good results, steady, efficient growth, operation safety guaranteed. Vietcombank is always exemplary, leading in seriously implementing the policies of the Government and state bank on operating the monetary policy in the difficult conditions. Vietcombank has established the business strategy with the clear objectives and direction in each period. Safety and effectiveness in business are the leading goal, green and sustainable development of the community is a key objective, developed based on the modern technologies with high quality human resources and administration under international standards.

Vietcombank has always strictly implemented the Party’s policy guidelines, the Government and state bank on operating the monetary policy, contributing to stabilize the currency market, curb inflation, and stabilize the exchange rate and interest rate. Vietcombank has proactively taken the lead in implementing strictly the provisions of interest rate ceiling; lower interest rate tally (in 2012, 2013, 2014) to facilitate to lower the interest rate, support enterprise, while ensuring good liquidity to the banks.

Thanks to the initiative, enterprising, persistent efforts of the cadres and employees, Vietcombank has achieved the basic business objectives with the state bank contributed to curbing inflation, promoting the production and business development, preventing the economic recession, stabilizing the macroeconomic and ensuring the social security.

Overview of individual customer’s review: most of the reviews are good reviews of various aspects of Vietcombank trademark including facilities, human team, service quality, the brand identity department. From the above assessment, most reviews appreciate the brand value of VCB. However, the current promotions, PR of VCB are not match with this brand and need to be improved in the future.

Unlike the review of the individual, the review of the business is somewhat stricter. While most individual’s reviews are good at evaluating the various aspects of Vietcombank trademark including facilities, human team, service quality, the brand identity department, the business has the diversifier look. 3.4.2. Limitations and reasons Through the content related to assessing the situation of brand development activity of Joint Stock

Commercial Bank for Foreign Trade of Vietnam, some limitations and reasons may include the following 3.4.2.1. Some limitations:

Firstly, at the Branches, the inconsistency in designing and conveying the brand is huge. Currently, the Branches has full authority in its scope for business and brand development, so management and inspection are relatively difficult. At the branches, space for direct transaction is very large, it loses space showing the relationship among departments and no opportunity for cross-selling products and services. In addition, the communication is only encapsulated at the branches and it is not interested in influence of the relevant branches or the system.

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Secondly, the current media images is reformed slowly and changed, which makes customer bored for the images, communication tools of Vietcombank. Thirdly, Vietcombank's brand strategy is not clear according to detailed directions in the short term, medium term and long term, so the deployment process is still full of confusion. Fourthly, human resources of brand development activities have not met the requirements set forth. 3.4.2.2. Some reasons: Firstly, Vietcombank has not been allowed to issue a brand handbook. This is the reason that many units have not implemented according to request yet.

Secondly, Vietcombank has not had Management Division of brand image. Thirdly, Vietombank should have widely deployed plans and images to ensure uniformity across the system for a period of 5 years at least. Fourthly, there is no specific schedule for deployment in the order of priority: external factors,

including signs; ATM; media advertisement samples; gradual elimination of applications including sample, interior and exterior used for old brand identity; KOP application into area and the interior; .... Fifthly, Vietcombank has no plan to inspect and supervise the implementation and compliance throughout the system regularly and continuously. Sixthly, Vietcombank does not regularly maintain to protect its brand image. The advertising system on websites is not modern and it requires professional unit for performing. Seventhly, the construction quality of brand works is still very sloppy with rapid deterioration, in

accordance with the weather, avoid rusting,... Note that use big aluminum plate to restrict junctions / transplantation. Eighthly, because Vietcombank's logo is 3D, using the light for signs in the evening makes people feel difficult to see and dazzled, it should ensure homogeneous element of the night and the day.

Ninthly, use of ads bannerat HSC and the branch has not been replaced and updated regularly for ensuring that the brand is always renewed and introduces new products to customers. In addition, use of too many banners at transaction locations limits promoting information in one location.

CHAPTER 4 BRAND DEVELOPMENT ORIENTATION AND SOLUTIONS OF VIETCOMBANK SYSTEM

Medium and long term strategic orientation of Vietcombank is to develop and expand its operations to 4.1. DEVELOPMENT STRATEGY OF VIETCOMBANK BY 2020 4.1.1. Development strategy of Vietcombank by 2020 4.1.2. Strategic orientation for some major activities of Vietcombank become multifunction Financial Bank Group with regional and international influence:

Bank reaches Top 1 Retail and Top 2 Wholesale. Bank achieves the highest profitability performance and a minimum 15% ROE. Bank heads the level of customer satisfaction. Bank head human resources quality. Bank reaches the best risk management.

