more competitive than competitors in the market. In addition, it can also be understood that brand strategy is a plan set out to achieve the set goals for brand development of the bank.[15, 17]
2.2.3.1.1. The role of brand development strategy
Brand development strategy plays a very important role in banking operations. Specifically as follows:
In today's fiercely competitive environment, thanks to the Brand Development Strategy, banks will be able to orient their brands to be more suitable for the competitive environment.
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Helps focus resources on branding.
Brand strategy will ensure consistency in the execution of decisions.
brand building and development
Prevent potential risks to the bank in the process of building and developing the brand.
Improve the effectiveness of brand decision execution by identifying and correcting errors in the brand development decision-making process.
Contribute to enhancing brand value through image and public trust in branded products.
2.2.3.1.2. The relationship between brand development strategy and other bank strategies
Bank brand strategy is the sum of the bank's short-term and long-term goals, visions and missions. It includes the entire business strategy based on: brand strategy, marketing strategy, financial strategy, human resource strategy, product strategy, and market strategy.
Thus, brand development strategy originates from and is governed by business strategy. Brand development strategy is relatively closely linked to functional strategies: human resources, finance, marketing, product.
2.2.3.2. Measures and tools for developing bank brands
The development of brand development tools should achieve the goals of brand development, which are to develop customer perceived value; develop the financial value of the brand, and develop the comprehensiveness of the brand. Therefore, the main tools for bank brand development should focus on the following main tools: Brand development through communication activities; Brand development through brand extension/renewal; and Development
brand through developing the financial value of the brand.
2.2.3.2.1. Brand development through brand communication activities
Brand communication is the process of sharing information. Communication is a type of social interaction in which at least two agents interact with each other, sharing common rules and signals. In its simplest form, information is transmitted from a sender to a receiver. In its more complex form, the information exchanged links the sender and the receiver. Communication development is the development of processes that enable a person to understand what another person says (signs, or writes), grasp the meaning of sounds and symbols, and learn the syntax of language. Communication typically has three main components: content, form, and purpose.
Brand communication is communication about the brand, which means that information about the brand is exchanged and conveyed to the communication objects. Brand information is information about the name, logo, brand identity system and supporting information such as additional introduction and promotion about the brand. Information is forever just information. The evaluation of this information depends entirely on the subjectivity of each person receiving this information.
When it comes to brand communication activities, it is impossible not to mention the two popular communication activities today: Below the line (BTL) and Above the line (ATL). ATL activities are activities that use traditional marketing channels and use media to build brand themes and personalities. Common advertising tools are: television, radio, print newspapers, magazines, newspaper spots, leaflets, online, publications, outdoor... and associated with media. These tools are rarely applied due to their nature of targeting target customers and reaching the majority of customers. The interactivity of ATL is very low and brand information is only one-way. In addition, its nature is to introduce images/information to customers, so it rarely creates high customer trust. The advantage of this form is that the measurability is relatively high/accurate. However, outdoor advertising is difficult to measure.
BTL activities are activities that use less communication tools, it includes some main tools as follows: Public relations (PR); Sponsorship; Event organization; Sales promotion.
Public relations (PR) tool: PR plays a strategic role in brand building, which is a trend in the world. This is not due to the impact of experts or PR associations but comes from the successes of major banking brands in reality such as: Dong A, Agribank, Techcombank... The success
The success of many strong brands that do not rely on the traditional mass advertising model has left branding experts puzzled and wondering what the communication secrets of these brands are.
PR activities: Press relations include organizing press conferences, drafting press releases, arranging interviews, gathering news, and even establishing one's own newspaper. The purpose is that good relations with the press are the shortest and most effective bridge between customers and businesses. For example: Inviting reporters to gather news and conduct interviews when opening new transaction offices, signing credit contracts with businesses, publishing the magazine "Vietcombank Information" once a month. Organizing events: Including activities: Opening new offices and branches, groundbreaking for investment projects, inaugurations, celebrations, cultural activities, exchanges between employees and workers... In addition, PR builds trust from consumers through objective opinions from third parties - the subjects that customers trust and respect and it can reflect content that traditional advertising cannot show.
Sponsorship tools : play a very important role in bringing the bank's image to customers. However, banks need to note that implementing sponsorship activities must be suitable to the needs of customers and can accurately reflect the bank's brand personality. Depending on the target and needs in each stage, choose the appropriate sponsorship program.
