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* STATE%BANK%OF%VIETNAM*
* BANKING%ACADEMY%OF%VIETNAM*
* FACULTY%OF%FOREIGN%LANGUAGE*
* *77777!"#!"77777*
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SOLUTIONS%FOR%THE%DEVELOPMENT%OF%BANK%MARKETING%
TOWARDS%INDIVIDUAL%CUSTOMERS%IN%%
VIETNAM%PROSPERITY%JOINT%STOCK%COMMERCIAL%BANK%–%VPBANK%
%
% %
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% Supervisor:% NGUYEN%THI%HIEN%HANH,%M.A%
% Student:% NGUYEN%THI%THU%HANG%
% Class:%% ATCA%–%K12% %
% Student%ID:% 12A7511056%
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ACKNOWLEGEMENTS

First of all, I would like to express the profound gratitude to my supervisor NGUYEN
THI HIEN HANH, M.A. for giving me great support, encouragement and constructive
feedback to accomplish the study.
I deeply appreciated all banking staff at Giang Vo sub-branch, Vietnam Prosperity
Joint Stock Commercial Bank – VPBank for assisting and instructing me with work
and data collection. I would like to give my special thanks to Ms. Bui Thi Huong
Giang, Manager of Customer Service
Finally, I wish to extend my heartiest thanks to all Banking Academy’s lecturers, who
have equipped me with sufficient knowledge and my family, who has supported me
wholeheartedly.


affect business performance of a bank. A study of its effects and problems was
conducted with an emphasis on the situation of VPBank operations. Indeed, the bank
has made continuous efforts in diversifing its products and services, adjusting price
policy, distribution channels, and particularly concentrating on human fators. The
impacts became apparent in recent years with the improvement in business reports and
the increase in customer satisfaction. Also, the limitation of public confidence together
with the modest performance compared to other banks were reported as the aftermath
of increasingly competitive environment, innovation in technology, customer focus
and awarenessm, suggesting that marketing activities in VPBank is still in need of
further improvements.
In an attempt to make VPBank more developed, some recommendations are proposed
to the banks, such as setting a dynamic competition strategy, effective branding and
image building; developing products policies, distribution channels and workforce
performance, as well as adjusting price strategy and improving promotion policy.
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LIST OF TABLES AND FIGURES
LIST OF TABLES
Table 1: Total assets and charter capial of some banks by 2012 (unit: billion dong) 21
Table 2: Interest rates and the savings deposits (interest paid at maturity) 19/05/2013 27
Table 3: Number of VPBank branches and Trading Offices & Savings by 2012 29
Table 4: Deposit mobilization structure in 2010 – 2011 in VPBank 34
Table 5: Interest applied for Phat Loc savings in Techcombank 39
Table 6: Number of ATMs and Branches &Trading Offices by 2011 40

LIST OF FIGURES
Figure 1: Structure of a bank product 8
Figure 2: Vietnam GDP growth rate from 2010 – I/2013 14
Figure 3 : VPBank’s organizational structure 18
Figure 4: Average measurement of Teller Service Quality in VPBank in 2011 32

Oversea – Chinese Banking Corp
POS
Point of Sales
ROA
Return on Equity
ROE
Return on Assets
SBV
State Bank off Vietnam
SJC
Saigin Jewelry Company
SLAs
Service Level Agreements
SMEs
Small and Medium Enterprises
Techcombank
Vietnam Technological and Commercial Joint- stock Bank
USD
The United States dollar
VIB
Vietnam International Bank
Vietcombank
Joint Stock Commercial Bank for Foreign Trade of Vietnam
Vietinbank
Vietnam Joint Stock Commercial Bank for Industry and Trade
VNBC
Vietnam Bank Card
VND
Vietnam Dong
VPBank