4.2. BASIS FOR BRAND DEVELOPMENT SOLUTIONS OF VIETCOMBANK SYSTEM 4.2.1. Assessment of factors affecting Vietcombank brand development 4.2.2. Some points of Vietcombank brand development solution according to SWOT 4.2.3.1. Strengths Firstly, Vietcombank is one of a handful of commercial banks with the best business in Vietnam market.

Secondly, now with a network of over 90 branches across the country, the Bank has expanded its service scope of financial- banking service products to the local, communes, wards and towns, etc. at all provinces across the country.

Thirdly, a staff of 14,000 employees is assessed with the best brains in the market and the banking sector and the staff with work experience over 10 years account for approximately 30% of total labor and 60% of total employees working over 3 years, demonstrating the quality of the staff of Vietcombank.

Fourthly, with the abundant resources of economic capacity, strong technology foundation and electronic banking system that has been recognized in the market, the Vietcombank brand expansion and development is done overnight. Fifthly, with over 4 million customers and regular transactions and opening accounts over 5 years, this

20 is the most obvious proof that Vietcombank has a large loyal customer and is always pleased to service products offered by Vietcombank.

Sixthly, although the brand identity system has been changed since 2013, until 2014, the “Vietcombank Brand Handbook” has not been enacted yet - this is the reason why the identity system is consistent but the implementation process has not achieved its objectives. Seventhly, all of the senior leaders Vietcombank are required to have consensus of Vietcombank brand

perception and building Vietcombank brand development to be No.1 in Vietnam in the coming years. 4.2.3.2. Weakness Firstly, Vietcombank brand currently lacks consistent and different images in comparison with competitors in the sector as well as businesses in Vietnam. Secondly, Vietcombank’s existing customers are not diversified and new products have not met the needs of many different audiences.

Thirdly, because the state commercial bank has high compliance, rate policies are inflexible and bureaucratic - thus it inadvertently undermines competition in the market as well as affects Vietcombank brand value. Fourthly, the current activities for the communication are not consistent, as well as giving promotional

gifts is limited by the state provisions, the law does not support businesses. 4.2.3.3. Opportunity Firstly, the large number of customers and wide network, the cross-selling opportunity is very potential, the problem is how to use the brand value and introduce the products of Vietcombank to do the best of this.

Secondly, the scale development need of Vietcombank system on both quantity and quality, innovation, unity of brand identity system at the branches / transaction locations help the Branches improve competitive advantages in their territory. Thirdly, with the leading position and leading the bank system, Vietcombank system must continually

motivate staff - this is the resource of brand value of the enterprise. 4.2.3.4. Challenge

Firstly, the competitive environment among enterprises is increasingly fierce, because the gap is easily be reduced through financial resources and especially a problem faced by Vietcombank is that foreign commercial banks which has been participating in the Vietnam market more and more. Secondly, globalization is happening deeper, premium customers will have more choices in foreign commercial banks instead of using service in Vietnam. Thirdly, the current view of Vietcombank's senior management is without uniformity, which affects the brand value in the system. Fourthly, although the working style of Vietcombank has been improved, it is still very rigid, fears

responsibility and individuals in the work have affected serving customers and serving time. 4.2.3.5. Action With the analysis of content related to the SWOT, some goals need to be implemented to increase the brand value development of Vietcombank system. Based on assessment of Vietcombank brand to compete with other brands in the banking sector, it will be the effective basis for building the brand development solutions of Vietcombank System. 4.3. SOME BRAND DEVELOPMENT SOLUTIONS OF VIETCOMBANK SYSTEM 4.3.1. Solutions of competitiveness improvement

The brand development is an integral part of the implementation of business strategies, competitiveness improvement through improving business efficiency and governance. Some specific solutions enhance the competitiveness of Vietcombank, as follows: 4.3.1.1. Regarding the development of business operations and enhancing business efficiency Improving the quality of assets, expanding mobilization capital with controlling credit quality and reducing bad debt, controlling bad debt rate.