Event Organization Tool: This is a relatively popular tool today when introducing images, new products or services to the public, the target customers who will use the service. This activity often takes place individually but is invested in a systematic way and creates uniqueness, attracting attention from the media. Although this is a form similar to sponsorship, event organization is often much more effective. Sales promotion at a macro level is the research and operation of management agencies, while business trade promotion is specific business activities. The motto is to definitely start from the market, including needs, tastes, specifications, competitors, policy barriers, distribution channels, prices, etc., and then prepare products to suit the market. When preparing products for the market, the question to ask is how much total product capacity we aim for, from which we can outline the roadmap, marketing methods, prices, etc.
Promotional Tools: at a modest cost, can help banks reach and stimulate customers to use their services. Usually, this tool does not use traditional communication activities.
Basically, BTL communication tools will help banks target small customer groups but bring greater value. Because of the high and multi-dimensional interaction with customers, this tool can easily create trust and customer loyalty by encouraging customers to trust and learn about the service.
In short, to have an effective communication strategy and develop the brand, banks need to flexibly use tools effectively based on combining both Above the line (ATL) and Below the line (BTL) communication tools.
2.2.3.2.2. Brand development through brand extension/renewal
Often, people use a successful brand name for another product, which has the risk of diluting the brand positioning. Therefore, companies still choose the same product type in the same industry to extend, they can add brand extensions to the core brand to find a quicker association. Basically, the brand extension has a name related to the parent brand (which is usually already imprinted in the customer's mind), so it triggers the buyer's memory more quickly.
There are two cases where a brand can be extended: they share the same product assets or are created by the same skills, and in this case, they complement each other and develop more. The success of a brand extension is entirely measured by market response. The more the extended brand is stretched, the more it stretches. When it breaks, the business will completely lose its original brand because the positioning image has faded.
There are two ways to extend a brand: sub-brand extension and product extension. Sub-brand extension means extending the original brand in depth or breadth of the product range by forming additional brands. Sub-brand extension also means that it can cannibalizes the market share of the old brands and the original brand becomes uncertain due to stretching. The difficulty of sub-brand extension is multi-brand positioning and communication. The choice of which brand to emphasize through communication depends on the strategic priority list for that brand.
Brand extension to other products allows the use of the old brand for products other than the original product using the brand. It is important that the new product has the same target customer group as the original product and reduces communication costs instead of building a new brand, avoiding the risk of swallowing up.
market share. This method takes advantage of the old customer base but does not attract new customers because the old brand means not creating a new impression.
2.2.3.2.3. Brand development through developing the financial value of the brand.
The financial value of a brand can be measured by assessing the level of investment in the brand. The value of a brand also increases substantially with the amount of investment in the brand.
In addition, the co-branding element will also bring value to both parties involved in the co-ownership. If any party has a problem that reduces the brand value, the other party will also be affected.
When talking about the financial value of a brand, it is impossible not to mention the forms: separation, merger, M&A. If the bank has a large value, it has the advantage in negotiating more favorable agreements in implementing these contents.
2.3. FACTORS AFFECTING BRAND DEVELOPMENT ACTIVITIES IN COMMERCIAL BANKS
2.3.1. Group of macro environmental factors
When Vietnam became a member of the WTO, the business environment of domestic banks changed significantly, because we had to fulfill international commitments according to the signed roadmap. With that change, the Vietnamese banking industry also faced many opportunities.
International integration will increase the prestige and position of the Vietnamese banking system, especially in the regional financial market. International integration will enhance competition and market discipline in banking activities, will encourage the creation of large-scale banks with healthy finances and effective business operations, while weak banks will be eliminated or have to improve if they want to survive. Integration will also create favorable conditions for domestic banks to penetrate the international market, opening up opportunities for the banking industry to conduct international exchanges and cooperation in the fields of monetary policy making, foreign exchange management, inspection, supervision and risk prevention, payment and development of new banking products and services. Therefore, the prestige and position of the Vietnamese banking system will be enhanced, at least in the regional market. This really creates many opportunities for the Vietnamese banking system in general and joint stock commercial banks in particular to gradually improve operational efficiency and develop strongly.[5]
In addition, some factors have an impact on business operations and development.
The brand of commercial banks includes: political institutional factors, legal environment and legal policies.
Political factors are the first factor that commercial bank managers pay special attention to analyzing to forecast the level of safety in operations in countries and regions where commercial banks are operating and investing. Factors such as political institutions, political stability or fluctuations in a country or region are initial signals that help managers identify opportunities or risks for commercial banks to make investment and production decisions in market areas within the national or international scope. Political factors are very complex factors, depending on specific conditions, this factor will affect economic development within the national or international scope. Strategic managers who want to develop the market need to be sensitive to the political situation in each geographical area, forecast political developments on the national, regional and global scope to make appropriate and timely strategic decisions.[6]
Legal factors: Creating a healthy or unhealthy business environment depends entirely on legal factors and state economic management. The promulgation of a quality legal system is the first condition to ensure an equal business environment for commercial banks, forcing commercial banks to do business honestly and responsibly. However, if the legal system is not perfect, it will also have a significant impact on the business environment, causing difficulties in the production and business activities of commercial banks. The law provides regulations that allow, do not allow or require commercial banks to comply. Just a small change in the legal system such as tax, investment... will affect the production and business activities of commercial banks.