2.3.4. PLACE*88888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*99*
2.3.5. PEOPLE*88888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*99*
2.3.6. PROCESS*88888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*9:*
2.3.7. PHYSICAL EVIDENCE*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*9:*
CHAPTER 3. THE CURRENT SITUATION VIETNAM ECONOMY AND
MARKETING ACTIVITIES IN VPBANK*88888888888888888888888888888888888888888888888888888888888888888888888888*9<*
3.1. The background of Vietnam current economy*8888888888888888888888888888888888888888888888888888888*9<*
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3.1.1. The stock market set a new bottom*888888888888888888888888888888888888888888888888888888888888888888888*9<*
3.1.2. The slump in real estate market*8888888888888888888888888888888888888888888888888888888888888888888888888888*9=*
3.1.3. Disorder in gold market*88888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*9=*
3.1.4. Banking sector sinks into troubles*88888888888888888888888888888888888888888888888888888888888888888888888*9>*
3.2. Introduction of VPBank*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*9>*
3.3. The SWOT of VPBank*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*9?*
3.3.1. STRENGTHS*8888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*9?*
3.3.2. OPPORTUNITIES*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*:A*
3.3.3. WEAKNESSES*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*:9*
3.3.4. THREATS*88888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*::*
3.4. The marketing strategies of VPBank*8888888888888888888888888888888888888888888888888888888888888888 888888888*:;*
3.4.1. PRODUCT POLICY*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*:;*
3.4.2. PRICE POLICY*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*:>*
3.4.3. PLACE POLICY*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*:B*
3.4.4. PROMOTION POLICY*88888888888888888888888888888888 88888888888888888888888888888888888888888888888888888888888*:@*
3.4.5 PEOPLE POLICY*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*;9*
3.4.6 PROCCESS POLICY*888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*;:*
3.4.7. PHYSICAL EVIDENCE*88888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*;;*
3.5. The achievements of Marketing strategies in VPBank*888888888888888888888888888888888888888*;;*
3.5.1. Deposit mobilization activities*8888888888888888888888888888888888888888888888888888888888888888888888888888888*;;*
3.5.2 Credit activities*8888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888888*;=*

vanished. In this context, marketing is playing a key role in addressing those
challenges. Moreover, in a competitive market mechanism today, individual customers
with their own characteristics are playing an increasing important role in the
development of a bank. The proper attention to these customers will bring
considerable income and steady growth for banks, particularly for a bank with the goal
of "becoming one of the top five commercial banks, and top three leading retail bank
in Vietnam" as VPBank.
When the role of financial services offered by banks has grown continuously, there
were mounting pressure on bankers for a more effective marketing management of
their financial services. However, because of the current socio-political and economic
situation in Vietnam, the banks seldom thought of the necessity of applying marketing
task in their day-to-day operations in the past. While Vietnamese banks were
accustomed to traditional business, the counter-parts in western countries are
becoming financial supermarkets providing a wide variety of services. Because of the
inefficiency of understanding about marketing activities under banking approach and
tools used to achieve its objectives, it is difficult to design or evaluate policies and
programs intended to address prevailing problems in Vietnam commercial banks in
general and VPBank in particular.
This calls for adoption of marketing approach towards promotion of banking services.
Hence, the issue promoted me to conduct a study on “Solutions for the development
of Bank Marketing towards individual customers in Vietnam Prosperity Joint
Stock Commercial Bank - VPBank " as my graduation thesis. This paper is expected
to provide the understanding about the theoretical framework of bank marketing
activities towards individual customers; as well as the real situation, then draw results
and limitations as a base to bring about the practical recommendations.
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1.2.The objectives of the study
The thesis attempt to:

without mentioning to other banks.
1.7. Structure of the thesis
In addition to Executive Summary and Conclusion, the thesis consists of four chapters:
Chapter 1 gives an Introduction about the whole thesis including research rationale
and research questions, methodology as well as the scope of the study.
Chapter 2 explains some theoretical framework of Bank Marketing, focusing on
marketing tools applied in marketing activities.
Chapter 3 describes the current situation of Vietnam economy and marketing activities
towards individual customers in VPBank in terms of elements of Marketing mix.
Chapter 4 gives some solutions to promote marketing activities for individual
customers in VPBank based on improving some limitations stated in chapter 3.