Restructuring the business segments in order to develop and enhance operational efficiency. Share joint-venture capital contribution: Reviewing and strengthening core business activities of the Bank, reducing business with the potential risk and ineffective business. Consolidating activities of its subsidiaries, strengthening the management and radically restructuring its subsidiaries, associated companies to improve operational efficiency 4.3.1.2. Regarding organizational structure, governance

Improving governance capacity with the international standard through completing business model, standardizing MIS, risk management under Basel II: Improving the quality of human resources through building evaluation and measurement mechanism of

21

work effectiveness and promoting the training of staff:

Renovating and developing IT systems: Restructuring and developing the network: 4.3.2. Proposal to establish "Brand Center" of Vietcombank 4.3.2.1. Necessity to establish a Brand Centre 4.3.2.2. Steps to set up a Brand Centre

For the successful establishment of a brand center, the Bank must begin an analysis of the current market situation in the country. A brand center should have at least 10-12 independent parts with different mandates. 4.3.2.3. Organizational chart of the brand center Establishment model of brand center of Vietcombank:

Chart 4.1: Model of brand center of Vietcombank Board of Management of the brand center will be the head to directly work with brand consulting partners in the process of implementation. The management apparatus should be divided into 6 departments with clear function and mission; Brand Management Department will have the largest scale with 05 main functions to ensure the operation of the brand identify system of Vietcombank in the right direction. In the immediate future, there will be 03 regional departments in charge of areas and it is expected to have 2-3 officials at each branch to guide and implement work items related to brand and monitoring using the brand identity system as prescribed.

Functions and duties of a number of departments at the brand center, as follows: - Strategic and Legal Department: construct strategies in units, periodically review and adjust to suit the requirements of each phase. The indispensably important role is that the protection of brands, so reviewing the domestic and foreign law is indispensable.

- Management Department: perform procurement function and equip Vietcombank system as standard of the brand identity system. Thus it can avoid heterogeneous quality and use of different materials in the same brand identity. - Marketing, Advertising and Public Relations Department: be responsible for working with media units

- to expand the ability to connect with communication tool. Information Technology Department: be responsible for solving problems in terms of technology and add new technology elements to communications activities. - Financial Planning Department: plan in accordance strategy approved and built. Additionally, the commercialization of Vietcombank image value should also be noted. - Brand Management Department: be responsible for reviewing and checking use of the identity system

during the operation, also evaluate communications program development. Functions and responsibilities of staff should be clearly pointed out. The brand center will follow a hierarchical structure, in which the staff will report to the manager. The number of employees of the brand center can be at least 120 and 10 employees in each department 4.3.2.4. Relationship between the brand center and other departments 4.3.2.5. Other related issues 4.3.3. Increasing the perceived value to the brand 4.3.3.1. Develop event programs for introducing the brand

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The task of building brand is associated with the task of advertising brand; therefore, it needs to hold events to introduce the brand. Commercial banks need to take advantage of the impact of events on the brand and should not think that only when we have a brand identity system, we organize introduction event, which is completely wrong. Commercial banks should take advantage of image promotion in events through building, creating excitement, waiting by invitation letter and hinted email to create excitement, curiosity; giving gifts at events so people remember the bank. Also, during events, it should use items related to the brand in wherever in the event programs for its customers to impress. For commercial banks, the organization scale is relatively similar. Therefore, it needs to organize events

to introduce brand at staff levels at Head Office and branch staff. 3.3.3.2. Building brand ambassador program

The brand plays an increasingly important role in purchasing decision. Customers do not just buy product or service; they buy the idea of the lifestyle that the brand represents. Selection of brand ambassador is not necessarily famous persons; the important issue here is the appropriateness of representative and brand of enterprises. The appropriateness should originate from the core business value of enterprises. The thesis has launched a number of criteria and expertise to perform. 4.3.3.3. Strengthening the brand through brand touch point

For Vietcombank, the brand touch points need to be concerned and monitored in the brand development process to ensure increasing the brand strength of Vietcombank. Some brand contact points should be focused, thoroughly interested such as: (i) Network and transaction locations; (ii) level of communication and experience of a bank teller; (iii) Improving the quality of service on the e-commerce channel; and (iv) strengthening the activities of public relations, social security. 4.3.4. Increase the ability to embrace rules of brand