The problem for commercial banks is to clearly understand the spirit of the law and comply with the provisions of the law, research to take advantage of the opportunities brought by the provisions of the law and have timely countermeasures against the risks that may come from the provisions of the law to avoid losses due to lack of legal knowledge in business.
Government policy and guidelines: play a major role in regulating the macro economy through its economic, financial, monetary policies and spending programs. In its relationship with commercial banks, the government plays the role of controller, encourager, sponsor, regulator, prohibitor, and restrictor, and plays the role of an important customer for commercial banks (in the government's spending program) and finally the government plays the role of a service provider for commercial banks such as providing macro information and other public services. To take advantage of
To take advantage of opportunities and minimize risks, commercial banks must grasp the views, regulations, prioritize government spending programs, and also establish good relationships, even lobbying when necessary, to create a favorable environment for commercial banks' operations.
2.3.2. Group of industry environmental factors
From the review, brand development evaluation criteria are identified as the evaluation criteria for brand development based on a number of components. These components may include distribution channel strategies, brand development, and brand promotion plans. However, each evaluation component includes a number of factors and aspects that need to be considered at a point in the brand development process. [24, 33]
In the factor, the distribution channel strategy is considered first, that is the need to consider that what channels are required to be used to perform the services or product distribution process of the brand. The brand is also necessary to decide that what strategy has been used to successfully monitor the brand position in the current market.
In the factors, brand development is necessary to consider that: is there any other product or service development program undertaken or introduced by any organization. In case, if there is any development program already undertaken by any organization, this program will be built into the new brand development plan to evaluate its effectiveness.
In addition, the competitive factor between existing commercial banks in the industry will determine the advantages of the commercial bank itself in developing its brand. The level of competition between commercial banks in the same industry will directly affect the supply and demand of each commercial bank's products, affect customers and income from products and services... thus affecting the efficiency of each commercial bank.
New entry ability of commercial banks: In the current market mechanism in our country, in most fields, production and business sectors with high profit margins are being watched by many foreign commercial banks and are ready to invest in that field if there is no intervention from the government and the State Bank. That forces commercial banks in high profit sectors to create barriers to new entry by fully exploiting the unique advantages of commercial banks, by setting appropriate prices (the level to prevent entry, this price can reduce the profit margin) and increasing expansion to occupy the market. Therefore, it affects the production and business efficiency of commercial banks. Besides, foreign commercial banks with potential
Strong financial resources and modern technology always have advantages when participating in the developing Vietnamese market. Domestic commercial banks need to have proactive solutions to expand their market share and increase their competitiveness.[7]
For substitute products in the banking industry, this is a special type of business, so the number of main products of commercial banks is limited. Therefore, most of the products of commercial banks are easily used by other commercial banks with almost no protection measures.
Input resources for commercial banks are individuals, organizations, businesses, etc. or commercial banks themselves. Input resources of a commercial bank are mainly provided by other commercial banks, business units and individuals. Ensuring the quality, quantity and price of input factors of commercial banks depends on the nature of those factors, on the nature of suppliers and their behaviors. If the input factors of commercial banks are irreplaceable and are provided by monopolies, ensuring the input factors of commercial banks depends on very large suppliers, the cost of input factors will be higher than normal, which will reduce the production and business efficiency of commercial banks. If the input factors of commercial banks are available and can be converted, ensuring the quantity and quality as well as reducing the cost of input factors is easy and not dependent on the supplier, it will improve business performance and continuously increase profits.
Customers using services are extremely important and receive special attention from commercial banks. If the products and services of commercial banks are not widely accepted by consumers, commercial banks cannot expand. Population density, income level, psychology and consumer preferences... of customers greatly affect the products and services offered by commercial banks to meet the increasing needs of customers, and this will affect the competitiveness of commercial banks, thereby affecting the efficiency of commercial banks.
Finally, the brand development plan is necessary to develop an implementable brand promotion plan in which it has been mentioned that how the brand promotion plan will be implemented to achieve the development goals and objectives. Therefore, this evaluation criterion for brand development has been implemented by a number of organizations and helps in creating an attractive and recognizable brand in the market. [44]
2.3.3. Group of internal factors of the enterprise