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CHAPTER 2. THEORETICAL FRAMEWORK OF BANK MARKETING
2.1. Concept of Bank Marketing
Selling in banking is that of marketing concerned with demonstrating to the customer

setting the business developments goals and making plans to meet them and managing
the various services and promoting them to achieve the plans – all in the context of a
changing environment in the market.” Thus the adoption of marketing concept by
banks recognizes that customer’s needs are changing and banks must define these in
explicit terms to satisfy them at a profit to the bank.
The marketing concept basically requires that all activities that have any relation with
the customer should be entirely co-ordinated by the marketing element in the bank. In
other words, that a way of thinking along marketing lines is permeated into all areas of
banking so as to enable the establishment of a marketing – oriented operation.
2.2. The necessity of Bank Marketing towards individual customers
2.2.1. Marketing is effective tool to attract individual customers.
Customers play a vital role in banking activities. The demand of individual customers
is diverse, especially in the growing and constantly changing society. Therefore, the
use of marketing tools to uncover the needs of individual customers can be seen that
the initial success of the bank, then banks will conduct research to launch new
products to meet customers’ needs.
Moreover, individual customers tend to make a comment on the pros, cons and quality
of products and services. Therefore, the marketing of improved service will retain
customers, create better assessments and have a strong influence on the decision of the
group of potential customers. Because those who are satisfied by banking products
will become effective advertising tool, banks will pay no cost. At the same time, banks
also need to conduct marketing activities to "nourish" the satisfaction of individual
customers in order to prevent them from falling into the “marketing trap” of other
competitors.
On the other hand, a significant amount of individual clients works in corporate, once
they are met their needs, the bank have more chance to be introduced to their work,
which means increasing organizational customers (in addition to individual
customers).

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creation of distinct products and services and specification of these products and
services in target markets to make individual customers realize their benefits. Hence,
the creation of the competitive position relies heavily on the marketing ability of each
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bank. It requires marketing department must be fully aware of the possibility of the
bank, the techniques used, as well as the specific needs of the target market.

2.3. Marketing Mix in Banking - useful tool applied in Bank Marketing
Marketing strategy is a plan for selecting and analyzing a target market and
developing and maintaining a marketing mix that will satisfy this target market. A
target market is a group of consumers at whom an organization directs its marketing
efforts.
The marketing mix consists of four basic variables: Product, Price, Promotion and
Place. A major task of marketing management is to blend together these elements of
the marketing mix in such a way that they fulfill the needs of selected target markets.
However as a service is not tangible the marketing mix for a service has three
additional elements: People, Process and Physical Evidence.
*
2.1.1. PRODUCT
The products of a bank are essentially services. Under the marketing concept services
offered by the banks have to be worked out after taking into account the customer
needs and preferences. In this perspective what the customers are buying from the
bank is security, convenience, prestige, freedom and a number of other want and need
satisfying extensions that are packaged in the form of basic banking services.
The product component of the financial services marketing mix is affected by the
problem of copying. It is difficult to use specific service attributes as the basic for
developing competitive advantage because distinctive attributes are easily duplicated
by competitors. By contrast, improvement in the quality of service provision in general

Promotion
Additional services
Core Products
Tangible Products
Additional Products
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The tangible product is the specific part of banking products. This is a form of
expression outside of banking products and services such as its name, form,
characteristics, symbols, terms of use. It is the base for customers to identify,
distinguish, compare and select products and services between banks.
Thirdly, the additional product
The additional products are other benefits added to the existing products or services, in
addition to the primary benefit of the customers. They make banking products and
services more complete and satisfy the needs and desires of customers, differentiating
themselves from competitors. The additional products are also strong elements of
competing banks today because of its versatility.
The success of many banks around the world is for the fact that their marketing
department realizes the products and services suitable to each segment of customers.
When implementing services or products, the marketing department firstly should
define the core needs of its customers, create the specific image of the products and
services to stimulate customers’ demand. This is also the basis for customer to
distinguish the banks from the others. Then the bank should seek to increase the
additional characteristics to create a collection of utilities, the benefits that can better
satisfy diverse needs of customers than competitors.
2.3.2. PRICE
Pricing in banking relates to the interest rates paid by the bankers on deposits, interest
charged by the banker on loans and demand draft, charges for various types of