Vietcombank need regularly update information on market through available various sources, especially if the borrowers work and have an appropriate system to submit documents and references to easily use in the process of branding. The bank can also participate in business associations to study the market and realize anything that can be useful in branding process of the bank to improve its performance. 4.3.4.1. Establishment of internal programs on brand development In business activities, the staffs have an important role in promoting the image of the enterprise by increasing brand touch points. Commercial banks need deploy some contents:

- To develop leadership skills and grasp their policy as well as related works. - To develop managers and grasp their new policy as well as related works. - To change corporate culture. - To deploy the view, attitude and values expressing new policies. - To apply activities and tools for employee engagement. - Programs of capacity development and process completion. - To organize seminars and events. - To ccommunicate the brand to staffs.

By above works, the internal program of brand development shall help to increase brand touch point for customers with the highest efficiency. In addition, there are other measures to support the local programs in brand development including building working behavior of employee in their assignment and brand development; publishing trailers on brand; building tools to create cohesion and relevant documents; organizing seminars to leaders, staffs and branch levels. 4.3.4.2. Improvement of communication capability

Communication is still the most important way to improve brand and this bank approves to apply it into their location communication strategy and measures to ensure that the brand is acceptable to their national or international target market. 4.3.4.3. For online public relations - website

Vietcombank almost uses traditional tools such as newspapers, leaflets, etc. However, the most developed tools at the moment is online PR. Online environment helps enterprises, individuals and organizations to easily connect together because of advantages of electronic commerce. It should be complete their functions in their websites. The banks currently fail to fully evaluate their role of their enterprise. 4.3.4.4. For development of corporate culture

Corporate culture is a factor to create the differentiation in competitive advantages of Vietcombank. During the development process, business culture of Vietcombank has gradually formed, developed and existed in every specific activity of all the members of the entire system. However, cultural factors are not really the foundation to business operations and do not become the driving force for sustainable development of Vietcombank.

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Solutions are proposed to Vietcombank including building working attitude of employees; reviewing and updating information on brand culture manuals.

Working attitude shall determine the initial impression of customers to the banks. Here, the introduction of core value and brand value into working requirement has vital role in increasing brand touch points of commercial banks. 4.3.4.5. For human resources

The bank must have suitable human resources and development policies to Vietcombank’s strategy and culture, combined with the application of modern banking technology in risk control and management resulting in providing various financial – bank services to meet different requirements of customers.

Building and selection of key managers are to serve the business development and senior professional building; including to implement policy of planning, transfer, recruitment, training and continuing education to managers according to standard program, to ensure to timely capture new business trends in the fields; to prepare contests to recruit position of director, managers of departments.

To encourage, incentive, motivational work for employees including to implement appropriate remuneration policy, appreciate talents; to continue improving salary and bonus policies in accordance with principles based on the capacity and dedication, competitiveness and to apply system of administration, to build marrking system and salary policy in accordance with work efficiency and operating range. 4.3.5. Complete business strateg and improve fiancial capacity 4.3.5.1. Completion of network development strategy: With the aim of transaction network development in depth and width in national and international

market, it should be implemented following measures: In addition to develop a network in width, it should develop domestic network in depth by strengthening the presence of Vietcombank in Ho Chi Minh City, Hanoi to each district and some provinces with its economic potential.

To invest in infrastructure and business locations to buy real estate undertakings as trading venues to ensure stable operations; to expand market into neighboring countries based on analyzing the potential development of these markets.

To review the branches, if any branch has not profit, such branch shall be more effectively restructured and moved to surrounding area. To upgrade industrial systems, human resources, risk management in order to assist to the process of network development. 4.3.5.2. Establishment of mergers and acquisitions strategy (M&A) including brand merger

In the current phase, national and international economic contexts are very complicated; there are many enterprises turning into difficulty that forces the employer to restructure or sell the enterprise. According to guidelines of the Government and State Bank, Vietcombank has many opportunities because its capitalization value is currently at attractive level to deploy M&A strategy. However, implementation of M&A shall be run into some difficulties such as order and procedures relating to M&A getting in trouble; ownership limitation makes it difficult in the process of M&A implementation; and there is not much objects to implement M&A. 4.3.5.3 Reviewing and completion of business strategy

Strategy building need the cohesion, guidance of planning, deployment through three mail factors including customers, products and distribution channels. Moreover, it need have book separation system between wholesale book and retail book in order to ensure the business performance pursuing strategic goals based on three factors mentioned above.

To expeditiously implement the scheme of planning process establishment at Vietcombank with the aim to: (i) synchronies the establishment, planning management in Vietcombank; thereby to overcome the shortcomings mentioned above, fully integrating business plan for budgeting and planning the work of other segments; (ii) to make basis of strategy plan planning handbook and (iii) ensure to build and make planning map in all areas of Vietcombank. Planning map shows a planning process to ensure the entire bank’s strategy that is concretized in marketing strategy and business plan. Such plans are part of overall strategy. Then, operation plan shall be built in the relationship with financial plan.

4.4. RECOMMENDATIONS The SBV should review bank strategy as a whole from short term to long term. There also needs to review and develop legislation consistent with the actual situation to be modified and adapted. The SBV should further accelerate the adoption of international standards in accordance with international rules on banking system in Vietnam. The SBV should pay more attention to financial associations and especially Banking Association, which domestic banks are equally participated and contributed to the voice of the banking industry. The government and SBV should closely supervise the restructuring progress of the banking sector in

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general and the economy in particular Vietnam. Regarding the work of personnel, management personnel under the central and local management leading to leaders in the banking system sometimes getting difficult and should give autonomy to the banks.

Regarding international accounting standards, the central bank should issue regulations framework of international accounting standards to match the actual situation. Through this development, the competitiveness of commercial banks on the international market and ensure the transparency of the market.

Regarding financial autonomy, the state commercial banks have currently no fiscal autonomy, this has reduced the competitiveness of domestic banks on the international market and even in Vietnam. The SBV and the Ministry of Finance should have more relaxed policies toward conformity with the actual situation.

Regarding wage mechanism, it currently is apply and through various levels of management from the SBV, Ministry of Finance and Ministry of Labors, Invalids and Social Affairs to review and approve salary unit. The Government and relevant ministries should have policies to encourage the use of banking services and reduce dependence and use of cash in circulation as current payment.

CONCLUSION

Being a vital lifeline for the economy, the banking system would almost become pioneers to take the new opportunities from the deep integration of the economy, it is the presence of a row series of foreign banks with many branches and transaction offices in Vietnam, leading to acquisitions, mergers in the financial sector, creating access to the capital foreign giants as well as leading to fundamental changes in products and services financial bank. Besides, Vietnam's banking system will also have the opportunity to more comprehensive cooperation with foreign banks opening up service industries associated with foreign ownership limits which are raised or removed. Accordingly, the quality of service and advanced products, procedures are minimized, and technology is innovated, risk management capability is improved and the capacity to connect to the sanctions system international primary will be strengthened.

It can be said that the banking system plays an important role in promoting economic development of Vietnam and sustainable stability, basic channel providing capital for the economy to contribute to the implementation of macroeconomic economic indicators. The banking system has played an important role in regulating the economy and stabilize the macro economy. If the SBV is responsible for the construction implementation of monetary policy through tools such as open market operations, reserve requirement and interest rates,etc… the commercial banking system is on the one hand directly affected by these tools, on the other hand also participated indirectly regulating the macro economy through relationships with economic organizations, businesses and individuals staff on financial activities.

By studying a systematic manner the basic theory of brand development and brand development banking system in general, practical brand development at Vietcombank in particular, the thesis has completed a number of tasks as follows:

Firstly, theoretical systematization of brand, brand development banks and commercial banks brands. The thesis has access contents relating to the bank brand development and tools of such strategy, which provide a basis on assessing the development situation of Vietcombank brand. Secondly, the thesis has learned the lessons of experience on developing and developed banking brand of international banks and local banks.

Thirdly, the thesis has evaluated the bank’s business performance in the period 2010-2014. In addition, the thesis has to assess the status brand development of Vietcombank system based upon the data and images collected during the study period. Besides, the results of the customer survey were evaluated to analyze the development situation of Vietcombank brand in a specific and clear way. Fourthly, with the bank’s strategic orientation up to 2020, the thesis has applied SWOT to evaluate the problems faced by Vietcombank in brand development process by 2020. Fifthly, the thesis proposed 05 solutions for Vietcombank in their brand development and some recommendations to the State authorities.