clients and emphasis is to retain than acquiring new customers. The rationale behind
relationship banking is to transform single-service users in to multi-service clients and
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2.3.4. PLACE
The place decision mainly deals with selection of a suitable location for the branch.
Sound location decisions help in activating the business. The location should have
adequate availability of transportation, communication, electricity and other necessary
facilities for the smooth functioning of the banks. Technological development,
increased customer satisfaction, inadequacy of the traditional challenge to serve all
customer segments have brought about ATM, tele-banking, home banking, Internet
banking and now SMS Banking. Another significant development is a strategic alliance
set up by the private banks to overcome the handicap of limited branch network. In
such alliance the branch network of one branch will be used by the other for selected
transaction like bill collection, cheque collection, etc.
2.3.5. PEOPLE
Banking products cannot be separated from the person (banker) who markets them.
The product and the seller together constitute the banking product. Banks should adopt
internal marketing in order to make the whole business customer-oriented. The bank
products should be marketed to the employees first before they are marketed to
customer. The corporate mission should be communicated repeatedly and effectively to
all employees by the top management. The placement policy should emphasize that the
recruits should not only be conversant with all aspects of banking businesses but also
have the skill for social interaction and tolerance for interpersonal contact. The quality
for banking sector is an aggregation of all the properties, which are found essential for
generating the efficiency and projecting a fair image. Even efficiency essentially is

Tangibles: banks give pens, writing pads to the internal customers. Even the
passbooks, cheque books, etc reduce the inherent intangibility of services.
Punch lines: punch lines or the corporate statement depict the philosophy and attitude
of the bank. Banks have influential punch lines to attract the customers.
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Most private and foreign banks like ICICI, Citibank and HDFC bank portray a new
look to the customers rather than drudgery banking counters. Attractive brand names,
logos, symbols, etc. add to the customer’s perception of service quality.
A bank with proper marketing policy will ensure to meet its objectives. After chapter II
- Bank Marketing for individual customers, we have gained a basic understanding of
the marketing in banking, which would be basis for further studying the situation of
Bank Marketing activities towards individual customers in VPBank mentioned in
chapter III.

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CHAPTER 3. THE CURRENT SITUATION OF VIETNAM ECONOMY AND
MARKETING ACTIVITIES IN VPBANK
3.1. The background of Vietnam current economy
2012 can be considered as a gloomy picture of economy for most countries in the
world. While USA is still struggling with the policies to deal with the financial crisis,
Europe crumbled with prolonged debt crisis. In Asia, China, the 2
nd
largest economy
in the world, is also slowing down with the decline in a series of growth target.
Obviously, Vietnam is not out of this spiral when facing many challenges to find a
solution for the problem of growth in 2013.

plans. Most businesses and organizations rush to “pour money” into real estate aiming
at middle and senior segment. At the same time, a huge amount of this type of goods
was produced, even in Hanoi was able to solve the housing problem by 2050.
However, as investors and speculators pushed prices up too high, inconsistent with the
actual affordability of the majority of the people, real estate has never got difficult as
in 2012.
Although the real estate market in Hanoi and HCMC have noted the strong decline in
all segments in 2012, then the price is still far from the affordability of those wishing
to make home-buying in, so in 2013 market likely to adjust downward until they reach
their real estate prices reasonable.
3.1.3. Disorder in gold market
The introduction of Decree 24 on the management of gold trading activities as a tool to
control the gold market, limit the difference between the world price and the home
price with the purpose of removing gold speculation and smuggling.
However, after officially taking effect on 25
th
May, the gold market goes against law-
makers’ expectations. Accordingly, SJC gold – the brand of state widened the gap with
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world prices, fluctuating at around 3 million per tael. But in the last days of 2012, this
gap has to be loosened up to 5 million VND per tael. Then, domestic prices became
more and more optimistic with the world price even as government took actions.
3.1.4. Banking sector sinks into troubles
“Interest group” still exists in Vietnamese banking system. Some commercial banks
are hold and controlled only by a few people in a family in many different forms.
Cross-ownership situation also exists as a major problem of the current commercial
banks. The owners of this bank may establish subsidiaries, make a contribution and
ownership participation in other bank’s operation. This creates a negative situation,